EXHIBIT 8.8
FOREIGN CUSTODY MANAGER DELEGATION AGREEMENT
AGREEMENT made as of this 1st day of June 1998 between Xxxxxxxx Xxxxxxxxx
Mutual Funds, a management investment company registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940,
as amended (the "Act"), acting through its Board of Trustees or its duly
appointed representative on behalf of the portfolios listed on the attached
Appendix "C" as the same may be amended from time to time (the "Fund"), and
XXXXX BROTHERS XXXXXXXX & CO., a New York limited partnership with an office in
Boston, Massachusetts (the "Delegate").
WITNESSETH
WHEREAS the Fund has appointed the Delegate as custodian (the "Custodian")
of certain of the Fund's Assets pursuant to a Custodian Agreement dated June 1,
1998 (the "Custodian Agreement");
WHEREAS the Fund may, from time to time, determine to invest and maintain
some or all of the Fund's Assets outside the United States;
WHEREAS the Board of Trustees of the Fund (the "Board") wishes to delegate
to the Delegate certain functions with respect to the custody of Fund's Assets
outside the United States;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Fund and the Delegate agree as follows. Capitalized
terms shall have the meaning indicated in Section 12 unless otherwise indicated.
1. MAINTENANCE OF FUND'S ASSETS ABROAD. The Fund, acting through its
Board or its duly authorized representative, hereby instructs Delegate pursuant
to the terms of the Custodian Agreement to place and maintain the Fund's Assets
within the countries listed in Schedule 1 attached hereto (as such Schedule may
be amended from time to time in accordance herewith). Such instruction shall be
deemed to include an instruction to use any Compulsory Securities Depository in
any such country and shall represent on instruction under the terms of the
Custodian Agreement. Countries may be added to Schedule 1 by written
instruction of the Fund that is accepted in writing by the Delegate as an
amendment to Schedule 1. With respect to amendments adding countries to
Schedule 1, the Fund acknowledges that - (a) the Delegate shall perform services
hereunder only with respect to the countries where it provides custodial
services to the Fund under the Custodian Agreement; (b) depending on
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conditions in the particular country, advance notice may be required before the
Delegate shall be able to perform its duties hereunder in or with respect to
such country (such advance notice to be reasonable in light of the specific
facts and circumstances attendant to performance of duties in such country); and
(c) nothing in this Agreement shall require the Delegate to provide delegated or
custodial services in any country not listed in Schedule 1 until such amended
Schedule 1 has been accepted by the Delegate in accordance herewith.
2. DELEGATION. Pursuant to the provisions of Rule 17f-5 under the Act
as amended, the Board hereby delegates to the Delegate, and the Delegate hereby
accepts such delegation and agrees to perform, only those duties set forth in
this Agreement concerning the safekeeping of the Fund's Assets in each of the
countries set forth in Schedule 1 hereto as amended from time to time. The
Delegate is hereby authorized to take such actions on behalf of or in the name
of the Fund as are reasonably required to discharge its duties under this
Agreement, including, without limitation, to cause the Fund's Assets to be
placed with a particular Eligible Foreign Custodian in accordance herewith. The
Fund confirms to the Delegate that the Fund or its investment adviser has
considered the Sovereign Risk and Country Risk as part of its continuing
investment decision process, including such factors as may be reasonably related
to the systemic risk of maintaining the Fund's Assets in a particular country,
including, but not limited to, financial infrastructure, prevailing custody and
settlement systems and practices (including the use of any Compulsory Securities
Depository), and the laws relating to the safekeeping and recovery of the Fund's
Assets held in custody pursuant to the terms of the Custodian Agreement.
3. SELECTION OF ELIGIBLE FOREIGN CUSTODIAN AND CONTRACT ADMINISTRATION.
The Delegate shall perform the following duties with respect to the selection of
Eligible Foreign Custodians and administration of certain contracts governing
the Fund's foreign custodial arrangements:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIAN. The Delegate shall place and
maintain the Fund's Assets with an Eligible Foreign Custodian; PROVIDED that
the Delegate shall have determined that the Fund's Assets will be subject to
reasonable care based on the standards applicable to custodians in the relevant
market after considering all factors relevant to the safekeeping of such assets
including without limitation:
(i) The Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical protections
available for certificated securities (if applicable), the controls and
procedures for dealing with any Securities Depository, the method of
keeping custodial records, and the security and data protection practices;
(ii) Whether the Eligible Foreign Custodian has the requisite
financial strength to provide reasonable care for the Fund's Assets;
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(iii) The Eligible Foreign Custodian's general reputation and
standing and, in the case of a Securities Depository, the depository's
operating history and number of participants; and
(iv) Whether the Fund will have jurisdiction over and be able to
enforce judgments against the Eligible Foreign Custodian, such as by virtue
of the existence of any offices of such Eligible Foreign Custodian in the
United States or such Eligible Foreign Custodian's appointment of an agent
for service of process in the United States or consent to jurisdiction in
the United States.
The Delegate shall be required to make the foregoing determination to the best
of its knowledge and belief based only on information reasonably available to
it.
(b) CONTRACT ADMINISTRATION. In the case of an Eligible Foreign Custodian
that is not a Securities Depository or a U.S. Bank, the Delegate shall cause
that the foreign custody arrangements shall be governed by a written contract
that the Delegate has determined will provide reasonable care for Fund assets
based on the standards applicable to custodians in the relevant market. Each
such contract shall, except as set forth in the last paragraph of this
subsection (b), include provisions that provide:
(i) For indemnification or insurance arrangements (or any
combination of the foregoing) such that the Fund will be adequately
protected against the risk of loss of assets held in accordance with such
contract;
(ii) That the Fund's Assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the
Eligible Foreign Custodian or its creditors except a claim of payment for
their safe custody or administration or, in the case of cash deposits,
liens or rights in favor of creditors of such Custodian arising under
bankruptcy, insolvency or similar laws;
(iii) That beneficial ownership of the Fund's Assets will be
freely transferable without the payment of money or value other than for
safe custody or administration;
(iv) That adequate records will be maintained identifying the
Fund's Assets as belonging to the Fund or as being held by a third party
for the benefit of the Fund;
(v) That the Fund's independent public accountants will be given
access to those records described in (iv) above or confirmation of the
contents of such records; and
(vi) That the Delegate will receive sufficient and timely
periodic reports with respect to the safekeeping of the Fund's Assets,
including, but not limited to, notification of any transfer to or from the
Fund's account or a third party account containing the Fund's Assets.
Such contract may contain, in lieu of any or all of the provisions
specified in this Section 3 (b), such other
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provisions that the Delegate determines will provide, in their entirety,
the same or a greater level of care and protection for the Fund's Assets as
the specified provisions, in their entirety.
(c) LIMITATION TO DELEGATED SELECTION. Notwithstanding anything in this
Agreement to the contrary, the duties of Delegate under this Section 3 shall
apply only to Eligible Foreign Custodians selected by the Delegate and shall not
apply to Compulsory Securities Depositories or to any Eligible Foreign Custodian
that the Delegate is directed to use pursuant to Section 7.
4. MONITORING. The Delegate shall establish a system to monitor at
reasonable intervals (but at least annually) the appropriateness of maintaining
the Fund's Assets with each Eligible Foreign Custodian that has been selected by
the Delegate pursuant to Section 3 of this Agreement. The Delegate shall
monitor the continuing appropriateness of placement of the Fund's Assets in
accordance with the criteria established under Section 3(a) of this Agreement.
The Delegate shall monitor the continuing appropriateness of the contract
governing the Fund's arrangements in accordance with the criteria established
under Section 3(b) of this Agreement.
5. REPORTING. At least annually and more frequently as mutually
agreed between the parties, the Delegate shall provide to the Board and the
Investment Advisor written reports specifying placement of the Fund's Assets
with each Eligible Foreign Custodian selected by the Delegate pursuant to
Section 3 of this Agreement and shall promptly report as to any material changes
to such foreign custody arrangements. Delegate will prepare such a report with
respect to any Eligible Foreign Custodian that the Delegate has been instructed
to use pursuant to Section 7 only to the extent specifically agreed with respect
to the particular situation.
6. WITHDRAWAL OF FUND'S ASSETS. If the Delegate determines that an
arrangement with a specific Eligible Foreign Custodian selected by the Delegate
under Section 3 of this Agreement no longer meets the requirements of said
Section, Delegate shall withdraw the Fund's Assets from the non-complying
arrangement as soon as reasonably practicable; PROVIDED, however, that if in the
reasonable judgment of the Delegate, such withdrawal would require liquidation
of any of the Fund's Assets or would materially impair the liquidity, value or
other investment characteristics of the Fund's Assets, it shall be the duty of
the Delegate to
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provide information regarding the particular circumstances and to act only in
accordance with Instructions of the Fund with respect to such liquidation or
other withdrawal.
7. DIRECTION AS TO ELIGIBLE FOREIGN CUSTODIAN. Notwithstanding this
Delegation Agreement, the Fund, acting through its Board, its Investment Adviser
or its other authorized representative, may direct the Delegate to place and
maintain the Fund's Assets with a particular Eligible Foreign Custodian. In
such event, the Delegate shall be entitled to rely on any such instruction as a
Proper Instruction under the terms of the Custodian Agreement and shall have no
duties under this Delegation Agreement with respect to such arrangement save
those that it may undertake specifically in writing with respect to each
particular instance.
8. STANDARD OF CARE. In carrying out its duties under this Agreement,
the Delegate agrees to exercise reasonable care, prudence and diligence such as
a person having responsibility for safekeeping the Fund's Assets would exercise.
9. REPRESENTATIONS. The Delegate hereby represents and warrants that
it is a U.S. Bank and that this Agreement has been duly authorized, executed and
delivered by the Delegate and is a legal, valid and binding agreement of the
Delegate.
The Fund hereby represents and warrants that its Board has determined that
it is reasonable to rely on the Delegate to perform the delegated
responsibilities provided for herein and that this Agreement has been duly
authorized, executed and delivered by the Fund and is a legal, valid and binding
agreement of the Fund.
10. EFFECTIVENESS; TERMINATION. This Agreement shall be effective as of
the date on which this Agreement shall have been accepted by the Delegate, as
indicated by the date set forth below the Delegate's signature. This Agreement
may be terminated at any time, without penalty, by written notice from the
terminating party to the non-terminating party. Such termination shall be
effective on the 30th day following the date on which the non-terminating party
shall receive the foregoing notice. The foregoing to the contrary
notwithstanding, this Agreement shall be deemed to have been terminated
concurrently with the termination of the Custodian Agreement.
11. NOTICES. Notices and other communications under this Agreement are
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to be made in accordance with the arrangements designated for such purpose under
the Custodian Agreement unless otherwise indicated in a writing referencing this
Agreement and executed by both parties.
12. DEFINITIONS. Capitalized terms in this agreement have the following
meanings:
COMPULSORY SECURITIES DEPOSITORY - shall mean a Securities Depository the
use of which is mandatory (i) under applicable law or regulation; (ii)
because securities cannot be withdrawn from the depository; or, (iii)
because maintaining securities outside the Securities Depository is
not consistent with prevailing custodial practices.
b. COUNTRY RISK - shall have the meaning set-forth in Section 9.1.2 of
the Custodian Agreement.
c. ELIGIBLE FOREIGN CUSTODIAN - shall have the meaning set forth in Rule
17f-5(a)(1) and shall also include a U.S. Bank.
d. FUND'S ASSETS - shall mean any of the Fund's investments (including
foreign currencies) for which the primary market is outside the United
States, and such cash and cash equivalents as are reasonably necessary to
effect the Fund's transactions in such investments.
e. PROPER INSTRUCTIONS - shall have the meaning set forth in the
Custodian Agreement.
f. SECURITIES DEPOSITORY - shall have the meaning set forth in Rule
17f-5(a)(6).
g. SOVEREIGN RISK - shall have the meaning set forth in Section 9.1.3 of
the Custodian Agreement.
h. U.S. BANK - shall mean a bank which qualifies to serve as a custodian
of assets of investment companies under Section 17(f) of the Act.
13. GOVERNING LAW AND JURISDICTION. This Agreement shall be construed
in
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accordance with the laws of the State of New York. The parties hereby submit to
the exclusive jurisdiction of the Federal courts sitting in the State of New
York or of the state courts of such State.
14. FEES. Delegate shall perform its functions under this agreement
for the compensation determined under the Custodian Agreement.
15. INTEGRATION. This Agreement sets forth all of the Delegate's duties
with respect to the selection and monitoring of Eligible Foreign Custodians, the
administration of contracts with Eligible Foreign Custodians, the withdrawal of
assets from Eligible Foreign Custodians and the issuance of reports in
connection with such duties. The terms of the Custodian Agreement (including
without limitation the provisions of Section 8.2 thereof) shall apply generally
as to matters not expressly covered in this Agreement, including dealings with
the Eligible Foreign Custodians in the course of discharge of the Delegate's
obligations under the Custodian Agreement.
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NOW THEREFORE, the parties have caused this Agreement to be executed by its duly
authorized representatives, effective as of the date first above written.
XXXXX BROTHERS XXXXXXXX & CO. Xxxxxxxx Xxxxxxxxx Mutual Funds on
behalf of the Portfolios listed on the
attached Appendix "C"
By: By:
------------------------------- -------------------------------
Name: Name:
-------------------- ------------------------
Title: Title:
-------------------- ------------------------
Date: Date:
-------------------- ------------------------
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SCHEDULE 1
TO XXXXXXXX XXXXXXXXX MUTUAL FUNDS
DELEGATION AGREEMENT
AS OF JUNE ______, 0000
XXXXXXXXX
AUSTRALIA
AUSTRIA
BAHRAIN
BANGLADESH
BELGIUM
BERMUDA
BOLIVIA
BOTSWANA
BRAZIL
BULGARIA
CANADA
CHILE
CHINA
COLOMBIA
CZECH REPUBLIC
DENMARK
ECUADOR
EGYPT
FINLAND
FRANCE
GERMANY
GHANA
GREECE
HONG KONG
HUNGARY
INDIA
INDONESIA
IRELAND
ISRAEL
ITALY
JAPAN
JORDAN
KENYA
KOREA
LATVIA
LEBANON
LUXEMBOURG
MALAYSIA
MAURITIUS
MEXICO
NAMIBIA
NETHERLANDS
NEW ZEALAND
NORWAY
OMAN
PAKISTAN
PANAMA
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PERU
PHILIPPINES
POLAND
PORTUGAL
ROMANIA
RUSSIA
SINGAPORE
SLOVAKIA
SOUTH AFRICA
SPAIN
SRI LANKA
SWAZILAND
SWEDEN
SWITZERLAND
TAIWAN
THAILAND
TURKEY
UKRAINE
UNITED KINGDOM
URUGUAY
VENEZUELA
ZAMBIA
ZIMBABWE
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