Exhibit (g)(7)
(JPMORGAN LOGO)
FORM OF
MASTER GLOBAL CUSTODY AGREEMENT
BETWEEN
EACH OF THE RIVERSOURCE FUNDS LISTED ON
SCHEDULE A HERETO, SEVERALLY AND NOT
JOINTLY,
AND
JPMORGAN CHASE BANK, N.A.
TABLE OF CONTENTS
1. INTENTION OF THE PARTIES; DEFINITIONS 2
1.1 Intention of the Parties 2
1.2 Definitions 2
2. WHAT THE BANK IS REQUIRED TO DO 5
2.1 Set Up Accounts 5
2.2 Cash Account 6
2.3 Segregation of Assets; Nominee Name 6
2.4 Settlement of Transactions 7
2.5 Contractual Settlement Date Accounting 7
2.6 Actual Settlement Date Accounting 8
2.7 Income Collection (AutoCredit(R)) 8
2.8 Miscellaneous Administrative Duties 9
2.9 Corporate Actions 9
2.10 Class Action Litigation 10
2.11 Proxies 10
2.12 Statements of Account 11
2.13 Access to Bank's Records 11
2.14 Maintenance of Financial Assets at Subcustodian Locations 13
2.15 Tax Relief Services 13
2.16 Foreign Exchange Transactions 13
2.17 Notifications 13
3. INSTRUCTIONS 14
3.1 Acting on Instructions; Method of Instruction and Unclear
Instructions 14
3.2 Verification and Security Procedures 14
3.3 Instructions; Contrary to Law/Market Practice 14
3.4 Cut-Off Times 15
3.5 Electronic Access 15
4. FEES, EXPENSES AND OTHER AMOUNTS OWING TO THE BANK 15
4.1 Fees and Expenses 15
4.2 Overdrafts 15
4.3 Bank's Right Over Securities; Set-off 16
5. SUBCUSTODIANS, SECURITIES DEPOSITORIES, AND OTHER AGENTS 16
5.1 Appointment of Subcustodians; Use of Securities Depositories 16
5.2 Liability for Subcustodians 17
6. ADDITIONAL PROVISIONS RELATING TO CUSTOMER 18
6.1 Representations of Customer and Bank 18
6.2 Customer is Liable to Bank Even if it is Acting for Another Person 19
7. WHEN BANK IS LIABLE TO CUSTOMER 19
7.1 Standard of Care; Liability 19
7.2 Force Majeure 21
7.3 Bank May Consult With Counsel 21
7.4 Bank Provides Diverse Financial Services and May Generate Profits
as a Result 21
7.5 Assets Held Outside Bank's Control 22
7.6 Ancillary services 22
8. TAXATION 22
8.1 Tax Obligations 22
8.2 Tax Relief Services 23
9. TERMINATION 24
9.1 Termination 24
9.2 Exit Procedure 28
10. MISCELLANEOUS 28
10.1 Notifications 28
10.2 Successors and Assigns 28
10.3 Interpretation 29
10.4 Entire Agreement 29
10.5 Information Concerning Deposits at JPMCB London Branch 29
10.6 Insurance 30
10.7 Security Holding Disclosure 30
10.8 USA PATRIOT Act Disclosure 30
10.9 Governing Law and Jurisdiction 30
10.10 Severability; Waiver; and Survival 31
10.11 Confidentiality 31
10.12 Counterparts 32
10.13 No Third Party Beneficiaries 32
SCHEDULE A List of Customers 36
SCHEDULE 1 List of Subcustodians and Markets Used by the Bank 36
SCHEDULE 2 Persons Authorized To Give Instructions 37
SCHEDULE 3 Authorized Fund Managers/Advisers 1
SCHEDULE 4 Form of Board Resolution 2
APPENDIX A Specimen Fund Manager Mandate
SCHEDULE 5 Electronic Access 5
EXHIBIT 1 TO SCHEDULE 5 Products
EXHIBIT A List of CSDA Markets
MASTER GLOBAL CUSTODY AGREEMENT
This Agreement, dated June 24, 2008, is between JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION ("Bank"), with a place of business at 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx
Xxxx, XX 00000; and each entity listed on Schedule A hereto that signs this
Agreement or a separate addendum in the form attached to this Agreement on
behalf of each of the series listed under its name on Schedule A, severally and
not jointly, with a place of business at 00000 Xxxxxxxxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, XX 00000 (each such series hereinafter, a separate and distinct
"Customer").
1. INTENTION OF THE PARTIES; DEFINITIONS
1.1 INTENTION OF THE PARTIES
(a) This Agreement sets out the terms on which Bank will be providing
custodial, settlement and other associated services to the
Customer. Bank will be responsible for the performance of only
those duties set forth in this Agreement.
(b) Investing in Financial Assets and cash in foreign jurisdictions
may involve risks of loss or other special features. The Customer
acknowledges that Bank is not providing any legal, tax or
investment advice in providing the services under this Agreement
and will not be liable for any losses resulting from Country
Risk.
(c) It is the intention of the parties that Bank will be the
exclusive provider of custodial, settlement and other associated
services to the Customer.
(d) Although the Bank and each Customer have executed this Agreement
in the form of a master agreement for administrative convenience,
this Agreement shall create a separate Agreement for each
Customer as though Bank had executed a separate Agreement with
each Customer. No rights, responsibilities or liabilities of any
Customer shall be attributed to any other Customer. All
references to a particular Customer should be deemed to be a
reference to the entity of which the Customer is a series. All
references to the board of or any officer of a Customer shall be
interpreted to mean the board or officer of the entity of which
the Customer is a series.
1.2 DEFINITIONS
As used herein, the following terms have the meaning hereinafter
stated.
"ACCOUNT" has the meaning set forth in Section 2.1 of this
Agreement.
"AFFILIATE" means an entity controlling, controlled by, or under
common control with, Bank or Customer, as applicable.
"AFFILIATED SUBCUSTODIAN" means a Subcustodian that is an
Affiliate.
"APPLICABLE LAW" means any applicable statute, treaty, rule,
regulation or common law and any applicable decree, injunction,
judgement, order, formal interpretation or ruling issued by a
court or governmental entity.
"AUTHORIZED PERSON" means any person who has been designated by
written notice from the Customer substantially in the form of
Schedules 2 or 3 (or another format mutually agreed to by
Customer and Bank) as the case may be (or by written notice
substantially in the form of Appendix A from any agent designated
by the Customer, including, without limitation, an investment
manager) to act on behalf of the Customer under this Agreement.
Such persons will continue to be Authorized Persons until such
time as Bank receives and has had reasonable time to act upon
updated Instructions from the Customer (or its agent) that any
such person is no longer an Authorized Person. Any reference in
this Agreement to an Instruction being delivered by the Customer
must be delivered by an Authorized Person.
"BANK INDEMNITEES" means Bank, its Subcustodians, and their
respective nominees, directors, officers, employees and agents.
"BANK'S LONDON BRANCH" means the London branch office of JPMorgan
Chase Bank, N.A.
"CASH ACCOUNT" has the meaning set forth in Section 2.1(a)(ii).
"CONFIDENTIAL INFORMATION" means and includes all non public
information concerning the Customer or the Accounts (including
portfolio holdings information) which the Bank receives in the
course of providing services under this Agreement. Nevertheless,
the term Confidential Information shall not include information
which is or becomes available to the general public by means
other than the Bank's breach of the terms of this Agreement or
information which the Bank obtains on a non confidential basis
from a person who is not known to be subject to any obligation of
confidence to any person with respect to that information or
information that Bank can demonstrate, from written records, has
been or is independently developed or obtained by Bank through
Bank custody employees none of whom had access to Confidential
Information.
"CORPORATE ACTION" means any subscription right, bonus issue,
stock repurchase plan, redemption, exchange, tender offer, or
similar matter with respect to a Financial Asset in the
Securities Account that require discretionary action by the
beneficial owner of the security, but does not include rights
with respect to class action litigation or proxy voting.
"COUNTRY RISK" means the risk of investing or holding assets in a
particular country or market, including, but not limited to,
risks arising from nationalization, expropriation or other
governmental actions; the country's financial infrastructure,
including prevailing custody, tax and settlement practices; laws
applicable to the safekeeping and recovery of Financial Assets
and cash held in custody; the regulation of the banking and
securities industries, including changes in market rules;
currency restrictions, devaluations or
fluctuations; and market conditions affecting the orderly
execution of securities transactions or the value of assets.
"ENTITLEMENT HOLDER" means the person named on the records of a
Securities Intermediary as the person having a Securities
Entitlement against the Securities Intermediary.
"FINANCIAL ASSET" means a Security and refers, as the context
requires, either to the asset itself or to the means by which a
person's claim to it is evidenced, including a Security, a
security certificate, or a Securities Entitlement. "Financial
Asset" does not include cash.
"INSTRUCTIONS" means an instruction that has been verified in
accordance with a Security Procedure or, if no Security Procedure
is applicable, which Bank believes in good faith to have been
given by an Authorized Person in the manner specified next to
their name in the relevant Schedule.
"LIABILITIES" means any liabilities, losses, claims, costs,
damages, penalties, fines, obligations, or expenses of any kind
whatsoever (including, without limitation, reasonable attorneys',
accountants', consultants' or experts' fees and disbursements).
"SECURITIES" means shares, stocks, debentures, bonds, notes, U.S.
exchange-traded derivatives, structured notes, loans or other
like obligations, whether issued in certificated or
uncertificated form, and any certificates, receipts, warrants or
other instruments representing rights to receive, purchase or
subscribe for the same that are commonly traded or dealt in on
securities exchanges or financial markets or other obligations of
an issuer or counterparty, or shares, participations and
interests in an issuer recognised in the country in which it is
issued or dealt in as a medium for investment and any other
property as may be acceptable to Bank for the Securities Account.
"SECURITIES ACCOUNT" means each Securities custody account on
Bank's records to which Financial Assets are or may be credited
under this Agreement.
"SECURITIES DEPOSITORY" means any securities depository,
dematerialized book entry system or similar system.
"SECURITIES ENTITLEMENT" means the rights and property interests
of an Entitlement Holder with respect to a Financial Asset as set
forth in Part 5 of Article 8 of the Uniform Commercial Code of
the State of New York, as the same may be amended from time to
time.
"SECURITIES INTERMEDIARY" means Bank, a Subcustodian, a
Securities Depository, and any other financial institution which
in the ordinary course of business maintains Securities custody
accounts for others and acts in that capacity.
"SECURITY PROCEDURE" has the meaning set forth in Section 3.2(a).
"SUBCUSTODIAN" means any of the subcustodians appointed by Bank
from time to time to hold Securities and act on its behalf in
different jurisdictions (and
being at the date of this Agreement the entities listed in
Schedule 1) and includes any Affiliated Subcustodian.
All terms in the singular will have the same meaning in the
plural unless the context otherwise provides and visa versa.
2. WHAT THE BANK IS REQUIRED TO DO
2.1 SET UP ACCOUNTS
(a) Bank will establish and maintain the following accounts
("Accounts"):
(i) one or more Securities Accounts in the name of Customer
(or in another name requested by the Customer that is
acceptable to Bank) for Financial Assets, which may be
held by Bank or its Subcustodian or a Securities
Depository for Bank on behalf of the Customer,
including as an Entitlement Holder; and
(ii) one or more accounts in the name of Customer (or in
another name requested by the Customer that is
acceptable to Bank) ("Cash Account") for any and all
cash in any currency received by or on behalf of Bank
for the account of Customer.
Notwithstanding paragraph (ii), cash held in respect of those markets
where Customer is required to have a cash account in its own name held
directly with the relevant Subcustodian or Securities Depository will
be held in that manner and will not be part of the Cash Account.
(b) At the request of Customer, additional Accounts may be opened in
the future, which will be subject to the terms of this Agreement.
(c) Bank's obligation to open Accounts pursuant to Section 2.1(a) is
conditional upon Bank receiving such of the following documents
as Bank may require:
(i) a certified copy of the Customer's constitutional
documents as currently in force;
(ii) a certified copy of a resolution of the Customer's
board of directors or equivalent governing body,
substantially in the form set out in Schedule 4;
(iii) Bank's standard form fund manager mandate (in the form
set out in Appendix A), completed by any persons
designated in Schedule 3; and
(iv) in the case of any Account opened in a name not that of
the Customer, documentation with respect to that name
similar to that set forth in sub-sections (i) - (iii).
2.2 CASH ACCOUNT
(a) Any amount standing to the credit of the Cash Account is a debt
due from Bank, as banker, to Customer. Except as otherwise
provided in Instructions acceptable to Bank, all cash held in the
Cash Account will be deposited during the period it is credited
to the Accounts in one or more deposit accounts at Bank or at
Bank's London Branch. Any cash so deposited with Bank's London
Branch will be payable exclusively by Bank's London Branch in the
applicable currency, subject to compliance with Applicable Law,
including, without limitation, any restrictions on transactions
in the applicable currency imposed by the country of the
applicable currency.
(b) Any amounts credited by Bank to the Cash Account on the basis of
a notice or an interim credit from a third party, may be reversed
if Bank does not receive final payment in a timely manner. Bank
will notify the Customer promptly of any such reversal.
2.3 SEGREGATION OF ASSETS; NOMINEE NAME
(a) Bank will identify in its books that Financial Assets credited to
Customer's Securities Account belong to Customer (except as
otherwise may be agreed by Bank and Customer).
(b) To the extent permitted by Applicable Law or market practice,
Bank will require each Subcustodian to identify in its own books
that Financial Assets held at such Subcustodian by Bank as
custodian on behalf of Customer and its other customers belong to
Bank's customers, such that it is readily apparent that the
Financial Assets do not belong to Bank or the Subcustodian.
(c) Bank is authorized, in its discretion,
(i) to hold in bearer form, such Financial Assets as are
customarily held in bearer form or are delivered to
Bank or its Subcustodian in bearer form;
(ii) to hold Securities in or deposit Securities with any
Securities Depository;
(iii) to hold Securities in omnibus accounts on a fungible
basis and to accept delivery of Securities of the same
class and denomination as those deposited with Bank or
its Subcustodian;
(iv) to register in the name of Customer, Bank, a
Subcustodian, a Securities Depository, or their
respective nominees, such Financial Assets as are
customarily held in registered form; and
(v) to hold shares of registered mutual funds or other
commingled funds on the books of the transfer agent for
such funds.
2.4 SETTLEMENT OF TRANSACTIONS
Subject to Article 3 and Section 4.2 of this Agreement, Bank will act
in accordance with Instructions with respect to settlement of
transactions. Settlement will be conducted in accordance with
prevailing standards of the market in which the transaction occurs,
provided that such standards exist and are generally accepted by
Institutional Clients. For the avoidance of doubt, such standards
shall include practices regarding delivery against payment or delivery
in advance of payment that may be prevailing in the applicable market
for the type of transaction being settled. Without limiting the
generality of the foregoing, Customer authorizes Bank to deliver
Securities or payment in accordance with applicable market practice in
advance of receipt or settlement of consideration expected in
connection with such delivery or payment, and Customer acknowledges
and agrees that such action alone will not of itself constitute
negligence, fraud, or wilful misconduct of Bank, and the risk of loss
arising from any such action will be borne by Customer; provided,
however, unless otherwise directed by Customer, the risk of loss will
be Bank's if it makes a delivery before payment in a market where
delivery versus payment is the prevailing standard and is generally
accepted by Institutional Clients. In the case of the failure of
Customer's counterparty (or other appropriate party) to deliver the
expected consideration as agreed, Bank will contact the counterparty
to seek settlement at the direction of the Customer and will promptly
notify the Customer of such failure. Bank shall forward to Customer's
investment manager all documentation related to such settlement
promptly upon the request of the Customer. For the purpose of this
Section 2.4, "Institutional Clients" means US registered investment
companies, US-based commercial banks, insurance companies, pension
funds or financial institutions substantially comparable to the
Customer.
2.5 CONTRACTUAL SETTLEMENT DATE ACCOUNTING
(a) Unless otherwise directed by Customer, Bank will effect book
entries on a contractual settlement date accounting basis as
described below with respect to the settlement of transactions in
those markets where Bank generally offers contractual settlement
date accounting.
(i) Sales: On the settlement date for a sale, Bank will
credit the Cash Account with the proceeds of the sale
and transfer the relevant Financial Assets to an
account at Bank pending settlement of the transaction
where not already delivered.
(ii) Purchases: On the settlement date for the purchase (or
earlier, if market practice requires delivery of the
purchase price before the settlement date), Bank will
debit the Cash Account for the settlement amount and
credit a separate account at Bank. Bank then will post
the Securities Account as awaiting receipt of the
expected Financial Assets. Customer will not be
entitled to the delivery of Financial Assets that are
awaiting receipt until Bank or a Subcustodian actually
receives them.
The list of markets for which Bank provides contractual
settlement date accounting as of the date of this Agreement is
attached as Exhibit A. Bank may add markets to or remove markets
from this list upon written notice (which may be in the form of
NewsFlash communication sent via emails) to the Customer.
(b) Bank may reverse any debit or credit made pursuant to Section
2.5(a) prior to a transaction's actual settlement upon oral or
written notice to the Customer in cases where Bank reasonably
believes that the transaction will not settle in the ordinary
course within a reasonable time. The Customer will be responsible
for any costs or liabilities resulting from such reversal, unless
such costs were caused by the negligence, fraud or wilful
misconduct of Bank. The Customer acknowledges that the procedures
described in Section 2.5 are of an administrative nature, and
Bank does not undertake to make loans and/or Financial Assets
available to Customer.
2.6 ACTUAL SETTLEMENT DATE ACCOUNTING
With respect to settlement of a transaction that is not posted to
the Account on the contractual settlement date as referred to in
Section 2.5, Bank will post the transaction on the date on which
the cash or Financial Assets received as consideration for the
transaction is actually received and cleared by Bank.
2.7 INCOME COLLECTION (AUTOCREDIT(R))
(a) Bank will monitor information publicly available in the
applicable market about forthcoming income payments on the
Financial Assets, and will promptly notify the Customer of such
information.
(b) Bank will credit the Cash Account with income proceeds on
Financial Assets on the anticipated payment date, net of any
taxes that are withheld by Bank or any third party ("AutoCredit")
in those markets where Bank customarily provides an AutoCredit
service. Upon request, Bank shall provide the Customer with a
list of AutoCredit eligible markets. Bank may add markets to or
remove markets from the list of AutoCredit markets upon written
notice to the Customer that is reasonable in the circumstances.
Bank may reverse AutoCredit credits upon prompt oral
or written notification to the Customer if Bank believes that the
corresponding payment will not be received by Bank within a
reasonable period or the credit was incorrect. Promptly upon
Customer's request, Bank shall provide Customer's investment
manager with all documentation related to any such reversal of
credits.
(c) In markets where Bank does not provide an AutoCredit service,
income on Financial Assets (net of any taxes withheld by Bank or
any third party) will be credited only after actual receipt and
reconciliation.
(d) Bank will use reasonable efforts to contact appropriate parties
to collect unpaid interest, dividends or redemption proceeds and
will promptly notify the Customer of the late payment and will
provide Customer's investment manager all documentation related
to any such late payment.
2.8 MISCELLANEOUS ADMINISTRATIVE DUTIES; FRACTIONAL INTERESTS
(a) Until Bank receives Instructions to the contrary, Bank will:
(i) present all Financial Assets for which Bank has
received notice of a call for redemption or that have
otherwise matured, and all income and interest coupons
and other income items that call for payment upon
presentation;
(ii) execute in the name of Customer such certificates as
may be required to obtain payment in respect of
Financial Assets; and
(iii) exchange interim or temporary documents of title held
in the Securities Account for definitive documents of
title.
(b) In the event that, as a result of holding of Financial Assets in
an omnibus account, Customer receives fractional interests in
Financial Assets arising out of a Corporate Action or class
action litigation, Bank will credit Customer with the amount of
cash it would have received had the Financial Assets not been
held in an omnibus account, and Customer shall relinquish to Bank
its interest in such fractional interests.
(c) If some, but not all, of an outstanding class of Financial Assets
is called for redemption, Bank may allot the amount redeemed
among the respective beneficial holders of such a class of
Financial Assets on a pro rata basis or in a similar manner Bank
deems fair and equitable.
2.9 CORPORATE ACTIONS
(a) Bank will act in accordance with local market practice to obtain
information concerning Corporate Actions that is publicly
available in the local market. Bank also will review information
obtained from sources to which it subscribes for information
concerning such Corporate Actions. Bank will promptly provide
that information (or summaries that accurately reflect the
material points concerning the applicable Corporate Action) to
Customer or its Authorized Person.
(b) Bank will act in accordance with the Instructions in relation to
such Corporate Actions. If the Customer fails to provide Bank
with Instructions with respect to any Corporate Action within the
timeframe set forth in the notification Bank provides under
2.9(a) with respect to that Corporate Action, neither Bank nor
its Subcustodians or their respective nominees will be required
to take any action in relation to that Corporate Action, except
as otherwise agreed in writing by Bank and the Customer
(including pursuant to a standing Instruction) or as may be set
forth by Bank as a default action in the notification it provides
under Section 2.9(a) with respect to that Corporate Action.
Notwithstanding and in no way limiting the above, if Customer
fails to provide Bank with Instructions with respect to any
Corporate Action within the timeframe set forth in the
notification Bank provides under 2.9(a), upon written request by
Customer, Bank shall use commercially reasonable efforts to act
on Instructions received after the deadline set by Bank as set
forth in such notification but before the deadline set by the
Securities Depository to the extent circumstances permit.
2.10 CLASS ACTION LITIGATION
Any notices received by Bank's corporate actions department about
settled securities class action litigation that requires action by
affected owners of the underlying Financial Assets will be promptly
notified to Customer if Bank, using reasonable care and diligence in
the circumstances, identifies that Customer was a shareholder and held
the relevant Financial Assets in custody with Bank at the relevant
time.
2.11 PROXIES
(a) Bank will monitor information distributed to holders of Financial
Assets about upcoming shareholder meetings, promptly notify the
Customer of such information and, subject to Section 2.11(c), act
in accordance with the Customer's Instructions in relation to
such meetings ("the Proxy Voting Service").
(b) The Proxy Voting Service is available only in certain markets,
details of which are available from Bank on request. Provision of
the Proxy Voting Service is conditional upon receipt by Bank of a
duly completed enrollment form as well as additional
documentation that may be required for certain markets.
(c) The Proxy Voting Service does not include physical attendance at
shareholder meetings. Requests for physical attendance at
shareholder meetings can be made but they will be evaluated and
agreed to by Bank on a case by case basis.
(d) Customer acknowledges that the provision of the Proxy Voting
Service may be precluded or restricted under a variety of
circumstances, in which case best efforts that are also
commercially reasonable will be used by
Bank upon Customer's written request. These circumstances
include, but are not limited to:
(i) the Financial Assets being on loan or out for
registration;
(ii) the pendency of conversion or another corporate action;
(iii) the Financial Assets being held in a margin or
collateral account at Bank or another bank or broker,
or otherwise in a manner which affects voting;
(iv) local market regulations or practices, or restrictions
by the issuer; and
(v) Bank being required to vote all shares held for a
particular issue for all of Bank's customers on a net
basis (i.e., a net yes or no vote based on voting
instructions received from all its customers). Where
this is the case, Bank will inform Customer in writing.
2.12 STATEMENTS OF ACCOUNT
(a) Bank will provide Customer with a statement of account for each
Account, identifying cash and Financial Assets held in the
Account and any transfers to and from the Account. If agreed by
the parties, statements of account will be accessed by the
Customer on-line. Otherwise, statements will be sent to Customer
at times to be mutually agreed by the parties. Customer will
review its statement of account and give Bank written notice of
any suspected error or omission within a reasonable time of the
date of the relevant suspected error or omission.
(b) Customer acknowledges that information available to it on-line
with respect to transactions posted after the close of the prior
business day may not be accurate due to mis-postings, delays in
updating Account records, and other causes. Bank will not be
liable for any loss or damage arising out of the inaccuracy of
any such information accessed on-line, except to the extent such
inaccuracy is the result of Bank's gross negligence, wilful
misconduct or bad faith. For the avoidance of doubt, Customer may
rely on the accuracy of any intraday report to the extent that
such report (i) explicitly states it is a final report or (ii)
contains historical data that has been posted prior to the
current business day. In the event of a known systemic issue with
data available to Customer on-line, Bank will provide notice as
soon as practicable to Customer of such issue via banner headline
on the on-line system or via telephone.
2.13 ACCESS TO BANK'S RECORDS
(a) Bank will allow Customer's auditors and independent public
accountants such reasonable access to the records of Bank
relating to Financial Assets as is required in connection with
their examination of books and records pertaining to Customer's
affairs. Subject to restrictions under the
relevant local law, Bank also will permit (or cause Subcustodian
to permit) Customer's auditors and independent public
accountants, reasonable access to the records of any Subcustodian
of Financial Assets held in a Securities Account as may be
required in connection with such examination.
(b) Bank will, upon reasonable written notice, allow Customer
reasonable access during normal working hours to the records of
Bank relating to the Accounts. Bank may impose reasonable
restrictions on the number of individuals allowed access, the
frequency and length of such access, and the scope of the records
made available. The Customer shall reimburse Bank for the cost of
copying, collating and researching archived information at Bank's
regular hourly rate.
(c) Upon Customer's request, Bank will send the annual report (SAS 70
Level II Report) prepared by Bank's external auditors on the
procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited
and/or maintained in the Securities Depository, relating to the
services provided by Bank under this Agreement. Also, upon
Customer's request, a letter updating Customer on the matters
addressed in Bank's SAS 70 Level II report as of the date of the
relevant fiscal period of Customer, to the extent that the
relevant fiscal period of Customer differs by a period of three
(3) or more months from the date as of which the SAS 70 Level II
report is prepared. Such SAS 70 Level II report shall be of
sufficient scope and in sufficient detail as to provide
reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such
inadequacies, the reports shall so state. Such SAS 70 Level II
report shall be provided at least once a year, or at such greater
frequency as such SAS 70 Level II report is prepared. Bank shall
notify Customer in writing of (i) any change in frequency of
provision of SAS 70 Level II reports and (ii) if a SAS 70 Level
II report is to be dated as of a different date than such report
was previously dated. Bank shall also provide Customer, at such
times as Customer may reasonably request, reports received by
Bank from a clearing corporation or the Federal Reserve
book-entry system which the clearing corporation or the Federal
Reserve permits to be redistributed on their respective systems
of internal control when such reports relate to the services
provided by Bank under this Agreement.
(d) Bank shall take all reasonable action, as Customer may from time
to time request, to cooperate with Customer's auditor with
respect to the preparation of Customer's registration statement,
Form N-CSR, Form N-SAR or other annual or periodic reports to the
SEC and with respect to any other requirements thereof.
2.14 MAINTENANCE OF FINANCIAL ASSETS AT SUBCUSTODIAN LOCATIONS
Unless Instructions require another location acceptable to Bank,
Financial Assets will be held in the country or jurisdiction in which
their principal trading market is located, where such Financial Assets
may be presented for payment, where such Financial Assets were
acquired, or where such Financial Assets are held. Bank reserves the
right to refuse to accept delivery of Financial Assets or cash in
countries and jurisdictions other than those referred to in Schedule 1
to this Agreement, as in effect from time to time.
2.15 TAX RELIEF SERVICES
Bank will provide tax relief services as provided in Section 8.2.
2.16 FOREIGN EXCHANGE TRANSACTIONS
To facilitate the administration of Customer's trading and investment
activity, Bank may, but will not be obliged to, enter into spot or
forward foreign exchange contracts with Customer, or an Authorized
Person, and may also provide foreign exchange contracts and facilities
through its Affiliates or Subcustodians. Instructions, including
standing Instructions, may be issued with respect to such contracts,
but Bank may establish rules or limitations concerning any foreign
exchange facility made available. In all cases where Bank, its
Affiliates or Subcustodians enter into a master foreign exchange
contract that covers foreign exchange transactions for the Accounts of
Customer, the terms and conditions of that foreign exchange contract
and, to the extent not inconsistent, this Agreement, will apply to
such transactions.
2.17 NOTIFICATIONS
If Customer has agreed to access information concerning the Accounts
through Bank's website, Bank may make any notifications required under
this Agreement (other than notifications described in Sections 7.1 or
10.11 hereof) by posting it on the website. Notifications described in
Section 8 will be provided by Bank via NewsFlash communication until
Customer is notified otherwise.
2.18 SERVICE LEVEL AGREEMENT
Bank agrees to be subject to written service level standards, which
will be embodied in a Service Level Agreement and Key Performance
Indicators Agreement between Bank and Customer.
2.19 SUPERVISION
Bank shall supervise the performance of its employees of custodial
services provided in connection with this Agreement. Bank shall
provide appropriate training for employees and implement supervisory
procedures for all services provided hereunder by its employees.
3. INSTRUCTIONS
3.1 ACTING ON INSTRUCTIONS; METHOD OF INSTRUCTION AND UNCLEAR INSTRUCTIONS
(a) Customer authorizes Bank to accept and act upon any Instructions
received by it without inquiry. Customer will indemnify Bank
Indemnitees against, and hold each of them harmless from, any
Liabilities that may be imposed on, incurred by, or asserted
against Bank Indemnitees as a result of any action or omission
taken in accordance with any Instruction.
(b) Customer will where reasonably practicable use automated and
electronic methods of sending Instructions.
(c) Bank shall promptly notify an Authorized Person if Bank
determines that an Instruction does not contain all information
reasonably necessary for Bank to carry out the Instruction. Bank
will not be liable for any loss arising from any reasonable delay
in carrying out any such Instruction pending receipt of such
missing information, clarification or confirmation, provided that
such clarification or confirmation is sought in good faith and
promptly upon receipt of the relevant Instruction.
3.2 VERIFICATION AND SECURITY PROCEDURES
(a) Bank and Customer shall from time to time agree upon security
procedures to be followed by Customer upon the issuance of an
instruction and/or by Bank upon the receipt of an instruction, so
as to enable Bank to verify that such instruction is authorized
("Security Procedures"). A Security Procedure may, without
limitation, involve the use of algorithms, codes, passwords,
encryption and telephone call backs. The Customer acknowledges
that Security Procedures are designed to verify the authenticity
of, and not detect errors in, instructions. For the avoidance of
doubt, the parties agree that a SWIFT message issued in the name
of the Customer through any third party utility agreed upon by
the parties as being a method for providing Instructions and
authenticated in accordance with that utility's customary
procedures, shall be deemed to be an authorized Instruction.
(b) Bank and Customer shall ensure that any codes, passwords or
similar devices are reasonably safeguarded.
(c) Either party may record any of their telephone communications.
3.3 INSTRUCTIONS; CONTRARY TO LAW/MARKET PRACTICE
Bank need not act upon Instructions which it reasonably believes to be
contrary to Applicable Law or market practice, but Bank will be under
no duty to investigate whether any Instructions comply with Applicable
Law or market practice. Bank will promptly notify Customer in such
event.
3.4 CUT-OFF TIMES
Bank has established cut-off times for receipt of Instructions, which
will be made available to Customer. If Bank receives an Instruction
after its established cut-off time, Bank will attempt to act upon the
Instruction on the day requested if Bank deems it practicable to do so
or otherwise as soon as practicable on the next business day.
3.5 ELECTRONIC ACCESS
Access by Customer to certain applications or products of Bank via
Bank's web site or otherwise shall be governed by this Agreement and
the terms and conditions set forth in Schedule 5.
4. FEES, EXPENSES AND OTHER AMOUNTS OWING TO BANK
4.1 FEES AND EXPENSES
Customer will pay Bank for its services under this Agreement such fees
as may be agreed upon in writing from time to time, together with
Bank's reasonable out-of-pocket or incidental expenses, including, but
not limited to, legal fees and tax or related fees incidental to
processing charged directly or indirectly by governmental authorities,
issuers, or their agents. The Bank will invoice the Customer for
amounts owing to it and such amounts will be payable within thirty
(30) days of the invoice. The Bank will be entitled to deduct amounts
owing to it from the Cash Account if the Customer has not objected to
the invoice within sixty (60) days of the date of the invoice (or such
other period as the parties may agree in writing). If the Customer
disputes an invoice it shall nevertheless pay, or allow the Bank to
deduct, such portion of the invoice that is not subject to a bona fide
dispute. Without prejudice to Bank's other rights, the Bank reserves
the right to charge interest on overdue amounts from the due date
until actual payment at such rate as the Bank may reasonably
determine, unless Bank and Customer have mutually agreed upon another
rate.
4.2 OVERDRAFTS
If a debit to any currency in the Cash Account results in a debit
balance, then Bank may, in its discretion, (i) advance an amount equal
to the overdraft, (ii) or refuse to settle in whole or in part the
transaction causing such debit balance, or (iii) if any such
transaction is posted to the Securities Account, reverse any such
posting. If Bank elects to make such an advance, the advance will be
deemed a loan to Customer, payable on demand, bearing interest at the
applicable rate charged by Bank and communicated to client in writing
from time to time, for such overdrafts, from the date of such advance
to the date of payment (both after as well as before judgment) and
otherwise on the terms on which Bank makes similar overdrafts
available from time to time. No prior action or course of
dealing on Bank's part with respect to the settlement of transactions
on Customer's behalf will be asserted by Customer against Bank for
Bank's refusal to make advances to the Cash Account or to settle any
transaction for which Customer does not have sufficient available
funds in the applicable currency in the Account.
4.3 BANK'S RIGHT OVER SECURITIES; SET-OFF
(a) Without prejudice to Bank's rights under Applicable Law, until
satisfaction of all Liabilities outstanding from time to time
(whether actual or contingent) of Customer under or in connection
with this Agreement, Bank shall have, and Customer shall grant to
Bank a security interest in and a lien on the Financial Assets
held in the Securities Account and Bank shall be entitled without
notice to Customer, to withhold delivery of such Financial
Assets, sell or otherwise realize any of such Financial Assets
and to apply the proceeds and any other monies credited to the
Cash Account in satisfaction of such Liabilities solely to the
extent of such Liabilities. For this purpose, Bank may make such
currency conversions as may be necessary at its then current
rates for the sale and purchase of relevant currencies.
(b) Without prejudice to Bank's rights under Applicable Law, Bank may
set off against any amount owing by Customer under this Agreement
any amount in any currency standing to the credit of any of
Customer's Accounts. For this purpose, Bank shall be entitled to
accelerate the maturity of any fixed term deposits and to effect
such currency conversions as may be necessary at its current
rates for the sale and purchase of the relevant currencies.
5. SUBCUSTODIANS, SECURITIES DEPOSITORIES, AND OTHER AGENTS
5.1 APPOINTMENT OF SUBCUSTODIANS; USE OF SECURITIES DEPOSITORIES
(a) Bank is authorized under this Agreement to act through and hold
Customer's Financial Assets with Subcustodians. Bank will act in
good faith with due diligence and use reasonable care in the
selection, monitoring and continued appointment of such
Subcustodians. In addition, Bank and each Subcustodian may
deposit Securities with, and hold Securities in any Securities
Depository on such terms as such Securities Depository
customarily operates and Customer will provide Bank with such
documentation or acknowledgements that Bank may require to hold
the Financial Assets in such Securities Depository.
(b) Any agreement Bank enters into with a Subcustodian for holding
Bank's customers' assets will provide that such assets will not
be subject to any right, charge, security interest, lien or claim
of any kind in favor of such Subcustodian or its creditors except
a claim for payment for their safe
custody or administration, or, in the case of cash deposits,
except for liens or rights in favor of creditors of the
Subcustodian arising under bankruptcy, insolvency or similar law,
and that the beneficial ownership thereof will be freely
transferable without the payment of money or value other than for
safe custody or administration. Bank shall be responsible for all
claims for payment of fees for safe custody or administration so
that no Subcustodian exercises any claim for such payment against
Customer's assets. Where a Subcustodian deposits Securities with
a Securities Depository, Bank will cause the Subcustodian to
identify on its records as belonging to Bank, as agent, the
Securities shown on the Subcustodian's account at such Securities
Depository. Bank shall identify on its records as belonging to
Customer Financial Assets of Customer held by Subcustodian or
Securities Depository. This Section 5.1(b) will not apply to the
extent of any special agreement or arrangement made by Customer
with any particular Subcustodian.
(c) Bank is not responsible for the selection or monitoring of any
Securities Depository (other than as set forth in Section 2.21
with respect to an Eligible Securities Depository) and will not
be liable for any act or omission by (or the insolvency of) any
Securities Depository. In the event the Customer incurs a loss
due to the negligence, wilful default, or insolvency of a
Securities Depository, Bank will make reasonable efforts, in its
discretion, to seek recovery from the Securities Depository, but
Bank will not be obligated to institute legal proceedings, file
proof of claim in any insolvency proceeding, or take any similar
action.
5.2 LIABILITY FOR SUBCUSTODIANS
(a) Subject to Section 7.1(b), Bank will be liable for direct losses
incurred by Customer that result from:
(i) the failure by a Subcustodian to use reasonable care in
the provision of custodial services by it in accordance
with the standards prevailing in the relevant market or
from the fraud or wilful misconduct of such
Subcustodian in the provision of custodial services by
it; or
(ii) the insolvency of any Affiliated Subcustodian.
(b) Subject to Section 5.1(a) and Bank's duty to use reasonable care
in the monitoring of a Subcustodian's financial condition as
reflected in its published financial statements and other
publicly available financial information concerning it
customarily reviewed by Bank in its oversight process, Bank will
not be responsible for the insolvency of any Subcustodian which
is not a branch of Bank or an Affiliated Subcustodian, provided
that Bank conducts reasonable due diligence in selecting the
Subcustodian, monitor the financial position of the Subcustodian
on an ongoing basis and takes prompt action to replace the
Subcustodian in the event that the Bank receives information
through its monitoring process that would lead a reasonable
financial institution to arrive at a reasonable conclusion that
the Subcustodian presents an unreasonable risk of insolvency.
(c) Subject to compliance with Rule 17f-5, Bank reserves the right to
add, replace or remove Subcustodians. Bank will give prompt
notice of any such action, which will be advance notice whenever
practicable. Upon request by Customer, Bank will identify the
name, address and principal place of business of any Subcustodian
and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such
Subcustodian.
6. ADDITIONAL PROVISIONS RELATING TO CUSTOMER
6.1 REPRESENTATIONS OF CUSTOMER AND BANK
(a) The Customer represents and warrants that (i) it has full
authority and power, and has obtained all necessary
authorizations and consents, to deposit and control the Financial
Assets and cash in the Accounts, to use Bank as its custodian in
accordance with the terms of this Agreement, and to borrow money
(both any short term or intraday borrowings in order to settle
transactions prior to receipt of covering funds), xxxxx x xxxx
over Financial Assets as contemplated by Section 4.3, and enter
into foreign exchange transactions; (ii) assuming execution and
delivery of this Agreement by Bank, this Agreement is Customer's
legal, valid and binding obligation, enforceable in accordance
with its terms and it has full power and authority to enter into
and has taken all necessary corporate action to authorize the
execution of this Agreement; (iii) it has not relied on any oral
or written representation made by Bank or any person on its
behalf, and acknowledges that this Agreement sets out to the
fullest extent the duties of Bank; (iv) it is a resident of the
United States and shall notify Bank of any changes in residency
and (v) except as otherwise expressly agreed to by Bank in
writing, the Financial Assets (other than collateral with respect
to U.S. exchange-traded options) and cash deposited in the
Accounts are not subject to any encumbrance or security interest
whatsoever and Customer undertakes that, so long as Liabilities
are outstanding, it will not create or permit to subsist any
encumbrance or security interest over such Financial Assets or
cash.
Bank may rely upon the certification of such other facts as may be
required to administer Bank's obligations under this Agreement and
Customer shall indemnify Bank against all losses, liability, claims or
demands arising directly or indirectly from any such certifications.
(b) Bank represents and warrants that (i) assuming execution and
delivery of this Agreement by Customer, this Agreement is Bank's
legal, valid and
binding obligation, enforceable in accordance with its terms, (ii) it
has full power and authority to enter into and has taken all necessary
corporate action to authorize the execution of this Agreement and
(iii) it shall act in accordance with custody rules under the
Investment Company Act of 1940, as amended.
6.2 CUSTOMER IS LIABLE TO BANK EVEN IF IT IS ACTING FOR ANOTHER PERSON
If Customer is acting as an agent or for another person as envisaged
in Section 2.1(a) in respect of any transaction, cash, or Financial
Asset, Bank nevertheless will exercise reasonable care in treating
Customer as its principal for all purposes under this Agreement. In
this regard, Customer will be liable to Bank as a principal in respect
of any transactions relating to the Account, in the absence of
negligence or wilful misconduct by Bank. The foregoing will not affect
any rights Bank might have against Customer's principal or the other
person envisaged by Section 2.1(a).
7. WHEN BANK IS LIABLE TO CUSTOMER
7.1 STANDARD OF CARE; LIABILITY
(a) Bank will use reasonable care in performing its obligations under
this Agreement. Unless otherwise provided herein, Bank will not
be in violation of this Agreement with respect to any matter as
to which it has satisfied its obligation of reasonable care.
(b) Bank will be liable for the Customer's direct damages to the
extent they result from Bank's fraud, negligence or wilful
misconduct in performing its duties as set out in this Agreement
and to the extent provided in Section 5.2(a). Nevertheless, under
no circumstances will Bank be liable for any indirect,
incidental, consequential or special damages (including, without
limitation, lost profits (except for lost profits that directly
result from direct damages)) of any form incurred by any person
or entity, whether or not foreseeable and regardless of the type
of action in which such a claim may be brought, with respect to
the Accounts, Bank's performance under this Agreement, or Bank's
role as custodian.
(c) The Customer will indemnify Bank Indemnitees against, and hold
them harmless from, any Liabilities that may be imposed on,
incurred by or asserted against any of Bank Indemnitees in
connection with or arising (i) out of Bank's performance under
this Agreement, provided Bank Indemnitees have not acted with
negligence or engaged in fraud or wilful misconduct in connection
with the Liabilities in question or (ii) solely out of any Bank
Indemnitee's status as a holder of record of Customer's Financial
Assets, provided that, to the extent practicable, Bank uses
reasonable care to provide prompt notice to Customer of the
circumstances and all pertinent facts related to the claim for
indemnification. Nevertheless, Customer will not be obligated to
indemnify any Bank Indemnitee under the preceding sentence with
respect to any Liability for which Bank is liable under Section
5.2 of this Agreement. Customer shall not be liable for any
indirect, incidental, consequential or special damages
(including, without limitation, lost profits) of any form
incurred by Bank, whether or not foreseeable and regardless of
the type of action in which such a claim may be brought, with
respect to Customer's performance or non-performance under this
Agreement.
(d) Promptly upon receipt by Customer or Bank, as applicable, of
notice of its involvement in a matter that may be covered under
the indemnification provisions of Sections 3.1(a), 6.1(a) or
7.1(c) ("Claim"), such party ("Claimant") when seeking
indemnification under such Section, shall notify the other party
("Indemnitor") of such Claim in writing. Failure by Claimant to
so notify Indemnitor will not relieve Indemnitor from its
obligation to indemnify Claimant under this Agreement, except to
the extent that such failure to notify results in the forfeiture
by Indemnitor of any of substantive rights or defenses, and will
not relieve Indemnitor of its obligation to provide reimbursement
and contribution to Claimant. Indemnitor will be entitled to
assume the defense of any such Claim with counsel reasonably
satisfactory to Claimant. Upon assumption by Indemnitor of the
defense of any such Claim, Claimant may participate in the
defense of such Claim at any time and may retain its own counsel
but Indemnitor shall not be liable for any legal fees or expenses
subsequently incurred by Claimant in connection with the defense
thereof, unless (i) Indemnitor has agreed to pay such fees and
expenses, (ii) Indemnitor shall have failed to employ counsel
satisfactory to Claimant in a timely manner or (iii) Claimant
shall have reasonably determined that representation of Claimant
by counsel provided by Indemnitor pursuant to the foregoing would
be inappropriate due to actual or potential conflicting interests
between Indemnitor and Claimant, including, without limitation,
situations in which there are one or more legal defenses
available to Claimant that are different from or additional to
those available to Indemnitor. Claimant shall not settle or
compromise any Claim subject to indemnification hereunder without
the written consent of Indemntior (which consent shall not be
unreasonably withheld or delayed).
(e) Customer agrees that Bank provides no service in relation to, and
therefore has no duty or responsibility to: (i) question
Instructions or make any suggestions to Customer or an Authorized
Person regarding such Instructions; (ii) supervise or make
recommendations with respect to investments or the retention of
Financial Assets; (iii) advise Customer or an Authorized Person
regarding any default in the payment of principal or income of
any security other than as provided in Section 2.7(b) of this
Agreement; (iv) evaluate or report to Customer or an Authorized
Person regarding the financial condition of any broker, agent
or other party to which Bank is instructed to deliver Financial
Assets or cash.
7.2 FORCE MAJEURE
Bank will maintain and update from time to time business continuation
and disaster recovery procedures with respect to its global custody
business that it determines from time to time meet reasonable
commercial standards and regulatory requirements. In the event of
equipment failures, Bank shall, at no additional expense to Customer
or any Account, take commercially reasonable steps to minimize service
interruptions. In the event of business disruption that materially
impacts Bank's provision of service under this Agreement, Bank will
promptly notify Customer of the disruption and steps taken in
response, and will use commercially reasonable efforts to resume
operations as promptly as is practicable given the circumstances. Bank
will have no liability, however, where Bank has otherwise exercised
reasonable care, for any damage, loss, expense or liability of any
nature that Customer may suffer or incur, caused by an act of God,
fire, flood, civil or labor disturbance, war, terrorism, act of any
governmental authority or other act or threat of any authority (de
jure or de facto), legal constraint, fraud or forgery (except where
such fraud or forgery is attributable to Bank or its employees),
malfunction of equipment or software (except where such malfunction is
primarily attributable to Bank's negligence in maintaining the
equipment or software), failure of or the effect of rules or
operations of any external funds transfer system, inability to obtain
or interruption of external communications facilities, or any cause
beyond the reasonable control of Bank (including without limitation,
the non-availability of appropriate foreign exchange).
7.3 BANK MAY CONSULT WITH COUNSEL
Bank will be entitled to rely on, and may act upon the advice of
counsel in relation to matters of law, regulation or market practice
(which may be the counsel of Customer), and shall not be deemed to
have been negligent with respect to any action reasonably taken or
omitted in good faith pursuant to such advice. Bank will use
reasonable care in the selection and continued appointment of such
counsel.
7.4 BANK PROVIDES DIVERSE FINANCIAL SERVICES AND MAY GENERATE PROFITS AS A
RESULT
Customer hereby authorizes Bank to act under this Agreement
notwithstanding that: (a) Bank or any of its divisions, branches or
Affiliates may have a material interest in transactions entered into
by Customer with respect to the Account or that circumstances are such
that Bank may have a potential conflict of duty or interest, including
the fact that Bank or its Affiliates may act as a market maker in the
Financial Assets to which Instructions relate, provide brokerage
services to other customers, act as financial adviser to the issuer of
such Financial Assets, act in the same transaction as agent for more
than one customer, have a material
interest in the issue of the Financial Assets; or earn profits from
any of the activities listed herein. (b) Bank or any of its divisions,
branches or Affiliates may be in possession of information tending to
show that the Instructions received may not be in the best interests
of Customer. Bank is not under any duty to disclose any such
information.
7.5 ASSETS HELD OUTSIDE BANK'S CONTROL
Bank will not be obliged to hold Securities or cash with any person
not agreed to by Bank. Furthermore, Bank will not be obliged to
register or record Securities in the name of any person not agreed to
by Bank. If, however, the Customer makes such a request and Bank
agrees to the request, the consequences of doing so will be at the
Customer's own risk. Bank will not be liable for any losses incurred
as a result and may be precluded from providing some of the services
referred to in this Agreement (for example, and without limitation,
income collection, proxy voting, class action litigation and Corporate
Action notification and processing).
7.6 ANCILLARY SERVICES
Bank and its Subcustodians may use third parties to provide ancillary
services (i.e. services that do not form part of the custody services
contained in Article 2 and which include without limitation courier or
pricing services). Whilst Bank will use reasonable care (and procure
that its Subcustodians use reasonable care) in the selection and
retention of such third parties, it will not be responsible for any
errors or omissions made by such third party in providing the relevant
services.
8. TAXATION
8.1 TAX OBLIGATIONS
(a) Customer confirms that Bank is authorized to deduct from any cash
received or credited to the Cash Account any taxes or levies
required by any revenue or governmental authority for whatever
reason in respect of Customer's Accounts.
(b) Customer will provide to Bank such certifications, documentation,
and information as it may reasonably require in connection with
taxation, and warrants that, when given, this information is true
and correct in all material respect, not materially misleading in
any way, and contains all material information. Customer
undertakes to notify Bank immediately if any information provided
in accordance with the foregoing sentence requires updating or
correcting. Bank provides no service of controlling or
monitoring, and therefore has no duty in respect of, or liability
for any taxes, penalties, interest or additions to tax, payable
or paid that result from (i) the inaccurate completion of
documents by Customer or any
third party; (ii) provision to Bank or a third party of
inaccurate or misleading information by Customer or any third
party; (iii) the withholding of material information by Customer
or any third party; or (iv) as a result of any delay by any
revenue authority or any other cause beyond Bank's control.
(c) If Bank does not receive appropriate certifications,
documentation and information then, as and when appropriate and
required, additional tax shall be deducted from all income
received in respect of the Financial Assets issued (including,
but not limited to, United States non-resident alien tax and/or
backup withholding tax).
(d) Customer will be responsible in all events for the timely payment
of all taxes relating to the Financial Assets in the Securities
Account provided, however, that Bank will be responsible for any
penalty or additions to tax due solely as a result of Bank's
wilful misconduct, negligent acts or omissions with respect to
paying or withholding tax or reporting interest, dividend or
other income paid or credited to the Cash Account.
8.2 TAX RELIEF SERVICES
(a) Subject to the provisions of this Section, Bank will apply for a
reduction of withholding tax and any refund of any tax paid or
tax credits in respect of income payments on Financial Assets
credited to the Securities Account that Bank believes may be
available. To defray expenses pertaining to nominal tax claims,
Bank may from time-to-time set minimum thresholds as to a de
minimis value of tax reclaims or reduction of withholding which
it will pursue in respect of income payments under this Section.
(b) The provision of a tax relief service by Bank is conditional upon
Bank receiving from Customer (i) a declaration of its identity
and place of residence and (ii) certain other documentation (pro
forma copies of which are available from Bank), prior to the
receipt of Financial Assets in the Account or the payment of
income.
(c) Bank will perform tax relief services only with respect to
taxation levied by the revenue authorities of the countries
advised to Customer from time to time and Bank may, by
notification in writing, in its absolute discretion, supplement
or amend the countries in which the tax relief services are
offered. Other than as expressly provided in this Section 8.2
Bank will have no responsibility with regard to Customer's tax
position or status in any jurisdiction.
9. TERMINATION
9.1 TERMINATION
(a) The initial term of this Agreement shall be for a period of seven
years (the "Initial Term") following the date on which Bank
commenced providing services under the Agreement. Following the
Initial Term, either party may terminate this Agreement on sixty
(60) days' written notice to the other party. Notwithstanding the
foregoing sentence, (i) either party may terminate this Agreement
prior to the end of the initial term as permitted under Section
9.1(b) and (ii) Customer may terminate this Agreement prior to
the end of the initial term upon sixty (60) days written notice
subject to payment of the amount set out in Section 9.1(c).
(b) Notwithstanding Section 9.1(a):
(i) Either party may terminate this Agreement immediately
on written notice to the other party in the event that
a material breach of this Agreement by the other party
has not been cured within ninety (90) days' (or such
longer period consented to by the non-breaching party
in writing, such consent shall not be unreasonably
withheld) of that party being given written notice of
the material breach. Notwithstanding the foregoing, to
the extent that Bank determines in good faith that such
material breach is not capable of being cured by
commercially reasonable means, this Agreement may be
terminated by Customer immediately upon written notice
to Bank;
(ii) Either party may terminate this Agreement immediately
on written notice to the other party upon the other
party being declared bankrupt, entering into a
composition with creditors, obtaining a suspension of
payment, being put under court controlled management or
being the subject of a similar measure;
(iii) This Agreement may be terminated with respect to any
Customer to the extent that all of the assets of such
Customer are merged into another Customer or such
Customer ceases to exist;
(iv) Bank may terminate this Agreement on sixty (60) days'
written notice to Customer in the event that Bank
reasonably determines that Customer has ceased to
satisfy Bank's customary credit requirements; and
(v) Customer may terminate this Agreement immediately on
written notice to Bank in the event that Bank fails to
correct a material breach of certain service level
measurements set forth in the related Key Performance
Indicators Agreement within ninety (90) days' of Bank
being given written notice of such material breach.
(c) If Customer terminates this Agreement during the Initial Term
other than a termination pursuant to Section 9.1(b) hereof,
Customer shall pay Bank an early termination fee in order to
compensate Bank. The early termination fee shall be calculated as
follows:
(i) If early termination occurs during the first one-year period
of the Initial Term, the early termination fee shall equal the
sum of:
(x) The fees accrued and unpaid from the inception of this
Agreement through the termination date; plus
(y) The fees that would have been due to Bank for the
remainder of such one-year period had the Agreement not been
terminated, calculated on a pro-rata basis from the date of
termination through the end of such one-year period based on
estimated fees set forth in Schedule 6 that Bank would have
received during such one-year period; plus
(z) 290% of estimated fees set forth in Schedule 6 that Bank
would have received during such first one-year period
(calculated as sum of 80% of estimated fees to compensate
Bank for the loss in year 2 of the Initial Term, 70% of
estimated fees to compensate Bank for the loss in year 3 of
the Initial Term, 50% of estimated fees to compensate Bank
for the loss in year 4 of the Initial Term, 40% of estimated
fees to compensate Bank for the loss in year 5 of the
Initial Term, 30% of estimated fees to compensate Bank for
the loss in year 6 of the Initial Term and 20% of estimated
fees to compensate Bank for the loss in year 7 of the
Initial Term); or
(ii) If early termination occurs during the second one-year
period of the Initial Term, the early termination fee shall equal
the sum of:
(x) The fees accrued and unpaid from the inception of this
Agreement through the termination date; plus
(y) 80% of the fees that would have been due to Bank for the
remainder of the second one-year period had the Agreement
not been terminated, calculated on a pro-rata basis from the
date of termination through the end of the second one-year
period based on Bank's actual fees for services rendered
during the first one-year period of the Initial Term; plus
(z) 210% of Bank's actual fees for services rendered during
the first one-year period of the Initial Term (calculated as
sum of 70% of Bank's actual fees to compensate Bank for the
loss in year 3 of the Initial Term, 50% of Bank's actual
fees to compensate Bank for the loss in year 4 of the
Initial Term, 40%
of Bank's actual fees to compensate Bank for the loss in
year 5 of the Initial Term, 30% of Bank's actual fees to
compensate Bank for the loss in year 6 of the Initial Term
and 20% of Bank's actual fees to compensate Bank for the
loss in year 7 of the Initial Term); or
(iii) If early termination occurs during the third one-year
period of the Initial Term, the early termination fee shall equal
the sum of:
(x) The fees accrued and unpaid from the inception of this
Agreement through the termination date; plus
(y) 70% of the fees that would have been due to Bank for the
remainder of the third one-year period had the Agreement not
been terminated, calculated on a pro-rata basis from the
date of termination through the end of the third one-year
period based on Bank's actual fees for services rendered
during the second one-year period of the Initial Term; plus
(z) 140% of Bank's actual fees for services rendered during
the second one-year period of the Initial Term (calculated
as sum of 50% of Bank's actual fees to compensate Bank for
the loss in year 4 of the Initial Term, 40% of Bank's actual
fees to compensate Bank for the loss in year 5 of the
Initial Term, 30% of Bank's actual fees to compensate Bank
for the loss in year 6 of the Initial Term and 20% of Bank's
actual fees to compensate Bank for the loss in year 7 of the
Initial Term); or
(iv) If early termination occurs during the fourth one-year
period of the Initial Term, the early termination fee shall equal
the sum of:
(x) The fees accrued and unpaid from the inception of this
Agreement through the termination date; plus
(y) 50% of the fees that would have been due to Bank for the
remainder of the fourth one-year period had the Agreement
not been terminated, calculated on a pro-rata basis from the
date of termination through the end of the fourth one-year
period based on Bank's actual fees for services rendered
during the third one-year period of the Initial Term; plus
(z) 90% of Bank's actual fees for services rendered during
the third one-year period of the Initial Term (calculated as
sum of 40% of Bank's actual fees to compensate Bank for the
loss in year 5 of the Initial Term, 30% of Bank's actual
fees to compensate Bank for the loss in year 6 of the
Initial Term and 20% of Bank's actual fees to compensate
Bank for the loss in year 7 of the Initial Term); or
(v) If early termination occurs during the fifth one-year period
of the Initial Term, the early termination fee shall equal the
sum of:
(x) The fees accrued and unpaid from the inception of this
Agreement through the termination date; plus
(y) 40% of the fees that would have been due to Bank for the
remainder of the fifth one-year period had the Agreement not
been terminated, calculated on a pro-rata basis from the
date of termination through the end of the fifth one-year
period based on Bank's actual fees for services rendered
during the fourth one-year period of the Initial Term; plus
(z) 50% of Bank's actual fees for services rendered during
the fourth one-year period of the Initial Term (calculated
as sum of 30% of Bank's actual fees to compensate Bank for
the loss in year 6 of the Initial Term and 20% of Bank's
actual fees to compensate Bank for the loss in year 7 of the
Initial Term); or
(vi) If early termination occurs during the sixth one-year period
of the Initial Term, the early termination fee shall equal the
sum of:
(x) The fees accrued and unpaid from the inception of this
Agreement through the termination date; plus
(y) 30% of the fees that would have been due to Bank for the
remainder of the sixth one-year period had the Agreement not
been terminated, calculated on a pro-rata basis from the
date of termination through the end of the sixth one-year
period based on Bank's actual fees for services rendered
during the fifth one-year period of the Initial Term; plus
(z) 20% of Bank's actual fees for services rendered during
the fifth one-year period of the Initial Term to compensate
Bank for the loss in year 7 of the Initial Term); or
(vii) If early termination occurs during the seventh one-year
period of the Initial Term, the early termination fee shall equal
the sum of:
(x) The fees accrued and unpaid from the inception of this
Agreement through the termination date; plus
(y) 20% of the fees that would have been due to Bank for the
remainder of the seventh one-year period had the Agreement
not been terminated, calculated on a pro-rata basis from the
date of termination through the end of the seventh one-year
period based on Bank's actual fees for services rendered
during the sixth one-year period of the Initial Term.
For the avoidance of doubt, Customer shall not be liable for payment
of any early termination fee in the event that this Agreement is
terminated in accordance with Section 9.1(b) or otherwise terminated
by Bank. Solely for purposes of determining whether the termination
fee set forth under this Section 9.1(c) is payable, this Agreement
will be deemed to have been terminated if Customer transfers a
material portion of the assets held in custody under this Agreement to
another custodian.
9.2 EXIT PROCEDURE
Customer will provide Bank full details of the persons to whom Bank
must deliver Financial Assets and cash a reasonable period before the
effective time of termination of this Agreement. If Customer fails to
provide such details in a timely manner, Bank shall be entitled to
continue to be paid fees under this Agreement until such time as it is
able to deliver the Financial Assets and cash to successor custodian,
but Bank may take such steps as it reasonably determines to be
necessary to protect itself following the effective time of
termination, including ceasing to provide transaction settlement
services in the event that Bank is unwilling to assume any related
credit risk. Bank will in any event be entitled to deduct any amounts
owing to it that are not the subject of a bona fide dispute prior to
delivery of the Financial Assets and cash (and, accordingly, Bank will
be entitled to sell Financial Assets and apply the sale proceeds in
satisfaction of amounts owing to it). Customer will reimburse Bank
promptly for all out-of-pocket expenses it incurs in delivering
Financial Assets upon termination. Termination will not affect any of
the liabilities either party owes to the other arising under this
Agreement prior to such termination.
10. MISCELLANEOUS
10.1 NOTIFICATIONS
Notices (other than Instructions) under this Agreement will be served
by registered mail or hand delivery to the address of the respective
parties as set out on the first page of this Agreement, unless notice
of a new address is given to the other party in writing. Notice will
not be deemed to be given unless it has been received.
10.2 SUCCESSORS AND ASSIGNS
This Agreement will be binding on each of the parties' successors and
assigns, but the parties agree that neither party can assign its
rights and obligations under this Agreement without the prior written
consent of the other party, which consent will not be unreasonably
withheld (subject to approval by the Board of Customer).
Notwithstanding this prohibition, Customer may assign the right to
recover losses to its insurer, investment manager or Affiliates that
paid for losses sustained by Customer.
10.3 INTERPRETATION
Headings are for convenience only and are not intended to affect
interpretation. References to Sections are to Sections of this
Agreement and references to sub-Sections and paragraphs are to
sub-Sections of the Sections and paragraphs of the sub-Sections in
which they appear.
10.4 ENTIRE AGREEMENT
(a) The following Rider(s) are incorporated into this Agreement:
[ ] Cash Trade Execution;
[ ] Cash Sweep;
[ ] Accounting Services;
[X] Mutual Fund (only with respect to Customer who is a company
registered under the Investment Company Act of 1940, as
amended);
[ ] Compliance Reporting Services; and
[ ] Performance Measurement Reporting Services.
(b) This Agreement, including the Schedules, Exhibits, and Riders and
the related Service Level Agreement and Key Performance
Indicators (and any separate agreement which Bank and Customer
may enter into with respect to any Cash Account), sets out the
entire Agreement between the parties in connection with the
subject matter, and this Agreement supersedes any other
agreement, statement, or representation relating to custody,
whether oral or written. Amendments must be in writing and signed
by both parties.
10.5 INFORMATION CONCERNING DEPOSITS AT BANK'S LONDON BRANCH
Under U.S. federal law, deposit accounts that Customer maintains in
Bank's foreign branches (outside of the U.S.) are not insured by the
Federal Deposit Insurance Corporation. In the event of Bank's
liquidation, foreign branch deposits have a lesser preference than
U.S. deposits, and such foreign deposits are subject to cross-border
risks. However, the Financial Services Compensation Scheme (the
"FSCS") was created under the Financial Services and Markets Xxx 0000.
The terms of the FSCS offer protection in connection with deposits and
investments in the event of the persons to whom Bank's London Branch
provides services suffering a financial loss as a direct consequence
of Bank's London Branch being unable to meet any of its liabilities,
and subject to the FSCS rules regarding eligible claimants and
eligible claims, the Customer may have a right to claim compensation
from the FSCS. Subject to the terms of the FSCS, the limit on the
maximum compensation sum payable by the FSCS in relation to investment
business is L48,000 and in relation to deposits is L31,700. A detailed
description of the FSCS (including information on how to make a claim,
eligibility criteria and the procedures involved) is available from
the FSCS who
can be contacted at 0xx Xxxxx, Xxxxxx Xxxxxxxx, Xxxxxxxxx Xxxxxx,
Xxxxxx, X0 0XX.
10.6 INSURANCE
The Customer acknowledges that Bank will not be required to maintain
any insurance coverage specifically for the benefit of the Customer,
except that Bank will maintain commercially reasonable insurance
protection which covers Bank's duties and responsibilities generally
as a custodian of Financial Assets specifically for the benefit of the
Bank. Bank will provide details of its own general insurance coverage
to the Customer on request.
10.7 SECURITY HOLDING DISCLOSURE
With respect to Securities and Exchange Commission Rule 14b-2 under
The U.S Shareholder Communications Act, regarding disclosure of
beneficial owners to issuers of Securities, Bank is instructed not to
disclose the name, address or Security positions of Customer in
response to shareholder communications requests regarding the Account.
10.8 USA PATRIOT ACT DISCLOSURE
Section 326 of the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 ("USA PATRIOT Act") requires Bank to implement reasonable
procedures to verify the identity of any person that opens a new
Account with it. Accordingly, Customer acknowledges that Section 326
of the USA PATRIOT Act and Bank's identity verification procedures
require Bank to obtain information which may be used to confirm
Customer's identity including without limitation Customer's name,
address and organizational documents ("identifying information").
Customer may also be asked to provide information about its financial
status such as its current audited and unaudited financial statements.
Customer agrees to provide Bank with and consents to Bank obtaining
from third parties any such identifying and financial information
required as a condition of opening an account with or using any
service provided by Bank.
10.9 GOVERNING LAW AND JURISDICTION
This Agreement will be construed, regulated, and administered under
the laws of the United States or State of New York, as applicable,
without regard to New York's principles regarding conflict of laws,
except that the foregoing shall not reduce any statutory right to
choose New York law or forum. The United States District Court for the
Southern District of New York will have the sole and exclusive
jurisdiction over any lawsuit or other judicial proceeding relating to
or arising from this Agreement. If that court lacks federal subject
matter jurisdiction, the Supreme Court of the State of New York, New
York County will have sole and exclusive jurisdiction. Either of these
courts will have proper venue for any such lawsuit or judicial
proceeding, and the parties waive any
objection to venue or their convenience as a forum. The parties agree
to submit to the jurisdiction of any of the courts specified and to
accept service of process to vest personal jurisdiction over them in
any of these courts. The parties further hereby knowingly, voluntarily
and intentionally waive, to the fullest extent permitted by applicable
law, any right to a trial by jury with respect to any such lawsuit or
judicial proceeding arising or relating to this Agreement or the
transactions contemplated hereby. To the extent that in any
jurisdiction Customer may now or hereafter be entitled to claim, for
itself or its assets, immunity from suit, execution, attachment
(before or after judgement) or other legal process, Customer shall not
claim, and it hereby irrevocably waives, such immunity.
10.10 SEVERABILITY; WAIVER; AND SURVIVAL
(a) If one or more provisions of this Agreement are held invalid,
illegal or unenforceable in any respect on the basis of any
particular circumstances or in any jurisdiction, the validity,
legality and enforceability of such provision or provisions under
other circumstances or in other jurisdictions and of the
remaining provisions will not in any way be affected or impaired.
(b) Except as otherwise provided herein, no failure or delay on the
part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial
exercise of any power or right preclude any other or further
exercise, or the exercise of any other power or right. No waiver
by a party of any provision of this Agreement, or waiver of any
breach or default, is effective unless it is in writing and
signed by the party against whom the waiver is to be enforced.
(c) The parties' rights, protections, and remedies under this
Agreement shall survive its termination.
10.11 CONFIDENTIALITY
(a) Subject to Clause 10.11(b) the Bank will hold all Confidential
Information in confidence and will not disclose any Confidential
Information except as may be required by Applicable Law or a
regulator with jurisdiction over the Bank's business (provided
that Bank will provide Customer prior written notice of the same,
to the extent such notice is permitted); as necessary to the
defense of any claim or cause of action asserted against Bank
(provided that Bank will provide Customer prior written notice of
the same, to the extent such notice is permitted); or with the
prior written consent of the Customer.
(b) Solely to the extent required in connection with the Bank's
provision of services to Customer in accordance with this
Agreement, the Customer authorizes the Bank to disclose
Confidential Information to:
(i) any Subcustodian, subcontractor, agent, Securities
Depository, securities exchange, broker, third party
agent, proxy solicitor, issuer, or any other person
that the Bank reasonably believes is required in
connection with the Bank's provision of services to
Customer under this Agreement;
(ii) its professional advisors, auditors or public
accountants;
(iii) its employees and Affiliates, and
(iv) any revenue authority or any governmental entity in
relation to the processing of any tax relief claim.
(c) Subject to Clause 10.11(b) the Bank shall observe the same degree
of care as Bank observes with respect to its own Confidential
Information of a similar nature in preventing the unauthorized
use and dissemination of the Confidential Information. Upon
discovery of any unauthorized use or disclosure of Confidential
Information, Bank shall notify Customer in writing and will
specify the corrective action taken or to be taken.
(d) If Bank or any of its Affiliate is requested or required (by oral
question, interrogatories requests for information or documents,
subpoena, civil investigative demand, or similar process) to
disclose any Confidential Information, Bank will promptly notify
Customer in writing (to the extent permitted) of such request or
requirement so that Customer may seek an appropriate protective
order with the reasonable cooperation of Bank; provided, however,
Customer shall reimburse Bank for any out-of-pocket costs and
expenses incurred by Bank in cooperating with such request. If,
in the failure to obtain a protective order or in the absence of
a waiver hereunder, the Bank is, in the opinion of counsel to the
Bank compelled to disclose the Confidential Information, Bank may
disclose only such portion of the Confidential Information to the
party compelling disclosure as is required by Applicable Law.
(e) Except as otherwise required by Applicable Law or as needed to
enforce the terms of this Agreement, the parties shall hold the
terms and conditions of this Agreement in confidence.
10.12 COUNTERPARTS
This Agreement may be executed in several counterparts each of which
will be deemed to be an original and together will constitute one and
the same agreement.
10.13 NO THIRD PARTY BENEFICIARIES
A person who is not a party to this Agreement shall have no right to
enforce any term of this Agreement. Notwithstanding this prohibition,
this shall not limit the right to recover losses sustained by
Customer, by Customer's insurer, investment manager or Affiliates who
have paid for such losses.
EACH REGISTRANT LISTED JPMORGAN CHASE BANK, N.A.
ON SCHEDULE A HERETO, ON BEHALF
OF EACH OF ITS UNDERLYING SERIES
By: By:
---------------------------------- -------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxx X. Xxxxxx
Title: President Title: Executive Director
Date: June 24, 2008 Date: June 24, 2008
ADDENDUM TO MASTER GLOBAL CUSTODY AGREEMENT
The undersigned [___________________________] ("Customer") incorporated under
the laws of [_____________________] with address at [_______________________]
hereby requests the securities custody services of JPMorgan Chase Bank, N.A.,
and Customer, by its signature below, agrees to the terms and conditions of that
certain Master Global Custody Agreement, dated [___________________] with
JPMorgan Chase Bank, N.A. on behalf of each of the RiverSource Funds listed on
Schedule A, which such Schedule A is hereby amended with the addition of the
Customer pursuant to this addendum.
THE CUSTOMER
By:
------------------------------------
Name:
Title:
Date:
----------------------------------
JPMORGAN CHASE BANK, N.A.
By:
---------------------------------
Name:
Title:
Date:
-------------------------------
SCHEDULE A
LIST OF CUSTOMERS
RIVERSOURCE GLOBAL SERIES, INC.
Threadneedle Global Equity Income Fund
Threadneedle Global Extended Alpha Fund
SCHEDULE 1
LIST OF SUBCUSTODIANS AND MARKETS USED BY THE BANK
SCHEDULE 2
PERSONS AUTHORIZED TO GIVE INSTRUCTIONS
SCHEDULE 3
AUTHORIZED FUND MANAGERS/ADVISERS
SCHEDULE 4
FORM OF BOARD RESOLUTION
APPENDIX A
SPECIMEN FUND MANAGER MANDATE
ACCOUNT(S) COVERED BY THIS MANDATE:
SCHEDULE 5
ELECTRONIC ACCESS
EXHIBIT 1 TO SCHEDULE 5
PRODUCTS
EXHIBIT A
SCHEDULE 6
