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THE BANK OF NEW YORK MELLON
CUSTODY AGREEMENT
AGREEMENT, dated as of April 11, 2012 between First Trust Variable
Insurance Trust, a business trust organized and existing under the laws
of the State of Massachusetts having its principal office and place of
business at 000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, XX 00000 (the "Fund") and
The Bank of New York Mellon, a New York corporation authorized to do a
banking business having its principal office and place of business at Xxx
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Custodian").
W I T N E S S E T H:
that for and in consideration of the mutual promises hereinafter set forth the
Fund and Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
1. "AUTHORIZED PERSON" shall be any person, whether or not an officer
or employee of the Fund, duly authorized by the Fund's board to execute any
Certificate or to give any Oral Instruction with respect to one or more
Accounts, such persons to be designated in a Certificate annexed hereto as
Schedule I hereto or such other Certificate as may be received by Custodian from
time to time.
2. "CUSTODIAN AFFILIATE" shall mean any office, branch or subsidiary of
The Bank of New York Mellon Corporation.
3. "BOOK-ENTRY SYSTEM" shall mean the Federal Reserve/Treasury
book-entry system for receiving and delivering securities, its successors and
nominees.
4. "BUSINESS DAY" shall mean any day on which Custodian and relevant
Depositories are open for business.
5. "CERTIFICATE" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
Custodian, which is actually received by Custodian by letter or facsimile
transmission and signed on behalf of the Fund by an Authorized Person or a
person reasonably believed by Custodian to be an Authorized Person.
6. "COMPOSITE CURRENCY UNIT" shall mean the Euro or any other composite
currency unit consisting of the aggregate of specified amounts of specified
currencies, as such unit may be constituted from time to time.
7. "DEPOSITORY" shall include (a) the Book-Entry System, (b) the
Depository Trust Company, (c) any other clearing agency or securities depository
registered with the Securities and Exchange Commission identified to the Fund
from time to time, and (d) the respective successors and nominees of the
foregoing.
8. "FOREIGN DEPOSITORY" shall mean (a) Euroclear, (b) Clearstream
Banking, societe anonyme, (c) each Eligible Securities Depository as defined in
Rule 17f-7 under the Investment Company Act of 1940, as amended, identified to
the Fund from time to time, and (d) the respective successors and nominees of
the foregoing.
9. "INSTRUCTIONS" shall mean communications actually received by
Custodian by S.W.I.F.T., tested telex, letter, facsimile transmission, or other
method or system specified by Custodian as available for use in connection with
the services hereunder.
10."ORAL INSTRUCTIONS" shall mean verbal instructions received by
Custodian from an Authorized Person or from a person reasonably believed by
Custodian to be an Authorized Person.
11. "SERIES" shall mean the various portfolios, if any, of the Fund
listed on Schedule II hereto, and if none are listed references to Series shall
be references to the Fund.
12. "SECURITIES" shall include, without limitation, any common stock
and other equity securities, bonds, debentures and other debt securities, notes,
mortgages or other obligations, and any instruments representing rights to
receive, purchase, or subscribe for the same, or representing any other rights
or interests therein (whether represented by a certificate or held in a
Depository or by a Subcustodian).
13. "SUBCUSTODIAN" shall mean a bank (including any branch thereof) or
other financial institution (other than a Foreign Depository) located outside
the U.S. which is utilized by Custodian in connection with the purchase, sale or
custody of Securities hereunder and identified to the Fund from time to time,
and their respective successors and nominees.
ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, WARRANTIES, AND COVENANTS
1. (a) The Fund hereby appoints Custodian as custodian of all
Securities and cash at any time delivered to Custodian during the term of
this Agreement, and authorizes Custodian to hold Securities in registered
form in its name or the name of its nominees. Custodian hereby accepts
such appointment and agrees to establish and maintain one or more
securities accounts and cash accounts for each Series in which Custodian
will hold Securities and cash as provided herein. Custodian shall
maintain books and records segregating the assets of each Series from the
assets of any other Series. Such accounts (each, an "Account";
collectively, the "Accounts") shall be in the name of the Fund.
(b) Custodian may from time to time establish on its books and
records such sub-accounts within each Account as the Fund and Custodian
may agree upon (each a "Special Account"), and Custodian shall reflect
therein such assets as the Fund may specify in a Certificate or
Instructions.
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(c) Custodian may from time to time establish pursuant to a
written agreement with and for the benefit of a broker, dealer, future
commission merchant or other third party identified in a Certificate or
Instructions such accounts on such terms and conditions as the Fund and
Custodian shall agree, and Custodian shall transfer to such account such
Securities and money as the Fund may specify in a Certificate or
Instructions.
2. The Fund hereby represents and warrants, which representations
and warranties shall be continuing and shall be deemed to be reaffirmed
upon each delivery of a Certificate or each giving of Oral Instructions
or Instructions by the Fund, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement, and to perform
its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Fund, approved by a resolution of its board, constitutes
a valid and legally binding obligation of the Fund, enforceable in
accordance with its terms, and there is no statute, regulation, rule,
order or judgment binding on it, and no provision of its charter or
by-laws, nor of any mortgage, indenture, credit agreement or other
contract binding on it or affecting its property, which would prohibit
its execution or performance of this Agreement;
(c) It is conducting its business in substantial compliance
with all applicable laws and requirements, both state and federal, and
has obtained all regulatory licenses, approvals and consents necessary to
carry on its business as now conducted;
(d) It will not use the services provided by Custodian
hereunder in any manner that is, or will result in, a violation of any
law, rule or regulation applicable to the Fund;
(e) Its board or its foreign custody manager, as defined in
Rule 17f-5 under the Investment Company Act of 1940, as amended (the "'40
Act"), has determined that use of each Subcustodian (including any
Replacement Custodian) which Custodian is authorized to utilize in
accordance with Section 1(a) of Article III hereof satisfies the
applicable requirements of the '40 Act and Rule 17f-5 thereunder;
(f) The Fund or its investment adviser has determined that the
custody arrangements of each Foreign Depository provide reasonable
safeguards against the custody risks associated with maintaining assets
with such Foreign Depository within the meaning of Rule 17f-7 under the
'40 Act;
(g) It is fully informed of the protections and risks
associated with various methods of transmitting Instructions and Oral
Instructions and delivering Certificates to Custodian, shall, and shall
cause each Authorized Person, to safeguard and treat with extreme care
any user and authorization codes, passwords and/or authentication keys,
understands that there may be more secure methods of transmitting or
delivering the same than the methods selected by it, agrees that the
security procedures (if any) to be followed in connection therewith
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provide a commercially reasonable degree of protection in light of its
particular needs and circumstances, and acknowledges and agrees that
Instructions need not be reviewed by Custodian, may conclusively be
presumed by Custodian to have been given by person(s) duly authorized,
and may be acted upon as given;
(h) It shall manage its borrowings, including, without
limitation, any advance or overdraft (including any day-light overdraft)
in the Accounts, so that the aggregate of its total borrowings for each
Series does not exceed the amount such Series is permitted to borrow
under the '40 Act;
(i) Its transmission or giving of, and Custodian acting upon
and in reliance on, Certificates, Instructions, or Oral Instructions
pursuant to this Agreement shall at all times comply with the '40 Act;
(j) It shall impose and maintain restrictions on the
destinations to which cash may be disbursed by Instructions to ensure
that each disbursement is for a proper purpose; and
(k) It has the right to make the pledge and grant the security
interest and security entitlement to Custodian contained in Section 1 of
Article V hereof, free of any right of redemption or prior claim of any
other person or entity, such pledge and such grants shall have a first
priority subject to no setoffs, counterclaims, or other liens or grants
prior to or on a parity therewith, and it shall take such additional
steps as Custodian may require to assure such priority.
3. The Fund hereby covenants that it shall from time to time
complete and execute and deliver to Custodian upon Custodian's request a
Form FR U-1 (or successor form) whenever the Fund borrows from Custodian
any money to be used for the purchase or carrying of margin stock as
defined in Federal Reserve Regulation U.
ARTICLE III
CUSTODY AND RELATED SERVICES
1. (a) Subject to the terms hereof, the Fund hereby authorizes
Custodian to hold any Securities received by it from time to time for the
Fund's account. Custodian shall be entitled to utilize, subject to
subsection (c) of this Section 1, Depositories, Subcustodians, and,
subject to subsection (d) of this Section 1, Foreign Depositories, to the
extent possible in connection with its performance hereunder. Securities
and cash held in a Depository or Foreign Depository will be held subject
to the rules, terms and conditions of such entity. Securities and cash
held through Subcustodians shall be held subject to the terms and
conditions of Custodian's agreements with such Subcustodians.
Subcustodians may be authorized to hold Securities in Foreign
Depositories in which such Subcustodians participate. Unless otherwise
required by local law or practice or a particular subcustodian agreement,
Securities deposited with a Subcustodian, a Depositary or a Foreign
Depository will be held in a commingled account, in the name of
Custodian, holding only Securities held by Custodian as custodian for its
customers. Custodian shall identify on its books and records the
Securities and cash belonging to the Fund, whether held directly or
indirectly through Depositories, Foreign Depositories, or Subcustodians.
Custodian shall, directly or indirectly through Subcustodians,
Depositories, or Foreign Depositories, endeavor, to the extent feasible,
to hold Securities in the country or other jurisdiction in which the
principal trading market for such Securities is located, where such
Securities are to be presented for cancellation and/or payment and/or
registration, or where such Securities are acquired. Custodian at any
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time may cease utilizing any Subcustodian and/or may replace a
Subcustodian with a different Subcustodian (the "Replacement
Subcustodian"). In the event Custodian selects a Replacement
Subcustodian, Custodian shall not utilize such Replacement Subcustodian
until after the Fund's board or foreign custody manager has determined
that utilization of such Replacement Subcustodian satisfies the
requirements of the '40 Act and Rule 17f-5 thereunder.
(b) Unless Custodian has received a Certificate or
Instructions to the contrary, Custodian shall hold Securities indirectly
through a Subcustodian only if (i) the Securities are not subject to any
right, charge, security interest, lien or claim of any kind in favor of
such Subcustodian or its creditors or operators, including a receiver or
trustee in bankruptcy or similar authority, except for a claim of payment
for the safe custody or administration of Securities on behalf of the
Fund by such Subcustodian, and (ii) beneficial ownership of the
Securities is freely transferable without the payment of money or value
other than for safe custody or administration.
(c) With respect to each Depository, Custodian (i) shall
exercise due care in accordance with reasonable commercial standards in
discharging its duties as a securities intermediary to obtain and
thereafter maintain Securities or financial assets deposited or held in
such Depository, and (ii) will provide, promptly upon request by the
Fund, such reports as are available concerning the internal accounting
controls and financial strength of Custodian.
(d) With respect to each Foreign Depository, Custodian shall
exercise reasonable care, prudence, and diligence (i) to provide the Fund
with an analysis of the custody risks associated with maintaining assets
with the Foreign Depository, and (ii) to monitor such custody risks on a
continuing basis and promptly notify the Fund of any material change in
such risks. The Fund acknowledges and agrees that such analysis and
monitoring shall be made on the basis of, and limited by, information
gathered from Subcustodians or through publicly available information
otherwise obtained by Custodian, and shall not include any evaluation of
Country Risks. As used herein the term "Country Risks" shall mean with
respect to any Foreign Depository: (a) the financial infrastructure of
the country in which it is organized, (b) such country's prevailing
custody and settlement practices, (c) nationalization, expropriation or
other governmental actions, (d) such country's regulation of the banking
or securities industry, (e) currency controls, restrictions, devaluations
or fluctuations, and (f) market conditions which affect the order
execution of securities transactions or affect the value of securities.
2. Custodian shall furnish the Fund with an advice of daily
transactions (including a confirmation of each transfer of Securities)
and a monthly summary of all transfers to or from the Accounts.
3. With respect to all Securities held hereunder, Custodian shall,
unless otherwise instructed to the contrary:
(a) Receive all income and other payments and advise the Fund
as promptly as practicable of any such amounts due but not paid;
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(b) Present for payment and receive the amount paid upon all
Securities which may mature and advise the Fund as promptly as
practicable of any such amounts due but not paid;
(c) Forward to the Fund copies of all information or documents
that it may actually receive from an issuer of Securities which, in the
opinion of Custodian, are intended for the beneficial owner of
Securities;
(d) Execute, as custodian, any certificates of ownership,
affidavits, declarations or other certificates under any tax laws now or
hereafter in effect in connection with the collection of bond and note
coupons;
(e) Hold directly or through a Depository, a Foreign
Depository, or a Subcustodian all rights and similar Securities issued
with respect to any Securities credited to an Account hereunder; and
(f) Endorse for collection checks, drafts or other negotiable
instruments.
4. (a) Custodian shall notify the Fund of rights or discretionary
actions with respect to Securities held hereunder, and of the date or
dates by when such rights must be exercised or such action must be taken,
provided that Custodian has actually received, from the issuer or the
relevant Depository (with respect to Securities issued in the United
States) or from the relevant Subcustodian, Foreign Depository, or a
nationally or internationally recognized bond or corporate action service
to which Custodian subscribes, timely notice of such rights or
discretionary corporate action or of the date or dates such rights must
be exercised or such action must be taken. Absent actual receipt of such
notice, Custodian shall have no liability for failing to so notify the
Fund.
(b) Whenever Securities (including, but not limited to,
warrants, options, tenders, options to tender or non-mandatory puts or
calls) confer discretionary rights on the Fund or provide for
discretionary action or alternative courses of action by the Fund, the
Fund shall be responsible for making any decisions relating thereto and
for directing Custodian to act. In order for Custodian to act, it must
receive the Fund's Certificate or Instructions at Custodian's offices,
addressed as Custodian may from time to time request, not later than noon
(New York time) at least two (2) Business Days prior to the last
scheduled date to act with respect to such Securities (or such earlier
date or time as Custodian may specify to the Fund). Absent Custodian's
timely receipt of such Certificate or Instructions, Custodian shall not
be liable for failure to take any action relating to or to exercise any
rights conferred by such Securities.
5. All voting rights with respect to Securities, however registered,
shall be exercised by the Fund or its designee. Custodian will make
available to the Fund proxy voting services upon the request of, and for
the jurisdictions selected by, the Fund in accordance with terms and
conditions to be mutually agreed upon by Custodian and the Fund.
6. Custodian shall promptly advise the Fund upon Custodian's actual
receipt of notification of the partial redemption, partial payment or
other action affecting less than all Securities of the relevant class. If
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Custodian, any Subcustodian, any Depository, or any Foreign Depository
holds any Securities in which the Fund has an interest as part of a
fungible mass, Custodian, such Subcustodian, Depository, or Foreign
Depository may select the Securities to participate in such partial
redemption, partial payment or other action in any non-discriminatory
manner that it customarily uses to make such selection.
7. Custodian shall not under any circumstances accept bearer
interest coupons which have been stripped from United States federal,
state or local government or agency securities unless explicitly agreed
to by Custodian in writing.
8. The Fund shall be liable for all taxes, assessments, duties and
other governmental charges, including any interest or penalty with
respect thereto ("Taxes"), with respect to any cash or Securities held on
behalf of the Fund or any transaction related thereto. The Fund shall
indemnify Custodian and each Subcustodian for the amount of any Tax that
Custodian, any such Subcustodian or any other withholding agent is
required under applicable laws (whether by assessment or otherwise) to
pay on behalf of, or in respect of income earned by or payments or
distributions made to or for the account of the Fund (including any
payment of Tax required by reason of an earlier failure to withhold).
Custodian shall, or shall instruct the applicable Subcustodian or other
withholding agent to, withhold the amount of any Tax which is required to
be withheld under applicable law upon collection of any dividend,
interest or other distribution made with respect to any Security and any
proceeds or income from the sale, loan or other transfer of any Security.
In the event that Custodian or any Subcustodian is required under
applicable law to pay any Tax on behalf of the Fund, Custodian is hereby
authorized to withdraw cash from any cash account in the amount required
to pay such Tax and to use such cash, or to remit such cash to the
appropriate Subcustodian or other withholding agent, for the timely
payment of such Tax in the manner required by applicable law. If the
aggregate amount of cash in all cash accounts is not sufficient to pay
such Tax, Custodian shall promptly notify the Fund of the additional
amount of cash (in the appropriate currency) required, and the Fund shall
directly deposit such additional amount in the appropriate cash account
promptly after receipt of such notice, for use by Custodian as specified
herein. In the event that Custodian reasonably believes that Fund is
eligible, pursuant to applicable law or to the provisions of any tax
treaty, for a reduced rate of, or exemption from, any Tax which is
otherwise required to be withheld or paid on behalf of the Fund under any
applicable law, Custodian shall, or shall instruct the applicable
Subcustodian or withholding agent to, either withhold or pay such Tax at
such reduced rate or refrain from withholding or paying such Tax, as
appropriate; provided that Custodian shall have received from the Fund
all documentary evidence of residence or other qualification for such
reduced rate or exemption required to be received under such applicable
law or treaty. In the event that Custodian reasonably believes that a
reduced rate of, or exemption from, any Tax is obtainable only by means
of an application for refund, Custodian and the applicable Subcustodian
shall have no responsibility for the accuracy or validity of any forms or
documentation provided by the Fund to Custodian hereunder. The Fund
hereby agrees to indemnify and hold harmless Custodian and each
Subcustodian in respect of any liability arising from any
underwithholding or underpayment of any Tax which results from the
inaccuracy or invalidity of any such forms or other documentation, and
such obligation to indemnify shall be a continuing obligation of the
Fund, its successors and assigns notwithstanding the termination of this
Agreement.
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9. (a) For the purpose of settling Securities and foreign exchange
transactions, the Fund shall provide Custodian with sufficient
immediately available funds for all transactions by such time and date as
conditions in the relevant market dictate. As used herein, "sufficient
immediately available funds" shall mean either (i) sufficient cash
denominated in U.S. dollars to purchase the necessary foreign currency,
or (ii) sufficient applicable foreign currency, to settle the
transaction. Custodian shall provide the Fund with immediately available
funds each day which result from the actual settlement of all sale
transactions, based upon advices received by Custodian from
Subcustodians, Depositories, and Foreign Depositories. Such funds shall
be in U.S. dollars or such other currency as the Fund may specify to
Custodian.
(b) Any foreign exchange transaction effected by Custodian in
connection with this Agreement may be entered with Custodian or a
Custodian Affiliate acting as principal or otherwise through customary
banking channels. The Fund may issue a standing Certificate or
Instructions with respect to foreign exchange transactions, but Custodian
may establish rules or limitations concerning any foreign exchange
facility made available to the Fund. The Fund shall bear all risks of
investing in Securities or holding cash denominated in a foreign
currency.
(c) To the extent that Custodian has agreed to provide pricing
or other information services in connection with this Agreement,
Custodian is authorized to utilize any vendor (including brokers and
dealers of Securities) reasonably believed by Custodian to be reliable to
provide such information. The Fund understands that certain pricing
information with respect to complex financial instruments (e.g.,
derivatives) may be based on calculated amounts rather than actual market
transactions and may not reflect actual market values, and that the
variance between such calculated amounts and actual market values may or
may not be material. Where vendors do not provide information for
particular Securities or other property, an Authorized Person may advise
Custodian in a Certificate regarding the fair market value of, or provide
other information with respect to, such Securities or property as
determined by it in good faith. Custodian shall not be liable for any
loss, damage or expense incurred as a result of errors or omissions with
respect to any pricing or other information utilized by Custodian
hereunder.
10. Until such time as Custodian receives a certificate to the
contrary with respect to a particular Security, Custodian may release the
identity of the Fund to an issuer which requests such information
pursuant to the Shareholder Communications Act of 1985 for the specific
purpose of direct communications between such issuer and shareholder.
ARTICLE IV
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of Securities by the Fund,
the Fund shall deliver to Custodian a Certificate or Instructions, or
with respect to a purchase or sale of a Security generally required to be
settled on the same day the purchase or sale is made, Oral Instructions
specifying all information Custodian may reasonably request to settle
such purchase or sale. Custodian shall account for all purchases and
sales of Securities on the actual settlement date unless otherwise agreed
by Custodian.
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2. The Fund understands that when Custodian is instructed to deliver
Securities against payment, delivery of such Securities and receipt of
payment therefor may not be completed simultaneously. Notwithstanding any
provision in this Agreement to the contrary, settlements, payments and
deliveries of Securities may be effected by Custodian or any Subcustodian
in accordance with the customary or established securities trading or
securities processing practices and procedures in the jurisdiction in
which the transaction occurs, including, without limitation, delivery to
a purchaser or dealer therefor (or agent) against receipt with the
expectation of receiving later payment for such Securities. The Fund
assumes full responsibility for all risks, including, without limitation,
credit risks, involved in connection with such deliveries of Securities.
3. Custodian may, as a matter of bookkeeping convenience or by
separate agreement with the Fund, credit the Account with the proceeds
from the sale, redemption or other disposition of Securities or interest,
dividends or other distributions payable on Securities prior to its
actual receipt of final payment therefor. All such credits shall be
conditional until Custodian's actual receipt of final payment and may be
reversed by Custodian to the extent that final payment is not received.
Payment with respect to a transaction will not be "final" until Custodian
shall have received immediately available funds which under applicable
local law, rule and/or practice are irreversible and not subject to any
security interest, levy or other encumbrance, and which are specifically
applicable to such transaction.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
1. If Custodian should in its sole discretion advance funds on
behalf of any Series which results in an overdraft (including, without
limitation, any day-light overdraft) because the money held by Custodian
in an Account for such Series shall be insufficient to pay the total
amount payable upon a purchase of Securities specifically allocated to
such Series, as set forth in a Certificate, Instructions or Oral
Instructions, or if an overdraft arises in the separate account of a
Series for some other reason, including, without limitation, because of a
reversal of a conditional credit or the purchase of any currency, or if
the Fund is for any other reason indebted to Custodian with respect to a
Series, including any indebtedness to The Bank of New York under the
Fund's Cash Management and Related Services Agreement (except a borrowing
for investment or for temporary or emergency purposes using Securities as
collateral pursuant to a separate agreement and subject to the provisions
of Section 2 of this Article), such overdraft or indebtedness shall be
deemed to be a loan made by Custodian to the Fund for such Series payable
on demand and shall bear interest from the date incurred at a rate per
annum ordinarily charged by Custodian to its institutional customers, as
such rate may be adjusted from time to time. In addition, the Fund hereby
agrees that Custodian shall to the maximum extent permitted by law have a
continuing lien, security interest, and security entitlement in and to
any property, including, without limitation, any investment property or
any financial asset, of such Series at any time held by Custodian for the
benefit of such Series or in which such Series may have an interest which
is then in Custodian's possession or control or in possession or control
of any third party acting in Custodian's behalf. The Fund authorizes
Custodian, in its sole discretion, at any time to charge any such
overdraft or indebtedness together with interest due thereon against any
balance of account standing to such Series' credit on Custodian's books.
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2. If the Fund borrows money from any bank (including Custodian if
the borrowing is pursuant to a separate agreement) for investment or for
temporary or emergency purposes using Securities held by Custodian
hereunder as collateral for such borrowings, the Fund shall deliver to
Custodian a Certificate specifying with respect to each such borrowing:
(a) the Series to which such borrowing relates; (b) the name of the bank,
(c) the amount of the borrowing, (d) the time and date, if known, on
which the loan is to be entered into, (e) the total amount payable to the
Fund on the borrowing date, (f) the Securities to be delivered as
collateral for such loan, including the name of the issuer, the title and
the number of shares or the principal amount of any particular
Securities, and (g) a statement specifying whether such loan is for
investment purposes or for temporary or emergency purposes and that such
loan is in conformance with the '40 Act and the Fund's prospectus.
Custodian shall deliver on the borrowing date specified in a Certificate
the specified collateral against payment by the lending bank of the total
amount of the loan payable, provided that the same conforms to the total
amount payable as set forth in the Certificate. Custodian may, at the
option of the lending bank, keep such collateral in its possession, but
such collateral shall be subject to all rights therein given the lending
bank by virtue of any promissory note or loan agreement. Custodian shall
deliver such Securities as additional collateral as may be specified in a
Certificate to collateralize further any transaction described in this
Section. The Fund shall cause all Securities released from collateral
status to be returned directly to Custodian, and Custodian shall receive
from time to time such return of collateral as may be tendered to it. In
the event that the Fund fails to specify in a Certificate the Series, the
name of the issuer, the title and number of shares or the principal
amount of any particular Securities to be delivered as collateral by
Custodian, Custodian shall not be under any obligation to deliver any
Securities.
ARTICLE VI
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any shares issued by the Fund
("Shares") it shall deliver to Custodian a Certificate or Instructions
specifying the amount of money and/or Securities to be received by
Custodian for the sale of such Shares and specifically allocated to an
Account for such Series.
2. Upon receipt of such money, Custodian shall credit such money to
an Account in the name of the Series for which such money was received.
3. Except as provided hereinafter, whenever the Fund desires
Custodian to make payment out of the money held by Custodian hereunder in
connection with a redemption of any Shares, it shall furnish to Custodian
a Certificate or Instructions specifying the total amount to be paid for
such Shares. Custodian shall make payment of such total amount to the
transfer agent specified in such Certificate or Instructions out of the
money held in an Account of the appropriate Series.
4. Notwithstanding the above provisions regarding the redemption of
any Shares, whenever any Shares are redeemed pursuant to any check
redemption privilege which may from time to time be offered by the Fund,
Custodian, unless otherwise instructed by a Certificate or Instructions,
shall, upon presentment of such check, charge the amount thereof against
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the money held in the Account of the Series of the Shares being redeemed,
provided, that if the Fund or its agent timely advises Custodian that
such check is not to be honored, Custodian shall return such check
unpaid.
ARTICLE VII
PAYMENT OF DIVIDENDS OR
DISTRIBUTIONS
1. Whenever the Fund shall determine to pay a dividend or
distribution on Shares it shall furnish to Custodian Instructions or a
Certificate setting forth with respect to the Series specified therein
the date of the declaration of such dividend or distribution, the total
amount payable, and the payment date.
2. Upon the payment date specified in such Instructions or
Certificate, Custodian shall pay out of the money held for the account of
such Series the total amount payable to the dividend agent of the Fund
specified therein.
ARTICLE VIII
CONCERNING CUSTODIAN
1. (a) Except as otherwise expressly provided herein, Custodian
shall not be liable for any costs, expenses, damages, liabilities or
claims, including attorneys' and accountants' fees (collectively,
"Losses"), incurred by or asserted against the Fund, except those Losses
arising out of Custodian's own negligence or willful misconduct.
Custodian shall have no liability whatsoever for the action or inaction
of any Depositories or of any Foreign Depositories, except in each case
to the extent such action or inaction is a direct result of the
Custodian's failure to fulfill its duties hereunder. With respect to any
Losses incurred by the Fund as a result of the acts or any failures to
act by any Subcustodian (other than a Custodian Affiliate), Custodian
shall take appropriate action to recover such Losses from such
Subcustodian; and Custodian's sole responsibility and liability to the
Fund shall be limited to amounts so received from such Subcustodian
(exclusive of costs and expenses incurred by Custodian). In no event
shall Custodian be liable to the Fund or any third party for special,
indirect or consequential damages, or lost profits or loss of business,
arising in connection with this Agreement, nor shall Custodian or any
Subcustodian be liable: (i) for acting in accordance with any Certificate
or Oral Instructions actually received by Custodian and reasonably
believed by Custodian to be given by an Authorized Person; (ii) for
acting in accordance with Instructions without reviewing the same; (iii)
for conclusively presuming that all Instructions are given only by
person(s) duly authorized; (iv) for conclusively presuming that all
disbursements of cash directed by the Fund, whether by a Certificate, an
Oral Instruction, or an Instruction, are in accordance with Section 2(i)
of Article II hereof; (v) for holding property in any particular country,
including, but not limited to, Losses resulting from nationalization,
expropriation or other governmental actions; regulation of the banking or
securities industry; exchange or currency controls or restrictions,
devaluations or fluctuations; availability of cash or Securities or
market conditions which prevent the transfer of property or execution of
Securities transactions or affect the value of property; (vi) for any
Losses due to forces beyond the control of Custodian, including without
limitation strikes, work stoppages, acts of war or terrorism,
insurrection, revolution, nuclear or natural catastrophes or acts of God,
- 11 -
or interruptions, loss or malfunctions of utilities, communications or
computer (software and hardware) services; (vii) for the insolvency of
any Subcustodian (other than a Custodian Affiliate), any Depository, or,
except to the extent such action or inaction is a direct result of the
Custodian's failure to fulfill its duties hereunder, any Foreign
Depository; or (viii) for any Losses arising from the applicability of
any law or regulation now or hereafter in effect, or from the occurrence
of any event, including, without limitation, implementation or adoption
of any rules or procedures of a Foreign Depository, which may affect,
limit, prevent or impose costs or burdens on, the transferability,
convertibility, or availability of any currency or Composite Currency
Unit in any country or on the transfer of any Securities, and in no event
shall Custodian be obligated to substitute another currency for a
currency (including a currency that is a component of a Composite
Currency Unit) whose transferability, convertibility or availability has
been affected, limited, or prevented by such law, regulation or event,
and to the extent that any such law, regulation or event imposes a cost
or charge upon Custodian in relation to the transferability,
convertibility, or availability of any cash currency or Composite
Currency Unit, such cost or charge shall be for the account of the Fund,
and Custodian may treat any account denominated in an affected currency
as a group of separate accounts denominated in the relevant component
currencies or (ix) for any action or inaction taken or omitted to by
Custodian in good faith in accordance with the advice or opinion of
counsel for the Fund or its own outside counsel.
(b) Custodian may enter into subcontracts, agreements and
understandings with any Custodian Affiliate, whenever and on such terms
and conditions as it deems necessary or appropriate to perform its
services hereunder. No such subcontract, agreement or understanding shall
discharge Custodian from its obligations hereunder.
(c) The Fund agrees to indemnify Custodian and hold Custodian
harmless from and against any and all Losses sustained or incurred by or
asserted against Custodian by reason of or as a result of any action or
inaction, or arising out of Custodian's performance hereunder, including
reasonable fees and expenses of counsel incurred by Custodian in a
successful defense of claims by the Fund; provided however, that the Fund
shall not indemnify Custodian for those Losses arising out of Custodian's
own negligence or willful misconduct. This indemnity shall be a
continuing obligation of the Fund, its successors and assigns,
notwithstanding the termination of this Agreement.
2. Without limiting the generality of the foregoing, Custodian shall
be under no obligation to inquire into, and shall not be liable for:
(a) Any Losses incurred by the Fund or any other person as a
result of the receipt or acceptance of fraudulent, forged or invalid
Securities, or Securities which are otherwise not freely transferable or
deliverable without encumbrance in any relevant market;
(b) The validity of the issue of any Securities purchased,
sold, or written by or for the Fund, the legality of the purchase, sale
or writing thereof, or the propriety of the amount paid or received
therefor;
(c) The legality of the sale or redemption of any Shares, or
the propriety of the amount to be received or paid therefor;
- 12 -
(d) The legality of the declaration or payment of any dividend
or distribution by the Fund;
(e) The legality of any borrowing by the Fund;
(f) The legality of any loan of portfolio Securities, nor
shall Custodian be under any duty or obligation to see to it that any
cash or collateral delivered to it by a broker, dealer or financial
institution or held by it at any time as a result of such loan of
portfolio Securities is adequate security for the Fund against any loss
it might sustain as a result of such loan, which duty or obligation shall
be the sole responsibility of the Fund. In addition, Custodian shall be
under no duty or obligation to see that any broker, dealer or financial
institution to which portfolio Securities of the Fund are lent makes
payment to it of any dividends or interest which are payable to or for
the account of the Fund during the period of such loan or at the
termination of such loan, provided, however that Custodian shall promptly
notify the Fund in the event that such dividends or interest are not paid
and received when due;
(g) The sufficiency or value of any amounts of money and/or
Securities held in any Special Account in connection with transactions by
the Fund; whether any broker, dealer, futures commission merchant or
clearing member makes payment to the Fund of any variation margin payment
or similar payment which the Fund may be entitled to receive from such
broker, dealer, futures commission merchant or clearing member, or
whether any payment received by Custodian from any broker, dealer,
futures commission merchant or clearing member is the amount the Fund is
entitled to receive, or to notify the Fund of Custodian's receipt or
non-receipt of any such payment; or
(h) Whether any Securities at any time delivered to, or held
by it or by any Subcustodian, for the account of the Fund and
specifically allocated to a Series are such as properly may be held by
the Fund or such Series under the provisions of its then current
prospectus and statement of additional information, or to ascertain
whether any transactions by the Fund, whether or not involving Custodian,
are such transactions as may properly be engaged in by the Fund.
3. Custodian may, with respect to questions of law specifically
regarding an Account, obtain the advice of counsel and shall be fully
protected with respect to anything done or omitted by it in good faith in
conformity with such advice.
4. Custodian shall be under no obligation to take action to collect
any amount payable on Securities in default, or if payment is refused
after due demand and presentment.
5. Custodian shall have no duty or responsibility to inquire into,
make recommendations, supervise, or determine the suitability of any
transactions affecting any Account.
6. The Fund shall pay to Custodian the fees and charges as may be
specifically agreed upon from time to time and such other fees and
charges at Custodian's standard rates for such services as may be
applicable. The Fund shall reimburse Custodian for all costs associated
- 13 -
with the conversion of the Fund's Securities hereunder and the transfer
of Securities and records kept in connection with this Agreement. The
Fund shall also reimburse Custodian for out-of-pocket expenses which are
a normal incident of the services provided hereunder.
7. Custodian has the right to debit any cash account for any amount
payable by the Fund in connection with any and all obligations of the
Fund to Custodian. In addition to the rights of Custodian under
applicable law and other agreements, at any time when the Fund shall not
have honored any of its obligations to Custodian, Custodian shall have
the right without notice to the Fund to retain or set-off, against such
obligations of the Fund, any Securities or cash Custodian or a Custodian
Affiliate may directly or indirectly hold for the account of the Fund,
and any obligations (whether matured or unmatured) that Custodian or a
Custodian Affiliate may have to the Fund in any currency or Composite
Currency Unit. Any such asset of, or obligation to, the Fund may be
transferred to Custodian and any Custodian Affiliate in order to effect
the above rights.
8. The Fund agrees to forward to Custodian a Certificate or
Instructions confirming Oral Instructions by the close of business of the
same day that such Oral Instructions are given to Custodian. The Fund
agrees that the fact that such confirming Certificate or Instructions are
not received or that a contrary Certificate or contrary Instructions are
received by Custodian shall in no way affect the validity or
enforceability of transactions authorized by such Oral Instructions and
effected by Custodian. If the Fund elects to transmit Instructions
through an on-line communications system offered by Custodian, the Fund's
use thereof shall be subject to the Terms and Conditions attached as
Appendix I hereto. If Custodian receives Instructions which appear on
their face to have been transmitted by an Authorized Person via (i)
computer facsimile, email, the Internet or other insecure electronic
method, or (ii) secure electronic transmission containing applicable
authorization codes, passwords and/or authentication keys, the Fund
understands and agrees that Custodian cannot determine the identity of
the actual sender of such Instructions and that Custodian shall
conclusively presume that such Written Instructions have been sent by an
Authorized Person, and the Fund shall be responsible for ensuring that
only Authorized Persons transmit such Instructions to Custodian. If the
Fund elects (with Custodian's prior consent) to transmit Instructions
through an on-line communications service owned or operated by a third
party, the Fund agrees that Custodian shall not be responsible or liable
for the reliability or availability of any such service.
9. The books and records pertaining to the Fund which are in
possession of Custodian shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the '40 Act and
the rules thereunder. The Fund, or its authorized representatives, shall
have access to such books and records during Custodian's normal business
hours. Upon the reasonable request of the Fund, copies of any such books
and records shall be provided by Custodian to the Fund or its authorized
representative. Upon the reasonable request of the Fund, Custodian shall
provide in hard copy or on computer disc any records included in any such
delivery which are maintained by Custodian on a computer disc, or are
similarly maintained.
10. It is understood that Custodian is authorized to supply any
information regarding the Accounts which is required by any law,
regulation or rule now or hereafter in effect. The Custodian shall
provide the Fund with any report obtained by the Custodian on the system
- 14 -
of internal accounting control of a Depository, and with such reports on
its own system of internal accounting control as the Fund may reasonably
request from time to time.
11. Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in
this Agreement, and no covenant or obligation shall be implied against
Custodian in connection with this Agreement.
12. From time to time as requested by the Fund, the Custodian
shall provide to the Fund such certifications and sub-certifications, in
the form agreed to by the Fund and the Custodian, with respect to Form
N-Qs, Form N-CSRs, compliance policies and procedures under Rule 38a-1
under the Investment Company Act of 1940, as amended, and such other
matters that may be reasonably requested by the Fund or the Fund's Chief
Compliance Officer from time to time. In addition, the Custodian will,
from time to time, provide a written assessment of its compliance program
in conformity with current industry standards that is reasonably
acceptable to the Fund to enable the Fund to fulfill its obligations
under Rule 38a-1 of the Investment Company Act of 1940, as amended.
ARTICLE IX
TERMINATION
1. Either of the parties hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date
of giving of such notice. In the event such notice is given by the Fund,
it shall be accompanied by a copy of a resolution of the board of the
Fund, certified by the Secretary or any Assistant Secretary, electing to
terminate this Agreement and designating a successor custodian or
custodians, each of which shall be a bank or trust company having not
less than $2,000,000 aggregate capital, surplus and undivided profits. In
the event such notice is given by Custodian, the Fund shall, on or before
the termination date, deliver to Custodian a copy of a resolution of the
board of the Fund, certified by the Secretary or any Assistant Secretary,
designating a successor custodian or custodians. In the absence of such
designation by the Fund, Custodian may designate a successor custodian
which shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. Upon the date set forth
in such notice this Agreement shall terminate, and Custodian shall upon
receipt of a notice of acceptance by the successor custodian on that date
deliver directly to the successor custodian all Securities and money then
owned by the Fund and held by it as Custodian, after deducting all fees,
expenses and other amounts for the payment or reimbursement of which it
shall then be entitled.
2. If a successor custodian is not designated by the Fund or
Custodian in accordance with the preceding Section, the Fund shall upon
the date specified in the notice of termination of this Agreement and
upon the delivery by Custodian of all Securities (other than Securities
which cannot be delivered to the Fund) and money then owned by the Fund
be deemed to be its own custodian and Custodian shall thereby be relieved
- 15 -
of all duties and responsibilities pursuant to this Agreement, other than
the duty with respect to Securities which cannot be delivered to the Fund
to hold such Securities hereunder in accordance with this Agreement.
ARTICLE X
MISCELLANEOUS
1. Each party shall keep confidential any information relating to
the other party's business ("Confidential Information"). Confidential
Information shall include (a) any data or information that is
competitively sensitive material, and not generally known to the public,
including, but not limited to, information about product plans, marketing
strategies, finances, operations, customer relationships, customer
profiles, customer lists, sales estimates, business plans, and internal
performance results relating to the past, present or future business
activities of the Fund or Custodian and their respective subsidiaries and
affiliated companies; (b) any scientific or technical information,
design, process, procedure, formula, or improvement that is commercially
valuable and secret in the sense that its confidentiality affords the
Fund or Custodian a competitive advantage over its competitors; (c) all
confidential or proprietary concepts, documentation, reports, data,
specifications, computer software, source code, object code, flow charts,
databases, inventions, know-how, and trade secrets, whether or not
patentable or copyrightable; and (d) anything designated as confidential.
Notwithstanding the foregoing, information shall not be Confidential
Information and shall not be subject to such confidentiality obligations
if: (a) it is necessary for Custodian to release such information in
connection with the provision of services under this Agreement; (b) it is
already known to the receiving party at the time it is obtained; (c) it
is or becomes publicly known or available through no wrongful act of the
receiving party; (d) it is rightfully received from a third party who, to
the best of the receiving party's knowledge, is not under a duty of
confidentiality; (e) it is released by the protected party to a third
party without restriction; (f) it is requested or required to be
disclosed by the receiving party pursuant to a court order, subpoena,
governmental or regulatory agency request or law (provided the receiving
party will provide the other party written notice of the same, to the
extent such notice is permitted); (g) it is relevant to the defense of
any claim or cause of action asserted against the receiving party; (h) it
has been or is independently developed or obtained by the receiving
party; or (i) it is necessary for Custodian to release such information
to Custodian's internal or external accountants or legal counsel who are
subject to a duty of confidentiality. Custodian acknowledges and agrees
that in connection with its services under this Agreement it receives
non-public confidential portfolio holdings information ("Portfolio
Information") with respect to the Fund. Custodian agrees that, subject to
the foregoing provisions of and the exceptions set forth in this Article
X Section 1 (other than the exception set forth above in this Article X
Section 1 as sub-item (a), which exception set forth in sub-item (a)
shall not be applicable to the Fund's Portfolio Information), Custodian
will keep confidential the Fund's Portfolio Information and will not
disclose the Fund's Portfolio Information other than pursuant to a
written Certificate or Instructions; provided that without the need for
such a written Certification or Instructions and notwithstanding any
other provision of this Article X Section 1 to the contrary, the Fund's
Portfolio Information may be disclosed to third party pricing services
which are engaged by Custodian in connection with the provision of
services under this Agreement and which shall be subject to a duty of
confidentiality with respect to such Portfolio Information.
- 16 -
2. The Fund agrees to furnish to Custodian a new Certificate of
Authorized Persons in the event of any change in the then present
Authorized Persons. Until such new Certificate is received, Custodian
shall be fully protected in acting upon Certificates or Oral Instructions
of such present Authorized Persons.
3. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to Custodian, shall be sufficiently given
if addressed to Custodian and received by it at its offices at Xxx Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as Custodian may
from time to time designate in writing.
4. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Fund shall be sufficiently given if
addressed to the Fund and received by it at its offices at ***, or at
such other place as the Fund may from time to time designate in writing.
5. Each and every right granted to either party hereunder or under
any other document delivered hereunder or in connection herewith, or
allowed it by law or equity, shall be cumulative and may be exercised
from time to time. No failure on the part of either party to exercise,
and no delay in exercising, any right will operate as a waiver thereof,
nor will any single or partial exercise by either party of any right
preclude any other or future exercise thereof or the exercise of any
other right.
6. In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any exclusive jurisdiction, the
validity, legality and enforceability of the remaining provisions shall
not in any way be affected thereby. This Agreement may not be amended or
modified in any manner except by a written agreement executed by both
parties, except that any amendment to the Schedule I hereto need be
signed only by the Fund and any amendment to Appendix I hereto need be
signed only by Custodian. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable
by either party without the written consent of the other.
7. This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to conflicts of
laws principles thereof. The Fund and Custodian hereby consent to the
jurisdiction of a state or federal court situated in New York City, New
York in connection with any dispute arising hereunder. The Fund hereby
irrevocably waives, to the fullest extent permitted by applicable law,
any objection which it may now or hereafter have to the laying of venue
of any such proceeding brought in such a court and any claim that such
proceeding brought in such a court has been brought in an inconvenient
forum. The Fund and Custodian each hereby irrevocably waives any and all
rights to trial by jury in any legal proceeding arising out of or
relating to this Agreement.
8. It is expressly acknowledged and agreed that the obligations of
the Fund hereunder shall not be binding upon any of the shareholders,
Trustees, officers, employees or agents of the Fund personally, but shall
bind only the trust property of the Fund as provided in the Fund's
Declaration of Trust. The execution and delivery of this Agreement have
been authorized by the Trustees of the Fund and signed by an officer of
- 17 -
the Fund, acting as such, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any
of them personally, but shall bind only the trust property of the Fund as
provided in the Fund's Declaration of Trust.
9. The Fund hereby acknowledges that Custodian is subject to federal
laws, including the Customer Identification Program (CIP) requirements
under the USA PATRIOT Act and its implementing regulations, pursuant to
which Custodian must obtain, verify and record information that allows
Custodian to identify the Fund. Accordingly, prior to opening an Account
hereunder Custodian will ask the Fund to provide certain information
including, but not limited to, the Fund's name, physical address, tax
identification number and other information that will help Custodian to
identify and verify the Fund's identity such as organizational documents,
certificate of good standing, license to do business, or other pertinent
identifying information. The Fund agrees that Custodian cannot open an
Account hereunder unless and until Custodian verifies the Fund's identity
in accordance with its CIP.
10. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
- 18 -
IN WITNESS WHEREOF, the Fund and Custodian have caused this
Agreement to be executed by their respective officers, thereunto duly
authorized, as of the day and year first above written.
FIRST TRUST VARIABLE INSURANCE TRUST
By: /s/ Xxxx X. Xxxxxxx
----------------------------
Title: President
Tax Identification No:
THE BANK OF NEW YORK MELLON
By:/s/ Xxxxxxx X. Xxxxxxx
-------------------------
Title: Managing Director
- 19 -
SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS
(THE FUND - ORAL AND WRITTEN INSTRUCTIONS)
The undersigned hereby certifies that he/she is the duly elected and
acting ________________________ of First Trust Variable Insurance Trust
(the "Fund"), and further certifies that the following officers or
employees of the Fund have been duly authorized in conformity with the
Fund's Declaration of Trust and By-Laws to deliver Certificates and Oral
Instructions to The Bank of New York ("Custodian") pursuant to the
Custody Agreement between the Fund and Custodian dated _______________,
and that the signatures appearing opposite their names are true and
correct:
_____________________ _____________________ _____________________
Name Title Signature
_____________________ _____________________ _____________________
Name Title Signature
_____________________ _____________________ _____________________
Name Title Signature
_____________________ _____________________ _____________________
Name Title Signature
_____________________ _____________________ _____________________
Name Title Signature
_____________________ _____________________ _____________________
Name Title Signature
_____________________ _____________________ _____________________
Name Title Signature
This certificate supersedes any certificate of Authorized Persons
you may currently have on file.
[seal] By:
----------------------------------------
Title:
Date:
SCHEDULE II
SERIES
First Trust/Dow Xxxxx Dividend & Income Allocation Portfolio
APPENDIX I
ELECTRONIC SERVICES TERMS AND CONDITIONS
1. LICENSE; USE. (a) This Appendix I shall govern the Fund's use of
electronic communications, information delivery, portfolio management and
banking services, that The Bank of New York Mellon and its affiliates
("Custodian") may provide to the Fund, such as The Bank of New York
Inform (TM) and The Bank of New York CA$H-Register Plus(R), and any
computer software, proprietary data and documentation provided by
Custodian to the Fund in connection therewith (collectively, the
"ELECTRONIC SERVICES"). In the event of any conflict between the terms of
this Appendix I and the main body of this Agreement with respect to the
Fund's use of the Electronic Services, the terms of this Appendix I shall
control.
(b) Custodian grants to the Fund a personal, nontransferable and
nonexclusive license to use the Electronic Services to which the Fund
subscribes solely for the purpose of transmitting instructions and
information ("Written Instructions"), obtaining reports, analyses and
statements and other information and data, making inquiries and otherwise
communicating with Custodian in connection with the Fund's relationship
with Custodian. The Fund shall use the Electronic Services solely for its
own internal and proper business purposes and not in the operation of a
service bureau. Except as set forth herein, no license or right of any
kind is granted to with respect to the Electronic Services. The Fund
acknowledges that Custodian and its suppliers retain and have title and
exclusive proprietary rights to the Electronic Services, including any
trade secrets or other ideas, concepts, know-how, methodologies, and
information incorporated therein and the exclusive rights to any
copyrights, trade dress, look and feel, trademarks and patents (including
registrations and applications for registration of either), and other
legal protections available in respect thereof. The Fund further
acknowledges that all or a part of the Electronic Services may be
copyrighted or trademarked (or a registration or claim made therefor) by
Custodian or its suppliers. The Fund shall not take any action with
respect to the Electronic Services inconsistent with the foregoing
acknowledgments, nor shall the Fund attempt to decompile, reverse
engineer or modify the Electronic Services. The Fund may not copy,
distribute, sell, lease or provide, directly or indirectly, the
Electronic Services or any portion thereof to any other person or entity
without Custodian's prior written consent. The Fund may not remove any
statutory copyright notice or other notice included in the Electronic
Services. The Fund shall reproduce any such notice on any reproduction of
any portion of the Electronic Services and shall add any statutory
copyright notice or other notice upon Custodian's request.
(c) Portions of the Electronic Services may contain, deliver or rely
on data supplied by third parties ("Third Party Data"), such as pricing
data and indicative data, and services supplied by third parties ("Third
Party Services") such as analytic and accounting services. Third Party
Data and Third Party Services supplied hereunder are obtained from
sources that Custodian believes to be reliable but are provided without
any independent investigation by Custodian. Custodian and its suppliers
do not represent or warrant that the Third Party Data or Third Party
Services are correct, complete or current. Third Party Data and Third
Party Services are proprietary to their suppliers, are provided solely
for the Fund's internal use, and may not be reused, disseminated or
redistributed in any form. The Fund shall not use any Third Party Data in
any manner that would act as a substitute for obtaining a license for the
data directly from the supplier. Third Party Data and Third Party
Services should not be used in making any investment decision. CUSTODIAN
AND ITS SUPPLIERS ARE NOT RESPONSIBLE FOR ANY RESULTS OBTAINED FROM THE
USE OF OR RELIANCE UPON THIRD PARTY DATA OR THIRD PARTY SERVICES.
Custodian's suppliers of Third Party Data and Services are intended third
party beneficiaries of this Section 1(c) and Section 5 below.
(d) The Fund understands and agrees that any links in the Electronic
Services to Internet sites may be to sites sponsored and maintained by
third parties. Custodian make no guarantees, representations or
warranties concerning the information contained in any third party site
(including without limitation that such information is correct, current,
complete or free of viruses or other contamination), or any products or
services sold through third party sites. All such links to third party
Internet sites are provided solely as a convenience to the Fund and the
Fund accesses and uses such sites at its own risk. A link in the
Electronic Services to a third party site does not constitute Custodian's
endorsement, authorisation or sponsorship of such site or any products
and services available from such site.
2. EQUIPMENT. The Fund shall obtain and maintain at its own cost and
expense all equipment and services, including but not limited to
communications services, necessary for it to utilize and obtain access to
the Electronic Services, and Custodian shall not be responsible for the
reliability or availability of any such equipment or services.
3. PROPRIETARY INFORMATION. The Electronic Services, and any
proprietary data (including Third Party Data), processes, software,
information and documentation made available to the Fund (other than
which are or become part of the public domain or are legally required to
be made available to the public) (collectively, the "Information"), are
the exclusive and confidential property of Custodian or its suppliers.
However, for the avoidance of doubt, reports generated by the Fund
containing information relating to its account(s) (except for Third Party
Data contained therein) are not deemed to be within the meaning of the
term "Information." the Fund shall keep the Information confidential by
using the same care and discretion that the Fund uses with respect to its
own confidential property and trade secrets, but not less than reasonable
care. Upon termination of the Agreement or the licenses granted herein
for any reason, the Fund shall return to Custodian any and all copies of
the Information which are in its possession or under its control (except
that the Fund may retain reports containing Third Party Data, provided
that such Third Party Data remains subject to the provisions of this
Appendix). The provisions of this Section 3 shall not affect the
copyright status of any of the Information which may be copyrighted and
shall apply to all information whether or not copyrighted.
4. MODIFICATIONS. Custodian reserves the right to modify the
Electronic Services from time to time. The Fund agrees not to modify or
attempt to modify the Electronic Services without Custodian's prior
written consent. The Fund acknowledges that any modifications to the
Electronic Services, whether by the Fund or Custodian and whether with or
without Custodian's consent, shall become the property of Custodian.
5. NO REPRESENTATIONS OR WARRANTIES; LIMITATION OF LIABILITY.
CUSTODIAN AND ITS MANUFACTURERS AND SUPPLIERS MAKE NO WARRANTIES OR
REPRESENTATIONS WITH RESPECT TO THE ELECTRONIC SERVICES OR ANY THIRD
PARTY DATA OR THIRD PARTY SERVICES, EXPRESS OR IMPLIED, IN FACT OR IN
LAW, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE. THE FUND
ACKNOWLEDGES THAT THE ELECTRONIC SERVICES, THIRD PARTY DATA AND THIRD
PARTY SERVICES ARE PROVIDED "AS IS." TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR
ANY DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL, WHICH
CUSTOMER MAY INCUR IN CONNECTION WITH THE ELECTRONIC SERVICES, THIRD
PARTY DATA OR THIRD PARTY SERVICES, EVEN IF CUSTODIAN OR SUCH SUPPLIER
KNEW OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL CUSTODIAN OR
ANY SUPPLIER BE LIABLE FOR ACTS OF GOD, MACHINE OR COMPUTER BREAKDOWN OR
MALFUNCTION, INTERRUPTION OR MALFUNCTION OF COMMUNICATION FACILITIES,
LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR CAUSE BEYOND THEIR
REASONABLE CONTROL.
6. SECURITY; RELIANCE; UNAUTHORIZED USE; FUNDS TRANSFERS. Custodian
will establish security procedures to be followed in connection with the
use of the Electronic Services, and the Fund agrees to comply with the
security procedures. The Fund understands and agrees that the security
procedures are intended to determine whether instructions received by
Custodian through the Electronic Services are authorized but are not
(unless otherwise specified in writing) intended to detect any errors
contained in such instructions. The Fund will cause all persons utilizing
the Electronic Services to treat any user and authorization codes,
passwords, authentication keys and other security devices with the
highest degree of care and confidentiality. Upon termination of the
Fund's use of the Electronic Services, the Fund shall return to Custodian
any security devices (e.g., token cards) provided by Custodian. Custodian
is hereby irrevocably authorized to comply with and rely upon on Written
Instructions and other communications, whether or not authorized,
received by it through the Electronic Services. The Fund acknowledges
that it has sole responsibility for ensuring that only Authorized Persons
use the Electronic Services and that to the fullest extent permitted by
applicable law Custodian shall not be responsible nor liable for any
unauthorized use thereof or for any losses sustained by the Fund arising
from or in connection with the use of the Electronic Services or
Custodian's reliance upon and compliance with Written Instructions and
other communications received through the Electronic Services. With
respect to instructions for a transfer of funds issued through the
Electronic Services, when instructed to credit or pay a party by both
name and a unique numeric or alpha-numeric identifier (e.g. ABA number or
account number), the Custodian, its affiliates, and any other bank
participating in the funds transfer, may rely solely on the unique
identifier, even if it identifies a party different than the party named.
Such reliance on a unique identifier shall apply to beneficiaries named
in such instructions as well as any financial institution which is
designated in such instructions to act as an intermediary in a funds
transfer. It is understood and agreed that unless otherwise specifically
provided herein, and to the extent permitted by applicable law, the
parties hereto shall be bound by the rules of any funds transfer system
utilized to effect a funds transfer hereunder.
7. ACKNOWLEDGMENTS. Custodian shall acknowledge through the
Electronic Services its receipt of each Written Instruction communicated
through the Electronic Services, and in the absence of such
acknowledgment Custodian shall not be liable for any failure to act in
accordance with such Written Instruction and the Fund may not claim that
such Written Instruction was received by Custodian. Custodian may in its
discretion decline to act upon any instructions or communications that
are insufficient or incomplete or are not received by Custodian in
sufficient time for Custodian to act upon, or in accordance with such
instructions or communications.
8. VIRUSES. The Fund agrees to use reasonable efforts to prevent the
transmission through the Electronic Services of any software or file
which contains any viruses, worms, harmful component or corrupted data
and agrees not to use any device, software, or routine to interfere or
attempt to interfere with the proper working of the Electronic Services.
9. ENCRYPTION. The Fund acknowledges and agrees that encryption may
not be available for every communication through the Electronic Services,
or for all data. The Fund agrees that Custodian may deactivate any
encryption features at any time, without notice or liability to the Fund,
for the purpose of maintaining, repairing or troubleshooting its systems.
10. ON-LINE INQUIRY AND MODIFICATION OF RECORDS. In connection with
the Fund's use of the Electronic Services, Custodian may, at the Fund's
request, permit the Fund to enter data directly into a Custodian database
for the purpose of modifying certain information maintained by
Custodian's systems, including, but not limited to, change of address
information. To the extent that the Fund is granted such access, the Fund
agrees to indemnify and hold Custodian harmless from all loss, liability,
cost, damage and expense (including attorney's fees and expenses) to
which Custodian may be subjected or which may be incurred in connection
with any claim which may arise out of or as a result of changes to
Custodian database records initiated by the Fund.
11. AGENTS. the Fund may, on advance written notice to the
Custodian, permit its agents and contractors ("Agents") to access and use
the Electronic Services on the Fund's behalf, except that the Custodian
reserves the right to prohibit the Fund's use of any particular Agent for
any reason. The Fund shall require its Agent(s) to agree in writing to be
bound by the terms of the Agreement, and the Fund shall be liable and
responsible for any act or omission of such Agent in the same manner, and
to the same extent, as though such act or omission were that of the Fund.
Each submission of a Written Instruction or other communication by the
Agent through the Electronic Services shall constitute a representation
and warranty by the Fund that the Agent continues to be duly authorized
by the Fund to so act on its behalf and the Custodian may rely on the
representations and warranties made herein in complying with such Written
Instruction or communication. Any Written Instruction or other
communication through the Electronic Services by an Agent shall be deemed
that of the Fund, and the Fund shall be bound thereby whether or not
authorized. The Fund may, subject to the terms of this Agreement and upon
advance written notice to the Bank, provide a copy of the Electronic
Service user manuals to its Agent if the Agent requires such copies to
use the Electronic Services on the Fund's behalf. Upon cessation of any
such Agent's services, the Fund shall promptly terminate such Agent's
access to the Electronic Services, retrieve from the Agent any copies of
the manuals and destroy them, and retrieve from the Agent any token cards
or other security devices provided by Custodian and return them to
Custodian.