CINlibrary/1065219.6
MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
Dated As Of July 1, 2001
TABLE OF CONTENTS
PAGE
DEFINITIONS...................................................................1
ARTICLE I CUSTODY PROVISIONS.................................................3
Appointment of Custodian...................................................3
Custody of Cash and Securities.............................................3
Receipt and Holding of Assets............................................4
Disbursements of Cash and Delivery of Securities.........................4
Actions Which May be Taken Without Instructions..........................5
Prohibited Actions.......................................................7
Confirmation and Statements..............................................7
Registration of Securities...............................................8
Segregated Accounts......................................................8
Settlement of Fund Transactions............................................8
Customary Practices......................................................8
Contractual Income.......................................................8
Contractual Settlement...................................................9
Lending of Securities......................................................9
Persons Having Access to Assets of the Fund................................9
Standard of Care; Scope of Custodial Responsibilities......................9
Standard of Care.........................................................9
Scope of Duties.........................................................10
No Liability Until Receipt..............................................10
Amounts Due from Transfer Agent.........................................11
Collection Where Payment Refused........................................11
No Duty to Ascertain Authority..........................................11
Reliance on Instructions................................................11
Appointment of Subcustodians.............................................11
Overdraft Facility and Security for Payment...............................12
Tax Obligations...........................................................12
ARTICLE II FOREIGN CUSTODY MANAGER SERVICES..................................13
Delegation................................................................13
Changes to Appendix C.....................................................13
Reports to Board..........................................................13
Monitoring System.........................................................13
Standard of Care..........................................................13
Use of Eligible Securities Depositories...................................14
ARTICLE III Information Services.............................................14
Risk Analysis.............................................................14
Monitoring of Eligible Securities Depositories............................14
Use of Agents.............................................................14
Exercise of Reasonable Care...............................................14
Liabilities and Warranties................................................14
ARTICLE IV GENERAL PROVISIONS................................................15
Compensation..............................................................15
Insolvency of Eligible Foreign Custodians.................................15
Liability for Securities Depositories.....................................15
Damages...................................................................16
Indemnification; Liability of the Trust and the Fund......................16
Force Majeure.............................................................16
Termination...............................................................16
Inspection of Books and Records...........................................17
Miscellaneous.............................................................17
MUTUAL FUND CUSTODY AND
SERVICES AGREEMENT
This AGREEMENT is effective as of July 1, 2001, and is between THE XXXX
FAMILY OF FUNDS, (the "Trust") a business trust organized under the laws of the
State of Ohio having its principal office and place of business at 0000
Xxxxxxxxx Xxxxx, Xxxxxx, Xxxx 00000-0000, on behalf of the Xxxx International
Value Fund (the "Fund") and BOSTON SAFE DEPOSIT AND TRUST COMPANY, (the
"Custodian") a Massachusetts trust company with its principal place of business
at Xxx Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Trust and the Custodian desire to restate the terms of
their existing custody agreement to reflect the changes to Rules 17f-5 and
17f-7, and to set forth their agreement with respect to the custody of the
Fund's Securities and cash and the processing of the Fund's Securities
transactions;
WHEREAS, the Board desires to delegate certain of its responsibilities
for performing the services set forth in paragraphs (c)(1), (c)(2) and (c)(3) of
Rule 17f-5 to the Custodian as a Foreign Custody Manager; and
WHEREAS, the Custodian agrees to accept such delegation with respect to
Foreign Assets, including those held by Eligible Foreign Custodians in the
Selected Countries as set forth in jurisdictions listed on Appendix C as set
forth in Article II;
WHEREAS, the Custodian agrees to perform the function of a Primary
Custodian under Rule 17f-7;
NOW THEREFORE, the Trust and the Custodian agree as follows:
DEFINITIONS
The following words and phrases, unless the context requires otherwise, shall
have the following meanings:
1. "Act": the Investment Company Act of 1940 and the Rules and
Regulations thereunder, all as amended from time to time.
2. "Agreement": this agreement and any amendments.
3. "Authorized Person": the Chairman of the Trust's Board, its
President, and any Vice President, Secretary, Treasurer or any other
person, whether or not any such person is an officer or employee of
the Trust, duly authorized by the Board to add or delete jurisdictions
pursuant to Article II and to give Instructions on behalf of the Fund,
who is listed in the certification annexed hereto as Appendix A or
such other certification as may be received by the Custodian from time
to time.
4. "Board": the Board of Trustees (or the body authorized to
exercise authority similar to that of the board of directors of
a corporation) of the Trust.
5. "Book-Entry System": the Federal Reserve/Treasury book-entry
system for United States and federal agency Securities, its
successor or successors and its nominee or nominees.
6. "Business Day": any day on which the Fund, the Custodian, the
Book-Entry System and appropriate clearing corporation(s) are
open for business.
7. "Eligible Foreign Custodian": (a) a banking institution or trust
company incorporated or organized under the laws of a country other
than the United States, that is regulated as such by the country's
government or an agency of the country's government; (b) a
majority-owned direct or indirect subsidiary of a U.S. Bank or
bank-holding company that is incorporated or organized under the laws
of a country other than the United States; or (c) any entity, other
than a Securities Depository, with respect to which exemptive or
no-action relief has been granted by the Securities and Exchange
Commission. For the avoidance of doubt, the term "Eligible Foreign
Custodian" shall not include Euroclear, Clearstream, Bank One or any
other transnational system for the central handling of securities or
equivalent book-entries regardless of whether or not such entities or
their service providers are acting in a custodial capacity with
respect to Foreign Assets, Securities or other property of the Fund.
8. "Eligible Securities Depository": the meaning of the term set forth
in Rule 17f-7(b)(1).
9. "Fee Schedule": the fees listed in a separate document agreed upon
by the Parties as such may be amended from time to time in accordance
with Article IV.
10. "Foreign Assets": any of the Fund's investments, including foreign
currencies, for which the primary market is outside the United States,
and cash and cash equivalents that are reasonably necessary to effect
the Fund's transactions in those investments.
11. "Foreign Custody Manager": the meaning of the term set forth in
Rule 17f-5(a)(3).
12. "Instructions": directions and instructions to the Custodian from
an Authorized Person in writing by facsimile or electronic
transmission subject to the Custodian's practices or any other method
specifically agreed upon, provided that the Custodian may, in its
discretion, accept oral directions and instructions from an individual
it reasonably believes to be an Authorized Person and may require
confirmation in writing.
13. "Primary Custodian": the meaning set forth in Rule 17f-7(b)(2).
14. "Prospectus": the Trust's current prospectus and statement of
additional information relating to the registration of the Fund's
Shares under the Securities Act of 1933, as amended.
15. "Risk Analysis": the analysis required under Rule
17f-7(a)(1)(i)(A).
16. "Rules 17f-4, 17f-5 and 17f-7": such Rules as promulgated under
Section 17(f) of the Act, as such rules (and any successor rules or
regulations) may be amended from time to time.
17. "Security" or "Securities": bonds, debentures, notes, stocks,
shares, evidences of indebtedness, and other securities, commodities,
interests and investments from time to time owned by the Fund.
18. "Securities Depository": a system for the central handling of
securities as defined in Rule 17f-4(a).
19. "Selected Countries": the jurisdictions listed on Appendix C as
such may be amended from time to time in accordance with Article II.
20. "Shares": shares of the Fund, however designated.
ARTICLE I
CUSTODY PROVISIONS
1. Appointment of Custodian. The Trust, on behalf of the Fund, has appointed,
and the Custodian hereby accepts appointment, as custodian of all the Securities
and monies at the time owned by or in the possession of the Fund during the
period of this Agreement.
2.Custody of Cash and Securities.
(a) Receipt and Holding of Assets. The Fund will deliver or cause to be delivered to the Custodian
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all Securities and monies owned by it at any time during the period of this Custody Agreement.
The Custodian will not be responsible for such Securities and monies until actually received.
The Board specifically authorizes the Custodian to hold Securities, Foreign Assets or other
property of the Fund with any domestic subcustodian or Securities Depository, and Eligible
Foreign Custodians or Eligible Securities Depositories in the Selected Countries as provided in
Article II. Securities, Foreign Assets and monies of the Fund deposited in a Securities
Depository or Eligible Securities Depositories will be reflected in an account or accounts that
include only assets held by the Custodian or an Eligible Foreign Custodian for its customers.
(b) Disbursements of Cash and Delivery of Securities. The
Custodian shall disburse cash or deliver out Securities only
for the purposes listed below. Instructions must specify or
evidence the purpose for which any transaction is to be made
and the Trust shall be solely responsible to assure that
Instructions are in accord with any limitations or
restrictions applicable to the Fund.
(1) In payment for Securities purchased for the Fund;
(2) In payment of dividends or distributions with respect
to Shares;
(3) In payment for Shares which have been redeemed by the
Fund;
(4) In payment of taxes;
(5) When Securities are sold, called, redeemed, retired,
or otherwise become payable;
(6) In exchange for or upon conversion into other
securities alone or other securities and cash
pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;
(7) Upon conversion of Securities pursuant to their terms
into other securities;
(8) Upon exercise of subscription, purchase or other
similar rights represented by Securities;
(9) For the payment of interest, management or
supervisory fees, distributions or operating
expenses;
(10) In payment of fees and in reimbursement of the
expenses and liabilities of the Custodian
attributable to the Fund;
(11) In connection with any borrowings by the Fund or
short sales of securities requiring a pledge of
Securities, but only against receipt of amounts
borrowed;
(12) In connection with any loans, but only against
receipt of adequate collateral as specified in
Instructions which shall reflect any restrictions
applicable to the Fund.
(13) For the purpose of redeeming Shares of the capital
stock of the Fund and the delivery to, or the
crediting to the account of, the Custodian or the
Fund's transfer agent, such Shares to be purchased or
redeemed;
(14) For the purpose of redeeming in kind Shares of the
Fund against delivery to the Custodian, its
Subcustodian or the Fund's transfer agent of such
shares to be so redeemed;
(15) For delivery in accordance with the provisions
of any agreement among the Trust, on behalf of the
Fund, the Custodian and a broker-dealer registered
under the Securities Exchange Act of 1934
(the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc.
("NASD"), relating to compliance with the rules of
The Options Clearing Corporation and of any
registered national securities exchange, or of any
similar organization or organizations, regarding
escrow or other arrangements in connection with
transactions by the Fund. The Custodian will act
only in accordance with Instructions in the
delivery of Securities to be held in escrow and
will have no responsibility or liability for any
such Securities which are not returned promptly when
due other than to make proper requests for such
return;
(16) For spot or forward foreign currency exchange
transactions to facilitate security trading, receipt
of income from Securities or related transactions;
(17) Upon the termination of this Agreement; and
(18) For other proper purposes as may be specified in
Instructions issued by an officer of the Trust which
shall include a statement of the purpose for which
the delivery or payment is to be made, the amount of
the payment or specific Securities to be delivered,
the name of the person or persons to whom delivery or
payment is to be made, and a certification stating
that the purpose is a proper purpose under the
instruments governing the Fund.
(c) Actions Which May be Taken Without Instructions. Unless an
Instruction to the contrary is received, the Custodian shall:
(1) Collect all income due or payable, provided that the
Custodian shall not be responsible for the failure to
receive payment of (or late payment of) distributions
or other payments with respect to Securities or other
property held in the account;
(2) Present for payment and collect the amount payable
upon all Securities which may mature or be called,
redeemed, retired or otherwise become payable.
Notwithstanding the foregoing, the Custodian shall
have no responsibility to the Fund for monitoring or
ascertaining any call, redemption or retirement dates
with respect to put bonds or similar instruments which
are owned by the Fund and held by the Custodian or its
nominees where such dates are not published in sources
routinely used by the Custodian. Nor shall the
Custodian have any responsibility or liability to the
Fund for any loss by the Fund for any missed payments
or other defaults resulting therefrom, unless the
Custodian received timely notification from the Fund
specifying the time, place and manner for the
presentment of any such put bond owned by the Fund and
held by the Custodian or its nominee. The Custodian
shall not be responsible and assumes no liability for
the accuracy or completeness of any notification the
Custodian may furnish to the Fund with respect to put
bonds or similar instruments;
(3) Surrender Securities in temporary form for definitive
Securities;
(4) Hold directly, or through a Securities Depository with
respect to Securities therein deposited, for the
account of the Fund all rights and similar Securities
issued with respect to any Securities held by the
Custodian hereunder for the Fund;
(5) Submit or cause to be submitted to the Fund or its
investment advisor as designated by the Fund
information actually received by the Custodian
regarding ownership rights pertaining to property held
for the Fund;
(6) Deliver or cause to be delivered any Securities held
for the Fund in exchange for other Securities or cash
issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise
of any conversion privilege;
(7) Deliver or cause to be delivered any Securities held
for the Fund to any protective committee,
reorganization committee or other person in connection
with the reorganization, refinancing, merger,
consolidation or recapitalization or sale of assets of
any corporation, and receive and hold under the terms
of this Agreement such certifications of deposit,
interim receipts or other instruments or documents as
may be issued to it to evidence such delivery;
(8) Make or cause to be made such transfers or exchanges
of the assets specifically allocated to the Fund and
take such other steps as shall be stated in
Instructions to be for the purpose of effectuating any
duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Fund;
(9) Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to
such Securities entered into by the Fund;
(10) Deliver Securities owned by the Fund to the issuer
thereof or its agent when such Securities are called,
redeemed, retired or otherwise become payable;
provided, however, that in any such case the cash or
other consideration is to be delivered to the
Custodian. Notwithstanding the foregoing, the
Custodian shall have no responsibility to the Fund for
monitoring or ascertaining any call, redemption or
retirement dates with respect to the put bonds or
similar instruments which are owned by the Fund and
held by the Custodian or its nominee where such dates
are not published in sources routinely used by the
Custodian. Nor shall the Custodian have any
responsibility or liability to the Fund for any loss
by the Fund for any missed payment or other default
resulting therefrom unless the Custodian received
timely notification from the Fund specifying the time,
place and manner for the presentment of any such put
bond owned by the Fund and held by the Custodian or
its nominee. The Custodian shall not be responsible
and assumes no liability to the Fund for the accuracy
or completeness of any notification the Custodian may
furnish to the Fund with respect to put bonds or
similar investments;
(11) Endorse and collect all checks, drafts or other
orders for the payment of money received by the
Custodian for the account of the Fund; and
(12) Execute any and all documents, agreements or other
instruments as may be necessary or desirable for the
accomplishment of the purposes of this Agreement.
(d) Prohibited Actions. The Custodian is hereby prohibited from
assigning, hypothecating, pledging or otherwise encumbering or
disposing of any Securities or other property of the Fund
except as (1) authorized pursuant to Instructions or (2)
otherwise authorized in this Agreement.
(e) Confirmation and Statements. Promptly after the close of business on each day, the Custodian
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shall furnish the Fund with confirmations and a summary of all transfers to or from the account
of the Fund during the day. Where securities purchased by the Fund are in a fungible bulk of
securities registered in the name of the Custodian (or its nominee) or shown on the Custodian's
account on the books of a Securities Depository, the Custodian shall by book-entry or otherwise
identify the quantity of those securities belonging to the Fund. At least monthly, the
Custodian shall furnish the Fund with a detailed statement of the Securities and monies held
for the Fund under this Custody Agreement.
(f) Registration of Securities. The Custodian is authorized to hold all Securities, Foreign
--------------------------
Assets, or other property of the Fund in nominee name, in bearer form or in book-entry form.
The Custodian may register any Securities, Foreign Assets or other property of the Fund in the
name of the Fund, in the name of the Custodian, any domestic subcustodian, or any Eligible
Foreign Custodian, in the name of any duly appointed registered nominee of such entity, in the
name of any Securities Depository or any Eligible Securities Depository, or in the name of any
successor or successors, or nominee or nominees of such entity. The Fund agrees to furnish to
the Custodian appropriate instruments to enable the Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered nominee or in the name of a
Securities Depository or an Eligible Securities Depository, 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.
(g) Segregated Accounts. Upon receipt of Instructions, the
Custodian will, from time to time establish segregated
accounts on behalf of the Fund to hold and deal with specified
assets as shall be directed.
3. Settlement of Fund Transactions.
(a) Customary Practices. Settlement of transactions may be effected
in accordance with trading and processing practices customary in
the jurisdiction or market where the transaction occurs. The
Fund acknowledges that this may, in certain circumstances,
require the delivery of cash or Securities (or other property)
without the concurrent receipt of Securities (or other property)
or cash. In such circumstances, the Custodian shall have no
responsibility for nonreceipt of payments (or late payment) or
nondelivery of Securities or other property (or late delivery)
by the counterparty.
(b) Contractual Income. Unless the parties agree to the contrary,
the Custodian shall credit the Fund, in accordance with the
Custodian's standard operating procedure, with income and
maturity proceeds on securities on contractual payment date net
of any taxes or upon actual receipt. To the extent the Custodian
credits income on contractual payment date, the Custodian may
reverse such accounting entries with back value to the
contractual payment date if the Custodian reasonably believes
that such amount will not be received.
(c) Contractual Settlement. Unless the parties agree to the
contrary, the Custodian will attend to the settlement of
securities transactions in accordance with the Custodian's
standard operating procedure, on the basis of either contractual
settlement date accounting or actual settlement date accounting.
To the extent the Custodian settles certain securities
transactions on the basis of contractual settlement date
accounting, the Custodian may reverse with back value to the
contractual settlement date any entry relating to such
contractual settlement if the Custodian reasonably believes that
such amount will not be received.
4. Lending of Securities. The Custodian may lend the assets of the Fund in
accordance with the terms and conditions of a separate securities lending
agreement.
5. Persons Having Access to Assets of the Fund.
(a) No trustee, officer or agent of the Trust, and no officer, director, employee or agent of the
Fund's investment adviser, of any sub-investment adviser of the Fund, or of the Fund's
administrator, shall have physical access to the assets of the Fund held by the Custodian or be
authorized or permitted to withdraw any investments of the Fund, nor shall the Custodian
deliver any assets of the Fund to any such person. No officer, director, employee or agent of
the Custodian who holds any similar position with the Fund's investment adviser, with any
sub-investment adviser of the Fund or with the Fund's administrator shall have access to the
assets of the Fund.
(b) Nothing in this Section 5 shall prohibit any duly authorized
trustee, officer or agent of the Fund, or any duly authorized
officer, director, employee or agent of the investment
adviser, of any sub-investment adviser of the Fund or of the
Fund's administrator, from giving Instructions to the
Custodian or executing a certification so long as it does not
result in delivery of or access to assets of the Fund
prohibited by paragraph (a) of this Section 5.
6. Standard of Care; Scope of Custodial Responsibilities.
(a) Standard of Care. Custodian shall be required to exercise
reasonable care with respect to its duties under this
Agreement unless otherwise provided.
(1) Notwithstanding any other provision of this Custody
Agreement, the Custodian shall not be liable for any
loss or damage, including counsel fees, resulting from
its action or omission to act or otherwise, except for
any such loss or damage arising out of the negligence
or willful misconduct of the Custodian.
(2) The Custodian may, with respect to questions of law,
apply for and obtain the advice and opinion of counsel
to the Trust or of its own 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 such advice or opinion.
(b) Scope of Duties. Without limiting the generality of the
foregoing, the Custodian shall be under no duty or obligation
to inquire into, and shall not be liable for the following:
(1) The acts or omissions of any agent appointed,
pursuant to Instructions of the Fund or its
investment advisor including, but not limited to, any
broker-dealer or other entity, to hold any Securities
or other property of the Fund as collateral or
otherwise pursuant to any investment strategy.
(2) The validity of the issue of any Securities purchased
by the Fund, the legality of the purchase thereof, or
the propriety of the amount paid therefor;
(3) The legality of the sale of any Securities by the
Fund or the propriety of the amount for which the
same are sold;
(4) The legality of the issue or sale of any Shares, or
the sufficiency of the amount to be received
therefor;
(5) The legality of the redemption of any Shares, or
the propriety of the amount to be paid therefor;
(6) The legality of the declaration or payment of any
distribution of the Fund;
(7) The legality of any borrowing for temporary
administrative or emergency purposes.
(c) No Liability Until Receipt. The Custodian shall not be liable
for, or considered to be the Custodian of, any money, whether
or not represented by any check, draft, or other instrument
for the payment of money, received by it on behalf of the Fund
until the Custodian actually receives and collects such money.
(d) Amounts Due from Transfer Agent. The Custodian shall not be
required to effect collection of any amount due to the Fund
from the Fund's transfer agent nor be required to cause
payment or distribution by such transfer agent of any amount
paid by the Custodian to the transfer agent.
(e) Collection Where Payment Refused. The Custodian shall not be
required 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 it shall be directed to take
such action and it shall be assured to its satisfaction of
reimbursement of its related costs and expenses.
(f) No Duty to Ascertain Authority. 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 Fund
are such as may properly be held by the Fund under the
provisions of its governing instruments or Prospectus.
(g) Reliance on Instructions. The Custodian shall be entitled to rely upon any Instruction, notice or other
------------------------
instrument in writing received by the Custodian and reasonably believed by the Custodian to be
genuine and to be signed by an Authorized Person. Where the Custodian is issued Instructions
orally, the Fund acknowledges that if written confirmation is requested, the validity of the
transactions or enforceability of the transactions authorized by the Fund shall not be affected
if such confirmation is not received or is contrary to oral Instructions given. The Custodian
shall be under no duty to question any direction of an Authorized Person, to review any
property held in the account, to make any suggestions with respect to the investment of the
assets in the account, or to evaluate or question the performance of any Authorized Person.
The Custodian shall not be responsible or liable for any diminution of value of any securities
or other property held by the Custodian.
7. Appointment of Subcustodians. The Custodian is hereby
authorized to appoint one or more domestic subcustodians or
Eligible Foreign Custodians located in a jurisdiction that is
a Selected Country (which may be an affiliate of the
Custodian) to hold Securities, Foreign Assets and monies at
any time owned by the Fund. The Custodian is also hereby
authorized when acting pursuant to Instructions to: 1) place
Securities, Foreign Assets and monies with any Eligible
Foreign Custodian located in a jurisdiction that is not a
Selected Country and with Euroclear, Clearstream, Banc One or
any other transnational depository; and 2) place assets with a
broker or other agent as subcustodian in connection with
futures, options, short selling or other transactions. When
acting pursuant to such Instructions, the Custodian shall not
be liable for the acts or omissions of any subcustodian so
appointed.
8. Overdraft Facility and Security for Payment. In the event that
the Custodian receives Instructions to make payments or
transfers of monies on behalf of the Fund for which there
would be, at the close of business on the date of such payment
or transfer, insufficient monies held by the Custodian on
behalf of the Fund, the Custodian may, in its sole discretion,
provide an overdraft (an "Overdraft") to the Fund in an amount
sufficient to allow the completion of such payment or
transfer. Any Overdraft provided hereunder: (a) shall be
payable on the next Business Day, unless otherwise agreed by
the Trust and the Custodian; and (b) shall accrue interest
from the date of the Overdraft to the date of payment in full
by the Fund at a rate agreed upon from time to time, by the
Custodian and the Trust or, in the absence of specific
agreement, by such rate as charged to other customers of
Custodian under procedures uniformly applied. The Custodian
and the Trust acknowledge that the purpose of such Overdraft
is to temporarily finance the purchase of Securities for
prompt delivery in accordance with the terms hereof, to meet
unanticipated or unusual redemptions, to allow the settlement
of foreign currency exchange contracts or to meet other
unanticipated Fund expenses. The Custodian shall promptly
notify the Fund (an "Overdraft Notice") of any Overdraft. To
secure payment of any Overdraft, the Trust hereby grants to
the Custodian a continuing security interest in and right of
setoff against the Securities and cash in the Fund's account
from time to time in the full amount of such Overdraft. Should
the Fund fail to pay promptly any amounts owed hereunder, the
Custodian shall be entitled to use available cash in the
Fund's account and to liquidate Securities in the account as
necessary to meet the Fund's obligations under the Overdraft.
In any such case, and without limiting the foregoing, the
Custodian shall be entitled to take such other action(s) or
exercise such other options, powers and rights as the
Custodian now or hereafter has as a secured creditor under the
Massachusetts Uniform Commercial Code or any other applicable
law.
9. Tax Obligations. For purposes of this Agreement, "Tax
Obligations" shall mean taxes, withholding, certification and
reporting requirements, claims for exemptions or refund,
interest, penalties, additions to tax and other related
expenses. To the extent that the Custodian has received
relevant and necessary information with respect to the
Account, the Custodian shall perform the following services
with respect to Tax Obligations:
(a) the Custodian shall file claims for exemptions or refunds with
respect to withheld foreign (non-U.S.) taxes in instances in
which such claims are appropriate;
(b) the Custodian shall withhold appropriate amounts, as required
by U.S. tax laws, with respect to amounts received on behalf
of nonresident aliens; and
(c) the Custodian shall provide to the Fund or the Authorized
Person such information received by the Custodian which could,
in the Custodian's reasonable belief, assist the Fund or the
Authorized Person in the submission of any reports or returns
with respect to Tax Obligations. The Fund shall inform the
Custodian in writing as to which party or parties shall
receive information form the Custodian.
The Custodian shall provide such other services with respect to Tax Obligations,
including preparation and filing of tax returns and reports and payment of
amounts due (to the extent funded), as requested by the Fund and agreed to by
the Custodian in writing. The Custodian shall have no independent obligation to
determine the existence of any information with respect to, or the extent of,
any Tax Obligations now or hereafter imposed on the Fund or the Account by any
taxing authority. Except as specifically provided herein or agreed to in writing
by the Custodian, the Custodian shall have no obligations or liability with
respect to Tax Obligations, including, without limitation, any obligation to
file or submit returns or reports with any taxing authorities.
In making payments to service providers pursuant to Instructions, the Trust
acknowledges that the Custodian is acting as a paying agent and not as the
payor, for tax information reporting and withholding purposes.
ARTICLE II
FOREIGN CUSTODY MANAGER SERVICES
1. Delegation. The Board delegates to the Custodian, and the Custodian hereby
agrees to accept, responsibility as the Fund's Foreign Custody Manager for
selecting, contracting with and monitoring Eligible Foreign Custodians in
Selected Countries set forth in Appendix C (except as noted therein) in
accordance with Rule 17f-5(c).
2. Changes to Appendix C. Appendix C may be amended from time to time to add or
delete jurisdictions by written agreement signed by an Authorized Person and the
Custodian, but the Custodian reserves the right to delete jurisdictions upon
reasonable notice to the Fund.
3. Reports to Board. Custodian shall provide written reports notifying the Board
of the placement of Foreign Assets with a particular Eligible Foreign Custodian
and of any material change in Fund's foreign custody arrangements. Such reports
shall be provided to the Board quarterly, except as otherwise agreed by the
Custodian and the Trust.
4. Monitoring System. In each case in which the Custodian has exercised
delegated authority to place Foreign Assets with an Eligible Foreign Custodian,
the Custodian shall establish a system, to re-assess or re-evaluate selected
Eligible Foreign Custodians, at least annually in accordance with Rule
17f-5(c)(3).
5. Standard of Care. In exercising the delegated authority under this Article II
of the Agreement, the Custodian agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for the safekeeping of the
Foreign Assets would exercise in performing the delegated responsibilities
described in this Article II of the Agreement. Contracts with Eligible Foreign
Custodians shall provide for reasonable care for Foreign Assets based on the
standards applicable to Eligible Foreign Custodians in the Selected Country in
accordance with Rule 17f-5. In making this determination, the Custodian shall
consider the provisions of Rule 17f-5(c)(2).
6. Use of Eligible Securities Depositories. In exercising its delegated
authority, the Custodian may assume, unless instructed in writing to the
contrary, that the Board or the Fund's investment adviser has determined,
pursuant to Rule 17f-7, to place and maintain Foreign Assets with any Eligible
Securities Depository as to which the Custodian has provided the Fund with a
Risk Analysis.
ARTICLE III
Information Services
1. Risk Analysis. The Custodian will provide the Fund with a Risk Analysis with
respect to Eligible Securities Depositories operating in the countries listed in
Appendix C. If the Custodian is unable to provide a Risk Analysis with respect
to a particular Eligible Securities Depository, it will notify the Fund. If a
new Eligible Securities Depository commences operation in one of the Appendix C
countries, the Custodian will provide the Fund with a Risk Analysis in a
reasonably practicable time after such Eligible Securities Depository becomes
operational. If a new country is added to Appendix C, the Custodian will provide
the Fund with a Risk Analysis with respect to each Eligible Securities
Depository in that country within a reasonably practicable time after the
addition of the country to Appendix C.
2. Monitoring of Eligible Securities Depositories. The Custodian will monitor on
a continuous basis the custody risks associated with maintaining Foreign Assets
with each Eligible Securities Depository for which it has provided the Fund with
a Risk Analysis as required under Rule 17f-7. The Custodian will promptly notify
Fund or its investment adviser of any material change in these risks.
3. Use of Agents. The Custodian may employ agents, including, but not limited to
Eligible Foreign Custodians, to perform its responsibilities under Sections 1
and 2 above.
4. Exercise of Reasonable Care. The Custodian will exercise reasonable care,
prudence, and diligence in performing its responsibilities under this Article
III. With respect to the Risk Analyses provided or monitoring performed by an
agent, the Custodian will exercise reasonable care, prudence, and diligence in
the selection of such agent, and shall be entitled to rely upon information
provided by agents so selected in the performance of its duties and
responsibilities under this Article III.
5. Liabilities and Warranties. To the extent that the Custodian exercises
reasonable care, prudence, and diligence to ensure that information provided is
accurate, the Custodian shall have no liability with respect to information
provided to it by third parties. Due to the nature and source of information,
and the necessity of relying on various information sources, most of which are
external to the Custodian, the Custodian shall have no liability for direct or
indirect use of such information
ARTICLE IV
GENERAL PROVISIONS
1. Compensation.
(a) The Fund will compensate the Custodian for its services
rendered under this Agreement in accordance with the fees set
forth in the Fee Schedule, which schedule may be modified by
the Custodian upon not less than sixty days prior written
notice to the Fund.
(b) The Custodian will xxxx the Fund as soon as practicable after
the end of each calendar month. The Fund will promptly pay to
the Custodian the amount of such billing.
(c) If not paid directly or promptly by the Fund, the Custodian
may charge against assets held on behalf of the Fund
compensation and any expenses incurred by the Custodian in the
performance of its duties pursuant to this Agreement unless
the Fund notifies the Custodian of a discrepancy in the xxxx.
The Custodian may charge against assets held on behalf of the
Fund any reasonably uncontested amount.
(d) The Custodian shall also be entitled to charge against assets
of the Fund the reasonable amount of any loss, damage,
liability, fee or expense actually incurred with respect to
the Fund, including reasonable counsel fees, for which it
shall be entitled to reimbursement under the provisions of
this Agreement. The expenses that the Custodian may charge
include, but are not limited to, the expenses of domestic
subcustodians and Eligible Foreign Custodians incurred in
settling transactions.
2. Insolvency of Eligible Foreign Custodians. The Custodian shall be responsible
for losses or damages suffered by the Fund arising as a result of the insolvency
of an Eligible Foreign Custodian only to the extent that the Custodian failed to
comply with the standard of care set forth in Article II with respect to the
selection of, contracting with, and monitoring of such Eligible Foreign
Custodian.
3. Liability for Securities Depositories. The Custodian shall not be responsible
for losses resulting from the deposit or maintenance of Securities or other
property of the Fund with a Securities Depository. Nothing in this provision
shall preclude damages resulting from a breach of duty under Article III of this
Agreement.
4. Damages. Under no circumstances shall the Custodian be liable for any
indirect, consequential or special damages with respect to its role as Foreign
Custody Manager, Custodian or information vendor.
5. Indemnification; Liability of the Trust and the Fund.
(a) Subject to the limitations set forth in paragraph 5(b) of this
Article IV, the Trust shall indemnify and hold the Custodian
harmless from all liability and expense, including reasonable
counsel fees and expenses, arising out of the performance of the
Custodian's obligations under this Agreement except as a result
of the Custodian's negligence or willful misconduct.
(b) The Trust and the Custodian agree that the obligations of the
Trust and the obligations of the Fund under this Agreement shall
not be binding upon any of the Trustees, shareholders, nominees,
officers, employees or agents, whether past, present or future,
of the Trust or the Fund, individually, but are binding only
upon the assets belonging to the Fund. The Trust and the
Custodian further agree that the obligations of the Trust and
the obligations of the Fund under this Agreement shall not be
binding upon the assets belonging to any other series of the
Trust, but are binding only upon the assets belonging to the
Fund.
6. Force Majeure. Notwithstanding anything in this Agreement to the contrary,
the Custodian shall not be liable for any losses resulting from or caused by
events or circumstances beyond its reasonable control, including, but not
limited to, losses resulting from nationalization, strikes, expropriation,
devaluation, revaluation, confiscation, seizure, cancellation, destruction or
similar action by any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental authority of
currency restrictions, exchange controls, taxes, levies or other charges
affecting the Fund's property; or the breakdown, failure or malfunction of any
utilities or telecommunications systems; or any order or regulation of any
banking or securities industry including changes in market rules and market
conditions affecting the execution or settlement of transactions; or acts of
war, terrorism, insurrection or revolution; or any other similar event.
7. Termination.
(a) Either party may terminate this Agreement by giving the other
party sixty (60) days notice in writing, specifying the date
of such termination. In the event notice is given by the
Trust, it shall be accompanied by a certification evidencing
the vote of the Trust's Board to terminate this Agreement and
designating a successor.
(b) In the event notice of termination is given by the Custodian, the Trust shall, on or before the
termination date, deliver to the Custodian a certification evidencing the vote of the Board
designating a successor custodian. In the absence of such designation, the Custodian may
designate a successor custodian, which shall be the Trust or a person qualified to so act under
the Act. If the Trust fails to designate a successor custodian, the Trust shall, upon the date
specified in the notice of termination, and upon the delivery by the Custodian of all
Securities and monies then owned by the Fund, be deemed to be its own custodian with respect to
the Fund's assets and the Custodian shall thereby be relieved of all duties and
responsibilities under this Agreement other than the duty with respect to Securities held in
the Book-Entry System that cannot be delivered to the Trust.
(c) Upon termination of the Agreement, the Custodian shall, upon
receipt of a notice of acceptance by the successor custodian,
deliver to the successor all Securities and monies then held
by the Custodian on behalf of the Fund, after deducting all
fees, expenses and other amounts owed.
(d) In the event of a dispute following the termination of this
Agreement, all relevant provisions shall be deemed to continue
to apply to the obligations and liabilities of the parties.
8. Inspection of Books and Records. The books and records of the
Custodian shall be open to inspection and audit at reasonable
times by officers and auditors employed by the Fund at its own
expense and with prior written notice to the Custodian, and by
the appropriate employees of the Securities and Exchange
Commission. The Custodian agrees that the books and records of
the Fund required by the Act that are maintained by the
Custodian will be available on request and preserved for the
requisite periods in accordance with the Act.
9. Miscellaneous.
(a) Appendix A is a certification signed by the Secretary of the
Trust setting forth the names and the signatures of Authorized
Persons. The Trust shall furnish a new certification when the
list of Authorized Persons is changed in any way. Until a new
certification is received, the Custodian shall be fully
protected in acting upon Instructions from Authorized Persons
as set forth in the last delivered certification.
(b) Appendix B is a certification signed by the Secretary of the
Trust setting forth the names and the signatures of the
present officers of the Trust. The Trust agrees to furnish to
the Custodian a new certification when any changes are made.
Until a new certification is received, the Custodian shall be
fully protected in relying upon the last delivered
certification.
(c) Any required written notice or other instrument shall be
sufficiently given if addressed to the Custodian or the Fund
as the case may be and delivered to it at its offices at:
The Custodian:
Boston Safe Deposit and Trust Company
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
The Fund:
The Xxxx Family of Funds
0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
or at such other place as the parties may from time to time
designate to the other in writing.
(d) This Agreement may not be amended or modified except by a
written agreement executed by both parties.
(e) 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 Trust without the written consent of the Custodian, or
by the Custodian without the written consent of the Trust
authorized or approved by a vote of the Board, provided,
however, that the Custodian may assign the Agreement or any
function thereof to any corporation or entity which directly
or indirectly is controlled by, or is under common control
with, the Custodian and any other attempted assignment without
written consent shall be null and void.
(f) Nothing in this Agreement shall give or be construed to give
or confer upon any third party any rights hereunder other than
the Fund.
(g) The Custodian represents that it is a U.S. Bank within the
meaning of paragraph (a)(7) of Rule 17f-5 and meets the
requirements of the Act related to minimum aggregate capital,
surplus, and undivided profits.
(h) Except as otherwise provided in this Agreement, the Fund's
assets shall be immune to liens asserted by the Custodian.
(i) If the Custodian engages a service auditor to examine the
Custodian's description of controls over custodial functions,
the Custodian shall provide the SAS No. 70 report or any
equivalent report to the Fund's auditors.
(j) The Trust acknowledges and agrees that, except as expressly
set forth in this Agreement, the Trust is solely responsible
to assure that the maintenance of the Fund's Securities and
cash hereunder complies with applicable laws and regulations,
including without limitation the Act and the rules and
regulations promulgated thereunder and applicable
interpretations thereof or exemptions therefrom. The Trust
represents that the Board has determined that it is reasonable
to rely on the Custodian to perform the responsibilities
delegated pursuant to this Agreement.
(i) This Agreement shall be construed in accordance with the laws
of The Commonwealth of Massachusetts.
(j) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or
effect.
(k) Each party represents to the other that it has all necessary
power and authority, and has obtained any consent or approval
necessary to permit it, to enter into and perform this
Agreement and that this Agreement does not violate, give rise
to a default or right of termination under or otherwise
conflict with any applicable law, regulation, ruling, decree
or other governmental authorization or any contract to which
it is a party or by which any of its assets is bound.
(l) 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 representatives duly authorized as of the day and
year first above written.
THE XXXX FAMILY OF FUNDS
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
----------------------------------------------
Title: President
----------------------------------------------
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By: /s/ Xxxxxxxxxxx Xxxxx
----------------------------------------------
Name: Xxxxxxxxxxx Xxxxx
----------------------------------------------
Title: First Vice President
----------------------------------------------
APPENDIX A
LIST OF AUTHORIZED PERSONS
I, Xxxxx X. Xxxxxxxxx, the Secretary of THE XXXX FAMILY OF FUNDS, a
business trust organized under the laws of the State of Ohio (the "Trust") on
behalf of the Xxxx International Value Fund (the "Fund"), do hereby certify
that:
The following individuals have been duly authorized as Authorized
Persons to give Instructions on behalf of the Fund and the specimen signatures
set forth opposite their respective names are their true and correct signatures:
Name Signature
By:
--------------------------------------------
Xxxxx X. Xxxxxxxxx, Secretary
Dated:
--------------------------------------------
APPENDIX B
TRUST OFFICERS
I, Xxxxx X. Xxxxxxxxx, the Secretary of THE XXXX FAMILY OF FUNDS, a
business trust organized under the laws of the State of Ohio (the "Trust") on
behalf of the Xxxx International Value Fund (the "Fund"), do hereby certify
that:
The following individuals serve in the following positions with the
Trust and each individual has been duly elected or appointed to each such
position and qualified therefor in conformity with the Trust's governing
instrument and the specimen signatures set forth opposite their respective names
are their true and correct signatures:
Name Position Signature
Xxxxxxx X. Xxxxxx President
------------------------------
Xxxxxxx X. Xxxxxx Treasurer
------------------------------
Xxxxx X. Xxxxxxxxx Secretary
------------------------------
By:
--------------------------------------------
Xxxxx X. Xxxxxxxxx, Secretary
Dated:
--------------------------------------------
APPENDIX C
Selected Countries
Argentina Kenya
Australia Korea, Republic of
Austria Luxembourg
Bangladesh Malaysia
Belgium Mauritius
Bermuda Mexico
Botswana Namibia
Brazil The Netherlands
Canada New Zealand
Chile Norway
China, Peoples' Republic of Pakistan
Colombia Peru
Cyprus The Philippines
The Czech Republic Poland
Denmark Singapore
Egypt Slovak Republic
Finland South Africa
France Spain
Germany Sri Lanka
Ghana Sweden
Greece Switzerland
Hong Kong Taiwan
Hungary Thailand
India Turkey
Indonesia United Kingdom
Ireland Uruguay
Israel Venezuela
Italy Zambia
Japan Zimbabwe
"*Note, Custodian will not act as a Foreign Custody Manager with respect to
assets held in this country. Holding assets and use of the Custodian's usual
subcustodian in this country is subject to Instructions from an Authorized
Person and execution of a separate letter-agreement between the Trust and the
Custodian pertaining to custody and market risks."
APPENDIX D
ANCILLARY INFORMATION SERVICES AGREEMENT
Until Custodian provides a Risk Analysis pursuant to Article III of the
Agreement with respect to an Eligible Securities Depository operating in a
particular country as set forth on Appendix C, the following sets forth our
agreement with respect to the delivery of certain information to the Board or
its agents as requested by the Board from time to time. These terms shall
control over the provisions of Article III of this Agreement but shall cease to
apply as to any country for which Custodian provides a Risk Analysis for one or
more Eligible Securities Depositories operating therein. Otherwise, unless
continued as provided below, these provisions shall expire on July 2, 2001.
After expiration, the information set forth in Sections 2, A and B below
may be provided as agreed upon from time to time in writing between the Trust
and the Custodian subject to Section 3 hereof.
1. Provision of Information. In accordance with the provisions of this
Information Services Agreement, the Custodian agrees to provide to the Board, or
at the direction of the Board, the Fund's investment advisors, the information
set forth in Section 2, below, with respect to Eligible Foreign Custodians and
Eligible Securities Depositories which hold Securities, Foreign Assets, or other
property of the Fund and the systems and environment for securities processing
in the jurisdiction in which such Eligible Foreign Custodians or Eligible
Securities Depositories are located. The Custodian shall provide only that
portion of such information as is reasonably available to it.
2. Information to be Provided.
A. Country Information
o Settlement Environment
o Depository
o Settlement Period
o Trading
o Security Registration
o Currency
o Foreign Investment Restrictions
o Entitlements
o Proxy Voting
o Foreign Taxation
B. Subcustodian Information
o Financial Information o Regulator
o External Auditor o How Securities are Held
o Operational Capabilities
o Insurance Coverage
C. Depository Information (if applicable to the Country)
o Name
o Information relative to Determining Compulsory or Voluntary Status of
the Facility
o Type of Entity
o Ownership Structure
o Operating History
o Eligible Instruments
o Security Form
o Financial Data
o Regulator
o External Auditor
D. Information on the Following Legal Questions
o Would the applicable foreign law restrict the access afforded
the independent public accountants of the Fund to books and
records kept by an Eligible Foreign Custodian?
o Would the applicable foreign law restrict the ability of the
Fund to recover its assets in the event of bankruptcy of the
Eligible Foreign Custodian?
o Would the applicable foreign law restrict the ability of the
Fund to recover assets that are lost while under the control
of the Eligible Foreign Custodian?
o What are the foreseeable difficulties in converting the Fund's cash
into U.S. dollars?
3. Liability and Warranties. To the extent that the Custodian exercises
reasonable care, prudence, and diligence to ensure that information provided is
accurate the Custodian shall have no liability with respect to information
provided to it by third parties. Due to the nature and source of information,
and the necessity of relying on various information sources, most of which are
external to the Custodian, the Custodian shall have no liability for direct or
indirect use of such information. The Custodian makes no other warranty or
representation, either express or implied, as to the merchantability or fitness
for any particular purpose of the information provided under this Appendix D.
Acknowledged:
THE XXXX FAMILY OF FUNDS BOSTON SAFE DEPOSIT AND TRUST COMPANY
Title: Title:
--------------------- -----------------------------
