EXHIBIT g(i)
CUSTODY AGREEMENT
AGREEMENT, dated as of September 29, 2000 between Xxxxxxx Xxxxxxx Funds, a
business trust organized and existing under the laws of the State of
Massachusetts having its principal office and place of business at 0 Xxxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxx (the "Trust") on behalf of The International Equity
Fund, The EAFE Fund, and The Emerging Markets Fund (each a "Fund") and The Bank
of New York, a New York corporation authorized to do a banking business having
its principal office and place of business at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 ("Custodian").
W I T N E S S E T H:
that for and in consideration of the mutual premises hereinafter set forth each
Fund and Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
1. "AUTHORIZED PERSON" shall be any person, whether or not an officer or
employee of the Fund, duly authorized by the Fund's board to execute any
Certificate or to give any Oral Instruction with respect to one or more
Accounts, such persons to be designated in a Certificate annexed hereto as
Schedule I hereto or such other Certificate as may be received by Custodian from
time to time.
2. "BNY AFFILIATE" shall mean any office, branch or subsidiary of The Bank
of New York Company, Inc.
3. "BOOK-ENTRY SYSTEM" shall mean the Federal Reserve/Treasury book-entry
system for receiving and delivering securities, its successors and nominees.
4. "BUSINESS DAY" shall mean any day on which Custodian and relevant
Depositories are open for business.
5. "CERTIFICATE" shall mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement to be given to Custodian,
which is actually received by Custodian by letter or facsimile transmission and
signed on behalf of the Fund by an Authorized Person or a person reasonably
believed by Custodian to be an Authorized Person.
6. "COMPOSITE CURRENCY UNIT" shall mean the Euro or any other composite
currency unit consisting of the aggregate of specified amounts of specified
currencies, as such unit may be constituted from time to time.
7. "DEPOSITORY" shall include (a) the Book-Entry System, (b) the Depository
Trust Company, (c) any other clearing agency or securities depository registered
with the Securities and Exchange Commission identified to the Fund from time to
time, and (d) the respective successors and nominees of the foregoing.
8. "FOREIGN DEPOSITORY" shall mean (a) Euroclear, (b) Clearstream Banking,
societe anonyme, (c) each Eligible Securities Depository as defined in Rule
17f-7 under the Investment Company Act of 1940, as amended, identified to the
Fund from time to time, and (d) the respective successors and nominees of the
foregoing.
9. "INSTRUCTIONS" shall mean communications transmitted by electronic or
telecommunications media, including S.W.I.F.T., computer-to-computer interface,
or dedicated transmission lines.
10. "ORAL INSTRUCTIONS" shall mean verbal instructions received by
Custodian from an Authorized Person or from a person reasonably believed by
Custodian to be an Authorized Person.
11. "SERIES" shall mean the various portfolios, if any, of the Fund listed
on Schedule II hereto, and if none are listed references to Series shall be
references to the Fund.
12. "SECURITIES" shall include, without limitation, any common stock and
other equity securities, bonds, debentures and other debt securities, notes,
mortgages or other obligations, and any instruments representing rights to
receive, purchase, or subscribe for the same, or representing any other rights
or interests therein (whether represented by a certificate or held in a
Depository or by a Subcustodian).
13. "SUBCUSTODIAN" shall mean a bank (including any branch thereof) or
other financial institution (other than a Foreign Depository) located outside
the U.S. which is utilized by Custodian in connection with the purchase, sale or
custody of Securities hereunder and identified to the Fund from time to time,
and their respective successors and nominees.
ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, WARRANTIES, AND COVENANTS
1. (a) The Fund hereby appoints Custodian as custodian of all Securities
and cash at any time delivered to Custodian during the term of this Agreement,
and authorizes Custodian to hold Securities in registered form in its name or
the name of its nominees. Custodian hereby accepts such appointment and agrees
to establish and maintain one or more securities accounts and cash accounts for
each Series in which Custodian will hold Securities and cash as provided herein.
Custodian shall maintain books and records segregating the assets of each Series
from the assets of any other Series. Such accounts (each, an "Account";
collectively, the "Accounts") shall be in the name of the Fund for the benefit
of each Series.
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(b) Custodian may from time to time establish on its books and
records such sub-accounts within each Account as the Fund and Custodian may
agree upon (each a "Special Account"), and Custodian shall reflect therein
such assets as the Fund may specify in a Certificate or Instructions.
(c) Custodian may from time to time establish pursuant to a written
agreement with and for the benefit of a broker, dealer, future commission
merchant or other third party identified in a Certificate or Instructions
such accounts on such terms and conditions as the Fund and Custodian shall
agree, and Custodian shall transfer to such account such Securities and money
as the Fund may specify in a Certificate or Instructions.
2. The Fund hereby represents and warrants, which representations and
warranties shall be continuing and shall be deemed to be reaffirmed upon each
delivery of a Certificate or each giving of Oral Instructions or Instructions by
the Fund, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement, and to perform its obligations
hereunder;
(b) This Agreement has been duly authorized, executed and delivered by
the Fund, approved by a resolution of its board, constitutes a valid and legally
binding obligation of the Fund, enforceable in accordance with its terms, and
there is no statute, regulation, rule, order or judgment binding on it, and no
provision of its charter or by-laws, nor of any mortgage, indenture, credit
agreement or other contract binding on it or affecting its property, which would
prohibit its execution or performance of this Agreement;
(c) It is conducting its business in substantial compliance with all
applicable laws and requirements, both state and federal, and has obtained all
regulatory licenses, approvals and consents necessary to carry on its business
as now conducted;
(d) It will not use the services provided by Custodian hereunder in any
manner that is, or will result in, a violation of any law, rule or regulation
applicable to the Fund;
(e) Its board or its foreign custody manager, as defined in Rule 17f-5
under the Investment Company Act of 1940, as amended (the "`40 Act"), has
determined that use of each Subcustodian (including any Replacement Custodian)
and each Depository which Custodian or any Subcustodian is authorized to utilize
in accordance with Section 1(a) of Article III hereof, satisfies the applicable
requirements of the `40 Act and Rules 17f-4 or 17f-5 thereunder, as the case may
be;
(f) The Fund or its investment adviser has determined that the custody
arrangements of each Foreign Depository provide reasonable safeguards against
the custody risks associated with maintaining assets with such Foreign
Depository within the meaning of Rule 17f-7 under the x00 Xxx.;
(g) It is fully informed of the protections and risks associated with
various methods of transmitting Instructions and Oral Instructions and
delivering Certificates to
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Custodian, understands that there may be more secure methods of transmitting or
delivering the same than the methods selected by the Fund, agrees that the
security procedures (if any) to be utilized provide a commercially reasonable
degree of protection in light of its particular needs and circumstances, and
acknowledges and agrees that Instructions need not be reviewed by Custodian, may
conclusively be presumed by Custodian to have been given by person(s) duly
authorized, and may be acted upon as given;
(h) It shall manage its borrowings, including, without limitation, any
advance or overdraft (including any day-light overdraft) in the Accounts, so
that the aggregate of its total borrowings for each Series does not exceed the
amount such Series is permitted to borrow under the `40 Act;
(i) Its transmission or giving of, and Custodian acting upon,
Certificates, Instructions, or Oral Instructions pursuant to this Agreement
shall at all times comply with the `40 Act;
(j) It shall impose and maintain restrictions on the destinations to
which cash may be disbursed by Instructions to ensure that each disbursement is
for a proper purpose; and
(k) It has the right to make the pledge and grant the security interest
and security entitlement to Custodian contained in Section 1 of Article V
hereof, free of any right of redemption or prior claim of any other person or
entity, such pledge and such grants shall have a first priority subject to no
setoffs, counterclaims, or other liens or grants prior to or on a parity
therewith, and it shall take such additional steps as Custodian may require
to assure such priority.
3. The Fund hereby covenants that it shall from time to time complete and
execute and deliver to Custodian upon Custodian's request a Form FR U-1 (or
successor form) whenever the Fund borrows from Custodian any money to be used
for the purchase or carrying of margin stock as defined in Federal Reserve
Regulation U.
ARTICLE III
CUSTODY AND RELATED SERVICES
1. (a) Subject to the terms hereof, the Fund hereby authorizes Custodian to
hold any Securities received by it from time to time for the Fund's account on
behalf of each Series. Custodian shall be entitled to utilize Depositories,
Subcustodians, and, subject to subsection(c) of this Section 1, Foreign
Depositories, to the extent possible in connection with its performance
hereunder. Securities and cash held in a Depository or Foreign Depository will
be held subject to the rules, terms and conditions of such entity. Securities
and cash held through Subcustodians shall be held subject to the terms and
conditions of Custodian's agreements with such Subcustodians. Subcustodians may
be authorized to hold Securities in Foreign Depositories in which such
Subcustodians participate. Unless otherwise required by local law or practice or
a particular subcustodian agreement, Securities deposited with a Subcustodian, a
Depositary or a Foreign Depository will be held in a commingled account, in the
name of Custodian, holding only Securities held by Custodian as custodian for
its customers. Custodian shall identify on its books and records the Securities
and cash belonging to the Fund, whether held directly or
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indirectly through Depositories, Foreign Depositories, or Subcustodians.
Custodian shall, directly or indirectly through Subcustodians, Depositories, or
Foreign Depositories, endeavor, to the extent feasible, to hold Securities in
the country or other jurisdiction in which the principal trading market for such
Securities is located, where such Securities are to be presented for
cancellation and/or payment and/or registration, or where such Securities are
acquired. Custodian at any time may cease utilizing any Subcustodian and/or may
replace a Subcustodian with a different Subcustodian (the "Replacement
Subcustodian"). In the event Custodian selects a Replacement Subcustodian,
Custodian shall not utilize such Replacement Subcustodian until after the Fund's
board or foreign custody manager has determined that utilization of such
Replacement Subcustodian satisfies the requirements of the `40 Act and Rule
17f-5 thereunder.
(b) Unless Custodian has received a Certificate or Instructions to the
contrary, Custodian shall hold Securities indirectly through a Subcustodian only
if (i) the Securities are not subject to any right, charge, security interest,
lien or claim of any kind in favor of such Subcustodian or its creditors or
operators, including a receiver or trustee in bankruptcy or similar authority,
except for a claim of payment for the safe custody or administration of
Securities on behalf of the Fund by such Subcustodian, and (ii) beneficial
ownership of the Securities is freely transferable without the payment of money
or value other than for safe custody or administration.
(c) With respect to each Foreign Depository, Custodian shall exercise
reasonable care, prudence, and diligence (i) to provide the Fund with an
analysis of the custody risks associated with maintaining assets with the
Foreign Depository, and (ii) to monitor such custody risks on a continuing basis
and promptly notify the Fund of any material change in such risks. The Fund
acknowledges and agrees that such analysis and monitoring shall be made on the
basis of, and limited by, information gathered from Subcustodians or through
publicly available information otherwise obtained by Custodian, and shall not
include any evaluation of Country Risks. As used herein the term "Country Risks"
shall mean with respect to any Foreign Depository: (a) the financial
infrastructure of the country in which it is organized, (b) such country's
prevailing settlement practices, (c) nationalization, expropriation or other
governmental actions, (d) such country's regulation of the banking or securities
industry, (e) currency controls, restrictions, devaluations or fluctuations, and
(f) market conditions which affect the order execution of securities
transactions or affect the value of securities.
2. Custodian shall furnish the Fund with an advice of daily transactions
(including a confirmation of each transfer of Securities) and a monthly summary
of all transfers to or from the Accounts.
3. With respect to all Securities held hereunder, Custodian shall, unless
otherwise instructed to the contrary:
(a) Receive all income and other payments and advise the Fund as
promptly as practicable of any such amounts due but not paid;
(b) Present for payment and receive the amount paid upon all Securities
which may mature and advise the Fund as promptly as practicable of any such
amounts due but not paid;
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(c) Forward to the Fund copies of all information or documents that it
may actually receive from an issuer of Securities which, in the opinion of
Custodian, are intended for the beneficial owner of Securities;
(d) Execute, as custodian, any certificates of ownership, affidavits,
declarations or other certificates under any tax laws now or hereafter in effect
in connection with the collection of bond and note coupons;
(e) Hold directly or through a Depository, a Foreign Depository, or a
Subcustodian all rights and similar Securities issued with respect to any
Securities credited to an Account hereunder; and
(f) Endorse for collection checks, drafts or other negotiable
instruments.
4. (a) Custodian shall notify the Fund of rights or discretionary actions
with respect to Securities held hereunder, and of the date or dates by when such
rights must be exercised or such action must be taken, provided that Custodian
has actually received, from the issuer or the relevant Depository (with respect
to Securities issued in the United States) or from the relevant Subcustodian,
Foreign Depository, or a nationally or internationally recognized bond or
corporate action service to which Custodian subscribes, timely notice of such
rights or discretionary corporate action or of the date or dates such rights
must be exercised or such action must be taken. Absent actual receipt of such
notice, Custodian shall have no liability for failing to so notify the Fund.
(b) Whenever Securities (including, but not limited to, warrants,
options, tenders, options to tender or non-mandatory puts or calls) confer
discretionary rights on the Fund or provide for discretionary action or
alternative courses of action by the Fund, the Fund shall be responsible for
making any decisions relating thereto and for directing Custodian to act. In
order for Custodian to act, it must receive the Fund's Certificate or
Instructions at Custodian's offices, addressed as Custodian may from time to
time request, not later than noon (New York time) at least two (2) Business
Days prior to the last scheduled date to act with respect to such Securities
(or such earlier date or time as Custodian may specify to the Fund). Absent
Custodian's timely receipt of such Certificate or Instructions, Custodian
shall not be liable for failure to take any action relating to or to exercise
any rights conferred by such Securities.
5. All voting rights with respect to Securities, however registered, shall
be exercised by the Fund or its designee. For Securities issued in the United
States, Custodian's only duty shall be to mail to the Fund any documents
(including proxy statements, annual reports and signed proxies) actually
received by Custodian relating to the exercise of such voting rights. With
respect to Securities issued outside of the United States, Custodian's only duty
shall be to provide the Fund with access to a provider of global proxy services
at the Fund's request. The Fund shall be responsible for all costs associated
with its use of such services.
6. Custodian shall promptly advise the Fund upon Custodian's actual receipt
of notification of the partial redemption, partial payment or other action
affecting less than all Securities of the relevant class. If Custodian, any
Subcustodian, any Depository, or any Foreign
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Depository holds any Securities in which the Fund has an interest as part of a
fungible mass, Custodian, such Subcustodian, Depository, or Foreign Depository
may select the Securities to participate in such partial redemption, partial
payment or other action in any non-discriminatory manner that it customarily
uses to make such selection.
7. Custodian shall not under any circumstances accept bearer interest
coupons which have been stripped from United States federal, state or local
government or agency securities unless explicitly agreed to by Custodian in
writing.
8. The Fund shall be liable for all taxes, assessments, duties and other
governmental charges, including any interest or penalty with respect thereto
("Taxes"), with respect to any cash or Securities held on behalf of the Fund or
any transaction related thereto. The Fund shall indemnify Custodian and each
Subcustodian for the amount of any Tax that Custodian, any such Subcustodian or
any other withholding agent is required under applicable laws (whether by
assessment or otherwise) to pay on behalf of, or in respect of income earned by
or payments or distributions made to or for the account of the Fund (including
any payment of Tax required by reason of an earlier failure to withhold).
Custodian shall, or shall instruct the applicable Subcustodian or other
withholding agent to, withhold the amount of any Tax which is required to be
withheld under applicable law upon collection of any dividend, interest or other
distribution made with respect to any Security and any proceeds or income from
the sale, loan or other transfer of any Security. In the event that Custodian or
any Subcustodian is required under applicable law to pay any Tax on behalf of
the Fund, Custodian is hereby authorized to withdraw cash from any cash account
in the amount required to pay such Tax and to use such cash, or to remit such
cash to the appropriate Subcustodian or other withholding agent, for the timely
payment of such Tax in the manner required by applicable law. If the aggregate
amount of cash in all cash accounts is not sufficient to pay such Tax, Custodian
shall promptly notify the Fund of the additional amount of cash (in the
appropriate currency) required, and the Fund shall directly deposit such
additional amount in the appropriate cash account promptly after receipt of such
notice, for use by Custodian as specified herein. In the event that Custodian
reasonably believes that Fund is eligible, pursuant to applicable law or to the
provisions of any tax treaty, for a reduced rate of, or exemption from, any Tax
which is otherwise required to be withheld or paid on behalf of the Fund under
any applicable law, Custodian shall, or shall instruct the applicable
Subcustodian or withholding agent to, either withhold or pay such Tax at such
reduced rate or refrain from withholding or paying such Tax, as appropriate;
PROVIDED that Custodian shall have received from the Fund all documentary
evidence of residence or other qualification for such reduced rate or exemption
required to be received under such applicable law or treaty. In the event that
Custodian reasonably believes that a reduced rate of, or exemption from, any Tax
is obtainable only by means of an application for refund, Custodian and the
applicable Subcustodian shall have no responsibility for the accuracy or
validity of any forms or documentation provided by the Fund to Custodian
hereunder. The Fund hereby agrees to indemnify and hold harmless Custodian and
each Subcustodian in respect of any liability arising from any underwithholding
or underpayment of any Tax which results from the inaccuracy or invalidity of
any such forms or other documentation, and such obligation to indemnify shall be
a continuing obligation of the Fund, its successors and assigns notwithstanding
the termination of this Agreement.
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9. (a) For the purpose of settling Securities and foreign exchange
transactions, the Fund shall provide Custodian with sufficient immediately
available funds for all transactions by such time and date as conditions in the
relevant market dictate. As used herein, "sufficient immediately available
funds" shall mean either (i) sufficient cash denominated in U.S. dollars to
purchase the necessary foreign currency, or (ii) sufficient applicable foreign
currency, to settle the transaction. Custodian shall provide the Fund with
immediately available funds each day which result from the actual settlement of
all sale transactions, based upon advices received by Custodian from
Subcustodians, Depositories, and Foreign Depositories. Such funds shall be in
U.S. dollars or such other currency as the Fund may specify to Custodian.
(b) Any foreign exchange transaction effected by Custodian in connection
with this Agreement may be entered with Custodian or a BNY Affiliate acting as
principal or otherwise through customary banking channels. The Fund may issue a
standing Certificate or Instructions with respect to foreign exchange
transactions, but Custodian may establish rules or limitations concerning any
foreign exchange facility made available to the Fund. The Fund shall bear all
risks of investing in Securities or holding cash denominated in a foreign
currency.
(c) To the extent that Custodian has agreed to provide pricing or other
information services in connection with this Agreement, Custodian is authorized
to utilize any vendor (including brokers and dealers of Securities) reasonably
believed by Custodian to be reliable to provide such information, except that
Custodian shall not utilize and vendor for a Fund after such Fund has instructed
Custodian by a Certificate or Instructions not to utilize such vendor, it being
agreed that Custodian shall not be required to find any new or replacement
vendor for any such vendor. The Fund understands that certain pricing
information with respect to complex financial instruments (E.G., derivatives)
may be based on calculated amounts rather than actual market transactions and
may not reflect actual market values, and that the variance between such
calculated amounts and actual market values may or may not be material. Where
vendors do not provide information for particular Securities or other property,
an Authorized Person may advise Custodian in a Certificate regarding the fair
market value of, or provide other information with respect to, such Securities
or property as determined by it in good faith. Custodian shall not be liable for
any loss, damage or expense incurred as a result of errors or omissions with
respect to any pricing or other information utilized by Custodian hereunder.
10. Custodian shall promptly send to the Fund (a) any reports it receives
from a Depository on such Depository's system of internal accounting control,
and (b) such reports on its own system of internal accounting control as the
Fund may reasonably request from time to time.
ARTICLE IV
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of Securities by the Fund, the Fund
shall deliver to Custodian a Certificate or Instructions, or with respect to a
purchase or sale of a Security generally required to be settled on the same day
the purchase or sale is made, Oral Instructions specifying all information
Custodian may reasonably request to settle such purchase
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or sale. Custodian shall account for all purchases and sales of Securities on
the actual settlement date unless otherwise agreed by Custodian.
2. The Fund understands that when Custodian is instructed to deliver
Securities against payment, delivery of such Securities and receipt of payment
therefor may not be completed simultaneously. Notwithstanding any provision in
this Agreement to the contrary, settlements, payments and deliveries of
Securities may be effected by Custodian or any Subcustodian in accordance with
the customary or established securities trading or securities processing
practices and procedures in the jurisdiction in which the transaction occurs,
including, without limitation, delivery to a purchaser or dealer therefor (or
agent) against receipt with the expectation of receiving later payment for such
Securities. The Fund assumes full responsibility for all risks, including,
without limitation, credit risks, involved in connection with such deliveries of
Securities.
3. Custodian may, as a matter of bookkeeping convenience or by separate
agreement with the Fund, credit the Account with the proceeds from the sale,
redemption or other disposition of Securities or interest, dividends or other
distributions payable on Securities prior to its actual receipt of final payment
therefor. All such credits shall be conditional until Custodian's actual receipt
of final payment and may be reversed by Custodian to the extent that final
payment is not received. Payment with respect to a transaction will not be
"final" until Custodian shall have received immediately available funds which
under applicable local law, rule and/or practice are irreversible and not
subject to any security interest, levy or other encumbrance, and which are
specifically applicable to such transaction.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
1. If Custodian should in its sole discretion advance funds on behalf of
any Series which results in an overdraft (including, without limitation, any
day-light overdraft) because the money held by Custodian in an Account for such
Series shall be insufficient to pay the total amount payable upon a purchase of
Securities specifically allocated to such Series, as set forth in a Certificate,
Instructions or Oral Instructions, or if an overdraft arises in the separate
account of a Series for some other reason, including, without limitation,
because of a reversal of a conditional credit or the purchase of any currency,
or if the Fund is for any other reason indebted to Custodian with respect to
such Series, including any indebtedness to The Bank of New York under the Fund's
Cash Management and Related Services Agreement, if any (except a borrowing for
investment or for temporary or emergency purposes using Securities as collateral
pursuant to a separate agreement and subject to the provisions of Section 2 of
this Article), such overdraft or indebtedness shall be deemed to be a loan made
by Custodian to the Fund for such Series payable on demand and shall bear
interest from the date incurred at a rate per annum ordinarily charged by
Custodian to its institutional customers, as such rate may be adjusted from time
to time. In addition, the Fund hereby agrees that Custodian shall to the maximum
extent permitted by law have a continuing lien, security interest, and security
entitlement in and to property with a value equal from time to time to the
amount of such overdraft and interest thereon, including, without limitation,
any investment property or any financial asset, of such Series at any time held
by Custodian for the benefit of such Series or in which such Series may have an
interest which is
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then in Custodian's possession or control or in possession or control of any
third party acting in Custodian's behalf. The Fund authorizes Custodian, in its
sole discretion, at any time to charge any such overdraft or indebtedness
together with interest due thereon against any balance of account standing to
such Series' credit on Custodian's books.
2. The parties agree from time to time to agree on mutually acceptable
procedures to be followed in connection with any borrowing from any bank,
including the Custodian, if the borrowing is pursuant to a separate agreement.
ARTICLE VI
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any shares issued by the Fund ("Shares")
it or its agent shall deliver to Custodian a Certificate or Instructions
specifying the amount of money and/or Securities to be received by Custodian
for the sale of such Shares and specifically allocated to an Account for such
Series.
2. Upon receipt of such money, Custodian shall credit such money to an
Account in the name of the Series for which such money was received.
3. Except as provided hereinafter, whenever the Fund desires Custodian
to make payment out of the money held by Custodian hereunder in connection
with a redemption of any Shares, it or its agent shall furnish to Custodian a
Certificate or Instructions specifying the total amount to be paid for such
Shares. Custodian shall make payment of such total amount to the transfer
agent specified in such Certificate or Instructions out of the money held in
an Account of the appropriate Series.
4. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, Custodian,
unless otherwise instructed by a Certificate or Instructions, shall, upon
presentment of such check, charge the amount thereof against the money held
in the Account of the Series of the Shares being redeemed, provided, that if
the Fund or its agent timely advises Custodian that such check is not to be
honored, Custodian shall return such check unpaid.
ARTICLE VII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. Whenever the Fund shall determine to pay a dividend or distribution
on Shares it shall furnish to Custodian Instructions or a Certificate setting
forth with respect to the Series specified therein the date of the declaration
of such dividend or distribution, the total amount payable, and the
payment date.
2. Upon the payment date specified in such Instructions or Certificate,
Custodian shall pay out of the money held for the account of such Series the
total amount payable to the dividend agent of the Fund specified therein.
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ARTICLE VIII
CONCERNING CUSTODIAN
1. (a) Except as otherwise expressly provided herein, Custodian shall not
be liable for any costs, expenses, damages, liabilities or claims, including
attorneys' and accountants' fees (collectively, "Losses"), incurred by or
asserted against the Fund, except those Losses arising out of Custodian's own
negligence or willful misconduct. Custodian shall have no liability whatsoever
for the action or inaction of any Depositories, or, except to the extent such
action or inaction is a direct result of the Custodian's failure to fulfill its
duties hereunder, of any Foreign Depositories. With respect to any Losses
incurred by the Fund as a result of the acts or any failures to act by any
Subcustodian (other than a BNY Affiliate), Custodian shall take commercially
appropriate action to recover such Losses from such Subcustodian; and
Custodian's sole responsibility and liability to the Fund shall be limited to
amounts so received from such Subcustodian (exclusive of costs and expenses
incurred by Custodian). In no event shall Custodian be liable to the Fund or any
third party for special, indirect or consequential damages, or lost profits or
loss of business, arising in connection with this Agreement, nor shall BNY or
any Subcustodian be liable: (i) for acting in accordance with any Certificate or
Oral Instructions actually received by Custodian and reasonably believed by
Custodian to be given by an Authorized Person; (ii) for acting in accordance
with Instructions without reviewing the same; (iii) for conclusively presuming
that all Instructions are given only by person(s) duly authorized; (iv) for
conclusively presuming that all disbursements of cash directed by the Fund,
whether by a Certificate, an Oral Instruction, or an Instruction, are in
accordance with Section 2(i) of Article II hereof; (v) for holding property in
any particular country, including, but not limited to, Losses resulting from
nationalization, expropriation or other governmental actions; regulation of the
banking or securities industry; exchange or currency controls or restrictions,
devaluations or fluctuations; availability of cash or Securities or market
conditions which prevent the transfer of property or execution of Securities
transactions or affect the value of property; (vi) for any Losses due to forces
beyond the control of Custodian, including without limitation strikes, work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear or
natural catastrophes or acts of God, or interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services; (vii)
for the insolvency of any Subcustodian (other than a BNY Affiliate), any
Depository, or, except to the extent such action or inaction is a direct result
of the Custodian's failure to fulfill its duties hereunder, any Foreign
Depository; or (viii) for any Losses arising from the applicability of any law
or regulation now or hereafter in effect, or from the occurrence of any event,
including, without limitation, implementation or adoption of any rules or
procedures of a Foreign Depository, which may affect, limit, prevent or impose
costs or burdens on, the transferability, convertibility, or availability of any
currency or Composite Currency Unit in any country or on the transfer of any
Securities, and in no event shall Custodian be obligated to substitute another
currency for a currency (including a currency that is a component of a Composite
Currency Unit) whose transferability, convertibility or availability has been
affected, limited, or prevented by such law, regulation or event, and to the
extent that any such law, regulation or event imposes a cost or charge upon
Custodian in relation to the transferability, convertibility, or availability of
any cash currency or Composite Currency Unit, such cost or charge shall be for
the account of the Fund, and Custodian may treat any account
-11-
denominated in an affected currency as a group of separate accounts
denominated in the relevant component currencies.
(b) Custodian may enter into subcontracts, agreements and
understandings with any BNY Affiliate, whenever and on such terms and
conditions as it deems necessary or appropriate to perform its services
hereunder. No subcontract, agreement or understanding with any BNY Affiliate
or otherwise shall discharge Custodian from its obligations hereunder.
(c) The Fund agrees to indemnify Custodian and hold Custodian
harmless from and against any and all Losses sustained or incurred by or
asserted against Custodian by reason of or as a result of any action or
inaction, or arising out of Custodian's performance hereunder, including
reasonable fees and expenses of counsel incurred by Custodian in a successful
defense of claims by the Fund; provided however, that the Fund shall not
indemnify Custodian for those Losses arising out of Custodian's own
negligence or willful misconduct. This indemnity shall be a continuing
obligation of the Fund, its successors and assigns, notwithstanding the
termination of this Agreement.
2. Without limiting the generality of the foregoing, Custodian
shall be under no obligation to inquire into, and shall not be liable for:
(a) Any Losses incurred by the Fund or any other person as a result
of the receipt or acceptance of fraudulent, forged or invalid Securities, or
Securities which are otherwise not freely transferable or deliverable without
encumbrance in any relevant market;
(b) The validity of the issue of any Securities purchased, sold, or
written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received therefor;
(c) The legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor;
(d) The legality of the declaration or payment of any dividend or
distribution by the Fund;
(e) The legality of any borrowing by the Fund;
(f) The legality of any loan of portfolio Securities, nor shall
Custodian be under any duty or obligation to see to it that any cash or
collateral delivered to it by a broker, dealer or financial institution or
held by it at any time as a result of such loan of portfolio Securities is
adequate security for the Fund against any loss it might sustain as a result
of such loan, which duty or obligation shall be the sole responsibility of
the Fund. In addition, Custodian shall be under no duty or obligation to see
that any broker, dealer or financial institution to which portfolio
Securities of the Fund are lent makes payment to it of any dividends or
interest which are payable to or for the account of the Fund during the
period of such loan or at the termination of such loan, provided, however
that Custodian shall promptly notify the Fund in the event that such
dividends or interest are not paid and received when due;
-12-
(g) The sufficiency or value of any amounts of money and/or
Securities held in any Special Account in connection with transactions by the
Fund; whether any broker, dealer, futures commission merchant or clearing
member makes payment to the Fund of any variation margin payment or similar
payment which the Fund may be entitled to receive from such broker, dealer,
futures commission merchant or clearing member, or whether any payment
received by Custodian from any broker, dealer, futures commission merchant or
clearing member is the amount the Fund is entitled to receive, or to notify
the Fund of Custodian's receipt or non-receipt of any such payment; or
(h) Whether any Securities at any time delivered to, or held by it or
by any Subcustodian, for the account of the Fund and specifically allocated
to a Series are such as properly may be held by the Fund or such Series under
the provisions of its then current prospectus and statement of additional
information, or to ascertain whether any transactions by the Fund, whether or
not involving Custodian, are such transactions as may properly be engaged in
by the Fund.
3. Custodian may, with respect to questions of law specifically
regarding an Account, obtain the advice of counsel and shall be fully
protected with respect to anything done or omitted by it in good faith in
conformity with such advice. Where circumstances permit, Custodian will
notify the Fund of such advice of counsel. Custodian may, with respect to
questions of law specifically regarding an Account, obtain the advice of
counsel and shall be fully protected with respect to anything done or omitted
by it in good faith in conformity with such advice, provided that Custodian
shall not be so protected unless the Fund shall have received prior notice
from Custodian of the substance of the advice of counsel and Custodian's
intent to rely thereon, such notice to be provided to the Fund as far in
advance of such reliance as is reasonably possible. In the event Custodian
does not provide such prior notice, Custodian shall not be liable unless
acting in accordance with such advice constitutes the Custodian's own
negligence or willful misconduct.
4. Custodian shall be under no obligation to take action to collect any
amount payable on Securities in default, or if payment is refused after due
demand and presentment, but shall notify the Fund of such default or refusal
unless it reasonably believes the Fund has knowledge of such default or
refusal.
5. Custodian shall have no duty or responsibility to inquire into, make
recommendations, supervise, or determine the suitability of any transactions
affecting any Account.
6. The Fund shall pay to Custodian the fees and charges as may be
specifically agreed upon from time to time and such other fees and charges at
Custodian's standard rates for such services as may be applicable. The Fund
shall reimburse Custodian for all costs associated with the conversion of the
Fund's Securities hereunder and the transfer of Securities and records kept
in connection with this Agreement. The Fund shall also reimburse Custodian
for out-of-pocket expenses which are a normal incident of the services
provided hereunder.
-13-
7. Custodian has the right to debit any cash account for any amount
payable by the Fund in connection with any and all obligations of the Fund to
Custodian. In addition to the rights of Custodian under applicable law and
other agreements, at any time when the Fund shall not have honored any of its
obligations to Custodian, Custodian shall have the right without notice to
the Fund to retain or set-off, against such obligations of the Fund, any cash
Custodian or a BNY Affiliate may directly or indirectly hold for the account
of the Fund, and any obligations (whether matured or unmatured) that
Custodian or a BNY Affiliate may have to the Fund in any currency or
Composite Currency Unit. Any such cash of, or obligation to, the Fund may be
transferred to Custodian and any BNY Affiliate in order to effect the above
rights.
8. The Fund agrees to forward to Custodian a Certificate or Instructions
confirming Oral Instructions by the close of business of the same day that
such Oral Instructions are given to Custodian. The Fund agrees that the fact
that such confirming Certificate or Instructions are not received or that a
contrary Certificate or contrary Instructions are received by Custodian shall
in no way affect the validity or enforceability of transactions authorized by
such Oral Instructions and effected in accordance therewith by Custodian. If
the Fund elects to transmit Instructions through an on-line communications
system offered by Custodian, the Fund's use thereof shall be subject to the
Terms and Conditions attached as Appendix I hereto, and Custodian shall
provide user and authorization codes, passwords and authentication keys only
to an Authorized Person or a person reasonably believed by Custodian to be an
Authorized Person.
9. The books and records pertaining to the Fund which are in possession of
Custodian shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the `40 Act and the rules thereunder.
The Fund, or its authorized representatives, shall have access to such books
and records during Custodian's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided
by Custodian to the Fund or its authorized representative. Upon the
reasonable request of the Fund, Custodian shall provide in hard copy or on
computer disc any records included in any such delivery which are maintained
by Custodian on a computer disc, or are similarly maintained.
10. It is understood that Custodian is authorized to supply any information
regarding the Accounts which is required by any law, regulation or rule now or
hereafter in effect. The Custodian shall provide the Fund with any report
obtained by the Custodian on the system of internal accounting control of a
Depository, Foreign Depository, or Subcustodian, and with such reports on its
own system of internal accounting control as the Fund may reasonably request
from time to time.
11. Custodian shall have no duties or responsibilities whatsoever except
such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied against Custodian
in connection with this Agreement.
-14-
ARTICLE IX
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving
to the other party a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of
giving of such notice. In the event such notice is given by the Fund, it
shall be accompanied by a copy of a resolution of the board of the Fund,
certified by the Secretary or any Assistant Secretary, electing to terminate
this Agreement and designating a successor custodian or custodians. In the
event such notice is given by Custodian, the Fund shall, on or before the
termination date, deliver to Custodian a copy of a resolution of the board of
the Fund, certified by the Secretary or any Assistant Secretary, designating
a successor custodian or custodians. In the absence of such designation by
the Fund, Custodian may designate a successor custodian which shall be a bank
or trust company having not less than $2,000,000 aggregate capital, surplus
and undivided profits. Upon the date set forth in such notice this Agreement
shall terminate, and Custodian shall upon receipt of a notice of acceptance
by the successor custodian on that date deliver directly to the successor
custodian all Securities and money then owned by the Fund and held by it as
Custodian, after deducting all fees, expenses and other amounts for the
payment or reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or Custodian
in accordance with the preceding Section, the Fund shall upon the date
specified in the notice of termination of this Agreement and upon the
delivery by Custodian of all Securities (other than Securities which cannot
be delivered to the Fund) and money then owned by the Fund be deemed to be
its own custodian and Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with respect
to Securities which cannot be delivered to the Fund to hold such Securities
hereunder in accordance with this Agreement.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees to furnish to Custodian a new Certificate of
Authorized Persons in the event of any change in the then present Authorized
Persons. Until such new Certificate is received, Custodian shall be fully
protected in acting upon Certificates or Oral Instructions of such present
Authorized Persons.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to Custodian, shall be sufficiently given if
addressed to Custodian and received by it at its offices at 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as Custodian may
from time to time designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if
addressed to the Fund and received by it at its offices at 0 Xxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx XX0 0XX, Attention: Xxxx Xxxxxxxx, or at such other place
as the Fund may from time to time designate in writing.
-15-
4. Each and every right granted to either party hereunder or under any
other document delivered hereunder or in connection herewith, or allowed it
by law or equity, shall be cumulative and may be exercised from time to time.
No failure on the part of either party to exercise, and no delay in
exercising, any right will operate as a waiver thereof, nor will any single
or partial exercise by either party of any right preclude any other or future
exercise thereof or the exercise of any other right.
5. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any exclusive jurisdiction, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected thereby. This Agreement may not be amended or modified
in any manner except by a written agreement executed by both parties, except
that any amendment to the Schedule I hereto need be signed only by the Fund
and any amendment to Appendix I hereto need be signed only by Custodian and
delivered to the Fund at least fifteen (15) days before such amendment takes
effect, unless Custodian reasonably believes that such period could expose
Custodian to liability. 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 either
party without the written consent of the other.
6. This Agreement shall be construed in accordance with the substantive
laws of the State of New York, without regard to conflicts of laws principles
thereof. The Fund and Custodian hereby consent to the jurisdiction of a state
or federal court situated in New York City, New York in connection with any
dispute arising hereunder. The Fund hereby irrevocably waives, to the fullest
extent permitted by applicable law, any objection which it may now or
hereafter have to the laying of venue of any such proceeding brought in such
a court and any claim that such proceeding brought in such a court has been
brought in an inconvenient forum. The Fund and Custodian each hereby
irrevocably waives any and all rights to trial by jury in any legal
proceeding arising out of or relating to this Agreement.
7. 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.
8. A copy of the Agreement and Declaration of Trust establishing the
Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trust by officers of the Trust as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the Trustees, officers or shareholders of any Fund individually
but are binding only upon the assets and property belonging to the Funds.
-16-
IN WITNESS WHEREOF, the Fund and Custodian have caused this Agreement
to be executed by their respective officers, thereunto duly authorized, as of
the day and year first above written.
XXXXXXX XXXXXXX FUNDS
By: /s/ Xxxxx Xxxxxxx
----------------------
R. Xxxxx Xxxxxxx, President
Tax Identification No:
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. XxXxxx
----------------------
Title: Vice President
SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS
(The Fund - Oral and Written Instructions)
The undersigned hereby certifies that he/she is the duly elected and acting
President of Xxxxxxx Xxxxxxx Funds (the "Fund"), and further certifies that the
following officers or employees of the Fund have been duly authorized in
conformity with the Fund's Declaration of Trust and By-Laws to deliver
Certificates and Oral Instructions to The Bank of New York ("Custodian")
pursuant to the Custody Agreement between the Fund and Custodian dated
_______________, and that the signatures appearing opposite their names are
true and correct:
Xxxxx Xxxxxxx President /s/ Xxxxx Xxxxxxx
Xxxx X. Xxxxx Trustee /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxxx, Xx. Trustee /s/ Xxxx X. Xxxxxx, Xx.
Xxxxxx Xxxxxxxx Vice President /s/ Xxxxxx Xxxxxxxx
Xxxx Xxxxxxxx Vice President /s/ Xxxx Xxxxxxxx
Xxxxx Xxxxxxxxx Secretary /s/ Xxxxx Xxxxxxxxx
This certificate supersedes any certificate of Authorized Persons you
may currently have on file.
[seal] By:
--------------------------------
Title:
Date:
SCHEDULE II
SERIES
The Emerging Markets Fund
The International Equity Fund
The EAFE Fund
APPENDIX I
THE BANK OF NEW YORK
ON-LINE COMMUNICATIONS SYSTEM (THE "SYSTEM")
TERMS AND CONDITIONS
1. LICENSE; USE. Upon delivery to an Authorized Person or a person
reasonably believed by Custodian to be an Authorized Person the Fund of software
enabling the Fund to obtain access to the System (the "Software"), Custodian
grants to the Fund a personal, nontransferable and nonexclusive license to use
the Software solely for the purpose of transmitting Written Instructions,
receiving reports, making inquiries or otherwise communicating with Custodian in
connection with the Account(s). The Fund shall use the Software solely for its
own internal and proper business purposes and not in the operation of a service
bureau. Except as set forth herein, no license or right of any kind is granted
to the Fund with respect to the Software. The Fund acknowledges that Custodian
and its suppliers retain and have title and exclusive proprietary rights to the
Software, including any trade secrets or other ideas, concepts, know-how,
methodologies, or information incorporated therein and the exclusive rights to
any copyrights, trademarks and patents (including registrations and applications
for registration of either), or other statutory or legal protections available
in respect thereof. The Fund further acknowledges that all or a part of the
Software may be copyrighted or trademarked (or a registration or claim made
therefor) by Custodian or its suppliers. The Fund shall not take any action with
respect to the Software inconsistent with the foregoing acknowledgments, nor
shall you attempt to decompile, reverse engineer or modify the Software. The
Fund may not copy, sell, lease or provide, directly or indirectly, any of the
Software or any portion thereof to any other person other than an Authorized
Person or entity without Custodian's prior written consent. The Fund may not
remove any statutory copyright notice or other notice included in the Software
or on any media containing the Software. The Fund shall reproduce any such
notice on any reproduction of the Software and shall add any statutory copyright
notice or other notice to the Software or media upon Custodian's request.
2. EQUIPMENT. The Fund shall obtain and maintain at its own cost and
expense all equipment and services, including but not limited to communications
services, necessary for it to utilize the Software and obtain access to the
System, and Custodian shall not be responsible for the reliability or
availability of any such equipment or services.
3. PROPRIETARY INFORMATION. The Software, any data base and any
proprietary data, processes, information and documentation made available to the
Fund by Custodian (other than which are or become part of the public domain or
are legally required to be made available to the public) (collectively, the
"Information"), are the exclusive and confidential property of Custodian or its
suppliers. The Fund shall keep the Information
confidential by using the same care and discretion that the Fund uses with
respect to its own confidential property and trade secrets, but not less than
reasonable care. Upon termination of the Agreement or the Software license
granted herein for any reason, the Fund shall return to Custodian any and all
copies of the Information which are in its possession or under its control.
4. MODIFICATIONS. Custodian reserves the right to modify the Software
from time to time and the Fund shall install new releases of the Software as
Custodian may direct. The Fund agrees not to modify or attempt to modify the
Software without Custodian's prior written consent. The Fund acknowledges that
any modifications to the Software, whether by the Fund or Custodian and whether
with or without Custodian's consent, shall become the property of Custodian.
5. NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS MANUFACTURERS AND
SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE SOFTWARE,
SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. THE FUND ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY DATABASE ARE
PROVIDED "AS IS." IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ANY
DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL, WHICH THE FUND MAY
INCUR IN CONNECTION WITH THE SOFTWARE, SERVICES OR ANY DATABASE, EVEN IF
CUSTODIAN OR SUCH SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF GOD, MACHINE
OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION OF
COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR
CAUSE BEYOND THEIR REASONABLE CONTROL.
6. SECURITY; RELIANCE; UNAUTHORIZED USE. The Fund will cause all persons
utilizing the Software and System to treat all applicable user and authorization
codes, passwords and authentication keys with the same care it uses with respect
to its own proprietary materials, but not less than reasonable care, and it will
establish internal control and safekeeping procedures to restrict the
availability of the same to persons duly authorized to give Instructions..
Custodian is hereby irrevocably authorized to act in accordance with and rely on
Instructions received by it through the System. The Fund acknowledges that it is
its sole responsibility to assure that only persons duly authorized use the
System and that Custodian shall not be responsible nor liable for any
unauthorized use thereof.
7. SYSTEM ACKNOWLEDGMENTS. Custodian shall acknowledge through the
System its receipt of each transmission communicated through the System, and
in the absence of such acknowledgment Custodian shall not be liable for any
failure to act in accordance with such transmission and the Fund may not
claim that such transmission was received by Custodian.
8. EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED
STATES LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER,
TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER
COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE OF THE UNITED
STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN ACCORDANCE WITH THE
EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS
PROHIBITED. The Fund hereby authorizes Custodian to report its name and address
to government agencies to which Custodian is required to provide such
information by law.
9. ENCRYPTION. The Fund acknowledges and agrees that encryption may
not be available for every communication through the System, or for all
data. The Fund agrees that Custodian may deactivate any encryption features
at any time, without notice or liability to the Fund, for the purpose of
maintaining, repairing or troubleshooting the System or the Software.
