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EXHIBIT 8
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the ___ day of
October, 1996, by and between The Chaconia Income & Growth Fund, Inc. (the
"Fund"), a corporation organized under the laws of the State of Maryland and
having its office c/o American Data Services, Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; and Star Bank, N.A. (the "Custodian"), a national banking
association having its principal office and place of business at Star Bank
Center, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Fund and the Custodian desire to enter into this Agreement to
provide for the custody and safekeeping of the assets of the Fund as required by
the Investment Company Act of 1940, as amended (the "Act").
WHEREAS, the Fund hereby appoints the Custodian as custodian of all the
Fund's Securities and moneys at any time owned by the Fund during the term of
this Agreement (the "Fund Assets").
WHEREAS, the Custodian hereby accepts such appointment as Custodian and
agrees to perform the duties thereof as hereinafter set forth.
THEREFORE, in consideration of the mutual promises hereinafter set forth,
the Fund and the Custodian agree as follows:
ARTICLE I
Definitions
The following words and phrases, when used in this Agreement, unless the
context otherwise requires, shall have the following meanings:
Authorized Person - the Chairman, President, Secretary, Treasurer,
Controller, or Senior Vice President of the Fund, or any other person, whether
or not any such person is an officer or employee of the Fund, duly authorized by
the Board of Directors of the Fund to give Oral Instructions and Written
Instructions on behalf of the Fund, and listed in the Certificate annexed hereto
as Appendix A, or such other Certificate as may be received by the Custodian
from time to time.
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Book-Entry System - the Federal Reserve Bank book-entry system for United
States Treasury securities and federal agency securities.
Depository - The Depository Trust Company ("DTC"), a limited purpose trust
company its successor(s) and its nominee(s) or any other person or clearing
agent.
Dividend and Transfer Agent - the dividend and transfer agent appointed,
from time to time, pursuant to a written agreement between the dividend and
transfer agent and the Fund.
Foreign Securities - a) securities issued and sold primarily outside of the
United States by a foreign government, a national of any foreign country, or a
trust or other organization incorporated or organized under the laws of any
foreign country or; b) securities issued or guaranteed by the government of the
United States, by any state, by any political subdivision or agency thereof, or
by any entity organized under the laws of the United States or of any state
thereof, which have been issued and sold primarily outside of the United
States.
Money Market Security - debt obligations issued or guaranteed as to
principal and/or interest by the government of the United States or agencies or
instrumentalities thereof, commercial paper, obligations (including certificates
of deposit, bankers' acceptances, repurchase agreements and reverse repurchase
agreements with respect to the same), and time deposits of domestic banks and
thrift institutions whose deposits are insured by the Federal Deposit Insurance
Corporation, and short-term corporate obligations where the purchase and sale of
such securities normally require settlement in federal funds or their equivalent
on the same day as such purchase and sale, all of which mature in not more than
thirteen (13) months.
Officers - the Chairman, President, Secretary, Treasurer, Controller, and
Senior Vice President of the Fund listed in the Certificate annexed hereto as
Appendix A, or such other Certificate as may be received by the Custodian from
time to time.
Oral Instructions - verbal instructions received by the Custodian from an
Authorized Person (or from a person that the Custodian reasonably believes in
good faith to be an Authorized Person) and confirmed by Written Instructions
in such a manner that such Written Instructions are received by the Custodian
on the business day immediately following receipt of such Oral Instructions.
Prospectus - the Fund's then currently effective prospectus and Statement
of Additional Information, as filed with and declared effective from time to
time by the Securities and Exchange Commission.
Security or Securities - Money Market Securities, common stock, preferred
stock, options, financial futures, bonds, notes, debentures, corporate debt
securities, mortgages, 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 interest therein, or any
property or assets.
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Written Instructions - communication received in writing by the Custodian
from an Authorized Person.
ARTICLE III
DOCUMENTS AND NOTICES TO BE FURNISHED BY THE FUND
A. The following documents, including any amendments thereto, will be
provided contemporaneously with execution of the Agreement, to the Custodian by
the Fund:
1. A copy of the Articles of Incorporation of the Fund certified by the
Secretary.
2. A copy of the By-Laws of the Fund certified by the Secretary.
3. A copy of the resolution of the Board Of Directors Of the Fund
appointing the Custodian, certified by the Secretary.
4. A copy of the then current Prospectus.
5. A Certificate of the President and Secretary of the Fund setting
forth the names and signatures of the Officers of the Fund.
B. The Fund agrees to notify the Custodian in writing of the
appointment of any Dividend and Transfer Agent.
ARTICLE III
RECEIPT OF FUND ASSETS
A. During the term of this Agreement, the Fund will deliver or cause to
be delivered to the Custodian all moneys constituting Fund Assets. The
Custodian shall be entitled to reverse any deposits made on the Fund's behalf
where such deposits have been entered and moneys are not finally collected
within 30 days of the making of such entry.
B. During the term of this Agreement, the Fund will deliver or cause to
be delivered to the Custodian all Securities constituting Fund Assets. The
Custodian will not have any duties or responsibilities with respect to such
Securities until actually received by the Custodian.
C. As and when received, the Custodian shall deposit to the account(s)
of the Fund any and all payments for shares of the Fund issued or sold from
time to time as they are received from the Fund's distributor or Dividend and
Transfer Agent or from the Fund itself.
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ARTICLE IV
DISBURSEMENT OF FUND ASSETS
A. The Fund shall furnish to the Custodian a copy of the resolution of the
Board Of Directors of the Fund, certified by the Fund's Secretary, either (i)
setting forth the date of the declaration of my dividend or distribution in
respect of shares of the Fund, the date of payment thereof, the record date as
of which Fund shareholders entitled to payment shall be determined, the amount
payable per share to Fund shareholders of record as of that date, and the total
amount to be paid by the Dividend and Transfer Agent on the payment date, or
(ii) authorizing the declaration of dividends and distributions in respect of
shares of the Fund on a daily basis and authorizing the Custodian to
rely on a Certificate setting forth the date of the declaration of any such
dividend or distribution, the date of payment thereof, the record date as of
which Fund shareholders entitled to payment shall be determined, the amount
payable per share to Fund shareholders of record as of that date, and the total
amount to be paid by the Dividend and Transfer Agent on the payment date.
On the payment date specified in such resolution or Certificate
described above, the Custodian shall segregate such amounts from moneys held
for the account of the Fund so that they are available for such payment.
B. Upon receipt of Written Instructions so directing it, the Custodian
shall segregate amounts necessary for the payment of redemption proceeds to be
made by the Dividend and Transfer Agent from moneys held for the account of the
Fund so that they are available for such payment
C. Upon receipt of a Certificate directing payment and setting forth the
name and address of the person to whom such payment is to be made, the amount
of such payment, and the purpose for which payment is to be made, the Custodian
shall disburse amounts as and when directed from the Fund Assets. The Custodian
is authorized to rely on such directions and shall be under no obligation to
inquire as to the propriety of such directions.
D. Upon receipt of a Certificate directing payment, the Custodian shall
disburse moneys from the Fund Assets in payment of the Custodian's fees and
expenses as provided in Article VIII hereof.
ARTICLE V
CUSTODY OF FUND ASSETS
A. The Custodian shall open and maintain a separate bank account or
accounts in the United States in the name of the Fund, subject only to draft or
order by the Custodian acting
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pursuant to the terms of this Agreement, and shall hold all cash received by it
from or for the account of the Fund, other than cash maintained by the Fund in
a bank account established and used by the Fund in accordance with Rule 17-f3
under the Act. Moneys held by the Custodian on behalf of the Fund may be
deposited by the Custodian to its credit as Custodian in the banking department
of the Custodian. Such moneys shall be deposited by the Custodian in its
capacity as such, and shall be withdrawable by the Custodian only in such
capacity.
B. The Custodian shall hold all Securities delivered to it in safekeeping
in a separate account or accounts maintained at Star Bank, N.A. for the benefit
of the Fund.
C. All Securities held which are issued or issuable only in bearer form,
shall be held by the Custodian in that form; all other Securities hold for the
Fund shall be registered in the name of the Custodian or its nominee. The Fund
agrees to furnish to the Custodian appropriate instruments to enable the
Custodian to hold, or deliver in proper form for transfer, any Securities that
it may hold for the account of the Fund and which may, from time to time, be
registered in the name of the Fund.
D. With respect to all Securities held for the Fund, the Custodian shall
on a timely basis (concerning items 1 and 2 below, as defined in the Custodian's
Standards of Service Guide, as amended from time to time, annexed hereto as
Appendix C):
1.) Collect all income due and payable with respect to such
Securities;
2.) Present for payment and collect amounts payable upon all
Securities
3.) Surrender Securities in temporary form for definitive Securities;
and
4.) Execute, as agent, any necessary declarations or certificates of
ownership under the Federal income tax laws or the laws or
E. Upon receipt of a Certificate AND NOT OTHERWISE, the Custodian
shall:
1.) Execute and deliver to such persons as may be designated in such
Certificate proxies, consents, authorizations, and any other
2.) Deliver any Securities in exchange for other Securities or cash
issued
3.) Deliver any Securities to any protective committee,
reorganization receive and hold under the terms of this Agreement
such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence such
delivery;
4.) Make such transfers or exchanges of the assets of the Fund and
take such other steps as shall be stated in said Certificate to
be for the
5.) Deliver any Securities held for the Fund to the depository agent
for
F. The Custodian shall promptly deliver to the Fund all notices,
proxy material and executed but unvoted proxies pertaining to shareholder
meetings of Securities held by the Fund. The Custodian shall not vote or
authorize the voting of any Securities or give any consent,
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waiver or approval with respect thereto unless so directed by a Certificate or
Written Instruction.
G. The Custodian shall promptly deliver to the Fund all information
received by the Custodian and pertaining to Securities held by the Fund with
respect to tender or exchange offers, calls for redemption or purchase, or
expiration of rights.
ARTICLE VI
PURCHASE AND SALE OF SECURITIES
A. Promptly after each purchase of Securities by the Fund, the Fund shall
deliver to the Custodian (i) with respect to each purchase of Securities which
are not Money Market Securities, Written Instructions, and (ii) with respect to
each purchase of Money Market Securities, Written Instructions, or Oral
Instructions, specifying with respect to each such purchase the;
1.) name of the issuer and the title of the Securities,
2.) principal amount purchased and accrued interest, if any,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable, and
6.) name of the person from whom, or the broker through which, the
purchase was made.
The Custodian shall, against receipt of Securities purchased by or for the Fund,
pay out of the Fund Assets, the total amount payable to the person from whom or
the broker through which the purchase was made, provided that the same conforms
to the total amount payable as set forth in such Written Instructions or Oral
Instructions, as the case may be.
B. Promptly after each sale of Securities by the Fund, the Fund shall
deliver to the Custodian (i) with respect to each sale of Securities which are
not Money Market Securities, Written Instructions and (ii) with respect to each
sale of Money Market Securities, Written Instructions or Oral Instructions,
specifying with respect to each such sale the;
1.) name of the issuer and the title of the Securities,
2.) principal amount sold and accrued interest, if any,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable, and
6.) name of the person to whom, or the broker through which, the
sale was made.
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The Custodian shall deliver the Securities against receipt of the total amount
receivable, provided that the same conforms to the total amount receivable as
set forth in such Written Instructions or Oral Instructions, as the case may be.
C. On contractual settlement date, the account of the Fund will be
charged for all purchased Securities settling on that day, regardless of whether
or not delivery is made. Likewise, on contractual settlement date, proceeds
from the sale of Securities settling that day will be credited to the account of
the Fund, irrespective of delivery.
D. Purchases and sales of Securities effected by the Custodian will be
made on a delivery versus payment basis. The Custodian may, in its sole
discretion, upon receipt of a Certificate, elect to settle a purchase or sale
transaction in some other manner, but only upon receipt of acceptable
indemnification from the Fund.
E. The Custodian shall, upon receipt of a Written Instructions so
directing it, establish and maintain a segregated account or accounts for and
on behalf of the Fund. Cash and/or Securities may be transferred into such
account or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any agreement among the Fund,
the Custodian, and a broker-dealer registered under the
Securities and Exchange Act of 1934, as amended, and also a
member of the National Association of Securities Dealers (NASD)
(or any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the rules of
the Options Clearing Corporation and of any registered national
securities exchange, the Commodity Futures Trading Commission,
any registered contract market, or any similar organization or
organizations requiring escrow or other similar arrangements in
connection with transactions by the Fund;
2.) for purposes of segregating cash or government securities in
connection with options purchased, sold, or written by the Fund
or commodity futures contacts or options thereon purchased or
sold by the Fund;
3.) for the purpose of compliance by the fund with the procedures
required for reverse repurchase agreements, firm commitment
agreements, standby commitment agreements, and short sales by Act
Release No. 10666, or any subsequent release or releases or rule
of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment
companies; and
4.) for other corporate purposes, ONLY IN THE CASE OF THIS CLAUSE 4
UPON receipt of a copy of a resolution of the Board of Directors
of the Fund, certified by the Secretary of the Fund, setting
forth the purposes of such
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segregated account.
F. Except as otherwise may be agreed upon by the parties hereto, the
Custodian shall not be required to comply with any Written Instructions to
settle the purchase of any Securities on behalf of the Fund unless there is
sufficient cash in the account(s) at the time or to settle the sale of any
Securities from an account(s) unless such Securities are in deliverable form.
Notwithstanding the foregoing, if the purchase price of such Securities exceeds
the amount of cash in the account(s) at the time of such purchase, the Custodian
may, in its sole discretion, advance the amount of the difference in order to
settle the purchase of such Securities. The amount of any such advance shall be
deemed a loan from the Custodian to the Fund payable on demand and bearing
interest accruing from the date such loan is made up to but not including the
date such loan is repaid at a rate per annum customarily charged by the
Custodian on similar loans.
ARTICLE VII
FUND INDEBTEDNESS
In connection with any borrowings by the Fund, the Fund will cause to be
delivered to the Custodian by a bank or broker requiring Securities as
collateral for such borrowings (including the Custodian if the borrowing is from
the Custodian), a notice or undertaking in the form currently employed by such
bank or broker setting forth the amount of collateral. The Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to each such
borrowing: (a) the name of the bank or broker, (b) the amount and terms of the
borrowing, which may be set forth by incorporating by reference an attached
promissory note duly endorsed by the Fund, or a loan agreement, (c) the date,
and time if known, on which the loan is to be entered into, (d) the date on
which the loan becomes due and payable, (e) the total amount payable to the Fund
on the borrowing date, and (f) the description of the Securities securing the
loan, including the name of the issuer, the title and the number of shares or
the principal amount. The Custodian shall deliver on the borrowing date
specified in the Certificate the required collateral against the lender's
delivery of the total loan amount then payable, provided that the same conforms
to that which is described in the Certificate. The Custodian shall deliver, in
the manner directed by the Fund, such Securities as additional collateral, as
may be specified in a Certificate, to secure further any transaction described
in this Article VII. The Fund shall cause all Securities released from
collateral status to be returned directly to the Custodian and the Custodian
shall receive from time to time such return of collateral as may be tendered to
it. The Custodian may, at the option of the lender, keep such collateral in its
possession,
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subject to all rights therein given to the lender because of the loan. The
Custodian may require such reasonable conditions regarding such collateral and
its dealings with third-party lenders as it may deem appropriate.
ARTICLE VIII
CONCERNING THE CUSTODIAN
A. Except as otherwise provided herein, the Custodian shall not be liable
for any loss or damage resulting from its action or omission to act or
otherwise, except for any such loss or damage arising out of its own gross
negligence or willful misconduct. The Fund shall defend, indemnify and hold
harmless the Custodian and its directors, officers, employees and agents with
respect to any loss, claim, liability or cost (including reasonable attorneys'
fees) arising or alleged to arise from or relating to the Fund's duties
hereunder or any other action or inaction of the Fund or its Directors,
officers, employees or agents, except such as may arise from the negligent
action, omission, willful misconduct or breach of this Agreement by the
Custodian. The Custodian may, with respect to questions of law, apply for and
obtain the advice and opinion of counsel, at the expense of the Fund, and shall
be fully protected with respect to anything done or omitted by it in good faith
in conformity with the advice or opinion of counsel. The provisions under this
paragraph shall survive the termination of this Agreement.
B. Without limiting the generality of the foregoing, the, Custodian,
acting in the capacity of Custodian hereunder, shall be under no obligation to
inquire into, and shall not be liable for:
1.) The validity of the issue of any Securities purchased by or for
the account of the Fund, the legality of the purchase thereof, or
the propriety of the amount paid therefor;
2.) The legality of the sale of any Securities by or for the account
of the Fund, or the propriety of the amount for which the same
are sold;
3.) The legality of the issue or sale of any shares of the Fund, or
the sufficiency of the amount to be received therefor;
4.) The legality of the redemption of any share of the Fund, or the
propriety of the amount to be paid therefor;
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5.) The legality of the declaration or payment of any dividend by the
Fund in respect of shares of the Fund;
6.) The legality of any borrowing by the Fund on behalf of the Fund,
using Securities as collateral;
C. The Custodian shall not be under any duty or obligation to take action
to effect collection of any amount due to the Fund from any Dividend and
Transfer Agent of the Fund nor to take any action to effect payment or
distribution by any Dividend and Transfer Agent of the Fund of any amount paid
by the Custodian to any Dividend and Transfer Agent of the Fund in accordance
with this Agreement.
D. Notwithstanding Section D of Article V, the Custodian shall not be
under any duty or obligation to take action to effect collection of any amount,
if the Securities upon which such amount is payable are in default, or if
payment is refused after due demand or presentation, unless and until (i) it
shall be directed to take such action by a Certificate and (ii) it shall be
assured to its satisfaction (including prepayment thereof) of reimbursement of
its costs and expenses in connection with any such action.
E. The Fund acknowledges and hereby authorizes the Custodian to hold
Securities through its various agents described in Appendix B annexed hereto.
The Fund hereby represents that such authorization has been duly approved by the
Board Of Directors of the Fund as required by the Act. The Custodian
acknowledges that although certain Fund Assets are held by its agents, the
Custodian remains primarily liable for the safekeeping of the Fund Assets.
In addition, the Fund acknowledges that the Custodian may appoint one or
more financial institutions, as agent or agents or as sub-custodian or
sub-custodians, including, but not limited to, banking institutions located in
foreign countries, for the purposes of holding Securities and moneys at any time
owned by the Fund. The Custodian shall not be relieved of any obligation or
liability under this Agreement, in connection with the appointment or activities
of such agents or sub-custodians. Any such agent or sub-custodian shall be
qualified to serve as such for assets of investment companies registered under
the Act. Upon request,
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the Custodian shall promptly forward to the Fund any documents it receives from
any agent or sub-custodian appointed hereunder which may assist trustees of
registered investment companies fulfill their responsibilities under Rule 17f-5
of the Act.
F. The Custodian shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held by it for the account of
the Fund are such as properly may be held by the Fund under the provisions of
the Articles of Incorporation and the Fund's By-Laws.
G. The Custodian shall treat all records and other information relating
to the Fund and the Fund Assets as confidential and shall not disclose any such
records or information to any other person unless (i) the Fund shall have
consented thereto in writing or (ii) such disclosure is required by law.
H. The Custodian shall be entitled to receive and the Fund agrees to pay
to the Custodian such compensation as shall be determined pursuant to Appendix D
attached hereto, or as shall be determined pursuant to amendments to such
Appendix D. The Custodian shall be entitled to charge against any money held by
it for the account of the Fund, the amount of any of its fees, any loss, damage,
liability or expense, including counsel fees. The expenses which the Custodian
may charge against the account of the Fund include, but are not limited to, the
expenses of agents or sub-custodians incurred in settling transactions involving
the purchase and sale of Securities of the Fund.
I. The Custodian shall be entitled to rely upon any Oral Instructions and
any Written Instructions. The Fund agrees to forward to the Custodian Written
Instructions confirming Oral Instructions in such a manner so that such Written
Instructions are received by the Custodian, whether by hand delivery, facsimile
or otherwise, on the same business day on which such Oral Instructions were
given. The Fund agrees that the failure of the Custodian to receive such
confirming instructions shall in no way affect the validity of the transactions
or enforceability of the transactions hereby authorized by the Fund. The Fund
agrees that the Custodian shall incur no liability to the Fund for acting upon
Oral Instructions given to the
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Custodian hereunder concerning such transactions.
J. The Custodian will (i) set up and maintain proper books of account and
complete records of all transactions in the accounts maintained by the Custodian
hereunder in such manner as will meet the obligations of the Fund under the Act,
with particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder and those records are the property of the Fund, and (ii) preserve for
the periods prescribed by applicable Federal statute or regulation all records
required to be so preserved. All such books and records shall be the property
of the Fund, and shall be open to inspection and audit at reasonable times and
with Prior Notice by Officers and auditors employed by the Fund.
K. The Custodian shall send to the Fund any report received on the systems
of internal accounting control of the Custodian, or its agents or
sub-custodians, as the Fund may reasonably request from time to time.
L. The Custodian performs only the services of a custodian and shall have
no responsibility for the management, investment or reinvestment of the
Securities from time to time owned by the Fund. The Custodian is not a selling
agent for shares of the Fund and performance of its duties as custodian shall
not be deemed to be a recommendation to the Fund's depositors or others of
shares of the Fund as an investment.
M. The Custodian shall take all reasonable action, that the Fund may from
time to time request, to assist the Fund in obtaining favorable opinions from
the Fund's independent accountants, with respect to the Custodian's activities
hereunder, in connection with the, preparation of the Fund's Form N-1A, Form
N-SAR, or other annual reports to the Securities and Exchange Commission.
N. The Fund hereby pledges to and grants the Custodian a security interest
in any Fund Assets to secure the payment of any liabilities of the Fund to the
Custodian, whether acting in its capacity a Custodian or otherwise, or on
account of money borrowed from the Custodian. This pledge is in addition to any
other pledge of collateral by the Fund to the Custodian.
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ARTICLE X
Termination
A. Either of the parties hereto may terminate this Agreement for any
reason by giving to the other party a notice in writing specifying the date of
such termination, which shall be not less than ninety (90) days after the date
of giving of such notice. If such notice is given by the Fund, it shall be
accompanied by a copy of a resolution of the Board Of Directors of the Fund,
certified by the Secretary of the Fund, electing to terminate this Agreement and
designating a successor custodian or custodians. In the event such notice is
given by the Custodian, the Fund shall, on or before the termination date,
deliver to the Custodian a copy of a resolution of the Board Of Directors of the
Fund, certified by the Secretary, designating a successor custodian or
custodians to act on behalf of the Fund. In the absence of such designation by
the Fund, the Custodian may designate a successor custodian which shall be a
bank or trust company having not less than $100,000,000 aggregate capital,
surplus, and undivided profits. Upon the date set forth in such notice this
Agreement shall terminate, and the Custodian, provided that it has received a
notice of acceptance by the successor custodian, shall deliver and that date,
directly to the successor custodian all Securities and moneys then owned by the
Fund and held by it as Custodian. Upon termination of this Agreement, the Fund
shall pay to the Custodian on behalf of the Fund such compensation as may be due
as of the date of such termination. The Fund agrees on behalf of the Fund that
the Custodian shall be reimbursed for its reasonable costs in connection with
the termination of this Agreement.
B. If a successor custodian is not designated by the Fund, or by the
Custodian in accordance with the preceding paragraph, or the designated
successor cannot or will not serve, the Fund shall, upon the delivery by the
Custodian to the Fund of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and moneys owned by the
Fund, be deemed to be the custodian for the Fund, and the Custodian shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement, other than the
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duty with respect to Securities held in the Book-Entry System, which cannot be
delivered to the Fund, which shall be held by the Custodian in accordance with
this Agreenment.
ARTICLE XI
MISCELLANEOUS
A. Appendix A sets forth the names and the signatures of all Authorized
Persons, as certified by the Secretary of the Fund. The Fund agrees to furnish
to the Custodian a new Appendix A in form similar to the attached Appendix A, if
any present Authorized Person ceases to be an Authorized Person or if any other
or additional Authorized Persons are elected or appointed. Until such new
Appendix A shall be received, the Custodian shall be fully protected in acting
under the provisions of this Agreement upon Oral Instructions or signatures of
the then current Authorized Persons as set forth in the last delivered Appendix
A.
B. No recourse under any obligation of this Agreement or for any claim
based thereon shall be had against any organizer, shareholder, Officer,
Director, past, present future as such, of the Fund or of any predecessor or
successor, either directly or through the Fund or any such predecessor or
successor, whether by virtue of any constitution, statute or rule of law or
equity, or be the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Agreement and the obligations
thereunder are enforceable solely against the Fund, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
organizers. shareholders, Officers, Directors of the Fund or of any predecessor
or successor, or any of them as such. To the extent that any such liability
exists, it is hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
C. The obligations set forth in this Agreement as having been made by the
Fund have been made by the Board Of Directors, acting as such Directors for and
on behalf of the
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Fund, pursuant to the authority vested in them under the laws of the State of
Maryland, the Articles of Incorporation and the By-Laws of the Fund. This
Agreement has been executed by Officers of the Fund as officers, and not
individually, and the obligations contained herein are not binding upon any of
the Directors, Officers, agents or holders of shares, personally, but bind only
the Fund.
D. Provisions of the Prospectus and any other documents (including
advertising material) specifically mentioning the Custodian (other than merely
by name and address) shall be reviewed with the Custodian by the Fund prior to
publication and/or dissemination or distribution, and shall be subject to the
consent of the Custodian.
E. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently given if
addressed to the Custodian and mailed or delivered to it at its offices at Star
Bank Center ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇. ▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, attention
Mutual Fund Custody Department, or at such other place as the Custodian may
from time to time designate in writing.
F. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given when
delivered to the Fund or on the second business day following the time such
notice is deposited in the U.S. mail postage prepaid and addressed to the Fund
c/o American Data Services, Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or at such other place as the, Fund may from time to time designate in writing.
G. This Agreement, with the exception of the Appendices, may not be
amended or modified in any manner except by a written agreement executed by
both parties with the same formality as this Agreement, and authorized and
approved by a resolution of the Board of Directors of the Fund.
H. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund or by the Custodian and no
attempted assignment by the Fund or the Custodian shall be effective without
the written consent of the other party hereto.
15
16
I. This Agreement shall be construed in accordance with the laws of the
State of Ohio.
J. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized as of the day
and year first above written.
ATTEST: Chaconia Fund
By: ▇ ▇ ▇▇▇▇▇▇
------------------ -------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
---------------------
ATTEST: Star Bank, N.A.
By:
------------------ ------------------------
Title:
---------------------
16
17
APPENDIX A
Authorized Persons Specimen Signatures
------------------ -------------------
Chairman: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇
------------------ -------------------
President: --
------------------ -------------------
Secretary: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
------------------ -------------------
Treasurer: --
------------------ -------------------
Controller: --
------------------ -------------------
Adviser Employees: --
------------------ -------------------
--
------------------ -------------------
--
------------------ -------------------
Transfer Agent/Fund Accountant
Employees:
----------------- -------------------
----------------- -------------------
----------------- -------------------
----------------- -------------------
17
▇▇
▇▇▇▇▇▇▇▇ ▇
The following agents are employed currently by Star Bank N.A. for securities
processing and control...
The Depository Trust Company (New York)
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bankers Trust Company
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(For Foreign Securities and certain non-DTC eligible Securities)
18
19
APPENDIX C
STANDARDS OF SERVICE GUIDE
20
STANDARDS OF SERVICE GUIDE
STAR BANK, N.A.
MAIL LOCATION #6118,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
September, 1996
21
Star Bank, N.A.
Standards of Service Guide
Star Bank,N.A. is committed to providing superior quality service to all
customers and their agents at all times. We have compiled this guide as a tool
for our clients to determine our standards for the Processing of security
settlements, payment collection, and capital change transactions. Deadlines
recited in this guide represent the times required for Star Bank to guarantee
processing. Failure to meet these deadlines will result in settlement at our
client's risk. In all cases, Star Bank will make every effort to compete all
processing on a timely basis.
Star Bank is a direct participant of the Depository Trust Company, a direct
member of the Federal Reserve Bank of Cleveland, and utilizes the Bankers Trust
Company as its agent for ineligible and foreign securities.
For corporate reorganizations, Star Bank utilizes SEI's Reorg Source,
Financial Information, Inc., XCITEK, DTC Important Notices, and the Wall Street
Journal.
For bond calls and mandatory puts, Star Bank utilizes SEI's Bond Source,
▇▇▇▇▇ Information Systems, Standard & Poor's Corporation, and DTC Important
Notices. Star Bank will not notify clients of optional put opportunities.
Any securities delivered free to Star Bank or its agents must be received
three (3) business days prior to any payment or settlement in order for the Star
Bank standards of service to apply.
Should you have any questions regarding the information contained in this
guide, please feel free to contact your account representative.
The information contained in this Standards of Service Guide is
subject to change. Should any changes be made Star Bank will
provide you with an updated copy of its Standards of Service
Guide.
22
STAR BANK SECURITY SETTLEMENT STANDARDS
TRANSACTION TYPE INSTRUCTIONS DEADLINES* DELIVERY INSTRUCTIONS
DTC 1:30 P.M. on Settlement Date DTC Participation #▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Institutional # ______________________
For Account # ________________________
Federal Reserve Book Entry 12:30 P.M. on Settlement Date Federal Reserve Bank of Cinti/Trust
for Star Bank, NA, ABA# ▇▇▇▇▇▇▇▇▇
For Account # ________________________
Federal Reserve Book Entry (Repurchase 1:00 P.M. on Settlement Date Federal Reserve Bank of Cinti/Spec
Agreement Collateral Only) for Star Bank N.A, ABA# ▇▇▇▇▇▇▇▇▇
For Account # ________________________
PTC Securities 12:00 P.M. on Settlement Date PTC For Account BTRST/CUST
(GNMA Book Entry) Sub Account: Star Bank, NA #090334
Physical Securities 9:30 A.M. EST on Settlement Date Bankers Trust Company
(for Deliveries, by 4:00 P.M. on ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, Window 43
Settlement Date minus 1) for Star Bank Account #090334
CEDEL/EURO-CLEAR 11:00 A.M. on Settlement Euroclear Via Cedel Bridge
Date minus 2 In favor of Bankers Trust Comp
Cedel 53355
For Star Bank Account #501526354
Cash Wire Transfer 3:00 P.M. Star Bank, ▇. ▇. ▇▇▇▇▇/Trust
ABA# ▇▇▇▇▇▇▇▇▇
Credit Account #▇▇▇▇▇▇▇
Further Credit to ___________________
Account # ___________________________
*All times listed are Eastern Standard Time.
23
STAR BANK PAYMENT STANDARDS
SECURITY TYPE INCOME PRINCIPAL
Equities Payable Date
Municipal Bonds* Payable Date Payable Date
Corporate Bonds* Payable Date Payable Date
Federal Reserve Bank Book Entry* Payable Date Payable Date
PTC GNMA's (P&I) Payable Date + 1 Payable Date + 1
CMOs*
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1
SBA Loan Certificates When Recevied When Received
Unit Investment Trust Certificates* Payable Date Payable Date
Certificates of Deposit* Payable Date + 1 Payable Date + 1
Limited Partnerships When Received When Received
Foreign Securities When Received When Received
*Variable Rate Securities
Federal Reserve Bank Book Entry Payable Date Payable Date
DTC Payable Date + 1 Payable Date + 1
Bankers Trust Payable Date + 1 Payable Date + 1
NOTE: If a payable date falls on a weekend or bank holiday, payment will
be made on the immediately following business day.
24
STAR BANK CORPORATE REORGANIZATION STANDARDS
TYPE OF ACTION NOTIFICATION TO CLIENT DEADLINE FOR CLIENT INSTRUCTIONS TRANSACTION
TO STAR BANK POSTING
Rights, Warrants Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
and Optional Mergers or receipt of notice
Mandatory Puts with Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
Option to Retain or receipt of notice
Class Actions 10 business days prior to expiration date 5 business days prior to expiration Upon receipt
Voluntary Tenders, Later of 10 business days prior to expiration 5 business days prior to expiration Upon receipt
Exchanges, or receipt of notice
and Conversions
Mandatory Puts, At posting of funds or securities received None Upon receipt
Defaults,
Liquidations,
Bankruptcies, Stock
Splits, Mandatory
Exchanges
Full and Partial Later of 10 business days prior to expiration None Upon receipt
Calls or receipt of notice
NOTE: Fractional shares/par amounts resulting from any of the above will be
sold.
25
or receipt at notice
cm
Later of 10 business days prior to expiration 5 business days prior to
expiration UPon receipt
QC receipt of notice
10 business days prior to expiration date 5 business days prior to
expiration Upon receipt
Later of 10 business, days prior to expiration 5 business days prior to
expiration Upon receipt
or receipt of notice
At posting of funds or securities received None
Upon, receipt
full and Partial Calls Later or
10 business days prior to expiration None Of
receipt or notice
NOTE: Fractional shares/par amounts resulting from any of the above will be
sold.
26
APPENDIX D
SCHEDULE OF COMPENSATION
1
27
STAR BANK, N.A.
THIRD PARTY ACCESS COMPENSATION SCHEDULE FOR CHACONIA FUND
Third Party access is available within two (2) weeks and requires dial-up
software which will allow your organization to access its Star Bank account from
any location.
REQUIREMENTS AND EXPENSES
There will be a one time expense for the purchase of software
from SEI which includes internal password control and ability
to dial a Local IBM Information Systems number.
(Generally anywhere in the continental U.S.A.) $250.00
ONGOING EXPENSES
Telephone Connect time $.37/minute
28
Star Bank, N.A.
Proposed Custody Fee Schedule for Chaconia Fund
Star Bank, N.A., as Custodian, will receive monthly compensation for services
according to the terms of the following schedule:
I. Portfolio Transaction Fees:
(a) For each repurchase agreement transaction $7.00
(b) For each portfolio transaction processed through $9.00
DTC or Federal Reserve
(c) For each portfolio transaction processed through
our New York custodian $25.00
(d) For each GNMA/Amortized Security Purchase $16.00
(e) For each GNMA Prin/Int Paydown, GNMA Sales $8.00
(f) For each option/future contract written,
exercised or expired. $40.00
(g) For each Cedel/Euro clear transaction $80.00
(h) For each Disbursement (Fund expenses only) $5.00
A transaction is a purchase/sale of a security, free receipt/free delivery
(excludes initial conversion), maturity, tender or exchange:
II. Market Value Fee
Based upon an annual rate of: ▇▇▇▇▇▇▇
.▇▇▇▇ (▇ ▇▇▇▇▇ ▇▇▇▇▇▇) on First $20
.0002 (2 Basis Points) on Next $20
$.00015(1.5 Basis Points) on Balance
III. Monthly Minimum Fee-Per Fund $400.00
IV. Out of Pocket Expenses.
The only out-of-pocket expenses charged to your account
will be shipping fees or transfer fees.
V. ▇▇▇ Documents
Per Shareholder/year to hold each ▇▇▇ Document $8.00
VI. Earnings Credits
On a monthly basis any earnings credits generated from uninvested
custody balances will be applied against any cash management
service fees generated. Earnings credits are based on a cost of
funds tiered earnings credit rate.
29
STAR BANK
PROPOSED CASH MANAGEMENT FEE SCHEDULE FOR CHACONIA FUND
SERVICES UNIT COST($) MONTHLY COST($)
D.D.A. Account Maintenance 14.00
Deposits .399
Deposited Items .109
Checks Paid .159
Balance Reporting - P.C. Access 50.00
ACH Transaction .095
ACH Monthly Maintenance 40.00
Controlled Disbursement (1st account) 110.00
Each additional account 25.00
Deposited Items Returned .006
International Items Returned 10.00
NSP Returned Checks 25.00
Stop Payments 22.00
Data Transmission per account 110.00
Data Capture* .10
Drafts Cleared .179
Lockbox Maintenance** 55.00
Lockbox items Processed
with copy of check .32
without copy of check .26
Checks Printed .20
Positive Pay .06
Issued Items .015
Wires Incoming
Domestic 10.00
International 10.00
Wires Outgoing
Domestic
Repetitive 12.00
Non-Repetitive 13.00
International
Repetitive 35.00
Non-Repetitive 40.00
PC-Initiated Wires
Domestic
Repetitive 9.00
Non-Repetitive 9.00
International
Repetitive 25.00
Non-Repetitive 25.00
***Uncollected Charge Star Bank Prime Rate as of first of month plus 4%
* Price can vary depending upon what information needs to be captured
** With the use of lockbox, the collected balance in the demand deposit
account will be significantly increased and therefore earnings to offset
cash management service fees will be maximized.
*** Fees for uncollected balances are figured on the monthly average of all
combined accounts.
**** Other available cash management services are priced separately.
Revised 0/31/95
30
STAR MONEY MARKET
RESPONSE CARD
TO: STAR BANK
I hereby authorize the use of the STAR TREASURY FUND or STAR TAX-FREE FUND for
the purpose of meeting the liquidity needs of the account and sweeping income
and other cash receipts pending long term investment, all as directed by the
investment manager of the account. This authorization is valid until revoked in
writing.
Please check the selected Fund.
STAR TREASURY FUND
-----
STAR TAX-FREE FUND
-----
▇ ▇ ▇▇▇▇▇▇
--------------------------------------
Signature (▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇)
--------------------------------------
All Authorized Amount Numbers
--------------------------------------
Date
Investments in mutual funds are net deposits of or guaranteed by Star Bank and
are not insured by the Federal Deposit Insurance Corporation or by any other
government sponsored agency of The Federal Government or by any state. The
value of shares in mutual funds are not guaranteed and may fluctuate.