EXHIBIT 8
CUSTODIAN AGREEMENT
THIS AGREEMENT made on August __, 1989, between THE PRIMARY
INCOME FUNDS, INC., a Wisconsin corporation (hereinafter called the
"Corporation"), and FIRST WISCONSIN TRUST COMPANY, a corporation organized
under the laws of the State of Wisconsin (hereinafter called "Custodian"),
W I T N E S S E T H :
WHEREAS, the Corporation is in the process of registering with
the Securities and Exchange Commission under the Investment Company Act of
1940 as an open-end management investment company comprising a series of
three mutual funds, The Primary Income Fund, The Primary Money Market Fund
and The Primary U.S. Government Fund (collectively the "Funds"); and
WHEREAS, the Corporation desires that the securities and cash of
each of the Funds shall be hereafter held and administered separately by
Custodian pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
made, the Corporation and Custodian agree as follows:
1. Definitions
The word "securities" as used herein include stocks, shares,
bonds, debentures, notes, mortgages or other obligations and any
certificates, receipts, warrants or other instruments representing rights
to receive, purchase or subscribe for the same, or evidencing or
representing any other rights or interests therein, or in any property or
assets.
The words "officers' certificate" shall mean a request or
direction or certification in writing signed in the name of the
Corporation by any two of the President, a Vice President, the Secretary
and the Treasurer of the Corporation, or any other persons duly authorized
to sign by the Board of Directors of the Corporation.
2. Names, Titles and Signatures of Corporation's Officers
An officer of the Corporation will certify to Custodian the
names and signatures of those persons authorized to sign the officers'
certificates described in Section 1 hereof, and the names of the members
of the Board of Directors, together with any changes which may occur from
time to time.
3. Receipt and Disbursement of Money
A. Custodian shall open and maintain a separate account or
accounts in the name of each of the Funds, subject only to draft or order
by Custodian acting pursuant to the terms of this Agreement. Custodian
shall hold in such account or accounts, subject to the provisions hereof,
all cash received by it from or for the account of the relevant Fund.
Custodian shall make payments of cash to, or for the account of, a Fund
from such cash only (a) for the purchase of securities for the portfolio
of such Fund upon the delivery of such securities to Custodian, registered
in the name of the Corporation or of the nominee of Custodian referred to
in Section 7 or in proper form for transfer, (b) for the purchase or
redemption of shares of such Fund upon delivery thereof to Custodian, (c)
for the payment of interest, dividends, taxes, investment adviser's fees
or operating expenses (including, without limitation thereto, fees for
legal, accounting, auditing and custodian services and expenses for
printing and postage), (d) for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed to by such Fund
held by or to be delivered to Custodian, or (e) for other proper corporate
purposes certified by resolution of the Board of Directors of the
Corporation. Before making any such payment Custodian shall receive (and
may rely upon) an officers' certificate requesting such payment and
stating that it is for a purpose permitted under the terms of items (a),
(b), (c) or (d) of this Subsection A, and also, in respect of item (e),
upon receipt of an officers' certificate specifying the amount of such
payment, setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper corporate purpose, and naming the
person or persons to whom such payment is to be made; provided, however,
that an officers' certificate need not precede the disbursement of cash
for the purpose of purchasing a money market instrument if the President,
a Vice President, the Secretary or the Treasurer of the Corporation issues
appropriate oral instructions to Custodian and an appropriate officers'
certificate is received by Custodian within two business days thereafter.
B. Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received by
Custodian for the account of any Fund.
4. Receipt of Securities
Custodian shall hold in a separate account, and physically
segregated at all times from those of any other Fund, person, firm or
corporation, pursuant to the provisions hereof, all securities received by
it from or for the account of the applicable Fund. All such securities
are to be held or disposed of by Custodian for, and subject at all times
to the instructions of, the Corporation pursuant to the terms of this
Agreement. The Custodian shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such securities and
investments, except pursuant to the direction of the Corporation and only
for the account of the appropriate Fund as set forth in Section 5 of this
Agreement.
5. Transfer, Exchange, Redelivery, etc. of Securities
Custodian shall have sole power to release or deliver any
securities of any Fund held by it pursuant to this Agreement. Custodian
agrees to transfer, exchange or deliver securities held by it hereunder
only (a) for sales of such securities for the account of the applicable
Fund upon receipt by Custodian of payment therefor, (b) when such
securities are called, redeemed or retired or otherwise become payable,
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom, (d) in exchange for, or upon
conversion into, other securities alone or other securities and cash
whether pursuant to any plan of merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise, (e) upon conversion of
such securities pursuant to their terms into other securities, (f) upon
exercise of subscription, purchase or other similar rights represented by
such securities, (g) for the purpose of exchanging interim receipts or
temporary securities for definitive securities, (h) for the purpose of
redeeming in kind shares of such Fund upon delivery thereof to Custodian,
or (i) for other proper corporate purposes. As to any deliveries made by
Custodian pursuant to items (a), (b), (d), (e), (f) and (g), securities or
cash receivable in exchange therefor shall be deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian shall
receive (and may rely upon) an officers' certificate requesting such
transfer, exchange or delivery, and stating that it is for a purpose
permitted under the terms of items (a), (b), (c), (d), (e), (f), (g) or
(h) of this Section 5 and also, in respect of item (i), upon receipt of an
officers' certificate specifying the securities to be delivered, setting
forth the purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or persons
to whom delivery of such securities shall be made; provided, however, that
an officers' certificate need not precede any such transfer, exchange or
delivery of a money market instrument if the President, a Vice President,
the Secretary or the Treasurer of the Corporation issues appropriate oral
instructions to Custodian and an appropriate officers' certificate is
received by Custodian within two business days thereafter.
6. Custodian's Acts Without Instructions
Unless and until Custodian receives an officers' certificate to
the contrary, Custodian shall: (a) present for payment all coupons and
other income items held by it for the account of any Fund which call for
payment upon presentation and hold the cash received by it upon such
payment for the account of the Corporation; (b) collect interest and cash
dividends received, with notice to the applicable Fund, for the account of
such Fund; (c) hold for the account of such Fund hereunder all stock
dividends, rights and similar securities issued with respect to any
securities held by it hereunder; and (d) execute as agent on behalf of the
applicable Fund all necessary ownership certificates required by the
Internal Revenue Code or the Income Tax Regulations of the United States
Treasury Department or under the laws of any state now or hereafter in
effect, inserting the Corporation's name on such certificates as the owner
of the securities covered thereby, to the extent it may lawfully do so.
7. Registration of Securities
Except as otherwise directed by an officers' certificate,
Custodian shall register all securities, except such as are in bearer
form, in the name of a registered nominee of Custodian as defined in the
Internal Revenue Code and any Regulations of the Treasury Department
issued hereunder or in any provision of any subsequent Federal tax law
exempting such transaction from liability for stock transfer taxes, and
shall execute and deliver all such certificates in connection therewith as
may be required by such laws or regulations or under the laws of any
state. Custodian shall use its best efforts to the end that the specific
securities held by it hereunder shall be at all times identifiable in its
records.
The Corporation shall from time to time furnish to Custodian
appropriate instruments to enable Custodian to hold or deliver in proper
form for transfer, or to register in the name of its registered nominee,
any securities which it may hold for the account of any Fund and which may
from time to time be registered in the name of the Corporation.
8. Voting and Other Action
Neither Custodian nor any nominee of Custodian shall vote any of
the securities held hereunder by or for the account of a particular Fund,
except in accordance with the instructions contained in an officers'
certificate. Custodian shall deliver, or cause to be executed and
delivered, to the Corporation all notices, proxies and proxy soliciting
materials with relation to such securities, such proxies to be executed by
the registered holder of such securities (if registered otherwise than in
the name of the Corporation), but without indicating the manner in which
such proxies are to be voted.
9. Transfer Tax and Other Disbursements
The applicable Fund shall pay or reimburse Custodian from time
to time for any transfer taxes payable upon transfers of securities made
hereunder for such Fund's account, and for all other necessary and proper
disbursements and expenses made or incurred by Custodian in the
performance of this Agreement with respect to such Fund.
Custodian shall execute and deliver such certificates in
connection with securities delivered to it or by it under this Agreement
as may be required under the provisions of the Internal Revenue Code and
any Regulations of the Treasury Department issued thereunder, or under the
laws of any state, to exempt from taxation any exemptable transfers and/or
deliveries of any such securities.
10. Concerning Custodian
Custodian shall be paid as compensation for its services
pursuant to this Agreement such compensation as may from time to time be
agreed upon in writing between the Custodian and the Corporation. Until
modified in writing such compensation shall be as set forth in Exhibit A
attached hereto.
Custodian shall not be liable for any action taken in good faith
upon any certificate herein described or certified copy of any resolution
of the Board of Directors, and may rely on the genuineness of any such
document which it may in good faith believe to have been validly executed.
The Corporation agrees to indemnify and hold harmless Custodian
and its nominee from all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) incurred or assessed against it or by
its nominee in connection with the performance of this Agreement, except
such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct. Custodian is authorized to
charge the account of any Fund for such items. In the event of any
advance of cash for any purpose made by Custodian resulting from orders or
instructions of the Corporation, or in the event that Custodian or its
nominee shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of
this Agreement, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any
property at any time held for the account of the Corporation shall be
security therefor.
11. Subcustodians
Custodian is hereby authorized to engage another bank or trust
company as a Subcustodian for all or any part of the assets of any Fund,
so long as any such bank or trust company is a bank or trust company
organized under the laws of any state of the United States, having an
aggregate capital, surplus and undivided profit, as shown by its last
published report, of not less than Two Million Dollars ($2,000,000) and
provided that, if the Custodian utilizes the services of a Subcustodian,
the Custodian shall remain fully liable and responsible for any losses
caused to the applicable Fund by the Subcustodian as fully as if the
Custodian was directly responsible for any such losses under the terms of
this Agreement.
Notwithstanding anything contained herein, if any of the Funds
requires the Custodian to engage specific Subcustodians for the
safekeeping and/or clearing of assets, such Fund agrees to indemnify and
hold harmless Custodian from all claims, expenses and liabilities incurred
or assessed against it in connection with the use of such Subcustodian in
regard to such Fund's assets, except as may arise from its own negligent
action, negligent failure to act or willful misconduct.
12. Reports by Custodian
Custodian shall furnish each Fund weekly with a statement
summarizing all transactions and entries for the account of such Fund.
Custodian shall furnish each Fund at the end of every month with a list of
the portfolio securities showing the aggregate cost of each issue.
Custodian shall furnish each Fund, at the close of each quarter of the
Corporation's fiscal year, with a list showing the cost of the securities
held by it for such Fund hereunder, adjusted for all commitments confirmed
by the Corporation as of such close, certified by a duly authorized
officer of Custodian. The books and records of Custodian pertaining to
its actions under this Agreement shall be open to inspection and audit at
reasonable times by officers of, and of auditors employed by, the
Corporation.
13. Termination or Assignment
This Agreement may be terminated by the Corporation, or by
Custodian, on sixty days' notice, given in writing and sent by registered
mail to Custodian at P. O. Xxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000, or to the
Corporation at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, as the
case may be. Upon any termination of this Agreement, pending appointment
of a successor to Custodian or a vote of the shareholders of any Fund to
dissolve or to function without a custodian of its cash, securities and
other property, Custodian shall not deliver cash, securities or other
property of such Fund to the Corporation, but may deliver them to a bank
or trust company in the City of Milwaukee of its own selection, having an
aggregate capital, surplus and undivided profits, as shown by its last
published report, of not less than Two Million Dollars ($2,000,000) as a
custodian for the Corporation to be held under terms similar to those of
this Agreement; provided, however, that Custodian shall not be required to
make any such delivery or payment until full payment shall have been made
by the Corporation of all liabilities constituting a charge on or against
the properties then held by Custodian or on or against Custodian, and
until full payment shall have been made to Custodian of all its fees,
compensation, costs and expenses, subject to the provisions of Section 10
of this Agreement.
This Agreement may not be assigned by Custodian without the
consent of the Corporation, authorized or approved by a resolution of its
Board of Directors.
14. Deposits of Securities in Securities Depositories
No provision of this Agreement shall be deemed to prevent the
use by Custodian of a central securities clearing agency or securities
depository; provided, however, that Custodian and the central securities
clearing agency or securities depository meet all applicable federal and
state laws and regulations and the Board of Directors of the Corporation
approves by resolution the use of such central securities clearing agency
or securities depository.
15. Records
To the extent that Custodian in any capacity prepares or
maintains any records required to be maintained and preserved by the
Corporation pursuant to the provisions of the Investment Company Act of
1940, as amended, or the rules and regulations promulqated thereunder,
Custodian agrees to make any such records available to the Corporation
upon request and to preserve such records for the periods prescribed
in Rule 3la-2 under the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and their respective corporate seals to be
affixed hereto as of the date first above written by their respective
officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
Attest: FIRST WISCONSIN TRUST COMPANY
_______________________ By ____________________________
Attest: THE PRIMARY INCOME FUNDS, INC.
_______________________ By ____________________________
