1
Exhibit (8)
CUSTODIAN AGREEMENT
THIS CUSTODIAN AGREEMENT is made effective as of April 30, 1997,
between CADRE NETWORK HEALTH FINANCIAL SERVICES TRUST, a California trust (the
"Trust"), on behalf of its portfolio known as Cadre Network Health Financial
Services Liquid Asset Fund (the "Fund"), and FIRST TRUST NATIONAL ASSOCIATION, a
national banking association (the "Custodian").
The Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), authorized to establish several series of portfolios,
each having its own investment policies, the first of which is the
Fund; and
The Trust has appointed CADRE FINANCIAL SERVICES, INC. as
investment advisor and manager, transfer, dividend disbursing agent and
shareholder servicing agent for the Fund; and
The Trust desires to retain the Custodian to hold and
administer the Fund's securities, cash and other assets ("Property")
pursuant to the terms of this Agreement, as it way be amended from time
to time, and the Custodian desires to provide such services to the
Trust and the Fund.
In consideration of the mutual agreements contained herein, the Trust
and the Custodian agree as follows:
SECTION 1
EMPLOYMENT OF CUSTODIAN
The Trust hereby employs Custodian as the custodian of the Fund's
Property. The Trust agrees to deliver to Custodian all Securities owned by the
Fund, and all payments of income, payments of principal or capital distributions
received by it from time to time with respect to all such Securities, and the
cash consideration received by it for such shares of the Fund ("Shares") as may
be issued or sold from time to time. Custodian shall not be responsible for any
Property of the Fund held or received by the Trust or the Fund and not delivered
to Custodian.
Upon receipt of Written Orders, Custodian shall from time to time
employ one or more sub-custodians, but only in accordance with an applicable
vote by the Board of Trustees of the Trust, and provided that Custodian shall
have no more or less responsibility or liability to the Trust on account of any
actions or omissions of any sub-custodian so employed than such sub-custodian
has to Custodian.
2
SECTION 2
DEFINITIONS
As used in this Agreement, the following terms have the following
meanings, which apply to both the singular and plural forms of the terms
defined:
"Government Issues" means securities issued or guaranteed by the United
States, its agencies or instrumentalities.
"Investment Advisor" means Cadre Financial Services, Inc. or any
successor investment advisor appointed by the Trust; provided, however, that
Trust shall notify the Custodian of the identity of any successor investment
advisor pursuant to a Written Order, and the Custodian shall be entitled to rely
on the directions of any appointed investment advisor until notified of the
investment advisor's removal pursuant to a Written Order from the Trust.
"Money Market Instruments" means instruments generally identified as
money market instruments, including but not limited to bankers' acceptances,
certificates of deposit, fixed time deposits and letters of credit issued by
banks and savings institutions, and commercial paper issued by corporations.
"Receipt of Payment by Custodian," or words to that effect, means
either the receipt of (a) a certified or official bank check, (b) a written or
telegraphic advice from a bank, registered clearing agency or a Federal Reserve
Bank that funds have been or will be credited to the account of Custodian at
either the registered clearing agency or the Federal Reserve Bank, or (c) a bank
wire from a correspondent bank of Custodian.
"Receipt of Securities by Custodian," or words to that effect, means
the receipt by Custodian of (a) Securities in bearer from or in proper form for
transfer or (b) a written or telegraphic advice from a registered clearing
agency or a Federal Reserve Bank that Securities have been credited to the
account of Custodian at either the registered clearing agency or the Federal
Reserve Bank.
"Securities" means Government Issues, money market instruments, stocks,
shares, bonds, debentures, notes, mortgages, or other obligations and any
certificates, receipts, book credit advices, 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.
"Written Order" means a request, direction or certification from the
Trust or the Investment Advisor reasonably believed by the Custodian to have
been signed in the name of the Trust or the Investment Advisor by a person
authorized and certified as provided in this Section 2 or in Section 3. As
directed by the Investment Advisor or the Trust, Written Orders may include
communications effected directly between electro-mechanical or electronic
devices provided that the Investment Advisor and Custodian are satisfied that
such procedures
2
3
afford adequate safeguards for the Fund's assets. The Investment Advisor shall
certify to the Custodian the names and signatures of those persons authorized to
sign Written Orders on behalf of the Investment Advisor and the Custodian shall
be entitled to rely on such identity until notified otherwise in writing by the
Investment Advisor.
Notwithstanding any provision to the contrary hereunder, no person may
sign or countersign a Written Order if it would make any portion of the Fund
payable to him or her individually, or if the sums to be paid thereby are,
according to the tenor of such instrument, to be deposited to his or her
individual account, or if any Property deliverable pursuant thereto is to be
delivered to him or her individually or to his or her account.
SECTION 3
NAMES, TITLES AND SIGNATURES OF THE TRUST'S OFFICERS
An officer of the Trust shall certify to Custodian the names and
signatures of those persons authorized to sign the Written Orders on behalf of
the Trust and the names of the members of the Board of Trustees, together with
any changes which may occur from time to time.
SECTION 4
DISBURSEMENT AND RECEIPT OF MONEY
Section 4.1. Custodian shall open and maintain a separate account or
accounts with Custodian in the name of the Fund, 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 Fund. The Custodian shall not
permit any Trustee, officer, employee or agent of the Trust or the Fund to
withdraw any Securities or other investments upon his or her mere receipt.
Section 4.2. Custodian shall make payments of cash to, or for the
account of, the Fund from such cash only (a) for the purchase of Securities for
the Fund upon the Receipt of such Securities by Custodian, (b) for the purchase
or redemption of Shares, including but not limited to honoring redemption checks
or drafts drawn by the Fund's shareholders or their agents, settled through the
banking system in the usual and customary manner, (c) for the payment of
interest, dividends, taxes, management or supervisory fees or operating expenses
(including, without limitation thereto, fees for legal, accounting and auditing
services), (d) for the payments in connection with the conversion, exchange,
exercise of an option contract or surrender of Securities owned or subscribed to
by the Fund held by or to be delivered to the Custodian, (e) for payments in
connection with the return of Securities loaned by the Fund or the reduction of
cash collateral held by Custodian, or (f) for other proper purposes.
Section 4.3. Before making any payment the Custodian shall receive and
may rely only upon a Written Order directing such payment and stating that it is
for such a purpose permitted under Section 4.2 and, in respect of clause (f)
thereof, a copy of a resolution of the
3
4
Board of Trustees or of the Executive Committee of the Board of Trustees of the
Trust signed by an officer of the Trust and certified by its Secretary or an
Assistant Secretary, 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 purpose, and naming the person or persons to whom such payment is made.
Section 4.4. 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 the Fund, and to receive payments and receipts for requested
additional collateral in connection with Securities of the Fund on loan.
SECTION 5
SEGREGATION OF PROPERTY
Custodian shall hold in a separate account, and segregate at all times
from those of any other persons, firms or corporations, pursuant to the
provisions hereof, all Property received by it from or for the account of the
Fund unless deposited by the Custodian to its account with a registered clearing
agency, a Federal Reserve Bank pursuant to Section 9 or a sub-custodian
previously approved by a Written Order. The Custodian may hold securities of the
Fund in the name of a nominee or nominees or in registered or bearer form.
Custodian shall upon receipt of a Written Order establish and maintain a
segregated account or accounts for and on behalf of the Fund, into which account
or accounts may be transferred cash and Securities, including Securities
maintained in an account by Custodian pursuant to Section 8, (i) in accordance
with the provisions of any agreement among the Trust, Custodian and a
broker-dealer registered under the Exchange Act and a member of the NASO (or any
futures commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Trust, (ii) for purposes of segregating cash or government
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,
(iii) for the purposes of compliance by the Fund with the procedures required by
1940 Act Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of segregated
accounts by registered investment companies, and (iv) for other proper purposes,
but only, in the case of clause (iv), upon receipt of, in addition to a Written
Order, a certified copy of a resolution of the Board of Trustees signed by an
officer of the Trust and certified by the Secretary or an Assistant Secretary,
setting forth the purpose or purposes of such segregated account and declaring
such purposes to be proper purposes.
All such Property is to be held or disposed of by Custodian for, and
subject at all times to the instructions of, the Trust pursuant to the terms of
this Agreement. Custodian shall have no power or authority to assign,
hypothecate, pledge, or otherwise dispose of any Property except as set forth in
this Agreement. Notwithstanding the above, unless otherwise
4
5
directed by a Written Order, Custodian shall simultaneously with the payment to
a registered clearing agency or a Federal Reserve Bank for the receipt of
Securities by Custodian, direct such agency or Federal Reserve Bank to deliver
such Securities to or for the account of Custodian.
SECTION 6
BANK ACCOUNTS
The Custodian is authorized to open and maintain bank accounts in the
name of the Fund on the Custodian's books, including without limitation, deposit
accounts and specifically zero balance accounts. These accounts will be utilized
in order to provide what are commonly referred to as cash management services to
the Fund. The cash management services for each Portfolio will be provided by
the Custodian's affiliate, First Bank, in accordance with the terms and
conditions set forth in applicable cash management agreements (collectively
referred to as the "Cash Management Agreements").
SECTION 7
TRANSFER, EXCHANGE, DELIVERY, ETC. OF SECURITIES
Section 7.1. Custodian agrees to transfer, exchange or deliver any
Securities of the Trust held by Custodian hereunder only (a) for sales of such
Securities for the account of the Trust upon Receipt of Payment by Custodian
therefor, (b) to the issuer thereof, or its agents, when such Securities are
called, redeemed or retired or otherwise become payable, provided that in any
such case the cash or other consideration is to be delivered to the Custodian,
(c) in exchange for or upon conversion into other Securities alone or other
Securities and cash whether pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment, or otherwise of the Securities
of the issuer of such Securities, provided that, in any such case, the new
Securities and cash, if any, are to be delivered to the Custodian, (d) upon
exercise of subscription, purchase or other similar rights represented by such
Securities, provided that, in any such case the new Securities are to be
delivered to the Custodian, (e) for the purpose of exchanging interim receipts
or temporary Securities for definitive Securities, (f) for loans of Securities
by the Fund, but only against receipt of adequate collateral as agreed upon from
time to time by Custodian and the Fund, which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumentalities, except that in connection with any loans for which collateral
is to be credited to Custodian's account in the book-entry system authorized by
the U.S. Department of the Treasury, Custodian will not be held liable or
responsible for the delivery of Securities owned by the Fund prior to the
receipt of such collateral, (g) for the purpose of redeeming in kind Shares of
the Fund, provided that, in any such case the cash or other consideration is to
be delivered to the Custodian, or (h) for other proper purposes.
Section 7.2. Before making any such transfer, exchange or delivery of
Securities for a purpose permitted under the terms of Section 7.1, Custodian
shall receive and may rely upon a Written Order requesting such transfer,
exchange or delivery and stating that it is for such a
5
6
purpose permitted under Section 7.1 and, in respect of clause (h) thereof, a
copy of a resolution of the Board of Trustees or of the Executive Committee of
the Board of Trustees of the Trust signed by an officer of the Trust and
certified by its Secretary or an Assistant Secretary, specifying the Securities,
setting forth the purpose for which such payment, transfer, exchange or delivery
is to be made, declaring such purpose to be a proper purpose, and naming the
person or persons to whom such transfer, exchange or delivery of such Securities
shall be made.
SECTION 8
CUSTODIAN'S ACTS WITHOUT INSTRUCTION
Unless and until Custodian receives a Written Order to the contrary,
Custodian shall: (a) present on a timely basis all Securities for redemption
when called, redeemed, retired or otherwise become payable; (b) endorse for
collection, in the name of the Fund, checks, drafts and other negotiable
payments and present for payment on a timely basis all coupons and other income
items held by it for the account of the Fund which call for payment upon
presentation and hold cash received by it upon such payment for the account of
the Fund and sweep such idle cash balances into an overnight investment fund to
the extent permitted by the 1940 Act; (c) collect on a timely basis interest and
cash dividends, with notice to the Fund, for the account of the Fund; (d)
collect on a timely basis all other income and payments with respect to the
Securities held hereunder to which the Fund shall be entitled either by law or
by custom in the securities business; (e) hold for the Custodial account of the
Fund hereunder all stock dividends, rights and similar Securities issued with
respect to any Securities held by it hereunder; (f) execute as agent on behalf
of the Fund all necessary ownership certificates required by the Internal
Revenue Code or the Income Tax Regulations of the United States Treasury
Department or for any other federal tax purposes, or under the laws of any state
now or hereafter in effect, inserting the Fund's name on such certificates as
the owner of the Securities covered thereby, to the extent it may lawfully do
so; (g) surrender Securities in temporary form for Securities in definitive
form; (h) make payments to itself or others for minor expenses of handling
Securities or other similar items relating to its duties under this Agreement,
provided that all such payments shall be accounted for to the Trust; and (i) in
general. attend to all nondiscretionary details in connection with the sale,
exchange, substitution, purchase, transfer and other dealings with the
Securities of the Trust except as otherwise directed by the Board of Trustees of
the Trust.
With respect to clauses (a) through (e) above, the Custodian shall
credit the account of the Fund on the payable or effective date unless a
particular issue has a history of delayed payment by the issuer, in which case
the Custodian shall credit the account on the date of Receipt of Payment by
Custodian. Custodian shall be under no obligation or duty to take action to
effect collection of any amount if the Property upon which such payment is due
is in default, or if payment is refused after due demand and presentation.
Custodian shall have no responsibility to notify the Trust or the Investment
Advisor in the event of such default, but if Custodian receives notice of
default or refusal to pay from an issuer or transfer agent, Custodian shall so
advise the Investment Advisor.
6
7
Any credits to the account of the Fund made on the payable or effective
date shall be conditional upon actual receipt by the Custodian of final payment
and may be reversed any time prior to the date of Receipt of Payment by the
Custodian. The Custodian may, in its sole discretion and from time to time,
permit a Portfolio to use funds so credited to its account in anticipation of
Receipt of Payment. Any such funds shall be repayable immediately upon demand
made by the Custodian at any time prior to Receipt of Payment by the Custodian.
SECTION 9
REGISTRATION OF SECURITIES
Section 9.1. Except as otherwise directed by a Written Order, 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 thereunder, unless the Trust
has authorized in writing the appointing of a nominee to be used in common with
other registered investment companies having the same investment adviser as the
Trust 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. All Securities accepted by Custodian on behalf of the Trust pursuant
to this Agreement shall be in "street name" or other good delivery form.
Securities held by Custodian hereunder shall be at all times identifiable in its
records.
Section 9.2. The Fund 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 the Fund and which may from time
to time be registered in the name of the Fund.
SECTION 10
DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
Subject to and in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, Custodian may deposit
all or any part of the securities owned by the Fund in (1) a clearing agency
registered with the Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934 ("clearing agency") which acts as a securities
depository, and/or (2) the book-entry system as provided in Subpart O of
Treasury Circular ▇▇. ▇▇▇, ▇▇ ▇.▇.▇. ▇▇▇, ▇▇▇▇▇▇▇ ▇ of 31 C.F.R. Part 350, and
the book-entry regulations of federal agencies substantially in the form of
Subpart O. For the purpose herein, a "securities depository" is a system for the
central handling of securities where all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical delivery of the
securities. Any deposits made by Custodian of the Trust's Securities in a
clearing agency which acts as a securities depository or the book-entry system,
or both, shall be under an arrangement that contains the following elements:
7
8
(a) Custodian may deposit the Securities directly or through one or
more agents which are also qualified to act as custodians for investment
companies.
(b) Upon request, Custodian, or its agent which deposits the
Securities, shall promptly send to the Trust reports it receives from the
Federal Reserve Bank on its system of internal accounting control. Custodian and
all the agents through which the Securities are deposited shall send to the
Trust such reports on their own systems of internal accounting control as the
Trust may reasonably request from time to time.
(c) The underlying agreement between Custodian and the clearing agency,
or the agreements between Custodian and its agent and the agreement of said
agent and the clearing agency, and any amendments thereto, shall be submitted to
the Fund for its review and approval prior to Custodian making any deposits of
the Fund's Securities with such clearing agencies.
SECTION 11
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 the Fund, except in
accordance with the instructions contained in a Written Order. Custodian shall
promptly deliver, or cause to be executed and delivered, to the Trust or such
other entity(ies) designated by Investment Advisor or the Trust, all notices
proxies and proxy soliciting materials with relation to such Securities (if
registered otherwise than in the name of the Trust), but without indicating the
manner in which such proxies are to be voted. Custodian shall also promptly
deliver to the Investment Advisor all other communications it may receive with
respect to the Securities held by it hereunder.
SECTION 12
COMMUNICATIONS RELATING TO TRUST PORTFOLIO SECURITIES
Custodian shall transmit promptly to the Investment Advisor all written
information relating to the Fund's Securities (including, without limitation,
pendency of calls and maturities of securities and expirations of rights in
connection therewith and notices of exercise of call and put options written by
the Trust and the maturity of futures from issuers of the Securities being held
for the Fund). With respect to capital changes or reorganizations the Custodian
shall transmit promptly to the Investment Advisor all information received or
reasonably available from industry sources, depositories, and issuers or their
agents which requires an action by the Trust or its Investment Advisor. If the
Trust desires to take action with respect to any tender offer, exchange offer of
any other similar transactions, the Trust or its Investment Advisor at least
three business days prior to the date on which action is required to be taken
shall notify the Custodian of the action to be taken. The Custodian shall have
no liability for or responsibility to respond to the Trust's instructions with
regard to tender offers, exchange offers or similar transaction received upon
less than three business days' notice.
8
9
SECTION 13
TRANSFER TAX AND OTHER DISBURSEMENTS
Section 13.1. The Trust shall pay or reimburse Custodian from time to
time for any transfer taxes payable upon transfers for Securities made
hereunder, and for all other necessary and proper disbursements and
out-of-pocket expenses made or incurred by Custodian in the performance of this
Agreement acting upon a Written Order.
Section 13.2. 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 exemptible transfer and/or deliveries of
any such Securities.
SECTION 14
CONCERNING CUSTODIAN
Section 14.1. Custodian shall be paid as compensation for its services
pursuant to this Agreement such compensation as provided for in the Fee Schedule
attached hereto as Exhibit A. This fee schedule may be modified or amended only
by mutual agreement of the parties hereto in writing.
Section 14.2. Custodian shall not be liable for any action taken in
good faith and with reasonable care, in accordance with this Agreement, upon any
Written Order from the Trust or certified copy of any resolution of the Board of
Trustees or of the Executive Committee of the Board of Trustees and may rely on
the genuineness of any such document which it may in good faith believe to have
been validly executed.
Section 14.3. The Custodian shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement and shall be liable for
its own and its nominees' negligent or bad faith acts or failures to act or
willful misconduct.
The Fund shall indemnify and hold harmless the Custodian from and
against any loss, damage, taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) suffered or incurred by it or its nominee
resulting or arising from its performance in accordance with the terms of this
Agreement and from any action or omission to act of the Trust, its Investment
Advisor, any transfer, dividend disbursing or shareholder servicing agent of the
Trust or the Fund, administrator, or other agent, employee or independent
contractor of the Trust in connection with the performance of this Agreement,
except such as may arise from the Custodian's or its nominee's own negligence,
willful misconduct or bad faith acts or failures to act.
In addition, Custodian shall not be liable for any loss of data or any
delay in its performance under this Agreement to the extent such loss or delay
is due to causes beyond its
9
10
control, including but not limited to: acts of God, interruption in, loss of or
malfunction in power, significant computer hardware or systems software or
telephone communication service; acts of civil or military authority; sabotage;
war or civil commotion; fire; explosion; or strike except for minimum critical
activities. Custodian shall use its best efforts to take all practical steps to
minimizes any such loss or delay and to replace any lost data promptly.
Custodian agrees not to discriminate against the Trust in favor of any other
customer of Custodian in making computer time and its personnel available to
input and process the transactions hereunder when a loss or delay occurs.
Section 14.4. The Custodian will create, maintain, preserve for the
specified periods and make available upon request all records relating to its
activities and obligations under this Agreement as such will meet the
obligations of the Trust under the 1940 Act, including records required by Rule
31a-1 of the General Rules and Regulations under the 1940 Act and under other
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Trust. All such records shall be
the property of the Trust and shall at all times during the regular business
hours of Custodian be open for inspection by duly authorized officers, employees
or agents of the Trust and employees and agents of the Securities and Exchange
Commission.
Section 14.5. Custodian shall take all reasonable action, as the Trust
may from time to time request, to obtain from year to year favorable opinions
from the Trust's independent accountant with respect to its activities hereunder
in connection with the preparation by the Trust of the Trust's Form N-lA, and
Form N-SAR or other annual reports to the Securities and Exchange Commission and
with respect to any other requirements of such Commission.
Section 14.6. Custodian shall provide the Trust, at such times as the
Trust may reasonably require, with reports by independent public accountants on
the accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures contracts,
including securities deposited and/or maintained in a securities depository,
relating to the services provided by Custodian under this Agreement: such
reports shall be of sufficient scope and in sufficient detail as may reasonably
be required by the Trust to provide reasonable assurance that any material
inadequacies would be disclosed by such examination, and if there are no such
inadequacies, the reports shall so state.
Section 14.7. The Trust and the Custodian acknowledge that, except to
the extent set forth in any separate instrument signed by the parties with
respect to this Agreement, Custodian's duties hereunder do not include any
discretionary authority, control or responsibility with respect to the
management or disposition of any Property; that Custodian has no authority or
responsibility to render investment advice with respect to any Property; and
that Custodian is not a fiduciary with respect to the Trust. Custodian shall
have no duty or responsibility to monitor or otherwise investigate the actions
or omissions of the Trust or the Investment Advisor.
10
11
SECTION 15
REPORTS BY CUSTODIAN
Custodian shall furnish the Trust at the end of every month with a list
of the Property and a statement of all transactions and entries for the month
then ended. Custodian shall furnish the Trust, at the close of each of the
Fund's fiscal years, with a list of the Property held by it for the Fund
hereunder certified by a duly authorized officer of the Custodian. The books and
records of Custodian pertaining to its actions under this Agreement, including
reports reflecting individual security transactions, shall be open to inspection
and audit at reasonable times by officers of and auditors employed by the Trust.
Custodian shall include in its regular account statements the market
value of Property held for the Trust. Market valuations are provided for
informational purposes only. Custodian shall have the right to rely upon pricing
information received from pricing services or other pricing sources which it
deems reliable, and shall not be liable to the Trust for incorrect prices or
valuations received from such services or sources.
SECTION 16
SECURITY FOR PAYMENT
In order to secure payment of all fees and expenses payable to the
Custodian hereunder, including but not limited to any amounts payable under the
Trust's indemnity obligations set forth in this Agreement or in any of the Cash
Management Agreements, the Trust, on behalf of the Fund, hereby grants the
Custodian a right of setoff against any account established in the name of the
Fund and all Property held therein, including all amounts held in the custody
account and the various cash management accounts. If the Trust, on behalf of the
Fund, fails to promptly pay any amounts owed under this Agreement, the Custodian
shall be entitled to apply such cash or to dispose of such other Property held
for the benefit of such Portfolio as is necessary to discharge the obligations
of that Portfolio.
If any advance of funds is made by Custodian on behalf of the Trust to
purchase, or to take payment on or against delivery of securities or there shall
arise for whatever reason an overdraft in the Trust's account, the Trust agrees
to repay Custodian on demand the amount of the advance, overdraft or other
indebtedness, reserve requirements and accrued interest at a rate per annum
equal to the Federal Funds effective rate in effect from time to time (based on
a 360-day year for the actual number of days involved). To secure such payment
obligations, the Trust does hereby grant to Custodian a security interest in all
Property held in for the Trust from time to time.
SECTION 17
REPRESENTATIONS AND WARRANTIES
Section 17.1. The Trust hereby represents and warrants that (i) the
Trust is duly organized under the laws of its jurisdiction of organization and
is registered as an open-end
11
12
management investment company under the 1940 Act and (ii) the execution,
delivery and performance of this Agreement and the Cash Management Agreements
(a) are within its power, (b) have been duly authorized by all necessary action,
(c) will not contribute to or result in a breach or default under or conflict
with any existing law, order, regulation or ruling or any governmental or
regulatory agency or authority, and (d) will not violate any provision of the
Trust's Declaration of Trust or other organizational document, or bylaws, or any
amendment thereof, or any provision of its current prospectus or statement of
additional information. These representations and warranties shall be continuing
and shall survive the termination of this Agreement.
Section 17.2. Custodian hereby represents and warrants that (i) it is a
duly organized and existing national banking association and (ii) the execution,
delivery and performance of this Agreement (a) are within its power, (b) have
been duly authorized by all necessary action, (c) will not contribute to or
result in the breach or default under or conflict with any existing law, order,
regulation or ruling of any governmental or regulatory agency or authority, and
(d) will not violate any provision of the Custodian's organizational documents,
bylaws, or any amendment thereof. These representations and warranties shall be
continuing and shall survive the termination of this Agreement.
SECTION 18
TERMINATION OR ASSIGNMENT
Section 18.1. This Agreement may be amended only by mutual agreement of
the parties hereto in writing.
Section 18.2. This Agreement may be terminated by the Trust or by
Custodian, on sixty (60) days' notice given in writing and sent by registered
mail to the Custodian or to the Trust at the address specified in Section 19.1
or 19.2, as the case may be; provided, however, that the Trust may at any time
by action of its Board of Trustees immediately terminate this Agreement in the
event of the appointment of a conservator or receiver for Custodian by the
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction. Upon any termination of this Agreement, pending appointment of a
successor to Custodian or a vote of the shareholders of the Fund to dissolve or
to function without a custodian of its Property, Custodian shall not deliver
Property of the Trust to the Trust, but may deliver it to a bank or trust
company of its own selection, having an aggregate capital, surplus and undivided
profits, as shown by Its last published report of not less than One Hundred
Million Dollars ($1OO,000,000) as a custodian for the Fund 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 Trust of all liabilities constituting a charge on or
against the Property then held by Custodian or on or against Custodian, and
until full payment shall have been made to Custodian for all its fees,
compensation, costs and expenses, subject to the provisions of Section 14. If a
successor custodian shall be appointed by the Board of Trustees of the Trust,
Custodian shall, upon termination, deliver to such
12
13
successor custodian at the office of the Custodian, duly endorsed and in the
form for transfer, all Property then held by it hereunder and shall transfer to
an account of the successor custodian-ill of the Trust's Property held in
Securities Depositories pursuant to Section 10.
Section 18.3. This Agreement may not be assigned by Custodian without
the consent of the Trust authorized or approved by a resolution of its Board of
Trustees unless such transfer shall be pursuant to operation of law.
SECTION 19
MISCELLANEOUS
Section 19.1. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Custodian, shall be sufficiently given
if addressed to Custodian and mailed or delivered to it at its office at:
First Trust National Association
Pioneer Building, 6th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or at such other place as Custodian may from time to time designate in writing.
Section 19.2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Trust, shall be sufficiently given
if addressed to the Trust and mailed or delivered to it at its office at:
Hospital Council of Northern and Central California
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with copy to:
Cadre Financial Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or at such other place as the Trust may from time to time designate in writing.
Section 19.3. This Agreement shall be construed in accordance with the
laws of the State of New York.
13
14
Section 19.4. 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.
Section 19.5. The obligations of the Trust created hereunder are not
personally binding upon, nor shall resort be had to the property of, any of the
Trustees, officers, employees or agents of the Trust or of the Shareholders of
the Fund; provided, however, that this provision shall not be construed as
limiting the Custodian's recourse to any property of the Fund.
Section 19.6. This Agreement constitutes the entire Agreement between
the parties with respect to the subject matter hereof and supersedes and
terminates, as of the date hereof, all prior agreements between the Trust and
Custodian relating to the activity of the Fund's assets.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written by their respective officers
thereunto duly authorized.
Executed in several counterparts, each of which is an original.
CADRE NETWORK HEALTH
FINANCIAL SERVICES TRUST
By: /s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
----------------------------------
Title: Chairman
----------------------------------
FIRST TRUST NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Title: Vice President
----------------------------------
14
15
EXHIBIT A
FEE SCHEDULE
16
FIRST BANK CASH MANAGEMENT SERVICES
CASH MANAGEMENT SERVICES PER ITEM CHARGE
Wire xfer customer maintenance $8.000
Wire in without phone $5.000
Wire in with phone $12.000
CMT - monthly fixed charge $65.000
CMT out non-repetitive $4.500
Wire out CMT repeat $3.500
Internal wire debit $5.000
Internal wire credit $3.000
WIRE TRANSFERS
Control Disbursement Accounts - 1st $175.000
Control Disbursement Accounts - Remaining $20.000
Checks Presented - 1 - 9,999 $0.100
Checks Presented - 10,000 - 24,999 $0.090
Checks Presented - 25,000 - 74,999 $0.080
Checks Presented - 75,000 and greater $0.075
Cash Fax CD Sum $75.000
Cash Fax CD Sum $7.500
Terminal Connect $0.700
CONTROL DISBURSEMENT
Two day ACH item $0.040
One day ACH item $0.050
ACH received item $0.150
Process run $10.000
On us items $0.030
Received government items $0.150
Add, delete, change, reversal $15.000
ACH returns $5.000
ACH SERVICE
Page 1
17
FIRST BANK CASH MANAGEMENT SERVICES
CASH MANAGEMENT SERVICES PER ITEM CHARGE
ARP Partial Fixed $30.000
ARP Full Basic $0.080
ARP Partial Basic $0.065
ARP Partial Sorting $0.100
Check Sorting $0.030
ARP Audit Journal $0.000
ARP Tape or Floppy Output $30.000
Check Sort Fixed $20.000
ARP Full Fixed $35.000
Deposit Recon Items $0.060
Additional Recons $0.000
Deposit recon fixed $35.000
Range Accounts $0.000
ACCOUNT RECONCILEMENT SERVICES
Cashfax Plus BR summary $40.000
Cashfax plus BR ▇▇▇▇ $40.000
Cashfax Plus IR summary $50.000
Cashfax Plus IR ▇▇▇▇ $50.000
Cashfax Plus ZBA report $0.273
Cashfax Plus history $20.000
Cashfax Plus term connect $0.700
Fastline inquiry $0.000
INFORMATION REPORTING
CCS reporting logon $1.250
CCS input variable cost $1.250
CCS voice input $0.750
CCS reports - mailed $40.000
CCS/ATS location setup $1.500
CCS location maintenance $1.000
CCS reporting variable charges $1.100
CASH CONCENTRATION
Credit Formula - Credit Dollar Amount X 90% X Federal Funds Rate/360 Days
Compensation Formula: Overdraft Dollar Amount X FNB Ref Rate Less One
percent/360 Days
Page 2
18
FIRST TRUST CUSTODIAL SERVICES FEE SCHEDULE
CUSTODIAL SERVICES CHARGE
Annual Administration Per Account - Marked to Market $7,200.00
Annual Administration Per account - Non-valued $1,500.00
Market Value - Basis Point 1/3 B.P.
ADMINISTRATION CHARGES
DTC Book Entry Trade Transaction $10.00
Fed Book Entry Trade Transaction $10.00
Physical Trade Transaction $25.00
TRANSACTION CHARGES
Compensation Formula: Overdraft Dollar Amount X FNB Ref Rate Less one
Percent/360 Days
Page 1