Exhibit 99(g)(2)
[JPMORGAN LOGO]
GLOBAL CUSTODY AND FUND ACCOUNTING AGREEMENT
BETWEEN
EACH OF THE ENTITIES LISTED ON SCHEDULE A
AND
JPMORGAN CHASE BANK, N.A.
Global Custody Agreement - New York Law
GLOBAL CUSTODY AND FUND ACCOUNTING AGREEMENT
TABLE OF CONTENTS
1. INTENTION OF THE PARTIES; DEFINITIONS 1
1.1 INTENTION OF THE PARTIES 1
1.2 DEFINITIONS 1
2. WHAT BANK IS REQUIRED TO DO 4
2.1 SET UP ACCOUNTS 4
2.2 CASH ACCOUNT 4
2.3 SEGREGATION OF ASSETS; NOMINEE NAME 4
2.4 SETTLEMENT OF TRADES 5
2.5 CONTRACTUAL SETTLEMENT DATE ACCOUNTING 5
2.6 ACTUAL SETTLEMENT DATE ACCOUNTING 6
2.7 INCOME COLLECTION (AUTOCREDIT(R)) 6
2.8 CERTAIN MINISTERIAL ACTS 6
2.9 CORPORATE ACTIONS 7
2.10 PROXIES 8
2.11 STATEMENTS 9
2.12 ACCESS TO BANK'S RECORDS 10
2.13 MAINTENANCE OF FINANCIAL ASSETS AT SUBCUSTODIAN LOCATIONS 10
2.14 TAX RELIEF SERVICES 10
2.15 FOREIGN EXCHANGE TRANSACTIONS 10
2.16 FUND ACCOUNTING SERVICES 10
3. INSTRUCTIONS 11
3.1 ACTING ON INSTRUCTIONS; UNCLEAR INSTRUCTIONS 11
3.2 CONFIRMATION OF ORAL INSTRUCTIONS/ SECURITY DEVICES 11
3.3 INSTRUCTIONS; CONTRARY TO LAW/MARKET PRACTICE 11
3.4 CUT-OFF TIMES 12
4. FEES EXPENSES AND OTHER AMOUNTS OWING TO BANK 12
4.1 FEES AND EXPENSES 12
4.2 OVERDRAFTS 12
4.3 BANK'S RIGHT OVER SECURITIES; SET-OFF 12
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5. SUBCUSTODIANS, SECURITIES DEPOSITORIES AND OTHER AGENTS 13
5.1 APPOINTMENT OF SUBCUSTODIANS 13
5.2 LIABILITY FOR SUBCUSTODIANS 14
5.3 USE OF AGENTS 14
6. ADDITIONAL PROVISIONS RELATING TO CUSTOMER 15
6.1 REPRESENTATIONS OF CUSTOMER AND BANK 15
6.2 CUSTOMER TO PROVIDE CERTAIN INFORMATION TO BANK 15
6.3 CUSTOMER IS LIABLE TO BANK EVEN IF IT IS ACTING FOR ANOTHER PERSON 15
7. WHEN BANK IS LIABLE TO CUSTOMER 15
7.1 STANDARD OF CARE; LIABILITY 15
7.2 FORCE MAJEURE 16
7.3 BANK CAN CONSULT WITH COUNSEL 17
7.4 BANK PROVIDES DIVERSE FINANCIAL SERVICES AND MAY GENERATE PROFITS AS A RESULT 17
8. TAXATION 17
8.1 TAX OBLIGATIONS 17
8.2 TAX RELIEF SERVICES 18
9. TERMINATION 19
10. Miscellaneous 19
10.1 NOTICES 19
10.2 SUCCESSORS AND ASSIGNS 19
10.3 INTERPRETATION 19
10.4 ENTIRE AGREEMENT 19
10.5 INFORMATION CONCERNING DEPOSITS AT BANK'S LONDON BRANCH 20
10.6 INSURANCE 20
10.7 GOVERNING LAW AND JURISDICTION 20
10.8 SEVERABILITY; WAIVER; AND SURVIVAL 21
10.9 COUNTERPARTS 21
10.10 NO THIRD PARTY BENEFICIARIES 22
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GLOBAL CUSTODY AND FUND
ACCOUNTING AGREEMENT
This Agreement is between JPMORGAN CHASE BANK, N.A. ("BANK"), with a place
of business at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx; and each of the entities
listed on Schedule A hereto, each of which is acting on behalf of each of the
portfolios listed under its name on Schedule A (each, a "Fund"), with a place of
business at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000. For purposes of this
Agreement, each individual Fund is considered a separate "Customer."
This Agreement replaces the current agreements covering custody and fund
accounting services for each of the Funds and each of them is hereby superceded
by this Agreement.
The effective date of this Agreement for each entity is:
ENTITY AGREEMENT EFFECTIVE DATE
------ ------------------------
JPMorgan Institutional Trust February 4, 2005
JPMorgan Trust I February 18, 2005
JPMorgan Trust II February 18, 2005
X.X. Xxxxxx Mutual Fund Group February 19, 2005
X.X. Xxxxxx Xxxxxxx Mutual Fund Group, Inc. February 19, 2005
X.X. Xxxxxx Mutual Fund Investment Trust February 19, 2005
X.X. Xxxxxx Series Trust II February 19, 2005
X.X. Xxxxxx Xxxxxxx Series Trust February 19, 2005
Undiscovered Managers Funds February 19, 2005
UM Investment Trust February 19, 2005
UM Investment Trust II February 19, 2005
1. INTENTION OF THE PARTIES; DEFINITIONS
1.1 INTENTION OF THE PARTIES.
(a) This Agreement sets out the terms governing custodial, settlement
and certain other associated services offered by Bank to Customer. Bank will be
responsible for the performance of only those Securities custody duties that are
set forth in this Agreement. Customer acknowledges that Bank is not providing
any legal, tax or investment advice in connection with the services hereunder.
(b) Investing in foreign markets may be a risky enterprise. The
holding of Financial Assets and cash in foreign jurisdictions may involve risks
of loss or other special considerations. Bank will not be liable for any loss
that results from the general risks of investing or Country Risk.
1.2 DEFINITIONS.
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(a) 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.
"AFFILIATED SUBCUSTODIAN" means a Subcustodian that is an Affiliate.
"APPLICABLE LAW" means any statute, whether national, state or local,
applicable in the United States or any other country, the rules of the treaty
establishing the European Community, any other law, rule, regulation or
interpretation of any governmental entity, any applicable common law, and any
decree, injunction, judgment, order, ruling, or writ of any governmental entity.
"AUTHORIZED PERSON" means any person who has been designated by written
notice from Customer (or by any agent designated by Customer, including, without
limitation, an investment manager) to act on behalf of Customer hereunder. Such
persons will continue to be Authorized Persons until such time as Bank receives
Instructions from Customer (or its agent) that any such person is no longer 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.
"CASH ACCOUNT" has the meaning set forth in Section 2.1(a)(ii).
"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 holder, but does not include proxy solicitations.
"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 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.
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"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 instructions which: (i) contain all necessary
information required by Bank to enable Bank to carry out the Instructions; (ii)
are received by Bank in writing or via Bank's electronic instruction system,
SWIFT, telephone, tested telex, facsimile or such other methods as are for the
time being agreed by Customer (or an Authorized Person) and Bank; and (iii) Bank
believes in good faith have been given by an Authorized Person or are
transmitted with proper testing or authentication pursuant to terms and
conditions which Bank may specify.
"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 stocks, bonds, rights, warrants and other negotiable
and non-negotiable instruments, whether issued in certificated or uncertificated
form, that are commonly traded or dealt in on securities exchanges or financial
markets. "SECURITIES" also means other obligations of an issuer, or shares,
participations and interests in an issuer recognized 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 pursuant hereto.
"SECURITIES DEPOSITORY" has the meaning set forth in Section 5.1 of this
Agreement.
"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.
"SUBCUSTODIAN" has the meaning set forth in Section 5.1 and includes
Affiliated Subcustodians.
(b) All terms in the singular will have the same meaning in the plural
unless the context otherwise provides and visa versa.
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2. WHAT BANK IS REQUIRED TO DO
2.1 SET UP ACCOUNTS.
(a) Bank will establish and maintain the following accounts
("ACCOUNTS"):
(i) a Securities Account in the name of Customer for Financial
Assets, which may be received by or on behalf of Bank or
its Subcustodian for the account of Customer, including as
an Entitlement Holder; and
(ii) an account in the name of Customer ("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 a 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.
2.2 CASH ACCOUNT.
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.
2.3 SEGREGATION OF ASSETS; NOMINEE NAME.
(a) Bank will identify in its records 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 records that Financial
Assets held at such Subcustodian by Bank on behalf of its customers belong to
customers of Bank, 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;
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(ii) to hold Securities in or deposit Securities with any
Securities Depositary, settlement system or dematerialized
book entry or similar systems; and
(iii) 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.
(d) Bank is authorized, when directed to do so by Customer, to hold
Financial Assets at third parties and to register Financial Assets in broker
"street name" or in the name of other third parties (or their nominees).
Notwithstanding Section 7.1, Bank shall have no liability for any loss of
Financial Assets or other damages resulting from holding or registering
Financial Assets as so directed by the Customer.
Customer authorizes Bank or its Subcustodian to hold Financial Assets in omnibus
accounts and will accept delivery of Financial Assets of the same class and
denomination as those with Bank or its Subcustodian.
2.4 SETTLEMENT OF TRADES.
When Bank receives an Instruction directing settlement of a transaction
in Financial Assets that includes all information required by Bank, Bank will
use reasonable care to effect such settlement as instructed. Settlement of
transactions in Financial Assets will be conducted in accordance with prevailing
standards of the market in which the transaction occurs. Without limiting the
generality of the foregoing, the risk of loss will be Customer's whenever Bank
delivers Financial Assets or payment in accordance with applicable market
practice in advance of receipt or settlement of the expected consideration. 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, but Bank will not be obligated to institute
legal proceedings, file a proof of claim in any insolvency proceeding, or take
any similar action.
2.5 CONTRACTUAL SETTLEMENT DATE ACCOUNTING.
(a) Bank will effect book entries on a "contractual settlement date
accounting" basis as described below with respect to the settlement of trades in
those markets where Bank generally offers contractual settlement date accounting
and will notify Customer of those markets from time to time.
(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 the Bank
pending settlement of the trade 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 the Bank. Bank then will post the
Securities Account as awaiting receipt of the expected
Financial Assets. Customer will not be
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entitled to the Financial Assets that are awaiting receipt
until Bank or a Subcustodian actually receives them.
Bank reserves the right to restrict in good faith the availability of
contractual settlement date accounting for credit or operational reasons.
(b) Bank may (in its absolute discretion) upon oral or written
notification to Customer reverse any debit or credit made pursuant to Section
2.5(a) prior to a transaction's actual settlement, and Customer will be
responsible for any costs or liabilities resulting from such reversal. Customer
acknowledges that the procedures described in this sub-section are of an
administrative nature, and Bank does not undertake to make loans and/or
Financial Assets available to Customer pursuant to this sub-section.
2.6 ACTUAL SETTLEMENT DATE ACCOUNTING.
With respect to any sale or purchase 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 by Bank.
2.7 INCOME COLLECTION (AUTOCREDIT(R)).
(a) Bank will credit the Cash Account with income and redemption
proceeds on Financial Assets in accordance with the times notified by Bank from
time to time on or after the anticipated payment date, net of any taxes that are
withheld by Bank or any third party. Where no time is specified for a particular
market, income and redemption proceeds from Financial Assets will be credited
only after actual receipt and reconciliation. Bank may reverse such credits upon
oral or written notification to Customer that Bank believes that the
corresponding payment will not be received by Bank within a reasonable period or
such credit was incorrect.
(b) Bank will make good faith efforts in its discretion to contact
appropriate parties to collect unpaid interest, dividends or redemption
proceeds, but neither Bank nor its Subcustodians will be obliged to file any
formal notice of default, institute legal proceedings, file a proof of claim in
any insolvency proceeding, or take any similar action.
2.8 CERTAIN MINISTERIAL ACTS.
Until Bank receives Instructions to the contrary, Bank will:
(a) 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;
(b) execute in the name of Customer such certificates as may be
required to obtain payment in respect of Financial Assets;
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(c) exchange interim or temporary documents of title for
Financial Assets held in the Securities Account for
definitive documents of title; and
(d) provide information concerning the Accounts to
Subcustodians, Securities Depositories, counterparties,
issuers of Financial Assets, governmental entities,
securities exchanges, self-regulatory entities, and similar
entities to the extent required by Applicable Law or as may
be required in the ordinary course by market practice or
otherwise in order to provide the services contemplated by
this Agreement.
2.9 CORPORATE ACTIONS.
(a) Bank will notify Customer of any Corporate Action of which
information is either (i) received by it or by a Subcustodian to the extent that
Bank's central corporate actions department has actual knowledge of the
Corporate Action in time to notify its customers in a timely manner; or (ii)
published via a formal notice in publications and reporting services routinely
used by Bank for this purpose in time for Bank to notify its customers in a
timely manner. Bank also will use its reasonable efforts to notify Customer of
any class action litigation for which information is actually received by Bank's
central corporate actions department but shall not be liable for any Liabilities
arising out of Bank's failure to identify Customer's interest in any class
action litigation. Bank does not commit, however, to provide information
concerning Corporate Actions or class action litigation relating to Financial
Assets being held at Customer's request in a name not subject to the control of
Bank or its Subcustodian.
(b) If an Authorized Person fails to provide Bank with timely
Instructions with respect to any Corporate Action or class action, neither Bank
nor its Subcustodians or their respective nominees will take any action in
relation to that Corporate Action or class action, except as otherwise agreed in
writing by Bank and Customer 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 or class action.
(c) Bank may sell or otherwise dispose of fractional interests in
Financial Assets arising out of a Corporate Action or class action litigation
and, to the extent necessary to protect Customer's interest in that Corporate
Action or class action, credit the Cash Account with the proceeds of the sale or
disposition. If some, but not all, of an outstanding class of Financial Asset is
called for redemption, Bank may allot the amount redeemed among the respective
beneficial holders of such class of Financial Asset in any manner Bank deems to
be fair and equitable. Bank will promptly notify Customer of any action taken
pursuant to this sub-section.
(d) Notices of Corporate Actions and class actions dispatched to
Customer may have been obtained from sources which Bank does not control and may
have been translated or summarized. Although Bank believes such sources to be
reliable, Bank has no duty to verify the information contained in such notices
nor the faithfulness of any translation or summary and therefore does not
guarantee its accuracy, completeness or timeliness, and shall not be liable to
Customer for any loss that may result from relying on such notice.
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2.10 PROXIES.
(a) Subject to and upon the terms of this sub-section, Bank will
provide Customer with information which it receives on matters to be voted upon
at meetings of holders of Financial Assets ("NOTIFICATIONS"), and Bank will act
in accordance with Customer's Instructions in relation to such Notifications
("THE ACTIVE PROXY VOTING SERVICE"). If information is received by Bank at its
proxy voting department too late to permit timely voting by Customer, Bank's
only obligation will be to provide, so far as reasonably practicable, a
Notification (or summary information concerning a Notification) on an
"information only" basis.
(b) The active proxy voting service is available only in certain
markets, details of which are available from Bank on request. Provision of the
active 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) Bank will act upon Instructions to vote on matters referred to in
a Notification, provided Instructions are received by Bank at its proxy voting
department by the deadline referred to in the relevant Notification. If
Instructions are not received in a timely manner, Bank will not be obligated to
provide further notice to Customer and shall not be obliged to vote. It is
Customer's obligation to monitor the agreed upon means of providing
Notifications to determine if new Notifications have been received.
(d) Bank reserves the right to provide Notifications or parts thereof
in the language received. Bank will attempt in good faith to provide accurate
and complete Notifications, whether or not translated.
(e) Customer acknowledges that Notifications and other information
furnished pursuant to the active proxy voting service ("INFORMATION") are
proprietary to Bank and that Bank owns all intellectual property rights,
including copyrights and patents, embodied therein. Accordingly, Customer will
not make any use of such information except in connection with the active proxy
voting service.
(f) In markets where the active proxy voting service is not available
or where Bank has not received a duly completed enrollment form or other
relevant documentation, Bank will not provide Notifications to Customer but will
endeavor to act upon Instructions to vote on matters before meetings of holders
of Financial Assets where it is reasonably practicable for Bank (or its
Subcustodians or nominees as the case may be) to do so and where such
Instructions are received in time for Bank to take timely action (the "PASSIVE
PROXY VOTING SERVICE").
(g) Customer acknowledges that the provision of proxy voting services
(whether active or passive) may be precluded or restricted under a variety of
circumstances. 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;
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(iii) Financial Assets being held at Customer's request in a name
not subject to the control of Bank or its Subcustodian;
(iv) in a margin or collateral account at Bank or another bank
or broker, or otherwise in a manner which affects voting;
(v) local market regulations or practices, or restrictions by
the issuer;
(vi) Bank may be 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 by means of the Notification.
(h) Notwithstanding the fact that Bank may act in a fiduciary capacity
with respect to Customer under other agreements, in performing active or passive
voting proxy services Bank will be acting solely as the agent of Customer, and
will not exercise any discretion, with regard to such proxy services or vote any
proxy except when directed by an Authorized Person.
2.11 STATEMENTS AND INFORMATION AVAILABLE ON-LINE.
(a) Bank will send, or make available on-line, to Customer, at times
mutually agreed upon, a formal statement of account in Bank's standard format
for each Account maintained by Customer with Bank, identifying the Financial
Assets and cash held in each Account (each such statement a "STATEMENT OF
ACCOUNT"). Additionally, Bank will send (or make available on-line to) Customer
an advice or notification of any transfers of cash or Financial Assets with
respect to each Account. Bank will not be liable with respect to any matter set
forth in those portions of any Statement of Account or any such advice (or
reasonably implied therefrom) to which Customer has not given Bank a written
exception or objection within sixty (60) days of receipt of the Statement of
Account, provided such matter is not the result of Bank's negligence, willful
misconduct or bad faith. References in this Agreement to Statements of Account
include Statements of Account in electronic form.
(b) Prices and other information obtained from third parties which may
be contained in any Statement of Account or other statement sent to Customer
have been obtained from sources Bank believes to be reliable. Bank does not,
however, make any representation as to the accuracy of such information or that
the prices specified necessarily reflect the proceeds that would be received on
a disposal of the relevant Financial Assets.
(c) Customer acknowledges that, except for Statements of Account or as
otherwise expressly agreed by Bank, records and reports available to it on-line
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 records or reports accessed on-line.
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2.12 ACCESS TO BANK'S RECORDS.
Bank will allow Customer's 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 Applicable Law, Bank also will obtain an
undertaking to permit Customer's independent public accountants, reasonable
access to the records of any Subcustodian of Securities held in the Securities
Account as may be required in connection with such examination.
2.13 MAINTENANCE OF FINANCIAL ASSETS AT SUBCUSTODIAN LOCATIONS.
(a) 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.
(b) Bank will not be obliged to follow an Instruction to hold
Financial Assets with, or have them registered or recorded in the name of, any
person not chosen by Bank. However, if Customer does instruct Bank to hold
Securities and/or cash with or register or record Securities in the name of a
person not chosen by Bank and Bank agrees to do so, the consequences of doing so
are at Customer's own risk and Bank (i) will not be liable therefor and (ii) may
not provide services under this Agreement with respect to Securities or cash so
held, including, without limitation, services provided under Sections 2.8, 2.9,
2.10, and 8.2.
2.14 TAX RELIEF SERVICES.
Bank will provide tax relief services as provided in Section 8.2.
2.15 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, the terms
and conditions of that foreign exchange contract and, to the extent not
inconsistent, this Agreement, will apply to such transactions.
2.16 FUND ACCOUNTING SERVICES.
Bank shall perform fund accounting services as specified on the attached
Schedule B.
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3. INSTRUCTIONS
3.1 ACTING ON INSTRUCTIONS; UNCLEAR INSTRUCTIONS.
(a) Customer authorizes Bank to accept and act upon any Instructions
received by it without inquiry. Customer will indemnify the Bank Indemnitees
against, and hold each of them harmless from, any Liabilities that may be
imposed on, incurred by, or asserted against the Bank Indemnitees as a result of
any action or omission taken in accordance with any Instructions or other
directions upon which Bank is authorized to rely under the terms of this
Agreement.
(b) Unless otherwise expressly provided, all Instructions will
continue in full force and effect until canceled or superseded.
(c) Bank may (in its sole discretion and without affecting any part of
this Section 3.1) seek clarification or confirmation of an Instruction from an
Authorized Person and may decline to act upon an Instruction if it does not
receive clarification or confirmation satisfactory to it. Bank will not be
liable for any loss arising from any delay while it seeks such clarification or
confirmation.
(d) In executing or paying a payment order Bank may rely upon the
identifying number (e.g. Fedwire routing number or account) of any party as
instructed in the payment order. Customer assumes full responsibility for any
inconsistency between the name and identifying number of any party in payment
orders issued to Bank in Customer's name.
3.2 CONFIRMATION OF ORAL INSTRUCTIONS/ SECURITY DEVICES.
Any Instructions delivered to Bank by telephone will promptly thereafter
be confirmed in writing by an Authorized Person. Each confirmation is to be
clearly marked "Confirmation." Bank will not be liable for having followed such
Instructions notwithstanding the failure of an Authorized Person to send such
confirmation in writing or the failure of such confirmation to conform to the
telephone Instructions received. Either party may record any of their telephonic
communications. Customer will comply with any security procedures reasonably
required by Bank from time to time with respect to verification of Instructions.
Customer will be responsible for safeguarding any test keys, identification
codes or other security devices that Bank will make available to Customer or any
Authorized Person.
3.3 INSTRUCTIONS; CONTRARY TO LAW/MARKET PRACTICE.
Bank need not act upon Instructions which it reasonably believes to be
contrary to law, regulation or market practice, but Bank will be under no duty
to investigate whether any Instructions comply with Applicable Law or market
practice.
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3.4 CUT-OFF TIMES.
Bank has established cut-off times for receipt of some categories of
Instruction, 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.
4. FEES, EXPENSES AND OTHER AMOUNTS OWING TO BANK
4.1 FEES AND EXPENSES.
Customer will pay Bank for its services hereunder the fees set forth in
Schedule C hereto or such other amounts 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 by governmental authorities, issuers, or their agents.
Customer authorizes Bank to deduct amounts owing to it from the Cash Account,
for any such fees or expenses from time to time in arrears. Without prejudice to
Bank's other rights, Bank reserves the right to charge interest on overdue
amounts from the due date until actual payment at such rate as Bank may
reasonably determine.
4.2 OVERDRAFTS.
If a debit to any currency in the Cash Account results (or will result)
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 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) Customer grants Bank a security interest in and a lien on the
Financial Assets held in the Securities Account as security for any and all
amounts which are now or become owing to Bank under any provision of this
Agreement, whether or not matured or contingent ("Indebtedness").
(b) Without prejudice to Bank's rights under Applicable Law, Bank may
set off against any Indebtedness any amount in any currency standing to the
credit of any of Customer's accounts (whether deposit or otherwise) with any
Bank branch or office or with any Affiliate of Bank. For
12
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.
(c) With respect to any obligation of a Customer arising out of this
Agreement, the Bank shall look for payment or satisfaction of such obligation
solely to the assets of the Customer to which such obligation relates as though
the Bank had separately contracted by separate written instrument with respect
to each Customer.
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, being at the date of this
Agreement the entities listed in Schedule 1 and/or such other entities as Bank
may appoint as subcustodians ("SUBCUSTODIANS"). Bank will use reasonable care,
prudence and diligence in the selection and continued appointment of such
Subcustodians. In addition, Bank and each Subcustodian may deposit Financial
Assets with, and hold Financial Assets in, any securities depository, settlement
system, dematerialized book entry system or similar system (together a
"SECURITIES DEPOSITORY") on such terms as such systems customarily operate and
Customer will provide Bank with such documentation or acknowledgements that Bank
may require to hold the Financial Assets in such systems.
(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. 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. 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 will not be liable for any act or omission by (or the
insolvency of) any Securities Depository. In the event Customer incurs a loss
due to the negligence, willful misconduct, or insolvency of a Securities
Depository, Bank will make reasonable endeavors, in its discretion, to seek
recovery from the Securities Depository, but Bank will not be obligated to
institute legal proceedings, file a proof claim in any insolvency proceeding, or
take any similar action.
13
5.2 LIABILITY FOR SUBCUSTODIANS.
(a) Subject to Section 7.1(b), Bank shall be liable for the actions or
omissions of anySubcustodian to the same extent as if such act or omission was
performed by the Bank itself. In the event of any Losses suffered or incurred by
a Customer caused by or resulting from the actions or omissions of any
Subcustodian for which the Bank would otherwise be liable, the Bank shall
promptly reimburse such Customerin the amount of any such Losses. Bank shall
also be liable for losses that result from 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 or an Affiliated Subcustodian.
(c) Bank reserves the right to add, replace or remove Subcustodians.
Bank will give prompt notice of any such action, which will be advance notice if
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.
5.3 USE OF AGENTS.
(a) Bank may provide certain services under this Agreement through
third parties, which may be Affiliates. Except to the extent provided in Section
5.2 with respect to Subcustodians, Bank will not be responsible for any loss as
a result of a failure by any broker or any other third party that it selects and
retains using reasonable care to provide ancillary services that it may not
customarily provide itself, including, without limitation, delivery services and
providers of information regarding matters such as pricing, proxy voting,
corporate actions and class action litigation. Nevertheless, Bank will be liable
for the performance of any such broker selected by Bank that is an Affiliate to
the same extent as Bank would have been liable if it performed such services
itself.
(b) In the case of the sale under Section 2.8 of a fractional interest
(or in other cases where Customer has requested Bank to arrange for execution of
a trade) Bank will place trades with a broker which is an Affiliate to the
extent that Bank has established a program for such trading with such Affiliate.
An affiliated broker may charge its customary commission (or retain its
customary spread) with respect to any such transaction.
14
6. ADDITIONAL PROVISIONS RELATING TO CUSTOMER
6.1 REPRESENTATIONS OF CUSTOMER AND BANK.
(a) 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, to borrow money
or otherwise incur indebtedness as contemplated by this Agreement, to pledge
Financial Assets as contemplated by Section 4.3, and to 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; and (iv) it is
a resident of the United States and shall notify Bank of any changes in
residency.
(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 and (ii) it has
full power and authority to enter into and has taken all necessary corporate
action to authorize the execution of this Agreement.
Bank may rely upon the above or the certification of such other facts as may be
required to administer Bank's obligations hereunder. Customer shall indemnify
Bank against all losses, liability, claims or demands arising directly or
indirectly from any such certifications.
6.2 CUSTOMER TO PROVIDE CERTAIN INFORMATION TO BANK.
Upon request, Customer will promptly provide to Bank such information
about itself and its financial status as Bank may reasonably request, including
Customer's organizational documents and its current audited and unaudited
financial statements.
6.3 CUSTOMER IS LIABLE TO BANK EVEN IF IT IS ACTING FOR ANOTHER PERSON.
If Customer is acting as an agent for a disclosed or undisclosed
principal in respect of any transaction, cash, or Financial Asset, Bank
nevertheless will treat 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. The foregoing will not
affect any rights Bank might have against Customer's principal.
7. WHEN BANK IS LIABLE TO CUSTOMER
7.1 STANDARD OF CARE; LIABILITY.
(a) Bank shall exercise reasonable care, prudence and diligence in
carrying out all its
15
duties and obligations under this Agreement, and shall be liable to each
Customer for any and all claims, liabilities, losses, damages, fines, penalties
and expenses ("Losses") suffered or incurred by such Customer resulting from the
failure of Bank to exercise such reasonable care, prudence and diligence or
resulting from Bank's negligence or willful misconduct and to the extent
provided in Section 5.2(a). In addition, Bank shall be liable to each applicable
Customer for all Losses representing reasonable costs and expenses incurred by
such Customer in connection with any claim by such Customer against Bank arising
from the obligations of Bank hereunder, including, without limitation, all
reasonable attorneys' fees and expenses incurred by such Customer in connection
with any investigations, lawsuits or proceedings relating to such claim;
provided that such Customer has recovered from Bank for such claim.
Nevertheless, under no circumstances will Bank be liable for any
indirect, incidental, consequential or special damages (including, without
limitation, lost profits) 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 hereunder, or
Bank's role as custodian.
(b) Customer will indemnify the Bank Indemnitees against, and hold
them harmless from, any Liabilities that may be imposed on, incurred by or
asserted against any of the Bank Indemnitees in connection with or arising out
of (i) Bank's performance under this Agreement, provided the Bank Indemnitees
have acted with reasonable care and have not acted with negligence or engaged in
fraud or willful misconduct in connection with the Liabilities in question or
(ii) any Bank Indemnitee's status as a holder of record of Customer's Financial
Assets. 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 have no
liability whatsoever for any consequential, special, indirect or speculative
loss or damages (including, but not limited to, lost profits) suffered by Bank
in connection with the transactions and services contemplated hereby and the
relationship established hereby even if Customer has been advised as to the
possibility of the same and regardless of the form of action.
(c) Without limiting Subsections 7.1 (a) or (b), Bank will have 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; or
(v) review or reconcile trade confirmations received from brokers (and Customer
or its Authorized Persons issuing Instructions will bear any responsibility to
review such confirmations against Instructions issued to and Statements of
Account issued by Bank).
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
16
meet reasonable commercial standards. Bank will have no liability, however, 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, 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
professional advisers in relation to matters of law, regulation or market
practice (which may be the professional advisers of Customer), and will not be
liable to Customer for any action taken or omitted pursuant to such advice.
7.4 BANK PROVIDES DIVERSE FINANCIAL SERVICES AND MAY GENERATE PROFITS AS A
RESULT.
Customer acknowledges that Bank or its 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. For example, 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 these activities. Customer further acknowledges that Bank or its Affiliates
may be in possession of information tending to show that the Instructions
received may not be in the best interests of Customer but that Bank is not under
any duty to disclose any such information.
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 require in connection with taxation, and warrants
that, when given, this information is true and correct in every respect, not
misleading in any way, and contains all material information. Customer
undertakes to notify Bank immediately if any information requires updating or
correcting. Bank shall not be liable 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
17
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 the 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.
Customer will indemnify and hold Bank harmless from and against any and all
liabilities, penalties, interest or additions to tax with respect to or
resulting from, any delay in, or failure by, Bank (i) to pay, withhold or report
any U.S. federal, state or local taxes or foreign taxes imposed on, or (ii) to
report interest, dividend or other income paid or credited to the Cash Account,
regardless of the reason for such delay or failure, provided, however, that
Customer will not be liable to Bank for any penalty or additions to tax due
solely as a result of Bank's 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
minimus 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.
(d) Customer confirms that Bank is authorized to disclose any
information requested by any revenue authority or any governmental entity in
relation to the processing of any tax relief claim.
18
9. TERMINATION
Either party may terminate this Agreement on sixty (60) days' written
notice to the other party. If Customer gives notice of termination, it must
provide full details of the persons to whom Bank must deliver Financial Assets
and cash. If Bank gives notice of termination, then Customer must, within sixty
days, notify Bank of details of its new custodian, failing which Bank may elect
(at any time after the sixty day notice period) either to retain the Financial
Assets and cash until such details are given, continuing to charge fees due (in
which case Bank's sole obligation will be for the safekeeping of the Financial
Assets and cash), or deliver the Financial Assets and cash to Customer. Bank
will in any event be entitled to deduct any amounts owing to it 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 NOTICES.
Notices (other than Instructions) 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.
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;
19
/X/ Accounting Services;
/X/ Mutual Fund.
(b) This Agreement, including the Schedules, Exhibits, and Riders (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.
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 L 48,000 and in
relation to deposits is L 31,700. 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.
Bank will not be required to maintain any insurance coverage for the
benefit of Customer.
10.7 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. 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 judgment)
or other legal process, Customer
20
shall not claim, and it hereby irrevocably waives, such immunity.
10.8 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 hereunder 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) Bank's rights, protections, and remedies under this Agreement
shall survive its termination.
10.9 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.
21
10.10 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.
JPMorgan Institutional Trust
JPMorgan Trust I
JPMorgan Trust II
X.X. Xxxxxx Mutual Fund Group
X.X. Xxxxxx Xxxxxxx Mutual Fund Group, Inc.
X.X. Xxxxxx Mutual Fund Investment Trust
X.X. Xxxxxx Series Trust II
X.X. Xxxxxx Xxxxxxx Series Trust
Undiscovered Managers Funds
UM Investment Trust
UM Investment Trust II
By: /s/ Xxxxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxxxx Xxxxxx
Title: Treasurer
Date: February 18, 2005
JPMORGAN CHASE BANK, N.A.
By: /s/ Xxxxxx XxXxxxxxx
--------------------
Name: Xxxxxx XxXxxxxxx
Title: Senior Vice President
Date: February 18, 2005
22
Investment Company Rider to Global Custody Agreement
Between JPMorgan Chase Bank and
The Entities Listed on Appendix A
The following modifications are made to the Agreement:
"2.17. COMPLIANCE WITH SECURITIES AND EXCHANGE COMMISSION ("SEC") RULE
17f-5 ("RULE 17f-5").
(a) Customer's board of directors (or equivalent body) (hereinafter
'Board') hereby delegates to Bank, and, except as to the country or countries as
to which Bank may, from time to time, advise Customer that it does not accept
such delegation, Bank hereby accepts the delegation to it, of the obligation to
perform as Customer's 'Foreign Custody Manager' (as that term is defined in rule
17f-5(a)(3) as promulgated under the Investment Company Act of 1940, as amended
("1940 Act")), including for the purposes of: (i) selecting Eligible Foreign
Custodians (as that term is defined in rule 17f-5(a)(1), and as the same may be
amended from time to time, or that have otherwise been exempted pursuant to an
SEC exemptive order) to hold foreign Financial Assets and Cash, (ii) evaluating
the contractual arrangements with such Eligible Foreign Custodians (as set forth
in rule 17f-5(c)(2)), (iii) monitoring such foreign custody arrangements (as set
forth in rule 17f-5(c)(3)).
(b) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Customer's Board of the placement
of Financial Assets and Cash with particular Eligible Foreign Custodians
and of any material change in the arrangements with such Eligible Foreign
Custodians, with such reports to be provided to Customer's Board at such
times as the Board deems reasonable and appropriate based on the
circumstances of Customer's foreign custody arrangements (and until
further notice from Customer such reports shall be provided not less than
quarterly with respect to the placement of Financial Assets and Cash with
particular Eligible Foreign Custodians and with reasonable promptness
upon the occurrence of any material change in the arrangements with such
Eligible Foreign Custodians);
(ii) exercise such reasonable care, prudence and diligence in performing
as Customer's Foreign Custody Manager as a person having responsibility
for the safekeeping of foreign Financial Assets and cash would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined
that foreign Financial Assets and cash placed and maintained in the
safekeeping of such Eligible Foreign Custodian shall be subject to
reasonable care, based on the standards applicable to custodians in the
relevant market, after having considered all factors relevant to the
23
safekeeping of such foreign Financial Assets and cash, including, without
limitation, those factors set forth in rule 17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with an Eligible Foreign
Custodian requires that the Eligible Foreign Custodian shall provide
reasonable care for foreign Financial Assets and Cash based on the
standards applicable to custodians in the relevant market.
(v) have established a system to monitor the continued appropriateness of
maintaining foreign Financial Assets and cash with particular Eligible
Foreign Custodians and of the governing contractual arrangements; it
being understood, however, that in the event that Bank shall have
determined that the existing Eligible Foreign Custodian in a given
country would no longer afford foreign Financial Assets and cash
reasonable care and that no other Eligible Foreign Custodian in that
country would afford reasonable care, Bank shall promptly so advise
Customer and shall then act in accordance with the Instructions of
Customer with respect to the disposition of the affected foreign
Financial Assets and cash.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
foreign Financial Assets and cash on behalf of Customer with Eligible Foreign
Custodians pursuant to a written contract deemed appropriate by Bank.
(c) Except as expressly provided herein, Customer shall be solely
responsible to assure that the maintenance of foreign Financial Assets and cash
hereunder complies with the rules, regulations, interpretations and exemptive
orders as promulgated by or under the authority of the SEC.
(d) Bank represents to Customer that it is a U.S. Bank as defined in Rule
17f-5(a)(7). Customer represents to Bank that: (1) the foreign Financial Assets
and cash being placed and maintained in Bank's custody are subject to the 1940
Act, as the same may be amended from time to time; (2) its Board: (i) has
determined that it is reasonable to rely on Bank to perform as Customer's
Foreign Custody Manager (ii) or its investment adviser shall have determined
that Customer may maintain foreign Financial Assets and cash in each country in
which Customer's Financial Assets and cash shall be held hereunder and
determined to accept Country Risk. Nothing contained herein shall require Bank
to make any selection or to engage in any monitoring on behalf of Customer that
would entail consideration of Country Risk.
(e) Bank shall provide to Customer such information relating to Country
Risk as is specified in Appendix 1 hereto. Customer hereby acknowledges that:
(i) such information is solely designed to inform Customer of market conditions
and procedures and is not intended as a recommendation to invest or not invest
in particular markets; and (ii) Bank has gathered the information from sources
it considers reliable, but that Bank shall have no responsibility for
inaccuracies or incomplete information.
B. Add a new Section 2.18 to the Agreement as follows:
24
2.18. COMPLIANCE WITH SEC RULE 17f-7 ("RULE 17f-7").
(a) Bank shall, for consideration by Customer, provide an analysis of the
custody risks associated with maintaining Customer's Foreign Assets with each
Eligible Securities Depository used by Bank as of the date hereof (or, in the
case of an Eligible Securities Depository not used by Bank as of the date
hereof, prior to the initial placement of Customer's foreign Assets at such
Depository) and at which any foreign Assets of Customer are held or are expected
to be held. The foregoing analysis will be provided to Customer at Bank's
Website. In connection with the foregoing, Customer shall notify Bank of any
Eligible Securities Depositories at which it does not choose to have its Foreign
Assets held. Bank shall monitor the custody risks associated with maintaining
Customer's foreign Assets at each such Eligible Securities Depository on a
continuing basis and shall promptly notify Customer or its adviser of any
material changes in such risks.
(b) Bank shall exercise reasonable care, prudence and diligence in
performing the requirements set forth in Section 2.17(a) above.
(c) Based on the information available to it in the exercise of
diligence, Bank shall determine the eligibility under rule 17f-7 of each
depository before including it on Schedule 3 hereto and shall promptly advise
Customer if any Eligible Securities Depository ceases to be eligible. (Eligible
Securities Depositories used by Bank as of the date hereof are set forth in
Schedule 3 hereto, and as the same may be amended on notice to Customer from
time to time.)
D. Add the following after the first sentence of Section 5.1(a) of the
Agreement: "At the request of Customer, Bank may, but need not, add to Schedule
1 an Eligible Foreign Custodian where Bank has not acted as Foreign Custody
Manager with respect to the selection thereof. Bank shall notify Customer in the
event that it elects to add any such entity."
E. Add the following language as Sections 5.1(d) and (e) of the
Agreement:
" (d) The term Subcustodian as used herein shall mean the following:
(i) a 'U.S. Bank,' which shall mean a U.S. bank as defined in rule
17f5(a)(7);
(ii) an 'Eligible Foreign Custodian,' which shall mean: (i) a
banking institution or trust company, incorporated or organized
under the laws of a country other than the United States, that is
regulated as such by that country's government or an agency
thereof, and (ii) a majority-owned direct or indirect subsidiary
of a U.S. bank or bank holding company which subsidiary is
incorporated or organized under the laws of a country other than
the United States. In addition, an Eligible Foreign Custodian
shall also mean any other entity that shall have been so qualified
by exemptive order, rule or other appropriate action of the SEC.
(iii) For purposes of clarity, it is agreed that as used in
Section 5.2(a), the term Subcustodian shall not include any
Eligible Foreign Custodian as to which Bank has not acted as
Foreign Custody Manager.
25
(e) The term 'securities depository' as used herein when referring to
a securities depository located outside the U.S. shall mean:
an "Eligible Securities Depository" which, in turn, shall have the
same meaning as in rule 17f-7(b)(1)(i)-(vi) as the same may be
amended from time to time, or that has otherwise been made exempt
pursuant to an SEC exemptive order; provided that, prior to the
compliance date with rule 17f-7 for a particular securities
depository the term "securities depositories" shall be as defined
in (a)(1)(ii)-(iii) of the 1997 amendments to rule 17f-5.
(f) The term "securities depository" as used herein when referring to
a securities depository located in the U.S. shall mean a "securities depository"
as defined in rule 17f-4(a).
26
Appendix 1-A
INFORMATION REGARDING COUNTRY RISK
1. To aid Customer in its determinations regarding Country Risk, Bank
shall furnish annually and upon the initial placing of Financial Assets and cash
into a country the following information (check items applicable):
A Opinions of local counsel concerning:
/X/ i. Whether applicable foreign law would restrict the access afforded
Customer's independent public accountants to books and records
kept by an eligible foreign custodian located in that country.
/X/ ii. Whether applicable foreign law would restrict Customer's ability
to recover its Financial Assets and cash in the event of the
bankruptcy of an Eligible Foreign Custodian located in that
country.
/X/ iii. Whether applicable foreign law would restrict Customer's ability
to recover Financial Assets that are lost while under the control
of an Eligible Foreign Custodian located in the country.
B. Written information concerning:
/X/ i. The foreseeability of expropriation, nationalization, freezes, or
confiscation of Customer's Financial Assets.
/X/ ii. Whether difficulties in converting Customer's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.
C. A market report with respect to the following topics:
(i) securities regulatory environment, (ii) foreign ownership
restrictions, (iii) foreign exchange, (iv) securities settlement and
registration, (v) taxation, and (vi) depositories (including depository
evaluation), if any.
2. To aid Customer in monitoring Country Risk, Bank shall furnish
board the following additional information:
Market flashes, including with respect to changes in the information in
market reports.
SCHEDULE 2
ELIGIBLE SECURITIES DEPOSITORIES
SCHEDULE A
List of Entities Covered by the Custody Agreement
JPMORGAN TRUST I
JPMorgan Emerging Markets Debt Fund
JPMorgan Bond Fund
JPMorgan Global Strategic Income Fund
JPMorgan Short Term Bond Fund
JPMorgan Enhanced Income Fund
JPMorgan California Tax Free Bond Fund
JPMorgan Intermediate Tax Free Bond Fund
JPMorgan New Jersey Tax Free Bond Fund
JPMorgan
New York Tax Free Bond Fund
JPMorgan Tax Aware Short-Intermediate Income Fund
JPMorgan Tax Aware Disciplined Equity Fund
JPMorgan Tax Aware Enhanced Income Fund
JPMorgan Tax Aware U.S. Equity Fund
JPMorgan Tax Aware Large Cap Growth Fund
JPMorgan Tax Aware Large Cap Value Fund
JPMorgan Tax Aware International Opportunities Fund
JPMorgan Global Healthcare Fund
JPMorgan Market Neutral Fund
JPMorgan Emerging Markets Equity Fund
JPMorgan International Opportunities Fund
JPMorgan International Value Fund
JPMorgan Asia Equity Fund
JPMorgan Intrepid European Fund
JPMorgan International Growth Fund (beginning March 21, 2005)
JPMorgan International Small Cap Equity Fund
JPMorgan Japan Fund
JPMorgan International Equity Fund
JPMorgan Disciplined Equity Fund
JPMorgan Diversified Fund
JPMorgan U.S. Equity Fund
JPMorgan U.S. Small Company Fund
JPMorgan Capital Growth Fund (custody only until March 21, 2005)
JPMorgan Dynamic Small Cap Fund
JPMorgan Growth and Income Fund (custody only until March 21, 2005)
JPMorgan Mid Cap Equity Fund
JPMorgan Small Cap Core Fund
JPMorgan Small Cap Equity Fund
JPMorgan Value Advantage Fund
JPMorgan Intrepid America Fund
JPMorgan Intrepid Growth Fund
JPMorgan Intrepid Contrarian Fund
JPMorgan Intrepid Value Fund
JPMorgan 100% U.S. Treasury Securities Money Market Fund
JPMorgan California Municipal Money Market Fund
JPMorgan Federal Money Market Fund
JPMorgan
New York Municipal Money Market Fund
JPMorgan Prime Money Market Fund
JPMorgan Tax Free Money Market Fund
Growth and Income Portfolio
UNDISCOVERED MANAGERS FUNDS
Undiscovered Managers Behavioral Growth Fund
Undiscovered Managers Behavioral Value Fund
Undiscovered Managers REIT Fund
Undiscovered Managers Small Cap Growth Fund
X.X. XXXXXX MUTUAL FUND GROUP
JPMorgan Short Term Bond Fund II
X.X. XXXXXX XXXXXXX MUTUAL FUND GROUP, INC.
JPMorgan Mid Cap Value Fund
X.X. XXXXXX MUTUAL FUND INVESTMENT TRUST
JPMorgan Mid Cap Growth Fund
UM INVESTMENT TRUST
UM Multi-Strategy Fund
UM INVESTMENT TRUST II
Undiscovered Managers Spinnaker Fund
X.X. XXXXXX SERIES TRUST II
JPMorgan Bond Portfolio
JPMorgan International Equity Portfolio
JPMorgan Mid Cap Value Portfolio
JPMorgan Small Company Portfolio
JPMorgan U.S. Large Cap Core Equity Portfolio
X.X. XXXXXX XXXXXXX SERIES TRUST
JPMorgan Multi-Manager Small Cap Growth Fund
JPMorgan Multi-Manager Small Cap Value Fund
JPMORGAN INSTITUTIONAL TRUST
JPMorgan Ultra Short-Term Bond Trust
JPMorgan Short-Term Bond Trust
JPMorgan Intermediate Bond Trust
JPMorgan Core Bond Trust
JPMorgan Equity Index Trust
JPMORGAN TRUST II
JPMorgan Small Cap Growth Fund
JPMorgan Small Cap Value Fund
JPMorgan Strategic Small Cap Value Fund
JPMorgan Diversified Mid Cap Growth Fund
JPMorgan Diversified Mid Cap Value Fund
JPMorgan Diversified Mid Cap Fund
JPMorgan Large Cap Growth Fund
JPMorgan Large Cap Value Fund
JPMorgan Equity Income Fund
JPMorgan Equity Index Fund
JPMorgan Market Expansion Index Fund
JPMorgan International Equity Index Fund
JPMorgan Technology Fund
JPMorgan Multi-Cap Market Neutral Fund
JPMorgan U.S. Real Estate Fund
JPMorgan Investor Growth Fund
JPMorgan Investor Growth & Income Fund
JPMorgan Investor Balanced Fund
JPMorgan Investor Conservative Growth Fund
JPMorgan Short Duration Bond Fund
JPMorgan Ultra Short Term Bond Fund
JPMorgan Intermediate Bond Fund
JPMorgan Core Bond Fund
JPMorgan Core Plus Bond Fund
JPMorgan Government Bond Fund
JPMorgan Treasury & Agency Fund
JPMorgan High Yield Bond Fund
JPMorgan Mortgage-Backed Securities Fund
JPMorgan Short Term Municipal Bond Fund
JPMorgan Tax Free Bond Fund
JPMorgan Municipal Income Fund
JPMorgan Arizona Municipal Bond Fund
JPMorgan Kentucky Municipal Bond Fund
JPMorgan Louisiana Municipal Bond Fund
JPMorgan Michigan Municipal Bond Fund
JPMorgan Ohio Municipal Bond Fund
JPMorgan West Virginia Municipal Bond Fund
JPMorgan Liquid Assets Money Market Fund
JPMorgan U.S. Government Money Market Fund
JPMorgan U.S. Treasury Plus Money Market Fund
JPMorgan Municipal Money Market Fund
JPMorgan Michigan Municipal Money Market Fund
JPMorgan Ohio Municipal Money Market Fund
SCHEDULE B
DESCRIPTION OF FUND ACCOUNTING SERVICES
The Bank agrees to perform the following duties in accordance with the
requirements of the Funds' Registration Statements, the 1940 Act (if
applicable), applicable Internal Revenue Service ("IRS") regulations, and
procedures as may be agreed upon from time to time, including without
limitation, those set forth in the service level agreement pertaining to the
Funds to which the Bank is a party. In all instances, the Bank agrees to perform
such services in accordance with industry standards and best practices, which
may include those enumerated in the Audits of Investment Companies Audit and
Accounting Guide, as in effect from time to time. Where appropriate, the Bank
agrees to keep all records on a class-by-class basis for each of the Funds.
In connection with the provision of services under this Schedule B, the Bank or
its agent or delegatee shall provide the Funds' chief compliance officer with
periodic reports (i.e., semi-annual SAS 70 reports) regarding its fund
accounting control environment, and shall promptly provide special reports in
the event of any material violation of the federal securities laws relating to
such services of which it becomes aware. The Bank or its agent or delegatee will
provide the Funds' chief compliance officer with reasonable access to its
compliance personnel.
The Bank agrees to:
a. keep and maintain the books and records of each Fund pursuant to Rule
3la-1 under the 1940 Act (the "Rule"), which are applicable to fund
accounting and the services to be performed pursuant to this Schedule B,
including the following:
(i) journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements
of cash and all other debits and credits, as required by
subsection (b)(1) of the Rule;
(ii) general and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including interest
accrued and interest received, as required by subsection
(b)(2)(i) of the Rule;
(iii) separate ledger accounts required by subsections (b)(2)(ii) and
(iii) of the Rule; and
(iv) a monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of the
Rule.
b. perform the following accounting services daily for each Fund:
(i) calculate the net asset value per share;
(ii) obtain security prices from independent pricing services, or if
such quotes are unavailable, obtain such prices in accordance
with the Valuation Procedures approved by a Fund's Board;
(iii) provide exception, stale and halted price reporting to the
investment adviser;
(iv) verify and reconcile with the Funds' records all daily trade
activity;
(v) compute, as appropriate, each Fund's net income and capital
gains, dividend payables, dividend factors, 7-day yields, 7-day
effective yields, 30-day yields, weighted average portfolio
maturity and such other agreed-upon rates and yields;
(vi) review daily the net asset value calculation and dividend factor
(if any) for each Fund, check and confirm the net asset values
and dividend factors for reasonableness and deviations against
agreed-upon benchmarks and tolerance levels:
(vii) distribute portfolio information, net asset values and yields to
NASDAQ, the Funds' transfer agent (the "Transfer Agent"),
JPMorgan Funds Management, Inc.("JPMFM") and such other third
parties as directed by Customer;
(viii) report to JPMFM or its designee, at least weekly, about the daily
market pricing of securities in any money market Funds, with the
comparison to the amortized cost basis;
(ix) determine unrealized appreciation and depreciation on securities
held in variable net asset value Funds;
(x) record all Corporate Actions affecting securities held by each
Fund, including dividends, stock splits and recapitalizations;
(xi) amortize premiums and accrete discounts on securities purchased
at a price other than face value, if requested by a Customer or
JPMFM;
(xii) record and reconcile with the Transfer Agent all capital stock
activity;
(xiii) update Fund accounting system to reflect rate changes on variable
interest rate instruments;
(xiv) post Fund transactions to appropriate categories;
(xv) accrue expenses of each Fund according to instructions received
from JPMFM;
(xvi) calculate book capital account balances;
(xvii) maintain books and records;
(xviii) determine the outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3) income and
expense accounts;
(xix) provide accounting reports in connection with Customer's regular
annual audit and other audits and examinations by regulatory
agencies; and
(xx) provide such periodic reports as JPMFM or the Funds shall
reasonably request.
In connection with the provision of these services, the Bank agrees:
(a) to maintain, in a format acceptable to JPMFM and the Funds, documents in
accordance with the applicable provisions of Rule 31a-2 of the 1940 Act and
with requirements of other applicable domestic regulators, such as the IRS,
or Applicable Foreign Regulators (as hereinafter defined). the Bank agrees
to make such documents available upon reasonable request for inspection by
officers, employees and auditors of JPMFM or the Funds during the Bank's's
normal business hours. For purposes of this subclause (a), Applicable
Foreign Regulator shall mean a foreign regulator designated as such by a
Fund and a foreign regulator actually known to the Bank to have authority
over a Fund or its operations. Promptly after the identification of a
foreign regulator, appropriate representatives ofthe Bank and the Funds
shall meet and determine the requirements to which the foreign regulator
would subject such Fund. If the Bank and the Funds determine, in the
exercise of their reasonable judgment, that complying with such
requirements would impose a substantial additional burden on the Bank, the
Funds and the Bank agree to negotiate in good faith, taking into account
all relevant circumstances, an appropriate change in the fees payable
hereunder;
(b) that all records maintained and preserved by the Bankpursuant to this
Agreement which each Fund is required to maintain and preserve shall be and
remain the property of a Fund and
shall be surrendered to a Fund promptly upon request in the form in which
such records have been maintained and preserved. Upon reasonable request of
JPMFM or a Fund, the Bankshall provide, in the form reasonably requested by
JPMFM or the Fund, any records included in any such delivery, and the Funds
shall reimburse the Bankfor its expenses of providing such records in such
form;
(c) to make reasonable efforts to determine (i) the taxable nature of any
distribution or amount received by or deemed received by, or payable to, a
Fund; (ii) the taxable nature or effect on a Fund or its shareholders of
any corporate actions, class actions, tax reclaims or similar events; and
(iii) taxable amount of any distribution or dividend paid, payable, or
deemed paid by a Fund to its shareholders; subject to the following (w)
with respect to determinations contemplated by this clause (c) that a
prudent fund accountant would reasonably consider to be, and that the the
Bank considers to be, non-routine in nature, the Bank may seek in writing
the approval or authorization of a Fund or a designee of a Fund and shall
not be required to act in respect of any such determination (as to which a
written request for approval or authorization shall have been made) without
such approval or authorization; (x) the Bank need not make any such
accrual, unless and until such accrual has been approved and authorized by
a Fund or its designee; (y) a Fund shall, or shall cause its designee, to
provide such approval and authorization, or approval and authorization of
different determinations(s), promptly; and (z) provided the Bank has made
the reasonable efforts described in this clause (c) and thereafter has
acted in accordance with the approvals and authorizations of a Fund or its
designee,the Bank shall have no liability for any such accrual if it
otherwise, in performing its services hereunder, is not in breach of this
Agreement. The Bank shall accrue for these actions appropriately; and
(d) to provide such records and assistance, including office space within the
Bank's premises, to the Funds' independent accountants in connection with
the services such accountants provide to the Funds, as such accountants
shall reasonably request.
The parties further agree as follows with respect to the provision of
services pursuant to this Schedule B:
(a) The Bank may rely on each Fund's then currently effective Prospectus, and
JPMFM or each Fund shall promptly advisethe Bank of any amendments thereto
and provide copies of such amendments to the Bank.
(b) Both the Bank and JPMFM or its designee shall use reasonable efforts to
identify any changes in domestic and foreign laws and regulations
applicable to the Bank's providing of services under this Schedule B, and
each shall promptly advise the other of any changes it identifies and upon
any such identification the Bank and JPMFM (together with the Funds) shall
agree on any reasonable alteration to the services to be provided to the
Bank under this Schedule B.
(c) A Fund or its designee shall (i) furnish promptly to the Bank (andthe Bank
may rely upon) the amounts of, or written formulas or methodologies to be
used by the Bank to calculate the amounts of, Fund liabilities and (ii)
specify the timing for accruals of such liabilities. The Bank shall request
such additional information as it deems reasonably necessary for it to
perform its services under this Schedule B.
(d) The Bank shall not be required to include as Fund liabilities and expenses,
nor use in its calculations hereunder, including, without limitation, as a
reduction of net asset value, any accrual for any U.S. federal or state
income taxes, unless and until JPMFM or its designee
shall have specified to the Bank the precise amount of the same to be
included in liabilities and expenses or used to reduce net asset value. The
Bank agrees to include as a Fund liability proper accruals for foreign
taxes, unless, after being advised of the amount and the basis for the
accrual, JPMFM by Instructions directs the Bank not to do so.
(e) JPMFM or its designee shall furnish to the Bank, and the Bank may rely
upon, the following types of information (and explanations thereof): (i)
each Fund's tax basis in debt obligations acquired by a Fund before the
Bank's becoming fund accountant hereunder, the dates of such acquisitions,
and the amount of premium previously amortized and the discount previously
included in income, (ii) the amounts credited to any capital accounts,
(iii) the amount of any reserves, and (iv) similar information which is
required by the Bank for performing the services and is neither possessed
by the Bank nor available from a third party.
(f) The Bank shall not be responsible for, and shall not incur any loss or
liability with respect to: any errors or omissions in information supplied
by a Fund or its designee that the Bank has reviewed and has concluded to
be within reasonable tolerance limits, as agreed between the parties; any
improper use by a Fund, its designees, agents, distributor or investment
adviser of any valuations or computations supplied by the Bank under this
Agreement; any valuations of securities supplied by a Fund or an
independent pricing service approved by such Fund's Board (if applicable),
provided that, with respect to such valuations, thethe Bank has otherwise
complied with this Schedule B, has reviewed the valuations and has
concluded they are within reasonable tolerance limits agreed to by the
parties; any tax determination authorized and approved by a Fund or its
designee that the Bank has reviewed and has concluded is within reasonable
tolerance limits as agreed to by the parties; or any changes in U.S. law or
regulations applicable to the Bank's performance not identified by the
Bank's use of reasonable efforts which are not identified to the Bank by a
Fund.
SCHEDULE C
JPMorgan Chase Bank
Global Investor Services
FEE SCHEDULE FOR JPMORGAN INVESTMENT MANAGEMENT NORTH AMERICA
FUND ACCOUNTING AND CUSTODY SERVICES
The following schedules are applicable to 40 Act Funds, Commingled Funds
and 3c-7 Funds
CUSTODY FEE SCHEDULE
CUSTODY SAFEKEEPING FEES
BPS TRADES
--- ------
Argentina 25.00 100.00
Australia 5.00 50.00
Austria 8.00 50.00
Bahrain 60.00 150.00
Bangladesh 60.00 150.00
Belgium 5.00 50.00
Bermuda 20.00 75.00
Botswana 60.00 150.00
Brazil 15.00 58.00
Bulgaria 35.00 75.00
Canada (RBC) 3.00 25.00
Chile 35.00 75.00
China 25.00 75.00
Colombia 40.00 000.00
Xxxxx Xxxx 60.00 150.00
Croatia 40.00 115.00
Cyprus 60.00 150.00
Czech Republic 40.00 90.00
Denmark 4.00 50.00
ECU 1.50 24.00
Ecuador 50.00 100.00
Egypt 40.00 75.00
Estonia 35.00 75.00
Euroclear/Cedel 1.75 23.00
Euro CDs 1.00 23.00
Finland 5.00 50.00
France 3.00 47.00
Germany 2.00 27.00
Ghana 60.00 150.00
Greece 40.00 75.00
Hong Kong 4.00 50.00
Hungary 40.00 100.00
India 25.00 45.00
Indonesia 10.00 75.00
BPS TRADES
--- ------
Ireland 7.00 45.00
Israel 50.00 100.00
Italy 5.00 50.00
Ivory Coast 3.00 100.00
Jamaica 11.00 70.00
Japan 1.50 25.00
Jersey 60.00 150.00
Jordan 50.00 100.00
Kenya 60.00 150.00
Korea 20.00 48.00
Latvia 20.00 115.00
Lebanon 50.00 140.00
Lithuania 35.00 140.00
Luxembourg 3.00 50.00
Malaysia 8.00 75.00
Mauritius 60.00 150.00
Mexico 6.00 42.00
Morocco 50.00 150.00
Namibia 60.00 150.00
Nepal 60.00 150.00
Netherlands 4.00 50.00
New Zealand 2.00 47.00
Nigeria 60.00 150.00
Norway 6.00 50.00
Oman 35.00 130.00
Pakistan 30.00 150.00
Peru 50.00 100.00
Philippines 15.00 83.00
Poland 40.00 150.00
Portugal 25.00 83.00
Romania 40.00 115.00
Russia 25.00 100.00
Singapore 4.00 50.00
Slovakia 40.00 100.00
Slovenia 35.00 100.00
South Africa 5.00 50.00
Spain 7.75 50.00
Sri Lanka 20.00 100.00
Swaziland 60.00 150.00
Sweden 5.00 50.00
Switzerland 5.00 75.00
Taiwan 13.00 100.00
Thailand 15.00 63.00
Tunisia 60.00 150.00
BPS TRADES
--- ------
Turkey 20.00 75.00
United Kingdom 0.45 25.00
United States 0.10 See Below
Uruguay 60.00 150.00
Venezuela 35.00 100.00
Vietnam 60.00 150.00
Zambia 60.00 150.00
Zimbabwe 50.00 000.00
XXXXXX XXXXXX BILLABLE TRANSACTION FEES:
- DTC/FBE Trades: $ 7.50 per trade
- Automated Physical Trades: $ 20.00 per trade
- Manual Physical Trades: $ 20.00 per trade
- Physical Redemption: $ 7.00 per trade
- Physical P&I: $ 7.00 per trade
NON-BILLABLE TRANSACTIONS:
- Automated P&I Payment
- Cash Transactions
- Interest/Dividend
Transaction
OUT OF POCKET FEES:
- Passed-through as incurred (e.g. stamp duty, registration fees, scrip fees,
etc.).
- New markets or additional services required that are not included in this
schedule will be negotiated separately and added to this schedule as the
need arises.
FUND ACCOUNTING FEE SCHEDULE
The following schedule shall be employed in the calculation of the fees payable
for the services provided under this Agreement. For purposes of determining the
asset levels at which a Tier applies, assets for that fund type across the
entire JPMorgan Funds Complex (which shall be defined to include any 1940 Act
fund, commingled funds or Rule 3c-7 fund which is advised or subadvised by an
entity which is a subsidiary of JPMorgan & Co.) shall be used.
MONEY MARKETS:
Tier One $ 5,000,000,000 1.10 Bps
Tier Two $ 10,000,000,000 0.80 Bps
Tier Three $ 35,000,000,000 0.40 Bps
Tier Four Over $35BN 0.20 Bps
FIXED INCOME:
Tier One $ 10,000,000,000 1.00 Bps
Tier Two $ 20,000,000,000 0.75 Bps
Tier Three $ 30,000,000,000 0.50 Bps
Tier Four Over $30BN 0.25 Bps
DOMESTIC EQUITY:
Tier One $ 10,000,000,000 1.20 Bps
Tier Two $ 20,000,000,000 0.50 Bps
Tier Three $ 30,000,000,000 0.40 Bps
Tier Four Over $30BN 0.25 Bps
INTERNATIONAL FUNDS:
Tier One $ 10,000,000,000 3.00 Bps
Tier Two Over $10BN 2.50 Bps
EMERGING MARKETS:
Tier One $ 10,000,000,000 4.00 Bps
Tier Two Over $10BN 3.00 Bps
OTHER FEES:
Minimums: US Equity $ 20,000
US Fixed Income $ 20,000
Money Markets $ 10,000
International $ 25,000
Emerging Markets $ 40,000
Additional Share Classes $ 2,000
Multi-Manager (per manager) $ 6,000
- Fund minimums will apply only for Funds that have commenced operations.
OUT OF POCKET ACCOUNTING FEES:
- Pricing costs will be passed through as incurred.
