CUSTODIAN AGREEMENT
This CUSTODIAN AGREEMENT dated as of this _th day of May, 1998 by
and between The Bank of New York, a New York banking corporation (the
"Custodian"), and Peak TrENDS Trust (the "Trust"), a business trust organized
under the laws of the State of Delaware, under and by virtue of a Declaration of
Trust, dated as of , 1998, as amended and restated as of , 1998 (the "Trust
Agreement").
W I T N E S S E T H
WHEREAS, the Trust is a non-diversified, closed-end management
investment company, as defined in the Investment Company Act of 1940 (the
"Investment Company Act"), formed to purchase and hold certain U.S. treasury
securities (the "Treasury Securities"), to enter into and hold a forward
contract with an existing shareholder of Peak International Limited (the
"Contract"), and to issue Trust Enhanced Dividend Securities (the "TrENDS") in
accordance with the terms and conditions of the Trust Agreement;
WHEREAS, the Trust desires to engage the services of the
Custodian to perform certain custodial duties for the Trust; and
WHEREAS, the Custodian is willing to assume such duties, on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. DEFINITIONS. Capitalized terms not otherwise defined
herein shall have the respective meanings specified in the Trust Agreement.
2. APPOINTMENT OF CUSTODIAN; TRANSFER OF ASSETS. The Trust
hereby constitutes and appoints the Custodian, and the Custodian accepts such
appointment, as agent of the Trust and as custodian of all of the property at
any time owned or held by the Trust (collectively, the "Assets"). The Trust
hereby deposits the Assets with the Custodian and the Custodian hereby accepts
such into its custody and the Trustees shall deliver to the Custodian all of the
Assets, including all monies, securities and other property received by the
Trust at any time during the
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period of this Agreement, subject to the following terms and conditions. The
Custodian hereby agrees that it shall hold the Assets in a segregated custody
account, separate and distinct from all other accounts, in accordance with
Section 17(f) of, and in such manner as shall constitute the segregation and
holding in trust within the meaning of, the Investment Company Act and the rules
and regulations thereunder. The Trustees authorize the Custodian, for any Assets
held hereunder, to use the services of any United States securities depository
permitted to perform such services for registered investment companies and their
custodians under Rule 17f-4 under the Investment Company Act and which have been
approved by the Trustees, including but not limited to, The Depository Trust
Company and the Federal Reserve Book Entry System. The Custodian shall be under
no duty or obligation to inspect, review or examine any Assets to determine that
they are genuine, enforceable, or appropriate for the represented purpose or
that they are other than what they purport to be on their face.
3. ASSET DISPOSITION; EXAMINATIONS. The Custodian shall have no
power or authority to assign, hypothecate, pledge or otherwise dispose of the
Assets, except pursuant to a written direction in accordance with paragraph 4
below and then only for the account of the Trust. The Assets shall be subject to
no lien or charge of any kind in favor of the Custodian for itself or for any
other person claiming through the Custodian. The Custodian shall permit actual
examination of the Assets by the Trust's independent public accountant at the
end of each annual and semi-annual fiscal period of the Trust and at least one
other time during the fiscal year of the Trust chosen by such independent public
accountant and shall permit the inspection of the Assets by the Commission
through its employees or agents during the normal business hours of the
Custodian upon reasonable request.
4. AUTHORIZED ACTIONS. The Custodian shall take such actions with
respect to the Assets as directed in writing by any two Trustees or officers of
the Administrator duly authorized by the Trustees to give written instructions
on behalf of the Trustees and named in such resolutions of the Trustees,
certified by a Trustee, as may be received by the Custodian from time to time.
5. CUSTODIAN'S ACTIONS TAKEN IN GOOD FAITH. In connection with
the performance of its duties under this Agreement, the Custodian shall have no
duties or obligations other than those specifically set forth herein or in the
Trust Agreement or as may subsequently be agreed in writing by the parties
hereto and shall be under no liability to the Trust or any Holder for any action
taken in good faith in reliance on any paper, order, certification, list,
demand, request, consent, affidavit,
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notice, opinion, direction, endorsement, assignment, resolution, draft or other
document, prima facie properly executed, or for the disposition of the Assets
pursuant to the Trust Agreement or in respect of any action taken or suffered
under the Trust Agreement in good faith, in accordance with an opinion of
counsel or at the direction of the Trustees pursuant hereto; provided that this
provision shall not protect the Custodian against any liability to which it
would otherwise be subject by reason of its willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder or its negligence or
reckless disregard of its obligations and duties hereunder. Notwithstanding any
other provision of this Agreement, the Custodian shall under no circumstances be
liable for any punitive, exemplary, indirect or consequential damages.
6. TRUST AGREEMENT VALIDITY. The Custodian shall not be
responsible for the validity or sufficiency of the Trust Agreement or the due
execution thereof, or for the form, character, genuineness, sufficiency, value
or validity of any of the Assets and the Custodian shall in no event assume or
incur any liability, duty or obligation to any Holder or to the Trustees, other
than as expressly provided for herein. The Custodian shall not be responsible
for or in respect of the validity of any signature by or on behalf of the
Trustees.
7. LITIGATION OBLIGATIONS, COSTS AND INDEMNITY. The Custodian
shall not be under any obligation to appear in, prosecute or defend any action
which in its opinion may involve it in expense or liability, unless it shall be
furnished with such reasonable security and indemnity against such expense or
liability as it may require, and any pecuniary costs of the Custodian from such
actions shall be expenses which are reimbursable pursuant to paragraph 13
hereof.
8. TAXES; TRUST EXPENSES. In no event shall the Custodian be
personally liable for any taxes or other governmental charges imposed upon or in
respect of the Assets or upon the monies, securities or other properties
included therein. The Custodian shall be reimbursed and indemnified by the Trust
for all such taxes and charges, for any tax or charge imposed against the Trust
and for any expenses, including counsel fees, interest, penalties and additions
to tax which the Custodian may sustain or incur with respect to such taxes or
charges.
9. CUSTODIAN RESIGNATION, SUCCESSION. (a) The Custodian may
resign by executing an instrument in writing resigning as Custodian and
delivering the same to the Trustees, not less than 60 days before the date
specified in such instrument when, subject to clause (b) of this paragraph 9,
such resignation is to take effect. Upon receiving such notice of resignation,
the Trustees shall use their
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reasonable efforts promptly to appoint a successor Custodian in the manner and
meeting the qualifications provided in the Trust Agreement, by written
instrument or instruments delivered to the resigning Custodian and the successor
Custodian.
(b) In case no successor Custodian shall have been appointed
within 30 days after notice of resignation has been received by the Trust, the
resigning Custodian may forthwith apply to a court of competent jurisdiction for
the appointment of a successor Custodian and shall not resign until a successor
Custodian has been appointed. Such court may thereupon, after such notice, if
any, as it may deem proper and prescribed, appoint a successor Custodian.
10. CUSTODIAN REMOVAL. The Trust may remove the Custodian upon 60
days' prior written notice to the Custodian and appoint a successor Custodian.
In case at any time the Custodian shall not meet the requirements set forth in
the Trust Agreement or shall become incapable of acting or if a court having
jurisdiction shall enter a decree or order for relief in respect of the
Custodian in an involuntary case, or the Custodian shall commence a voluntary
case, under any applicable bankruptcy, insolvency, or other similar law now or
hereafter in effect, or any receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) for the Custodian or for any substantial part
of its property shall be appointed, or the Custodian shall make any general
assignment for the benefit of creditors, or shall generally fail to pay its
debts as they become due, the Trust may remove the Custodian immediately and
appoint a successor Custodian. The termination of the Administration Agreement
or the Paying Agent Agreement shall cause the removal of the Custodian
simultaneously therewith, unless otherwise agreed by both parties in writing.
11. TRANSFERS TO SUCCESSOR CUSTODIAN. Upon the
request of any successor Custodian, the Custodian hereunder shall, upon
payment of all amounts due it under this Agreement, execute and deliver an
instrument acknowledged by it transferring to such successor Custodian all the
rights and powers of the resigning Custodian; and the resigning Custodian shall
promptly transfer, deliver and pay over to the successor Custodian the Assets at
the time held by it hereunder, if any, together with all necessary instruments
of transfer and assignment or other documents properly executed necessary to
effect such transfer and such of the records or copies thereof maintained by the
resigning Custodian in the administration hereof as may be requested by the
successor Custodian, and the resigning Custodian shall unless it has been guilty
of wilful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder or its negligence or reckless disregard of its obligations and
duties hereunder thereupon be discharged from all duties and responsibilities
hereunder. Any
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resignation or removal of the Custodian shall become effective upon such
acceptance of appointment by the successor Custodian. The indemnification of the
resigning Custodian provided for hereunder shall survive any resignation,
discharge or removal of the Custodian hereunder.
12. CUSTODIAN MERGER, CONSOLIDATION. Any corporation into which
the Custodian may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Custodian shall be a party, shall be the successor custodian hereunder
and under the Trust Agreement without the execution or filing of any paper,
instrument or further act to be done on the part of the parties hereto, provided
that such corporation meets the requirements set forth in the Trust Agreement
and provided further that the Trust has given its prior written consent to the
Custodian with respect to any new successor Custodian.
13. COMPENSATION; EXPENSES. The Custodian shall receive
compensation for performing the usual, ordinary, normal and recurring services
under this Custodian Agreement and, with the prior written approval of the
Trustees, reimbursement for any and all expenses and disbursements incurred
hereunder, as provided in Section 3.1 of the Administration Agreement.
14. SECTION 17(f) QUALIFICATION. The Custodian hereby represents
that it is, and will at all times for the term of its appointment hereunder be,
qualified to act as a custodian under Section 17(f) of the Investment Company
Act.
15. CUSTODIAN'S LIMITED LIABILITY. The Trust shall indemnify and
hold the Custodian harmless from and against any loss, damages, cost or expense
(including the reasonable costs of investigation, preparation for and defense of
legal and/or administrative proceedings related to a claim against it and
reasonable attorneys' fees and disbursements), liability or claim incurred by
reason of any inaccuracy in information furnished to the Custodian by the
Trustees, or any act or omission in the course of, connected with or arising out
of any services to be rendered hereunder, provided that the Custodian shall not
be indemnified and held harmless from and against any such loss, damages, cost,
expense, liability or claim arising from its willful misfeasance, bad faith or
negligence in the performance of its duties, or its reckless disregard of its
duties and obligations hereunder. Neither the Federal Reserve Book Entry System
nor the Depository Trust Company shall be deemed to be agents of the Custodian.
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16. RIGHTS OF SET-OFF; BANKER'S LIEN. The Custodian hereby waives
all rights of set-off or banker's lien it may have with respect to the Assets
held by it as Custodian hereunder.
17. TERMINATION. This Agreement shall terminate upon the earlier
of the termination of the Trust or the appointment of a successor Custodian.
18. CHOICE OF LAW. This Agreement is executed and delivered in
the State of New York, and all laws or rules of construction of the State of New
York shall govern the right of the parties hereto and the interpretation of the
provisions hereof.
19. NOTICES. Any notice to be given to the Trust hereunder shall
be in writing and shall be duly given if mailed or delivered to Peak TrENDS
Trust, c/o Xxxxxx X. Xxxxxxx, Managing Trustee, 000 Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxx 00000, and to the Custodian if mailed or delivered to The Bank
of New York, 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx Xxxxx or at such other address as shall be specified by the addressee to
the other party hereto in writing.
20. NO THIRD PARTY BENEFICIARIES. Nothing herein, express or
implied, shall give to any person, other than the Trustees, the Custodian and
their respective successors and assigns, any benefit of any legal or equitable
right, remedy or claim hereunder.
21. AMENDMENTS; TRUST AGREEMENT CHANGES; WAIVER. This Agreement
shall not be deemed or construed to be modified, amended, rescinded, cancelled
or waived, in whole or in part, except by a written instrument signed by a duly
authorized representative of the party to be charged. The Trustees shall notify
the Custodian of any change in the Trust Agreement prior to the effective date
of any such change. Failure of either party hereto to exercise any right or
remedy hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
22. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
PEAK TRENDS TRUST
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as Trustee
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as Trustee
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as Trustee
THE BANK OF NEW YORK
By: _________________________
Name:
Title:
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