CUSTODY AGREEMENT
This agreement made this 30th day of January, 1998 between Xxxxxx Funds, Inc.
currently consisting of the Xxxxxx Value Fund (hereinafter called
"Customer") and CoreStates Bank, N.A. (hereinafter called "Agent").
WITNESSETH:
1. Appointment of Agent
Customer hereby appoints Agent as its agent and custodian, and Agent hereby
accepts such appointment and agrees to act as agent and custodian on the
terms hereinafter specified.
2. Custody of Assets
Agent shall act as custodian of all cash, securities, evidences of indebted-
ness and other property, including all income thereon and proceeds from the
sale or maturity thereof (collectively, the "Assets") from time to time
delivered to or received by it for Customer. The Assets shall be held in the
appropriate custodial account established from time to time upon Customer's
written request and shall be segregated at all times (except for cash and
Assets held in book form which shall be appropriately designated as
property of Customer) from the securities and property of any other person
or entity. If any of the assets are securities eligible for deposit in a
central depository system, Agent is hereby authorized to deposit those
securities in that system.
3. Reports
Agent shall forward or cause to be forwarded to Customer any financial reports,
proxy statements, tender offers or other materials received by it with respect
to Assets registered in the name of the Nominees. Agent shall promptly
forward or cause to be forwarded to Customer all proxies with respect to such
Assets excecuted in blank by the appropriate Nominees together with all
pertinent information and documents received by agent in connection with
such proxies.
4. Income of Assets
Agent will collect the income and after deducting any charges and expenses,
remit the net income to the Customer or reinvest the income or transfer the
net income to principal periodically in accordance with the Customer's
instructions.
(a) Unless otherwise instructed in writing, Agent shall retain in the
appropriate account of Customer any stock dividends, subscription rights
and other non-cash distributions on the Assets, or the proceeds from the
sale of any distributions.
(b) Agent or its Nominee is hereby authorized to sign any declarations,
endorsements, affidavits, certificates of ownership or other documents
which may be required with respect to all coupons, registered interest,
dividends or other income on the Assets.
5. Purchases and Sales of Assets
Agent shall promptly effect purchases and sales of the Assets in accordance
with Customer's instructions from time to time, and shall take all steps
necessary or advisable to collect the proceeds of any Assets which are
sold, redeemed or which have matured and shall promptly deposit said
proceeds in the appropriate account designated by Customer from time to
time, provided that Agent shall not be responsible for the collection of
Assets called for redemption or otherwise payable (other than by reason
of sale or other disposition by Agent) unless notice thereof is published
in national financial reporting services to which Agent subscribes, or
notice is otherwise received by Agent. Agent shall not be under any duty
to advise or recommend any sales or purchases of Assets for Customer's
account.
6. Limitation of Liability; Responsibilities
(a) Agent shall not be liable for any loss or damage suffered by Customer as
the result of any act or omission of any broker or other agent engaged by
Customer in effecting purchases, sales or exchanges of Assets except to
the extent of any liability caused by (1) the negligent, reckless or willful
conduct of Agent or its subagent or subcustodian, or (ii) the failure of
Agent or its subagent or subcustodian to perform any act required in this
Agreement. Agent shall not be liable for loss or damage caused directly
or indirectly by invasion, insurrection, riot, war, nuclear disaster,
order of civil authority or any other causes beyond its control.
(b) Agent shall not be responsible to file any tax returns or pay any
taxes due in connection with the Assets held hereunder and the income
therefrom.
(c) Agent shall be under no obligation to advise the Customer of due or
tender dates for those Assets which have tender options attached to,
stamped on, or incorporated in the Asset itself.
7. Statements
Agent shall deliver to Customer a monthly statement of all accounts main-
tained hereunder showing all receipts, disbursements and other transactions
affecting the Assets during the preceding month and a statement of the
cost and market value of each of the Assets at the end of the preceding
month. The scope, content and frequency of the statements required
hereunder may be changed from time to time upon the mutual written agreement
of the parties hereto.
8. Withdrawal of Assets
(a) Any securities and evidences of indebtedness included in the Assets may
be withdrawn from Agent in accordance with Customer's Instructions; provided,
however, that except as provided below, such Instructions shall direct that
the delivery of any such securities and evidence of indebtedness by Agent
shall be made only to (I) a bank shown in Exhibit 1, or its Nominee, (ii)
a broker, shown in Exhibit 1, or its Nominee, (iii) in the case of
commercial paper, to the obligor upon payment. In the event the Instructions
direct the delivery of Assets to any person or entity other than as set
forth above, such Instructions shall be in writing and countersigned by
a President, Vice President, Secretary or Treasurer of Customer or otherwise
be authorized pursuant to a resolution duly adopted and provided to
Agent in accordance with paragraph 10(c) below.
(b) Upon receipt of such Instructions and subject to the terms and conditions
thereof, Agent shall deliver the items specified therein to the person or
entity designated and shall obtain a proper receipt therefore.
(c) In connection with the sale of any Assets, Agent shall make delivery of
such Assets only against payment therefore, in federal funds or by certified
check or bank cashier's check, provided that, consistent with customary
practice at the place of delivery, Agent may (i) make delivery for inspection
prior to sale at buyer's location, upon delivery to Agent of a proper receipt
therefore, to a member of registered national securities exchange or bank
or trust company. In no event shall Agent be liable hereunder for not
delivering Assets in accordance with Customer's Instructions where such
delivery is withheld by reason of the purchaser's inability or unwillingness
to make a payment therefore in federal funds or by certified or bank
cashier's check or as otherwise provided in this paragraph 8(c).
(d) Any cash included in the Assets may be withdrawn from Agent in accordance
with written Instructions provided, however, that subject to a transfer
or other disposition of securities by bookkeeping entry in connection with
Agent's participation (through its agent) the Federal Reserve/Treasury
book-entry system, Agent shall make payments of cash to, or from the
account of, Customer only (I) upon the purchase of securities or other
Assets and delivery of such securities or other Assets to Agent in proper
form for transfer, (ii) to Customer's account with CoreStates Bank, N.A.
or with such other bank as Customer may designate by written Instructions
from time to time, (iii) for the payment of Agent's expenses and fees
authorized in this Agreement; (iv) for payments in connection with the
conversion, exchange or surrender of securities included in the Assets;
or (v) for other proper purposes. In making any cash payments, Agent shall
first receive Instructions requesting such payment and stating the purpose
therefore, and in the case of a payment under clause (v) above, such
Instructions shall, except as otherwise authorized pursuant to a resolution
duly adopted by the Customer or provided to Agent in accordance with
paragraph 10(c) below, be in writing and shall be countersigned by the
President, Vice President, Secretary or Treasurer of Customer.
(e) Agent shall promptly notify the Treasurer of the Customer of all
withdrawals from or deliveries to Agent for Customer's account hereunder.
9. Indemnity
With respect to any Assets received by Agent and registered in the name
of Agent or Agent's subagent or subcustodian or nominee or held on behalf of
Customer in Book Entry at a central depository system, Agent shall be
fully responsible and liable for and shall indemnify and hold Customer
harmless against any loss, damage or expense (including attorney's fees
and amonts paid with Agent's consent in settlement of any claim or action)
which Customer may sustain resulting from (I) any act of Agent, its subagent
or subcustodian or nominee, or any employee or other agent of any
of them which has not been authoirzed hereunder, or (ii) any failure by
Agent, or its subagent or subcustodian or nominee, to perform any of its
obligations under this Agreement. Except with respect to the extent same
may result, directly or indirectly from any negligent act or omission or
willful or reckless misconduct of Agent, its subagent or subcustodian or
nominee, or any employee or other agent or any of them or any failure of
Agent or its subagent or subcustodian or nominee, to perform any of Agent's
obligations under this Agreement, Customer shall indemnify and hold Agent
or any subagent, subcustodian or nominee harmless against any loss, damage
or expense (including attorney's fees and amounts paid, with Customer's
consent, in settlement of any claim or action) which Agent or any subagent
subcustodian or nominee may sustain resulting from its performance in
accordance with this Agreement.
10. Instructions, Notices and Authorized Persons
(a) As used in this Agreement, the term "Instructions" or "Instructed"
means a request or order given or delivered to Agent by the President,
Vice President, Secretary Treasurer, or a duly appointed investment
advisor or Customer. Unless specifically required herein to be in writing,
Instructions may be oral or written; provided, that any oral Instructions
shall be promptly confirmed in writing. Failure to provide a written
confirmation of oral Instruction shall not validate any such Instructions.
(b) Any notices, confirmations and receipts required hereunder to be
delivered by Agent to Customer, unless otherwise specifically provided,
shall be delivered by Agent to the Treasurer of Customer.
(c) Customer will from time to time file with Agent a certified copy of a
Corporate Resolution authorizing person or persons to give proper instructions
and specifying the class of instructions that may be given by each person
to Agent under this Agreement.
(d) Agent may rely and shall be protected in acting upon any oral or written
(including telegraph and other mechanical) instructions, request, letter
of transmittal, certificate, opinion of counsel, statement, instrument,
report, notice, consent, order or other paper or document reasonably
believed by it to be genuine and to have been signed, forwarded, or
presented by Customer.
11. Fees and Expenses
As compensation for its services under this Agreement, Agent may retain
those fees which are specified in its published or otherwise generally
applicable fee schedule in effect at the time its services are being
rendered. Customer recognizes that his schedule might be changed from
time to time with prior notice to Customer.
Asset Administration Fee: 1 basis point on the first $2.5 billion of
average, daily market value
Transaction Fees: $4.00 per book entry trade
$10.00 per trade & maturity of Federal Reserve Bank
$30.00 per physical trade
$10.00 per trade & maturity through PTC
$ 4.00 per pay down on martgage backed security
$ 5.50 per repurchase collateral (in/out)
$ 7.50 per wire transfer
$ 5.50 per dividend reinvestment
$ 2.50 pass through for Federal Reserve Bank
$ 8.00 per futures contract
$15.00 per option contract
Minimum Annual Fee: $2,500
12. Amendments or Termination
This agreement contains the entire understanding between Customer and Agent
concerning the subject matter of this Agreement, supersedes all other
Custody Agreements of dates previous and may be amended only in writing
signed by both parties. No term or provision of this agreement may be modified
or waived unless in writing and signed by the party against whom such waiver or
modification is sought to enforce. Either party's failure to insist at any time
upon strict compliance with is Agreement or with any of the terms hereunder,
or any continued course of such conduct on the part of either party shall
in no event constitute or be considered a waiver by either party of any
of its rights hereunder. This Agreement may be terminated at any time
provided such effective time shall be not less than 30 days from the date
of written notice of termination.
13. Applicable Law
The Agent represents that it has all the necessary power and authority to
perform its obligations under this Agreement, that the excecution and
delivery by it of this Agreement and the performance by it of its
obligations hereunder have been duly authorized by all necessary action
and will not violate any law, regulation or other restriction or
provision applicable to it or by which it is bound, and that this Agreement
constitues a legal, valid and binding obligation enforceable against Agent
in accordance with its terms. This agreement shall be interpreted and
enforced in accordance with the laws of the Commonwealth of Pennsylvania.
Attest:__________________________ /s/ Xxxxxxx X Xxxxxx
President Xxxxxx Funds, Inc.
Attest:__________________________ /s/ Xxxx Xxxxxx
Vice President CoreStates Bank