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EX-99.B8(A)(ii)
MUTUAL FUND CUSTODY AGREEMENT
THIS AGREEMENT is made as of November 3, 1995 by and between
SBSF Funds, Inc., a Maryland corporation (the "Company"), which may issue one or
more series of shares of common stock, and Key Trust Company of Ohio, N.A., a
bank chartered under the laws of the United States, having its principal office
at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000 (the "Custodian").
W I T N E S S E T H:
WHEREAS, the Company is registered as an open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Company desires to retain the Custodian to serve
as the Company's custodian and the Custodian is willing to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company, on behalf of each fund (each a "Fund")
listed on Attachment A hereto, as it may be amended from time to time,
separately and not jointly, hereby appoints the Custodian to act as custodian of
the securities, cash and other property of each Fund on the terms set forth in
this Agreement. The Custodian accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Paragraph 27 of this Agreement.
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2. Delivery of Documents. The Company has furnished the Custodian with
copies properly certified or authenticated of each of the following:
(a) Resolutions of the Company's Board of Directors authorizing the
appointment of the Custodian as custodian of the securities, cash and other
property of each Fund of the Company and approving this Agreement;
(b) Incumbency and signature certificates identifying and containing
the signatures of the Company's officers and/or the persons authorized to sign
Proper Instructions, as hereinafter defined, on behalf of the Company;
(c) The Company's Articles of Incorporation filed with the Secretary of
the State of Maryland and all amendments thereto (such Articles of
Incorporation, as currently in effect and as they shall from time to time be
amended, are herein called the "Articles");
(d) The Company's By-Laws and all amendments thereto (such By-Laws, as
currently in effect and as they shall from time to time be amended, are herein
called the "By-Laws");
(e) Resolutions of the Company's Board of Directors and/or the
Company's shareholders approving the Investment Advisory Agreement between the
Company on behalf of various Funds and Spears, Benzak, Salomon & Xxxxxxx, Inc.
dated as of April 5, 1995;
(f) The Administration Agreement between the Company and Spears,
Benzak, Salomon & Xxxxxxx, Inc. dated as of April 5, 1995;
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(g) The Distribution Agreement between the Company and Concord
Financial Group, Inc. dated as of April 5, 1995;
(h) The Company's current Registration Statement on Form N-1A under the
1940 Act and the Securities Act of 1933, as amended (the "1933 Act") as filed
with the Securities and Exchange Commission ("SEC"); and
(i) The Company's most recent prospectus including all amendments and
supplements thereto (the "Prospectus").
The Company will furnish the Custodian from time to time with copies of
all amendments of or supplements to the foregoing, if any. The Company will also
furnish the Custodian with a copy of the opinion of counsel for the Company with
respect to the validity of the shares issued by the Company ("Shares") and the
status of such Shares under the 1933 Act filed with the SEC, and any other
applicable federal law or regulation.
3. Definitions.
(a) "Authorized Person." As used in this Agreement, the term
"Authorized Person" means the Company's President, Vice-President, Treasurer and
any other person, whether or not any such person is an officer or employee of
the Company, duly authorized by Directors of the Company to give Proper
Instructions on behalf of the Company and the Funds listed on Attachment A which
may be amended from time to time.
(b) "Book-Entry System." As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United
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States and federal agency securities, its successor or successors and its
nominee or nominees.
(c) "Investment Adviser" means each investment adviser to the Funds of
the Company.
(d) "Property." The term "Property", as used in this Agreement, means:
(i) any and all securities, cash, and other property of the
Company which the Company may from time to time deposit, of cause to be
deposited, with the Custodian or which the Custodian may from time to
time hold for the Company;
(ii) all income, dividends, or distributions of any kind in
respect of any other such securities or other property;
(iii) all proceeds of the sales, repurchase, redemptions (or
otherwise) of any of such securities or other property; and
(iv) all proceeds of the sale of securities issued by the
Company, which are received by the Custodian from time to time from or
on behalf of the Company.
(e) "Securities Depository." As used in this Agreement, the term
"Securities Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the SEC or its successor or successors and its
nominee or nominees; and shall also mean any other registered clearing agency,
its successor or successors specifically identified in a certified copy of a
resolution of the Company's
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Board of Directors delivered to the Custodian and specifically approving
deposits by the Custodian therein.
(f) "Proper Instructions." Means instructions
(i) delivered by mail; telegram; cable; telex; facsimile
sending device; DTC "ID" or "IID" system or any similar system; and any
Trade Order Entry System acceptable to the parties; and received by the
Mutual Funds Custody Division of the Custodian, signed by two
Authorized Persons or by persons reasonably believed by the Custodian
to be Authorized Persons; or
(ii) transmitted electronically through the Custodian Asset
Management System or any similar electronic instruction system
acceptable to the Custodian; or
(iii) previously agreed to in writing by the Company and the
Custodian or provided orally by the Company in form satisfactory to the
Custodian and promptly followed by written instructions signed by an
Authorized Person.
4. Warranties and Representations.
(a) The Company warrants and represents that:
(i) It is a corporation organized under the laws of the State
of Maryland;
(ii) It is registered as an investment company under the
Investment Company Act of 1940, as amended;
and
(iii) It is duly authorized to enter into this Agreement and
the Agreement is a valid and binding obligation of the Company.
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(b) The Custodian warrants and represents that:
(i) It is a national bank duly organized under the laws of the
United States;
(ii) It is duly authorized to enter into this Agreement and
the Agreement is a valid and binding obligation of the Bank; and
(iii) It is not subject to any legal, regulatory or
contractual restriction that would materially affect its ability to
carry out its obligations under this Agreement.
5. Delivery and Registration of the Property. (a) The Company will
deliver or cause to be delivered to the Custodian all Property owned by it, at
any time during the period of this Agreement, except for securities and monies
to be delivered to any Subcustodian appointed pursuant to Paragraph 12 hereof.
The Custodian will not be responsible for such securities and such monies until
actually received by it. All securities delivered to the Custodian or to any
such subcustodian (other than in bearer form) shall be registered in the name of
the Company or in the name of a nominee of the Company or in the name of the
Custodian or any nominee of the Custodian (with or without indication of
fiduciary status) or in the name of any subcustodian or any nominee of such
subcustodian appointed pursuant to Paragraph 12 hereof or shall be properly
endorsed and in form for transfer satisfactory to the Custodian.
(b) The Custodian shall at all times hold securities of the
Company either: (i) by physical possession of the share certificates or other
instruments representing such securities in registered or bearer form; or (ii)
in the Book-Entry System;
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or (iii) in a Securities Depository; or (iv) by a sub-custodian of the Custodian
appointed in accordance with Paragraph 12 of this Agreement.
(c) The Custodian shall at all times hold securities of the
Company in the name of the Custodian, the Company or any nominee of either of
them, unless otherwise directed by Proper Instructions; provided that, in any
event, all securities and other assets of the Company shall be held in an
account of the Custodian containing only the securities and assets of the
Company, or only securities and assets held by the Custodian as a fiduciary or
custodian for customers, and provided further, that the records of the Custodian
shall indicate at all times the Company or other customer for which such
securities and other assets are held in such account and the respective
interests therein.
6. Voting Rights. It is the Custodian's responsibility to deliver to
the Company or the Investment Adviser, via overnight mail if necessary, all
forms of proxies, all notices of meetings, and any other notices or
announcements materially affecting or relating to securities owned by the
Company that are received by the Custodian, any Subcustodian (as hereinafter
defined), or any nominee of either of them, and upon receipt of Proper
Instructions, the Custodian shall execute and deliver, or use its best efforts
to cause such Subcustodian or nominee to execute and deliver, such proxies or
other authorizations as may be required. Where warrants, options, tenders or
other securities have fixed expiration dates, the Company understands that in
order for the Custodian to act, the Custodian must receive the instructions of
the Company or the Investment Adviser, addressed as the Custodian may from time
to time request, by no later than noon (Eastern time) at least one business day
prior to the last scheduled date to act with respect
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thereto (or such earlier date or time as the Custodian may reasonably notify the
Company). Absent the Custodian's timely receipt of such instructions, such
instruments will expire without liability to the Custodian.
7. Exercise of Rights; Tender Offers. Upon receipt of Proper
Instructions, the Custodian shall: (a) deliver warrants, puts, calls, rights or
similar securities to the issuer or trustee thereof, or to the agent of such
issuer or trustee, for the purpose of exercise or sale; and (b) deposit
securities upon invitations for tenders thereof, provided that the consideration
for such securities is to be paid or delivered to the Custodian, or the tendered
securities included in the Proper Instructions that are received in exchange for
the tendered securities are to be returned to the Custodian. Notwithstanding any
provision of this Agreement to the contrary, the Custodian shall take all action
as directed in Proper Instructions to comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions, or similar rights of security
ownership, and shall promptly notify the Company or the Investment Adviser of
such action in writing by facsimile transmission or in such manner as the
Company may designate in writing.
8. Options. Upon receipt of Proper Instructions, the Custodian shall:
(a) receive and retain confirmations or other documents, if any, evidencing the
purchase or writing of an option on a security or securities index by the
Company; (b) deposit and maintain in a segregated account, securities (either
physically or by book entry in a Securities Depository), cash or other assets;
and/or (c) pay, release and/or transfer such securities, cash, or other assets
in accordance with notices or other communications evidencing the expiration,
termination or exercise of such options furnished by the Options
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Clearing Corporation, the securities or options exchange on which such options
are traded or such other organization as may be responsible for handling such
option transactions. The Company and the broker-dealer shall be responsible for
the sufficiency of assets held in any segregated account established in
compliance with applicable margin maintenance requirements and the performance
of other terms of any option contract, and shall promptly upon notice from the
Custodian bring such accounts into compliance with such terms or requirements.
9. Futures Contracts. Upon receipt of Proper Instructions, the
Custodian shall: (a) receive and retain confirmation, if any, evidencing the
purchase or sale of a futures contract or an option on a futures contract by a
Fund; (b) deposit and maintain in a segregated account, cash, securities and
other assets designed as initial, maintenance or variation "margin" deposits
intended to secure the Company's performance of its obligations under any
futures contracts purchased or sold or any options on futures contracts written
by the Company, regarding such margin deposits; and (c) release assets from
and/or transfer assets into such margin accounts only in accordance with any
such Proper Instructions. The Company shall be responsible for the sufficiency
of assets held in the segregated account in compliance with applicable margin
maintenance requirements and the performance of any futures contract or option
on a futures contract in accordance with its terms, and shall promptly upon
notice act to bring such accounts into compliance with such terms or
requirements.
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10. Receipt and Disbursement of Money.
(a) The Custodian shall open and maintain a custody account for the
Company, and shall hold in such account, subject to the provisions hereof, all
cash received by it from or for the Company. The Custodian shall make payments
of cash to, or for the account of, the Company from such cash only (i) for the
purchase of securities for the Company as provided in Paragraph 16 hereof; (ii)
upon receipt of Proper Instructions, for the payment of dividends or for the
payment of interest, taxes, administration, distribution or advisory fees or
expenses which are to be borne by the Company under the terms of this Agreement,
any advisory agreement, any distribution agreement, or any administration
agreement; (iii) upon receipt of Proper Instructions for payments in connection
with the conversion, exchange or surrender of securities owned or subscribed to
by the Company and held by or to be delivered to the Custodian; (iv) to a
subcustodian pursuant to Paragraph 12 hereof; or (v) upon receipt of Proper
Instructions for other corporate purposes.
(b) The Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received as custodian
for the Company.
11. Receipt of Securities.
(a) Except as provided by Paragraph 12 hereof, the Custodian shall hold
all securities and non-cash Property received by it for the Company. All such
securities and non-cash Property are to be held or disposed of by the Custodian
for the Company pursuant to the terms of this Agreement. In the absence of
Proper Instructions,
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the Custodian shall have no power or authority to withdraw, deliver, assign,
hypothecate, pledge or otherwise dispose of any such securities and non-cash
Property, except in accordance with the express terms provided for in this
Agreement. In no case may any trustee, officer, employee or agent of the
Company, acting as individuals, withdraw any securities or non-cash Property.
12. Subcustodian Agreements. In connection with its duties under this
Agreement, the Custodian may, at its own expense, enter into subcustodian
agreements with other banks or trust companies for the receipt of certain
securities and cash to be held by the Custodian for the account of the Company
pursuant to this Agreement; provided that each such bank or trust company has an
aggregate capital, surplus and undivided profits, as shown by its last published
report, of not less then twenty million dollars ($20,000,000) and that such bank
or trust company agrees with the Custodian to comply with all relevant
provisions of the 1940 Act and applicable rules and regulations thereunder. The
Custodian will be liable for acts or omissions of any such subcustodian.
(a) Promptly after the close of business on each day the Custodian
shall furnish the Company with system access to review a summary of all
transfers to or from the account of the Company during said day. Where
securities are transferred to the account of the Company established at a
Securities Depository or the Book Entry System pursuant to Paragraph 13 hereof,
the Custodian shall use the Securities Depository or Book Entry System to
identity as belonging to the Company the securities in a commingled group of
securities registered in the name of the Custodian (or its nominee) or shown in
the Custodian's account on the books of a Securities Depository or the
Book-
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Entry System. At least monthly and from time to time, the Custodian shall
furnish the Company with a detailed statement of the Property held for the
Company under this Agreement.
(b) Notwithstanding any other provision of this Agreement, no provision
of this Paragraph 12, and no provision of this agreement relating to
subcustodians, shall apply to any agreement entered into by the Custodian for
the purpose of facilitating repurchase transactions by the Company ("Tri-Party
Agreements"), except that (i) the indemnification obligations owed to the
Custodian by the Company and set forth in Paragraph 28 shall apply to such
Tri-Party Agreements without qualification; and (ii) the Company's rights
contained in Paragraph 30 of this Agreement shall apply to such Tri-Party
Agreements. All actions taken by the Custodian in connection with such Tri-Party
Agreements shall be taken solely for the purpose of providing and accepting
instructions at the Company's request and on the Company's behalf.
13. Use of Securities Depository or the Book-Entry System. The Company
shall deliver to the Custodian a certified resolution of the Board of Directors
of the Company approving, authorizing and instructing the Custodian on a
continuous and ongoing basis until instructed to the contrary by Proper
Instructions actually received by the Custodian (i) to deposit in a Securities
Depository or the Book-Entry System all securities of the Company eligible for
deposit and (ii) to utilize a Securities Depository or the Book-Entry System to
the extent possible in connection with the performance of its duties hereunder,
including without limitation settlements of purchases and sales of securities by
the Company, and deliveries and returns of securities collateral in connection
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with borrowings. Without limiting the generality of such use, it is agreed that
the following provisions shall apply thereto:
(a) Securities and any cash of the Company deposited in a Securities
Depository or the Book-Entry System will at all times be segregated from any
assets and cash controlled by the Custodian in other than a fiduciary or
custodial capacity but may be commingled with other assets held in such
capacities. The Custodian will effect payment for securities, in the place where
the transaction is settled, unless the Company has given the Custodian Proper
Instructions to the contrary.
(b) All Books and records maintained by the Custodian which relate to
the Company's participation in a Securities Depository or the Book-Entry System
will at all times during the Custodian's regular business hours be open to the
inspection of the Company's duly authorized employees or agents, and the Company
will be furnished with all information in respect of the services rendered to it
as it may require.
14. Instructions Consistent with the Articles, etc.
The Custodian shall act only upon Proper Instructions. The Custodian
may assume that any Proper Instructions received hereunder are not in any way
inconsistent with any provision of the Articles or By-Laws of the Company or any
vote or resolution of the Company's Board of Directors, or any committee
thereof. The Custodian shall be entitled to rely upon any Proper Instructions
actually received by the Custodian pursuant to this Agreement. The Company
agrees that the Custodian shall incur no liability in acting upon Proper
Instructions given to the Custodian. In accordance with instructions from the
Company, advances of cash or other Property made by the Custodian, arising
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from the purchase, sale, redemption, transfer or other disposition of Property
of the Company, or in connection with the disbursement of trusts to any party,
or in payment of fees, expenses, claims or liabilities owed to the Custodian by
the Company, or to any other party which has secured judgment in a court of law
against the Company which creates an overdraft in the accounts or over-delivery
of Property shall be deemed a loan by the Custodian to the Company, to the
extent permitted under applicable law. Such loans shall be payable on demand,
bearing interest at such rate customarily charged by the Custodian for similar
loans or such other rate agreed to by the parties. The Company agrees that test
arrangements, authentication methods or other security devices to be used with
respect to instructions which the Company may give by telephone, telex, TWX,
facsimile transmission, bank wire or through an electronic instruction system,
shall be processed in accordance with terms and conditions for the use of such
arrangements, methods or devices as the Custodian may put in effect and modify
from time to time. The Company shall safeguard any test keys, identification
codes or other security devices which the Custodian makes available to the
Company and agrees that the Company shall be responsible for any loss, liability
or damage incurred by the Custodian or by the Company as a result of the
Custodian's acting in accordance with instructions from any unauthorized person
using the proper security device unless such loss, liability or damage was
incurred as a result of the Custodian's negligence or willful misconduct. The
Custodian may electronically record, but not be obligated to so record, any
instructions given by telephone and any other telephone discussions with respect
to the Account. In the event that the Company uses the Custodian's Asset
Management System, the Company agrees
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that the Custodian is not responsible for the consequences of the failure of
that system to perform for any reason, beyond the reasonable control of the
Custodian, or the failure of any communications carrier, utility, or
communications network. In the event that system is inoperable, the Company
agrees that it will accept the communication of transaction instructions by
telephone, facsimile transmission on equipment compatible to the Custodian's
facsimile receiving equipment or by letter, at no additional charge to the
Company.
15. Transaction Not Requiring Instructions. The Custodian is authorized
to take the following action without Proper Instructions:
(a) Collection of Income and Other Payments. The Custodian shall:
(i) collect and receive for the account of the Company, all
income and other payments and distributions, including (without
limitation) stock dividends, rights, warrants and similar items,
included or to be included in the Property of the Company, and promptly
advise the Company of such receipt and shall credit such income, as
collected, to the Company. From time to time, the Custodian may elect
to credit, but shall not be so obligated, the account with interest,
dividends or principal payments on payable or contractual settlement
date, in anticipation of receiving same from a payor, central
depository, broker or other agent employed by the Company or the
Custodian. Any such crediting and posting shall be at the Company's
sole risk, and the Custodian shall be authorized to reverse any such
advance posting after making every reasonable attempt to collect,
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in the event it does not receive good funds from any such
payor, central depository, broker or agent of the Customer.
(ii) with respect to securities of foreign issue, effect
collection of dividends, interest and other income, and to notify the
Company of any call for redemption, offer of exchange, right of
subscription, reorganization, or other proceedings materially affecting
such securities, or any default in payments due thereon. It is
understood, however, that the Custodian shall be under no
responsibility for any failure or dealing in effecting such collections
or giving such notice with respect to securities of foreign issue,
regardless of whether or not the relevant information is published in
any financial service available to it unless such failure or delay is
due to its negligence or willful misconduct; however, this
sub-paragraph (ii) shall not be construed as creating any such
responsibility with respect to securities of non-foreign issue.
Collections of income in foreign currency are, to the extent possible,
to be converted into United States dollars unless otherwise instructed
by Proper Instructions, and in effecting such conversion the Custodian
may use such methods or agencies as it may see fit. All risk and
expenses incident to such collection and conversion is for the account
of the Company and the Custodian shall have no responsibility for
fluctuations in exchange rates affecting any such conversion.
(iii) endorse and deposit for collection in the name of the
Company, checks, drafts, or other orders for the payment of money on
the same day as received;
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(iv) receive and hold for the account of the Company all
securities received by the Company as a result of a stock dividend,
share split-up or reorganization, recapitalization, readjustment or
other rearrangement or distribution of rights or similar securities
issued with respect to any portfolio securities of the Company held by
the Custodian hereunder;
(v) present for payment and collect the amount payable upon all
securities which may mature or be called, redeemed or retired, or
otherwise become payable on the date such securities become payable;
(vi) take any action which in the opinion of the
Custodian may be necessary and proper in connection with the collection
and receipt of such income and other payments and the endorsements for
collection of checks, drafts and other negotiable instruments;
(vii) with respect to domestic securities, to exchange
securities in temporary form for securities in definitive form, to
effect an exchange of the shares where the par value of stock is
changed, and to surrender securities at maturity or when advised of
earlier call for redemption, against payment therefor in accordance
with accepted industry practice. The Company understands that the
Custodian subscribes to one or more nationally recognized services that
provide information with respect to calls for redemption of bonds or
other corporate actions. The Custodian shall not be liable for failure
to redeem any called bond or take other action if notice of such call
or action was not provided by any service to which it subscribes
provided that the Custodian shall have acted in good faith
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without negligence or willful misconduct. The Custodian shall
have no duty to notify the Company of any rights, duties, limitations,
conditions or other information set forth in any security (including
mandatory or optional put, call and similar provisions), but the
Custodian shall forward to the Company or the Investment Adviser any
notices or other documents subsequently received in regard to any such
security. When fractional shares of stock of a declaring corporation
are received as a stock distribution, unless specifically instructed to
the contrary in writing, the Custodian is authorized to sell the
fraction received and credit the Company's account. Unless specifically
instructed to the contrary in writing, the Custodian is authorized to
exchange securities in bearer form for securities in registered form.
If any Property registered in the name of a nominee of the Custodian is
called for partial redemption by the issue of such Property, the
Custodian is authorized to allot the called portion to the respective
beneficial holders of the Property in such manner deemed to be fair and
equitable by the Custodian in its sole discretion.
(b) Deposits of Proceeds of Issuance of Shares. The
Custodian shall collect and receive for the account of the Fund all payments
received in payment for shares of such Fund issued by the Company.
(c) Redemptions. Upon receipt of notice by the Fund's
transfer agent stating that such transfer agent is required to redeem shares and
specifying the number and class of shares which such transfer agent is required
to redeem and the date and time the request or requests for redemption were
received by the Fund's distributor, the Custodian
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shall either (i) pay to such transfer agent, for distribution to the redeeming
shareholder, the amount payable to such shareholder upon the redemption of such
shares as determined in the manner described in the then current Prospectus, or
(ii) arrange for the direct payment of such redemption proceeds by the Custodian
to the redeeming shareholder in accordance with such procedures and controls as
are mutually agreed upon from time to time by and among the Custodian, the
Company and the Company's transfer agent.
(d) Miscellaneous Transactions. The Custodian is authorized to deliver
or cause to be delivered Property against payment or other consideration or
written receipt therefor in the following cases:
(i) for examination by a broker selling for the account of the
Company;
(ii) for the exchange of interim receipts or temporary
securities for definitive securities;
(iii) for transfer or securities into the name of the Company
or the Custodian or a nominee of either, or for exchange of securities
for a different number of bonds, certificates, or other evidence,
representing the same aggregate face amount or number of units bearing
the same interest rate, maturity date and call provisions, if any;
provided that, in any such case, the new securities are to be delivered
to the Custodian.
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16. Transactions Requiring Instructions. Upon receipt of Proper
Instructions and not otherwise, the Custodian, directly or through the use of a
Securities Depository or the Book-Entry System, shall:
(a) Execute and deliver to such persons as may be designated in such
Proper Instructions, proxies, consents, authorizations, and any other
instruments whereby the authority of the Company as owner of any securities may
be exercised;
(b) Deliver any securities held for the Company against receipt of
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;
(c) Deliver any securities held for the Company to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization of sale of
assets of any corporation, against receipt of such certificates or deposit,
interim receipts or other instruments or documents as may be issued to it to
evidence such delivery;
(d) Make such transfers or exchanges of the assets of the Company and
take such other steps as shall be stated in said instructions to be for the
purpose of effectuating any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Company;
(e) Release securities belonging to the Company to any bank or trust
company for the purpose of pledge or hypothecation to secure any loan incurred
by the
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Company; and pay such loan upon redelivery to it of the securities pledged or
hypothecated therefore and upon surrender of the note or notes evidencing the
loan;
(f) Deliver any securities held for the Company upon the exercise of a
covered call option written by the Company on such securities;
(g) Deliver securities held for the Company pursuant to separate
security lending agreements; and
(h) Regarding dividends and distributions, the Company shall furnish
the Custodian with appropriate evidence of action by the Company's Board of
Directors declaring and authorizing the payment of any dividends and
distributions to the shareholders of the particular Fund. Upon receipt by the
Custodian of Proper Instructions with respect to dividends and distributions
declared by the Company's Board of Directors and payable to the shareholders of
the Fund who have elected in the proper manner to receive their distributions
and/or dividends in cash, and in conformance with procedures mutually agreed
upon by the Custodian, the Company, and the Company's transfer agent, the
Custodian shall pay to the Company's transfer agent, as agent for the
shareholders, an amount equal to the amount indicated in said Proper
Instructions as payable by the Company to such shareholders for distribution in
cash by the transfer agent to such shareholders. In lieu of paying the Company's
transfer agent cash dividends and distributions, the Custodian may arrange for
the direct payment of cash dividends and distributions to shareholders by the
Custodian in accordance with such procedures and controls as are mutually agreed
upon from time to time by and among the Company, the Custodian and the Company's
transfer agent.
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17. Purchase of Securities. Promptly after each purchase of securities,
the Company or the appropriate Investment Adviser shall deliver to the Custodian
(as Custodian) Proper Instructions specifying with respect to each such
purchase: (a) the name of the issuer and the title of the securities, (b) the
number of shares of the principal amount purchased and accrued interest, if any,
(c) the dates of purchase and settlement, (d) the purchase price per unit, (e)
the total amount payable upon such purchase, (f) the name of the person from
whom or the broker through whom the purchase was made and (g) the Fund for which
the purchase was made. The Custodian shall upon receipt of securities purchased
by or for the Company pay out of the moneys held for the account of Company the
total amount payable to the person from whom or the broker through whom the
purchase was made, if and only if the same conforms to the total amount payable
as set forth in such Proper Instructions.
18. Sale of Securities. Promptly after each sale of securities, the
Company or the appropriate Investment Adviser shall deliver to the Custodian
Proper Instructions, specifying with respect to each such sale: (a) the name of
the issuer and the title of the security, (b) the number of shares or principal
amount sold, and accrued interest, if any, (c) the date of sale, (d) the sale
price per unit, (e) the total amount payable to the Company upon such sale, (f)
the name of the broker through whom or the person to whom the sale was made and
(g) the Fund for which the sale was made. The Custodian shall deliver the
securities upon receipt of the total amount payable to the Company upon such
sale, if and only if the same conforms to the total amount payable as set forth
in such Proper Instructions.
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19. Records. The books and records pertaining to the Company which are
in the possession of the Custodian shall be the property of the Company. Such
books and records shall be prepared and maintained as required by the 1940 Act;
other applicable federal and state securities laws and rules and regulations;
and, any state or federal regulatory body having appropriate jurisdiction. The
Company, or the Company's authorized representative, shall have access to such
books and records at all times during the Custodian's normal business hours, and
such books and records shall be surrendered to the Company promptly upon
request. Upon reasonable request of the Company, copies of any such books and
records shall be provided by the Custodian to the Company or the Company's
authorized representative.
20. Reports. The Custodian shall furnish the Company the following
reports:
(a) such periodic and special reports as the Directors may reasonably
request;
(b) a monthly statement summarizing all transactions and entries for
the account of each Fund;
(c) a monthly report of portfolio securities belonging to each Fund
showing the adjusted amortized cost of the issues and the market value at the
end of the month;
(d) a monthly report of the cash account of each Fund showing
disbursement; and
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(e) such other information as may be agreed upon from time to time
between the Directors and the Custodian.
21. Compliance with Rule 17f-2. The Custodian shall comply with the
requirements of Rule 17f-2 under the 1940 Act and will permit access to the
Company's securities only in compliance with the requirements of Rule 17f-2.
22. Cooperation with Accountants. The Custodian shall cooperate with
the Company's independent certified public accountants and shall take all
reasonable action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such accountants for
the expression of their unqualified opinion, including but not limited to the
opinion included in the Company's semiannual report on the Company's Form N-SAR.
23. Confidentiality. The Custodian agrees on behalf of itself and its
employees to treat confidentially and as the proprietary information of the
Company all records and other information relative to the Company and its prior,
present or potential Shareholders and relative to the advisers and its prior,
present or potential customers, and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Company, which
approval shall not be unreasonably withheld and may not be withheld where the
Custodian may be exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Company. Nothing contained herein,
however, shall prohibit the Custodian from advertising or soliciting the public
generally
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with respect to other products or services, regardless of whether such
advertisement or solicitation may include prior, present or potential
shareholders of the Company provided that, in no event, will any information
obtained as custodian be used in any such solicitation or advertisement.
24. Equipment Failures. In the event of the failure of certain equipment
including but not limited to data processing equipment, telecommunications
equipment, or power generators located at the Custodian, at a designated
subcustodian or nominee, or at a third party contracted to for certain
securities processing services, the Custodian shall, at no additional expense to
the Company, take reasonable steps to minimize service interruptions but shall
not have liability with respect thereto. The Custodian shall enter into and
shall maintain in effect with appropriate parties one or more agreements making
reasonable provision for backup emergency use of electronic data processing
equipment to the extent appropriate equipment is available.
25. Right to Receive Advice.
(a) Advice of Company. If the Custodian shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall promptly receive,
clarification or advice from the Company.
(b) Advice of Counsel. If the Custodian shall be in doubt as to any
question of law involved in any action to be taken or omitted by the Custodian,
it may request advice at its own cost from counsel of its own choosing (who may
be counsel for the Company or the Custodian, at the option of the Custodian).
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(c) Conflicting Advice. In case of conflict between directions or
advice received by the Custodian pursuant to subparagraph (a) of this paragraph
and advice received by the Custodian pursuant to subparagraph (b) of this
paragraph, the Custodian shall be entitled to rely on and follow the advice
received pursuant to the latter provision alone.
(d) Protection of the Custodian. The Custodian shall be protected in
any action or inaction which it takes or omits to take in reliance on any
directions or advice received pursuant to subparagraph (a) of this section.
However, nothing in this paragraph shall be construed as imposing upon the
Custodian any obligation (i) to seek directions or advice, or (ii) to act in
accordance with such directions or advice when received. Nothing in this
subparagraph shall excuse the Custodian when an action or omission on the part
of the Custodian constitutes willful misfeasance or negligence by the Custodian
or reckless disregard of its duties under this Agreement.
26. Compliance with Governmental Rules and Regulations. The Company
assumes full responsibility for insuring that the contents of each Prospectus of
the Company complies with all applicable requirements of the 1933 Act, the 1940
Act, and any laws, rules and regulations of governmental authorities having
jurisdiction.
27. Compensation. As compensation for the services described within
this agreement and rendered by the Custodian during the term of this Agreement,
the Company shall pay to Custodian the fees provided on Attachment B hereto, as
it may be amended from time to time. In addition, the Company agrees to
reimburse the Custodian
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for any out-of-pocket expenses described in Attachment B to this Agreement,
incurred in providing the services contained within this Agreement.
28. Indemnification. The Company, on behalf of each Fund individually
and not jointly, as sole owner of the Property, agrees, to the extent permitted
by applicable law, to indemnify and hold harmless the Custodian and its nominees
from all taxes, charges, expenses, assessments, claims, and liabilities
(including, without limitation, liabilities arising under the 1933 Act, the
Securities Exchange Act of 1934, the 1940 Act, and any state and foreign
securities and blue sky laws, all as or to be amended from time to time) and
expenses, including (without limitation) reasonable attorney's fees and
disbursements, arising directly or indirectly: (a) from the fact that securities
included in the Property are registered in the name of any such nominee; or (b)
without limiting the generality of the foregoing clause (a), from any action or
thing which the Custodian takes or does or omits to take or do (i) at the
request or on the direction of or in reliance on the advice of the Company given
in accordance with the terms of this Agreement, or (ii) upon Proper
Instructions; provided, that neither the Custodian nor any of its nominees or
subcustodian shall be indemnified against any liability to the Company or to its
Shareholders (or any expenses incident to such liability): (x) arising out of
the Custodian's or such nominee's or subcustodian's own willful misfeasance or
negligence or reckless disregard of its duties under this Agreement or any
material breach of any agreement between the Custodian and any nominee or
subcustodian, or (y) constituting any incidental or consequential damages. In
the event of any advance of cash for any purpose made by the Custodian resulting
from Proper Instructions of the Company, or in
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the event that the Custodian or its nominee or subcustodian shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's or subcustodian's own negligence or willful misfeasance,
the Company shall promptly reimburse the Custodian for such advance of cash or
such taxes, charges, expenses, assessments, claims or liabilities.
29. Notice of Litigation, Right to Prosecute. The Custodian shall
promptly inform the Company in writing of the commencement of any litigation or
proceeding in respect of which indemnity may be sought under the above Paragraph
28. The Company shall be entitled to participate in any such litigation or
proceeding and, after written notice from the Company to the Custodian, the
Company may assume the defense of such litigation or proceeding with counsel of
its choice at its own expense. The Custodian shall not consent to the entry of
any judgment or enter into any settlement in any such litigation or proceeding
without providing the Company with adequate notice of any such settlement or
judgment. The Custodian shall submit written evidence to the Company with
respect to any cost or expense for which it is seeking indemnification in such
form and detail as the Company may reasonably request.
30. Company's Right to Proceed. Notwithstanding anything to the
contrary contained herein, the Company shall have, at its election upon
reasonable notice to the Custodian, the right to enforce, to the extent
permitted by any applicable agreement and applicable law, the Custodian's rights
against any subcustodian or Securities Depository for loss, damage or expense
caused the Custodian or the Company by such
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subcustodian or Securities Depository and shall be entitled to enforce the
rights of the Custodian with respect to any claim against such subcustodian or
Securities Depository which the Custodian may have as a consequence of such
loss, damage or expense, if and to the extent that the Company has not been made
whole for any such loss or damage. The Custodian agrees to cooperate with the
Company and take all actions reasonably requested by the Company in connection
with the Company's enforcement of any rights of the Custodian. The Company
agrees to reimburse the Custodian for all reasonable out-of-pocket expenses
incurred by the Custodian in connection with the fulfillment of its obligations
as long as the Custodian has not otherwise breached the terms of this Agreement.
31. Responsibility of the Custodian. The Custodian shall not be
required to take any action except as specifically set forth herein. The
Custodian shall be responsible for its own negligent failure or that of any
subcustodian it shall appoint to perform its duties under this Agreement.
Without limiting the generality of the foregoing or of any other provision of
this Agreement, the Custodian in connection with its duties under this
Agreement shall not be under any duty or obligation to inquire into and shall
not be liable for or in respect of (a) the validity or invalidity or authority
or lack thereof of any advice, direction, notice or other instrument which
conforms to the applicable requirements of this Agreement, if any, and which
the Custodian believes to be genuine, (b) the validity of the issue of any
securities purchased or sold by the Company, the legality of the purchase or
sale thereof or the propriety of the amount paid or received therefore, (c) the
legality of the issue or sale of any shares, or the sufficiency of the
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amount to be received therefor, (d) the legality of the redemption of any
shares, or the propriety of the amount to be paid therefore, (e) the legality of
the declaration or payment of any dividend or distribution on shares, or (f)
delays or errors or loss of data occurring by reason of circumstances beyond the
Custodian's control, including acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdown (except as provided
in Paragraph 24), flood or catastrophe, acts of God, insurrection, war, riots,
or failure of the mail, transportation, communication or power supply. In no
event will the Custodian be liable for special, indirect or consequential
damages or lost profits or loss of business, which may be suffered by the Trust
or any third party, even if previously informed of the possibility of such
damages.
32. Collection. All collections of monies or other property in respect,
or which are to become part, of the Property (but not the safekeeping thereof
upon receipt by the Custodian) shall be at the sole risk of the Company. In any
case in which the Custodian does not receive any payment due the Company within
a reasonable time after the Custodian has made proper demands for the same, it
shall so notify the Company in writing, including copies of all demand letters,
any written responses thereto, and memoranda of all oral responses thereto, and
to telephonic demands, and await instructions from the Company. The Custodian
shall not be obliged to take legal action for collection unless and until
reasonably indemnified to its satisfaction. The Custodian shall also notify the
Company as soon as reasonably practicable whenever income due on securities is
not collected in due course.
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33. Duration and Termination. This Agreement shall be effective as of
the date hereof and shall continue until termination by the Company or by the
Custodian on 60 days' written notice. Upon any termination of this Agreement,
pending appointment of a successor to the Custodian or a vote of the
shareholders of the Company to dissolve or to function without a custodian of
its cash, securities or other property, the Custodian shall not deliver cash,
securities or other property of the Company to the Company, but may deliver them
to a bank or trust company designated by the Company or, failing that, to a bank
or trust company of the Custodian's selection, having aggregate capital, surplus
and undivided profits, as shown by its last published report of not less than
twenty million dollars ($20,000,000) as a successor custodian for the Company to
be held under terms similar to those of this Agreement, provided however, that
the Custodian shall not be required to make any such delivery or payment until
full payment shall have been made by the Company of all liabilities constituting
a charge on or against the properties then held by the Custodian or on or
against the Custodian and until full payment shall have been made to the
Custodian of all of its fee, compensation, costs and expenses, subject to the
provisions of Paragraph 26 of this Agreement. The termination by the Company of
a particular series or Fund within the Company that does not result in the
closure of the Company does not constitute termination of this Agreement.
34. Notices. Notices shall be addressed,
If to the Company: Xxxxx X. Xxxxx, Secretary
SBSF Funds, Inc.
c/o Bisys Investment Services Group
0000 Xxxx Xxxxxx-Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
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Copies to:
Xxxxxxxx X. Xxxxxx
Senior Vice President
KeyCorp Mutual Funds Group
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000-0000
Xxxxxxx X. Xxxxxx
Vice President and General Counsel
Spears, Benzak, Salomon & Xxxxxxx, Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
If to the Custodian: Key Trust Company of Ohio, N.A.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Division Head
Master Trust Division
or, if the address is to neither of the foregoing, at such other address as
shall have been notified to the sender of any such Notice or other
communication. If the location of the sender of a Notice and the address of the
addressee thereof are, at the time of sending, more than 100 miles apart, the
Notice may be sent by first-class mail, in which case it shall be deemed to have
been given three days after it is sent, or if sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been
given immediately, and, if the location of the sender of a Notice and the
address of the addressee thereof are, at the time of sending, not more than 100
miles apart, the Notice may be sent by first-class mail, in which case it shall
be deemed to have been given two days after it is sent, or if sent by messenger,
it shall be deemed to have been given on the day it is delivered, or if sent by
confirming telegram, cable, telex or facsimile sending device, it shall be
deemed to have been given immediately. All postage, cable, telegram, telex and
facsimile sending device charges arising from the sending of a Notice hereunder
shall be paid by the sender.
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35. Application of Agreement to Funds Individually, not Jointly. The
Company has entered into this Agreement on behalf of each Fund listed on
Attachment A individually, and not jointly. The rights and obligations of the
Company described in this Agreement apply to each individual Fund. No Fund shall
have any liability for any costs or expenses incurred by any other Fund. In
seeking to enforce a claim against any Fund, the Custodian shall look to the
assets only of that Fund and not to the assets of any other Fund.
36. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
37. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
38. Miscellaneous. This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the parties hereto. The captions in this
Agreement are included for convenience of reference only and in no way to define
or delimit any of the provisions hereof or otherwise affect their construction
or effect. This Agreement shall be deemed to be a contract made in New York and
governed by New York law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall not be
assigned by either party without the prior written consent of the other party,
but shall be
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binding upon and shall inure to the benefit of the parties hereto and their
respective successors.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below as of the day and
year first above written.
KEY TRUST COMPANY OF OHIO, N.A.
Attest: /s/ X.X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
Name: X.X. XXXXXXXX Name: XXXXXXX X. XXXXXXXX
Title: Vice President Title: Vice President
By: /s/ Meg. X. Xxxxxxxx
Name: XXX X. XXXXXXXX
Title: Trust Officer
SBSF FUNDS, INC., on behalf
each Fund listed on Attachment A,
individually and not jointly
Attest: ______________________ By: /s/ Xxxxx X. Xxxxxx
Name: Name: XXXXX X. XXXXXX
Title: Title: President
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ATTACHMENT A
NAME OF FUND
1. SBSF Fund
2. Convertible Securities Fund
3. Capital Growth Fund
4. Money Market Fund
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ATTACHMENT B
CUSTODY SERVICE FEES
For the services as described in this Agreement, each Fund of the Company listed
on Attachment A hereto shall pay a custody safekeeping fee and custody
transaction fees as follows:
DOMESTIC CUSTODY SAFEKEEPING FEES
.018% (1.8 Basis Points) on the assets of the Funds
DOMESTIC CUSTODY TRANSACTION FEES
$15.00 per DTC or Fed Book Entry transaction
$25.00 per physical transaction
$40.00 per future or option wire
$15.00 per Government Paydown
$ 8.00 per wire transfer
37
