EXHIBIT 99.8(c)
THE BENCHMARK FUNDS
FOREIGN CUSTODY AGREEMENT
Agreement dated this 1st day of March 1994 between The Benchmark Funds, a
Massachusetts business trust (the "Trust"), and The Northern Trust Company, an
Illinois state bank ("Northern").
1. Appointment of Custodian. The Trust hereby appoints Northern custodian
of all securities (including repurchase agreements, cash, cash equivalents and
other instruments (collectively, "Property") now owned or hereafter acquired by
the Trust on behalf of its International Growth Portfolio and International Bond
Portfolio, and any other investment portfolios of the Trust which may invest in
the securities of foreign issuers and which are specifically authorized by
resolution of the Trust's Board of Trustees to be added to this Agreement
(collectively, the "Portfolios"), and Northern hereby accepts such appointment,
upon the terms and conditions set forth in this Agreement. The Trust agrees
promptly to deliver and pay, or cause to be delivered and paid, to Northern, as
custodian for the Portfolios, or to an agent appointed pursuant to Section 8(a)
hereof or a sub-custodian appointed pursuant to Section 8(b) or 8(c) hereof, all
securities and cash now owned or hereafter acquired by the Trust on behalf of
the Portfolios.
2. Custody of Cash; Separate Accounts.
(a) Accounts. Northern will hold all cash and cash equivalents of each
Portfolio, in a separate account or accounts in the name of such
Portfolio, subject only to draft or order by Northern in accordance
with the terms of this Agreement. If and when authorized by proper
instructions of the Trustees or Officers of the Trust in accordance
with a vote of the majority of the Trustees of the Trust, Northern may
open and maintain an additional account or accounts in such other
banks or trust companies as may be designated by such instructions,
provided that such account to accounts shall be in the name of
Northern in its capacity as custodian and subject only to its draft or
order in accordance with the terms of this Agreement.
It is understood that the Property in such account or accounts may be
held in such countries or other jurisdictions as shall be specified
from time to time in "proper instructions" (as defined in Section 9
hereof).
(b) Proceeds of Sale of Shares of Trust. Upon receipt of funds for the
purchase of shares of any Portfolio, Northern shall promptly deposit
the purchase price in the account or accounts maintained pursuant to
Section 2(a) hereof.
(c) Collections. Unless otherwise directed by proper instructions from the
Trustees or Officers of the Trust, Northern shall collect, receive and
deposit in the account or accounts maintained pursuant to Section 2(a)
hereof all income, principal and other payments in respect of the
Property held by it under this Agreement and, subject to the other
provisions of this Agreement, do all other things necessary or proper
in connection with the collection of such income, principal and other
payments. Without limiting the generality of the foregoing, Northern
Shall:
(i) present for payment by the date of payment all coupons and other
income items requiring presentation;
(ii) present for payment all securities which may mature or be
called, redeemed, retired or otherwise become payable by the
date such securities become payable;
(iii) endorse and deposit for collection, on behalf of the Trust,
checks, drafts or other negotiable instruments no later than the
next business day as received;
(iv) execute ownership and other certificates and affidavits for all
Federal and State tax purposes in connection with the collection
of income; and
(v) notify the Trust as soon as reasonably practicable whenever
income, principal or other payments due on securities are not
collected in due course.
In any case in which Northern does not receive any such due and unpaid
income, principal or other payment within a reasonable time after it has made
proper demands for the same, it shall so notify the Trust in writing, including
copies of all demand letters, any written responses thereto, and memoranda of
telephonic demands and oral responses to written and telephonic demands, and
await proper instructions from the Trustees or Officers of the Trust. Northern
shall not be obligated to take legal action for collection unless and until
reasonably indemnified to its satisfaction.
3. Custody of Securities.
(a) Receipt of Securities. Northern will hold in a separate account, and
physically segregated at all times from those of any other persons,
firms, corporations or other Portfolios, pursuant to the provisions
hereof, all securities received by it for or for the account of a
Portfolio, subject to Sections 3(d), 8(a), 8(b) and 8(c) hereof, which
shall include securities the Portfolio desires to be held in places
within the United States ("domestic securities") and "foreign
securities," as defined in paragraph (c)(1) of Rule 17f-5 ("Rule
17f-5") under the Investment Company Act of 1940, as amended
(hereinafter collectively called "Securities") All Securities shall be
held or disposed of by Northern for the Trust pursuant to the terms of
this Agreement. Northern shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such Securities,
except pursuant to proper instructions and only for the account of the
Trust as set forth in Section 5 hereof. Any Securities delivered to
Northern other than in bearer form shall be properly endorsed and in
form for transfer or shall be in the name of Northern, the Trust or a
nominee of Northern of the Trust, subject to Sections 3(d), 8(a), 8(b)
and (c) hereof.
(b) Registered Name; Nominees. Northern shall register Securities of the
Trust held by it under this Agreement, other than those in bearer
from, in the name of the Trust or Northern or a nominee of the Trust
or Northern. Securities held by an agent appointed pursuant to Section
8(a) hereof or a sub-custodian appointed pursuant to Section 8(b) or
8(c) hereof may be registered in the name of such agent or
sub-custodian or a nominee of such agent or sub-custodian.
(c) Record Keeping and Inventory. Northern shall maintain records of all
receipts, deliveries and locations of Securities held by it under this
Agreement, together with a current inventory thereof. Without limiting
the generality of the foregoing, Northern shall comply with such
proper instructions from the Trustees or Officers of the Trust as may
be issued from time to time in this regard. With respect to Securities
held by any agent appointed pursuant to Section 8(a) hereof or any
sub-custodian appointed pursuant to Section 8(b) or 8(c) hereof,
Northern may rely upon certificates of the agent or sub-custodian as
to its holdings, it being understood that such reliance in no way
relieves Northern of its responsibilities under this Agreement.
Northern
will promptly report to the Trust the results of such inspections,
indicating any shortages or discrepancies uncovered thereby, and will
take appropriate action to remedy any such shortage or discrepancies.
(d) Use of Securities Depositories. Northern, each agent appointed
pursuant to Section 8(a) hereof and each sub-custodian appointed
pursuant to Section 8(b) or 8(c) hereof may deposit all or any part of
the Securities held by it hereunder and eligible therefor in the
depository systems covered by Rule 17f-4(b) under the 1940 Act;
provided that Northern, each such agent and each such sub-custodian
shall comply in all respects with clauses (d)(1) through (d)(4) of
Rule 17f-4 under the 1940 Act and, with respect to foreign securities
depositories, Rule 17f-5 under the 1940 Act; and provided further,
that no such deposit may be made prior to the approval by the Trust of
such depository system, which approval may be subject to such
conditions as the Trust may from time to time determine; and provided
further that with respect to domestic depository systems, (1) all
books and records maintained by Northern and each such agent and
sub-custodian which relate to the Trust's participation in such
depository systems will at all time during regular business hours be
open to inspection by the Trust's duly authorized officers, employees,
agents and auditors, and the Trust will be furnished with all the
information in respect of the services rendered to it as it may
require, (2) in connection with the use of such depository systems,
Northern will cooperate with the Trust in enforcing such rights as may
exist against such depository systems with respect to transactions or
Securities of a Portfolio. (3) payment for Securities purchased for
the account of any Portfolio shall be made only upon (i) receipt of
advice from the depository system that such Securities have been
transferred to the account (the "Account") contemplated by clause
(d)(2) of Rule 17f-4 under the 1940 Act and (ii) the making of an
entry on the records of Northern or such agent or sub-custodian, as
the case may be, to reflect such payment and transfer for the Account
of such Portfolio, and (4) transfer of Securities sold for the Account
of any Portfolio shall be made only upon (i) receipt of advice from
the depository system that payment for such Securities has been
transferred to the Account, and (ii) the making of an entry on the
records of Northern or such agent or sub-custodian, as the case may
be,
to reflect such transfer and payment for the Account of such
Portfolio. Except as may otherwise be agreed upon in writing by
Northern and the Trust, Securities of a Portfolio shall be maintained
in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as
sub-custodians pursuant to Section 8(c) hereof.
(e) Use of Sub-Custodians. With respect to Property which is maintained by
Northern in the custody of a sub-custodian pursuant to Section 8(b) or
8(c): (1) Northern will identify on its books as belonging to the
particular Portfolio any Property held by such sub-custodian; (2) any
Property held by a sub-custodian of Northern will be subject only to
the instructions of Northern or its agents, and any Securities held in
an eligible foreign securities depository (as defined in Section 8(c))
for the account of a sub-custodian will be subject only to the
instructions of such sub-custodian; (3) any agreement Northern shall
enter into with a foreign sub-custodian shall require that (i) the
Property is not subject to any right, charge, security interest, lien
or claim of any kind in favor of such sub-custodian or its creditors
except for a claim of payment for its safe custody or administration
and (ii) beneficial ownership of such Property is freely transferable
without the payment of money or value other than for safe custody or
administration; provided, however, that the foregoing shall not apply
to the extent that any of the above- mentioned rights, charges, etc.
result from any compensation or other expenses arising with respect to
the safekeeping of Property pursuant to such agreement; (4) Northern
will supply to the Trust at least monthly a statement in respect to
any Property held by each sub-custodian, including an identification
of the entity having possession of such Property, and Northern will
send to the Trust an advice or notification of any transfers of
Property indicating, as to Property acquired for a Portfolio, the
identity of the entity having physical possession of such Property. In
the absence of the filing in writing with Northern by the Trust of
exceptions or objections to any such statement within sixty (60) days
of the trust's receipt of such statement, or within sixty (60) days
after the date that a material defect is reasonably discoverable, the
Trust shall be deemed to have approved such statement; and in such
case or upon written approval of the Trust of any such statement
Northern shall, to the extent permitted
by law and provided Northern has used reasonable care with respect to
its obligations under this Agreement, be released, relieved and
discharged with respect to all matters and things set forth in such
statement as though such statement has been settled by the decree of a
court of competent jurisdiction in an action in which the Trust and
all persons having any equity interest in the Trust were parties; and
(5) Northern hereby warrants to the Trust that in its opinion, after
due inquiry, the established procedures to be followed by each of its
branches, each branch of a "qualified U.S. bank" and each eligible
"foreign custodian" (as defined in Section 8(c)) holding Property of
the Trust pursuant to this Agreement afford protection for such
Property at least equal to that afforded by Northern's established
procedures with respect to similar Property held by Northern (and its
securities depositories) in Chicago, Illinois.
(f) Distributions, Rights, Etc. Northern shall receive and collect all
distributions, rights and other items of like nature in respect of
Property held by it or by an agent appointed pursuant to section 8(a)
or a sub-custodian appointed pursuant to Section 8(b) or 8(c) of this
Agreement and deal with the same in accordance with this Agreement and
its other obligations to the Trust.
(g) Proxies, Notices, Voting, Etc. Northern shall arrange for the receipt
by it of all forms of proxies and all notices of meetings, calls,
maturities, tender offers, exchange offers and expirations of rights
and any other notices, consents, or announcements affecting or
relating to Property held by Northern, its agents appointed pursuant
to Section 8(a) hereof and all sub- custodians appointed pursuant to
Section 8(b) and 8(c) hereof, and upon issuance of proper
instructions, Northern shall execute and deliver such proxies or other
authorizations as may be necessary or appropriate.
(h) Nondiscretionary Details. In general, Northern shall attend to all
nondiscretionary details in connection with the sale, exchange,
substitution, purchase, transfer or other dealing with Property of the
Trust except as otherwise from time to time directed by proper
instructions from the Trustees or Officers of the Trust.
4. Disbursements of Cash. Upon the issuance of proper instructions,
Northern shall make payments or disbursements of
cash of each Portfolio held by it or subject to its draft or order under this
Agreement, insofar as such cash is available, only for the following purposes:
(a) Purchases Generally. To pay for and receive Property purchased for the
account of such Portfolio, payment to be made only (1) in accordance
with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in
which the transaction occurs, (2) in the case of a purchase effected
through a depository system, in accordance with the conditions set
forth in Section 3(d) hereof, or (3) in the case of repurchase
agreements, against delivery of the Securities which are the subject
of such repurchase agreement in certificate form or receipt of advice
from a depository system that such Securities have been transferred to
the Portfolio's Account (except that in the case of a repurchase
agreement Northern may transfer fund to the Account of the other party
to the repurchase agreement (i.e., the seller of the Securities) prior
to the receipt of written evidence that the Securities subject to such
repurchase agreement have been transferee by book-entry into the
Portfolio's Account, provided that Northern shall be responsible to
the Trust in the event that such Securities are not so transferred by
book-entry), the making of an entry on the records of Northern
reflecting such transfer, and receipt of written evidence of the
agreement by such person to repurchase such Securities from such
Portfolio. All Securities accepted by Northern either shall be
accompanied by payment of, or a "due xxxx" for, any dividends,
interest or other distributions of the issuer, due the purchaser or
Northern shall take such action as may be necessary to obtain the
same.
(b) Dividends and Distributions. To release or otherwise apply cash for
the payment of dividends or other distributions to shareholders of
such Portfolio which are payable in cash.
(c) Disbursements and Liabilities. To make or cause to be made
disbursements for the payment on behalf of the Trust with respect to
such Portfolio of interest, taxes, investment advisory, agency,
professional, custodial and administration fees and all other
operating expenses, including registration and qualification cost and
other expenses of issuing and selling shares of such Portfolio or
changing its capital structure,
whether or not such expenses shall be in whole or in part capitalized
or treated as deferred expenses.
(d) Redemption of Trust Shares. Subject to the Trust Agreement, the
Trust's then current Prospectus and applicable resolutions of Trust's
Trustees, to make funds available for payment to shareholders who have
duly requested redemption of their shares by the Trust pursuant to
such Prospectus.
(e) Conversions. To convert monies received with respect to Securities of
foreign issue into United States dollars or any other currency
necessary to effect any transaction involving the Securities whenever
it is practicable to do so through customary banking channels, using
any method or agency available, including, but not limited to, the
facilities of Northern, its subsidiaries, affiliates or
sub-custodians.
(f) Other Purposes. To make or cause to be made disbursements for any
other purpose which is declared in such instructions to be a proper
trust purpose; provided, however, that before making any such
disbursement Northern shall have received a copy of a resolution of
the Trustees certified by the Secretary of the Trust specifying the
amount of such disbursement, setting forth the purpose for which such
disbursement is to be made, declaring such purpose to be a proper
trust purpose and naming the person(s) to whom the disbursement is to
be made.
5. Release and Delivery of Securities. Northern shall have sole power to
release or deliver any Securities of a Portfolio held by it pursuant to this
Agreement. Upon issuance of proper instructions, Northern will transfer,
exchange or deliver Securities held by it hereunder only for the following
purposes:
(a) Sales. To deliver Securities which have been sold for the account of
such Portfolio in accordance with the customary or established
securities trading of securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs,
including, without limitation, delivering Securities to the purchaser
thereof or to a dealer therefor (or an agent for such purchaser or
dealer) against a receipt with the expectation of receiving later
payment for such Securities from such purchaser or dealer.
(b) Securities Loans. Upon receipt of the collateral
required by the Trust's then current Prospectus, to deliver Securities
which have xxx xxxx for the account of such Portfolio.
(c) Redemption or Maturity. To deliver Securities owned for the account of
such Portfolio to the issuer thereof or its agent when such Securities
are called, redeemed, retired or otherwise become payable; provided,
that in any such case, the cash or other consideration payable in
respect thereof is to be delivered to Northern.
(d) Changes of Name and Denomination. To deliver Securities owned for the
account of such Portfolio to the issuer thereof or its agent for
transfer into the name of the Trust or Northern or a nominee of either
or a permitted sub-custodian or agent or a nominee of such
sub-custodian or agent, or for exchange for a different number of
bonds, certificates, or other evidence representing the same aggregate
face amount or number of units bearing the same interest rate,
maturity dates and call/put provisions, if any; provided, that in any
such case, the new Securities are to be delivered to Northern.
(e) Street Delivery. To deliver Securities owned for the account of such
Portfolio to the broker or dealer selling the same for examination in
accordance with the then current "street delivery" custom.
(f) Securities as Collateral. To deliver Securities owned for the account
of such Portfolio for the purpose of pledge or hypothecation to secure
any loan (including a reverse repurchase agreement) incurred by the
Trust; provided that Securities shall be released only upon payment to
Northern of the monies borrowed, except that in cases where additional
collateral is required to secure a borrowing already made, subject to
proper prior authorization, further Securities may be delivered for
that purpose. Upon issuance of proper instructions, Northern shall pay
such loan upon redelivery to it of the Securities pledged or
hypothecated therefor and upon surrender of the note or notes, if any,
evidencing the loan.
(g) Exchanges, Deposits, Tenders, Etc. To exchange Securities or interim
receipts or temporary Securities held by it to by any agent appointed
pursuant to Section 8(a) hereof or any sub- custodian appointed
pursuant to Section 8(b) or 8(c) hereof for the account of such
Portfolio for
other Securities alone or for other Securities and cash, and to expend
cash, insofar as cash is available, in connection with any merger,
consolidation, reorganization, recapitalization, conversion or in
connection with the exercise of subscription or purchase rights, or
otherwise; to deposit any such Securities and cash in accordance with
the terms of any reorganization or protective plan or otherwise, and
to deliver Securities and related documents to the designated
depository or other receiving agent in response to tender offers or
similar offers to purchase received in writing.
(h) Other Purposes. To release or deliver any Securities held by it for
the account of such Portfolio for any other purpose which such
instructions declare to be a proper trust purpose; provided, however,
that before making such release or delivery Northern shall have
received a copy of the resolution of the Trustees certified by the
Secretary of the Trust specifying the Securities to be delivered,
setting forth the purpose for which such release or delivery is to be
made, declaring such purpose to be a proper trust purpose and naming
the person(s) to whom such release or delivery is to be made.
6. Records; Accounts and Reporting.
(a) Records. Northern shall create, maintain and retain all records
relating to its activates and obligations under this Agreement in such
manner as will enable the Trust and Northern to meet their respective
obligations under: (i) the 1940 Act, particularly Sections 30 and 31
thereof, and the rules and regulations thereunder including the
preparation and filing of all required periodic and other reports,
(ii) applicable Federal and State tax laws, and (iii) any other law or
administrative rule or procedure which may be applicable to the Trust
or Northern. All records maintained by Northern in connection with the
performance of its duties under this Agreement will remain the
property of the Trust, shall be returned to the Trust promptly upon
request and, in the event of termination of this Agreement, will be
delivered in accordance with Section 16 hereof.
(b) Accounts and Reporting. Northern shall keep the books of accounting
for the Trust and each of its Portfolios, including all books
necessary to permit prompt determinations of the Federal and State tax
status and origin of the Trust, each
such Portfolio and the dividends and other distributions declared
and/or paid thereby as and to the extent provided in or contemplated
by the Trust's current Prospectus as in effect from time to time (such
determination being collectively referred to herein as "Tax
Determinations"). Northern shall render statements or copies thereof
and shall make Tax Determinations from time to time as contemplated by
proper instructions from the Trustees or Officers of the Trust.
(c) Access to Records. Without limiting Section 3(d) hereof, subject to
security requirements of Northern applicable to its own employees
having access to similar records within Northern and such regulations
as to the conduct of such matters as may be reasonably imposed by
Northern after prior consultation with an officer of the Trust or its
administrator, the books and records of Northern pertaining to its
actions under this Agreement shall be open to inspection and audit at
reasonable times by those persons or classes or persons designated in
proper instructions from the Trustees or Officers of the Trust.
(d) Cooperations with the Trust and its Auditors. Northern shall cooperate
with the Trust and the Trust's independent public accounts in
connection with: (1) the preparation of reports to shareholders of the
Trust, to the Securities and Exchange Commission (including all
required periodic and other reports), to State securities
commissioners, and to others, (2) annual and other audits of the books
and records of the Trust (including, without limitation, such
procedures as may be designated in proper instructions from the
Trustees or officers of the Trust, and (3) other matters of a like
nature. Northern shall, subject to restrictions under applicable law,
obtain from any sub-custodian appointed pursuant to Section 8(c)
hereof an undertaking to permit independent public accountants of the
Trust such reasonable access to the records of such sub-custodian as
may be required in connection with their examination of the books and
records pertaining to the affairs of the Trust or to supply a
verifiable confirmation of the contents of such records.
7. Additional Duties of Northern.
(a) Valuation; Net Income Computation. Unless otherwise directed by proper
instructions from the Trustees or Officers of the Trust, Northern
shall compute and determine on the days at the times
specified in the Trust's then current Prospectus, the net asset value
of a spare of each Portfolio, such computation and determination to be
made in accordance with the Trust's then current Prospectus, and shall
promptly notify the Administrator of the Trust of the result of such
computation and determination.
Unless advised otherwise by proper instructions from the Trustees or
Officers of the Trust, Northern shall also calculate at the times
specified in the Trust's then current Prospectus the net income of
each Portfolio and shall promptly advise the Administrator of the
Trust of the results of such calculations. Such calculation shall be
made in accordance with the Trust's then current Prospectus.
8. Appointment of Agents and Sub-Custodians.
(a) Appointment of Agents. Northern, as custodian, may at any time or
times appoint (and may at any time remove) in accordance with the 1940
Act any other bank, trust company or responsible commercial agent to
carry out such of the provisions of this Agreement as Northern may
from time to time direct, provided that the appointment of such agent
shall not relieve Northern of any of its responsibilities under this
Agreement.
(b) Appointment of Sub-Custodians Generally. Northern, as custodian, may
from time to time employ one or more sub-custodians, but only in
accordance with the terms and conditions set forth in a resolution of
the Trustees of the Trust authorizing the appointment of each
particular sub-custodian, it being understood and agreed that: (1)
Northern shall have no more responsibility or liability to the Trust
on account of any actions or omissions of any sub- custodian so
employed than such sub-custodian has to Northern; (2) the
responsibility to liability of the sub-custodian to Northern shall
conform to any resolution of the Trustees of the Trust authorizing the
appointment of the particular sub-custodian or to the terms of any
agreement entered into between Northern and such sub-custodian to
which such resolution relates; provided, than Northern shall not be
responsible for the solvency of any sub-custodian appointed by it with
reasonable care; and (3) in no event shall Northern be responsible for
any act, omission, default or for the solvency of any eligible foreign
securities depository approved by the
Board of Trustees pursuant to Section 3(d) hereof. Any determination
of whether Northern or a sub-custodian has exercised reasonable care
under the terms of any such agreement or otherwise shall be made in
light of prevailing standards applicable to professional custodians in
the jurisdiction in which such custodial services are performed.
Northern shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth above with respect
to sub-custodians generally and regardless of whether assets are
maintained in the custody of a foreign banking institution, a foreign
securities depository or a branch of Northern or another U.S. bank,
Northern shall not be liable for any loss, damage, cost, expense,
liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism or any loss where
the sub-custodian has otherwise exercised reasonable care.
Northern may only deposit Securities in an account with a
sub-custodian which includes exclusively the assets held by Northern
for its customers, and Northern will cause such account to be
designated by such sub-custodian as a special custody account for the
exclusive benefit of customers of Northern.
(c) Appointment of Foreign Sub-Custodians. Northern may hold the
Portfolios' foreign securities and cash and cash equivalents in such
amounts as Northern may determine to be reasonably necessary to effect
a Portfolio's foreign securities transactions in accounts established
by Northern with one of its branches, a branch of a qualified U.S.
bank, an eligible foreign custodian or an eligible foreign securities
depository; provided, however, that the Board of Trustees of the Trust
has approved the use of such eligible foreign custodian (and
Northern's contract with such custodian) or eligible foreign
securities depository by resolution, and proper instructions to such
effect have been provided to Northern. Furthermore, if a branch of
Northern, a branch of a qualified U.S. bank or an eligible foreign
custodian is selected to act as Northern's sub-custodian to hold any
Property, such entity is authorized to hold such in its Account with
any eligible foreign securities depository in which it participates so
long as such foreign securities depository has been approved by the
Board of Trustees of the Trust. For purposes of this
Agreement (1) "qualified U.S. bank" shall mean a qualified U.S. bank
as defined in Rule 17f-5 under the 1940 Act ("Rule 17f-5"); (2)
"eligible foreign custodian" shall mean an eligible foreign custodian
as defined in Rule 17f-5; and (3) "eligible foreign securities
depository" shall mean a securities depository or clearing agency,
incorporated or organized under the laws of a country other than the
United States, which operates (i) the central system for handling of
securities or equivalent book-entries in that country or (ii) a
transnational system for the central handling of securities or
equivalent book-entries, or is otherwise authorized by the Securities
and Exchange Commission to hold the portfolio securities of registered
investment companies.
For purposes of this Section 8(c), the term "sub-custodian" will refer to
(i) any branch of Northern, (ii) any branch of a qualified U.S. bank or any
eligible foreign custodian with which Northern has entered into an agreement of
the type contemplated hereunder or (iii) any eligible foreign securities
depository.
If, after the initial approval of the sub-custodians by the Board of
Trustees of the Trust in connection with this Agreement, Northern wishes to
appoint other sub-custodians to hold Property of the Portfolios, it will so
notify the Trust and will provide it with information reasonably necessary to
determine any such new sub-custodian's eligibility under Rule 17f-5, including a
copy of the proposed agreement with such sub-custodian. The Trust shall within
30 days after receipt of such notice give a written approval or disapproval of
the proposed action.
If Northern intends to remove any sub-custodian previously approved, it
shall so notify the Trust and shall move the Property deposited with such
sub-custodian to another sub-custodian previously approved or to a new
sub-custodian provided that the appointment of any new sub-custodian will be
subject to the requirements set forth in the preceding paragraph. Northern shall
take steps as may be required to remove any sub-custodian which has ceased to
meet the requirements of Rule 17f-5.
Northern shall provide to the Trust on at least an annual basis, a report
confirming that its arrangements hereunder with respect to foreign
sub-custodians remain in compliance with the rules of the Securities and
Exchange Commission governing such arrangements.
9. Proper Instructions Generally.
(a) Proper Instructions Generally. Proper instructions shall be deemed to
have been issued upon issuance of written instructions signed by
not less than one officer and one responsible employee of Northern
which in the case of each such officer and employee Northern's' Board
of Directors shall have from time to time authorized to give the
particular class of instructions in question. Different persons may be
authorized to give instructions for different purposes.
(b) Proper Instructions from the Trustees or Officers of the Trust. Proper
instructors from the Trustees or Officers of the Trust shall be deemed
to have been issued upon receipt by Northern of written instructions
(including receipt of facsimile) signed by a majority of the Trustees
of the Trust or by not less than two of the Officers or Trustees of
the Trust designated from time to time by resolution of the Trustees.
Such instructions shall be deemed proper instructions as that term is
used in this Agreement in addition to also being deemed proper
instructions from the Trustees or Officers of the Trust. A certificate
executed by the Secretary or Assistant Secretary of the Trust as to
the persons serving as Trustees and/or who are Officers of the Trust
designated as set forth above may be received and accepted by Northern
as conclusive evidence of those persons who are such Trustees and/or
Officers and may be considered to be accurate until receipt of written
notice (or oral notice followed by written confirmation within seven
days) to the contrary. In the case of conflict between instructions
under Section 9(a)and under this Section 9(b), those given pursuant to
this Section 9(b) shall prevail upon receipt by Northern.
10. Delivery of Documents. The Trust has furnished Northern with copies,
properly certified or authenticated, of the following: before any Portfolio
engages in any transactions regulated by the Commodity Futures Trading
Commission ("CFTC"), a copy of either (i) a filed notice of eligibility to claim
the exclusion from the definition of "commodity pool operator" contained in
Section 2(a)(1)(A) of the Commodity Exchange Act ("CEA") that is provided in
Rule 4.5 under the CEA, together with all supplements as are required by the
CFTC, or (ii) a letter which has been granted the Trust by the CFTC which states
that the Trust will not be treated as a "pool" as defined in Section 4.10(d) of
the CFTC's General Regulations, or (iii) a letter which has been granted the
Trust by the CFTC which states that the CFTC will not take any enforcement
action if the Trust does not register as a "commodity pool operator."
The Trust will furnish Northern from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the forgoing,
if any.
11. Segregated Accounts.
(a) Northern shall upon receipt of proper instructions establish
and maintain a segregated account or accounts on its records for and
on behalf of each Portfolio of the Trust, into which account or
accounts may be transferred cash and/or Securities, including
securities in a depository system (i) for the purposes of compliance
by the Trust with the procedures required by a securities or option
exchange, providing such procedures comply with the 1940 Act and
release No. 10666 or any subsequent release or releases of the
Securities and Exchange Commission ("SEC") relating to the maintenance
of segregated accounts by registered investment companies, and (ii)
for other proper corporate purposes, but only, in the case of clause
(ii), upon receipt of proper instructions.
(b) Northern may enter into separate procedural, safekeeping or
other agreements with various futures commission merchants ("FCMs")
and banks that are unaffiliated with the Trust (each a "Safekeeping
Arrangement"), pursuant to which the banks will act as the Trust's
custodian with respect to the Trust's margin deposits in transactions
involving futures contracts and options on futures contracts. Such
margin deposits will be held in segregated accounts (each and "FCM
Account") subject to the disposition by the FCM involved in accordance
with the customer contract between FCM and the Trust ("FCM Contract"),
SEC rules governing such segregated accounts, CFTC rules and the rules
of the applicable commodities exchange. Transfers of initial and
variation margin and premiums shall be made from the Trust's custodial
accounts under the Custodian Agreement upon proper instructions.
12. Compensation; Reimbursement. The Trust shall pay to Northern, as
custodian, the compensation and expense reimbursement set forth in Exhibit A
hereto.
13. Duration and Termination. This Agreement shall continue, unless sooner
terminated as provided herein, until February 29, 1996, and for each Portfolio
thereafter shall continue automatically for periods of one year so long as each
such latter continuance is approved at least annually (a) by the vote of a
majority of the Trustees of the Trust who are not parties to this Agreement or
interested persons (as defined by the 0000 Xxx) of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trustees of the Trust or by a majority of the outstanding Shares (as
defined with respect to voting securities in the 1940 Act) representing the
interests in such Portfolio; provided, however, that this Agreement may be
terminated by the Trust at any time,
without the payment of any penalty, by vote of a majority of the Trustees of the
Trust or by vote of a majority of the outstanding Shares (as so defined) of the
Trust on 60 days' written notice to Northern, or by Northern at any time,
without the payment of any penalty, on 60 days' written notice to the Trust.
14. Amendment of Agreement. This Agreement may be amended by mutual
consent, but the consent of the Trust must be approved by vote of a majority of
those Trustees of the Trust who are not parties to this Agreement or interested
persons (as defined in the 0000 Xxx) of any such party.
15. Interpretative and Additional Provisions. In connection with the
operation of this Agreement, Northern and the Trust may agree from time to time,
by written instrument signed by both parties, on such provisions interpretative
of or in addition to the provisions of this Agreement as may in their joint
opinion be consistent with the general tenor of this Agreement, provided that no
such interpretative or additional provisions shall contravene any applicable
Federal or State laws or regulations, or any provision of the Trust Agreement or
the Trust's By-laws, as the same may from time to time be amended. No
interpretative or additionally provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
16. Successor Custodian.
(a) Appointment of Successor by Trust. If a successor custodian is
appointed by the Trust and a certified copy of the related appointing
resolutions is delivered to Northern, Northern shall, upon termination
of this Agreement or substitution of such successor for Northern,
deliver to such successor custodian, duly endorsed and in proper form
for transfer, all Securities then held by Northern hereunder (or by
any agent or sub-custodian of Northern) and all funds or other
Property of the Trust deposited with or held by Northern Hereunder (or
by any agent or sub- custodian of Northern).
(b) Delivery Pursuant to Shareholders Resolution. In the event that this
Agreement is to be terminated but no new custodian can be found by the
Trust, the Trust shall, before authorizing the delivery of the
Securities, funds and other Property to anyone other than a successor
custodian, submit to its Shareholders the question of whether the
Trust shall be liquidated or shall function without a custodian. Upon
approval by the Shareholders for the Trust to liquidate or function
without a custodian Northern shall, in like manner, upon receipt of a
certified copy of a resolution of the
Shareholders of the Trust deliver such Securities, funds and other
Property in accordance with such resolution.
(c) Selection of Successor by Northern. In the event that this Agreement
is terminated and no successor custodian has been appointed by the
Trust or certified copy of a resolution of the Shareholders has been
delivered to Northern on or before the date when such termination
shall become effective, then Northern shall have the right to deliver
to a back or trust company of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last
published report, of not less than $200 million, all Securities,
funds, property and instruments of the Trust held by Northern under
this Agreement (or any agent or sub-custodian of Northern) and all
instruments held by Northern (or such agent or sub-custodian) relative
thereto. Thereafter, such bank or trust company shall be the successor
custodian to Northern Under this Agreement.
17. Communications. Notices and other writings delivered or mailed postage
prepaid to the Trust in care of The Benchmark Funds, 0000 Xxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx, 00000, or to The Northern Trust Company at 00 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attentions: Fund Accounting, Canal Center, or to such
other address as the Trust or Northern may hereafter specify by written notice
to the most recent address specified by the party to whom such notice is
addressed, shall be deemed to have been properly delivered or given hereunder to
respective addressee.
18. Miscellaneous. The Trust's Declaration of Trust as amended to date is
on file with the Secretary of The Commonwealth of Massachusetts. The captions in
this Agreement are included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise affect their
constructions or effect. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. Any provisions in this Agreement
requiring compliance with any statute or regulation shall mean such statute or
regulation as amended and in effect from time to time. This Agreement shall be
construed in accordance with the laws of the State of Illinois (except as to
Section 19 hereof which shall be construed in accordance with the laws of The
Commonwealth of Massachusetts) and shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
19. Shareholder Liability. This Agreement is executed by or on behalf of
the Trust and the obligations hereunder are not binding upon any of the
Trustees, Officers or Shareholders of the
Trust individually but are binding only upon the Trust and its assets and
property. All obligations of the Trust under this Agreement shall apply only on
a Portfolio by Portfolio basis, and the assets of one Portfolio shall not be
liable for the obligations of another Portfolio.
THE BENCHMARK FUNDS
By /s/ Xxxxx X. Xxxxxx
---------------------------------
As its Vice President
THE NORTHERN TRUST COMPANY
By /s/ Xxx Xxxxxxxx
---------------------------------
As its Senior Vice President
EXHIBIT A
A. Basic Fee
Each Portfolio:
Flat Fee of $35,000
- plus -
9/100th of 1% of the Portfolio's average daily net assets
The basic fee is an annual fee which will be billed and payable monthly.
B. Out-of-Pocket Expenses Reimbursable by the Trust
The Trust will reimburse Northern Monthly for the following our-of-pocket
expenses incurred by Northern during such month in the performance of its duties
under this Foreign Custody Agreement: (i) telephone; (ii) postage; (iii) courier
fees of independent courier services; (iv) office supplies used in maintaining
the Trust's records; and (v) duplicating.
