Exhibit (g)(4)
FOREIGN CUSTODY MANAGER AGREEMENT
AGREEMENT made as of December 10, 1997, between Waterhouse Investors
Family of Funds, Inc., formerly Waterhouse Investors Cash Management Funds,
Inc. (the "Fund") and The Bank of New York ("BNY").
W I T N E S S E T H:
WHEREAS, the Fund desires to appoint BNY as a Foreign Custody Manager
on the terms and conditions contained herein;
WHEREAS, BNY desires to serve as a Foreign Custody Manager and
perform the duties set forth herein on the terms and condition contained
herein;
NOW THEREFORE, in consideration of the mutual promises hereinafter
contained in this Agreement, the Fund and BNY hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "Board" shall mean the board of directors or board of trustees, as
the case may be, of the Fund.
2. "Eligible Foreign Custodian" shall have the meaning provided in
the Rule.
3. "Monitoring System" shall mean a system established by BNY to
fulfill the Responsibilities specified in clauses 1(d) and 1(e) of Article III
of this Agreement.
4. "Qualified Foreign Bank" shall have the meaning provided in the
Rule.
5. "Responsibilities" shall mean the responsibilities delegated to
BNY as a Foreign Custody Manager with respect to each Specified Country and
each Eligible Foreign Custodian selected by BNY, as such responsibilities are
more fully described in Article III of this Agreement.
6. "Rule" shall mean Rule 17f-5 under the Investment Company Act of
1940, as amended, as such Rule became effective on June 16, 1997, and as may
hereafter be amended from time to time.
7. "Securities Depository" shall mean any securities depository or
clearing agency within the meaning of Section (a)(1)(ii) or (a)(1)(iii) of the
Rule.
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8. "Specified Country" shall mean each country listed on Schedule I
attached hereto and each country, other than the United States, constituting
the primary market for a security with respect to which the Fund has given
settlement instructions to The Bank of New York as custodian (the "Custodian")
under its Custody Agreement with the Fund.
ARTICLE II
BNY AS A FOREIGN CUSTODY MANAGER
1. The Fund on behalf of its Board hereby delegates to BNY with
respect to each Specified Country the Responsibilities.
2. BNY accepts the Board's delegation of Responsibilities with
respect to each Specified Country and agrees in performing the
Responsibilities as a Foreign Custody Manager to exercise reasonable care,
prudence and diligence such as a person having responsibility for the
safekeeping of the Fund's assets would exercise.
3. BNY shall provide to the Board at such times as the Board deems
reasonable and appropriate based on the circumstances of the Fund's foreign
custody arrangements, but not less frequently than quarterly, written reports
notifying the Board of the placement of assets of the Fund with a particular
Eligible Foreign Custodian within a Specified Country and of any material
change in the arrangements (including, in the case of Qualified Foreign Banks,
any material change in any contract governing such arrangements and in the
case of Securities Depositories, any material change in the established
practices or procedures of such Securities Depositories) with respect to
assets of the Fund with any such Eligible Foreign Custodian.
ARTICLE III
RESPONSIBILITIES
1. Subject to the provisions of this Agreement, BNY shall with
respect to each Specified Country select an Eligible Foreign Custodian. In
connection therewith, BNY shall: (a) determine that assets of the Fund held by
such Eligible Foreign Custodian will be subject to reasonable care, based on
the standards applicable to custodians in the relevant market in which such
Eligible Foreign Custodian operates, after considering all factors relevant to
the safekeeping of such assets, including, without limitation, those contained
in Section (c)(1) of the Rule; (b) determine that the Fund's foreign custody
arrangements with each Qualified Foreign Bank are governed by a written
contract with the Custodian (or, in the case of a Securities Depository, by
such a contract, by the rules or established practices or procedures of the
Securities Depository, or by any combination of the foregoing) which will
provide reasonable care for the Fund's assets based on the standards specified
in paragraph (c)(1) of the Rule; (c) determine that each contract with a
Qualified Foreign Bank shall include the provisions specified in paragraph
(c)(2)(i)(A) through (F) of the Rule or, alternatively, in lieu of any or all
of such (c)(2)(i)(A) through (F) provisions, such other provisions as BNY
determines will provide, in their entirety, the same or a greater level of
care and protection for the assets of the Fund as such specified provisions;
(d) monitor pursuant to the Monitoring System the appropriateness of
maintaining the assets of the Fund with a particular Eligible Foreign
Custodian pursuant to paragraph (c)(1) of the Rule and in
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the case of a Qualified Foreign Bank, any material change in the contract
governing such arrangement and in the case of a Securities Depository, any
material change in the established practices or procedures of such Securities
Depository; and (e) advise the Fund promptly whenever an arrangement
(including, in the case of a Qualified Foreign Bank, any material change in
the contract governing such arrangement and in the case of a Securities
Depository, any material change in the established practices or procedures of
such Securities Depository) described in preceding clause (d) no longer meets
the requirements of the Rule. Anything in this Agreement to the contrary
notwithstanding, BNY shall in no event be deemed to have selected any
Securities Depository the use of which is mandatory by law or regulation or
because securities cannot be withdrawn from such Securities Depository, or
because maintaining securities outside the Securities Depository is not
consistent with prevailing custodial practices in the relevant market (each, a
"Compulsory Depository"); it being understood however, that for each
Compulsory Depository utilized or intended to be utilized by the Fund, BNY
shall provide the Fund from time to time with information addressing the
factors set forth in Section (c)(1) of the Rule and BNY's opinions with
respect thereto so that the Fund may determine the appropriateness of placing
Fund assets therein. BNY shall also provide to the Fund or its designee such
other information relating to the Specified Countries as may reasonably be
requested by the Fund to assist in the Fund's evaluation of Country Risk,
including without limitation, information relating to each Specified Country's
custody and settlement practices.
2. (a) For purposes of Clauses (a) and (b) of preceding Section 1 of
this Article, with respect to Securities Depositories, it is understood that
such determination shall be made on the basis of, and limited by, publicly
available information with respect to each such Securities Depository.
(b) For purposes of clause (d) of preceding Section 1 of this
Article, BNY's determination of appropriateness shall not include, nor be
deemed to include, any evaluation of Country Risks associated with investment
in a particular country. For purposes hereof, "Country Risks" shall mean
systemic risks of holding assets in a particular country including, but not
limited to, (a) the use of Compulsory Depositories, (b) such country's
financial infrastructure, (c) such country's prevailing custody and settlement
practices, (d) nationalization, expropriation or other governmental actions,
(e) regulation of the banking or securities industry, (f) currency controls,
restrictions, devaluations or fluctuations, and (g) market conditions which
affect the orderly execution of securities transactions or affect the value of
securities.
ARTICLE IV
REPRESENTATIONS
1. The Fund hereby represents that: (a) this Agreement has been duly
authorized, executed and delivered by the Fund, constitutes a valid and
legally binding obligation of the Fund enforceable in accordance with its
terms, and no statute, regulation, rule, order, judgment or contract binding
on the Fund prohibits the Fund's execution or performance of this Agreement;
(b) this Agreement has been approved and ratified by the Board at a meeting
duly called and at which a quorum was at all times present; and (c) the Board
or its investment advisor has considered the Country Risks associated with
investment in each Specified Country and will
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have considered such risks prior to any settlement instructions being given to
the Custodian with respect to any other Specified Country.
2. BNY hereby represents that: (a) BNY is duly organized and existing
under the laws of the State of New York, with full power to carry on its
businesses as now conducted, and to enter into this Agreement and to perform
its obligations hereunder; (b) this Agreement has been duly authorized,
executed and delivered by BNY, constitutes a valid and legally binding
obligation of BNY enforceable in accordance with its terms, and no statute,
regulation, rule, order, judgment or contract binding on BNY prohibits BNY's
execution or performance of this Agreement; and (c) BNY has established the
Monitoring System.
ARTICLE V
CONCERNING BNY
1. BNY shall not be liable for any costs, expenses, damages,
liabilities or claims, including attorneys' and accountants' fees, sustained
or incurred by, or asserted against, the Fund except to the extent the same
arises out of the failure of BNY to exercise the care, prudence and diligence
required by Section 2 of Article II hereof. In no event shall BNY be liable to
the Fund, the Board, or any third party for special, indirect or consequential
damages, or for lost profits or loss of business, arising in connection with
this Agreement.
2. The Fund shall indemnify BNY and hold it harmless from and against
any and all costs, expenses, damages, liabilities or claims, including
reasonable attorneys' and accountants' fees, sustained or incurred by, or
asserted against, BNY by reason or as a result of any action or inaction, or
arising out of BNY's performance hereunder, provided that the Fund shall not
indemnify BNY to the extent any such costs, expenses, damages, liabilities or
claims arises out of BNY's failure to exercise the reasonable care, prudence
and diligence required by Section 2 of Article II hereof, including without
limitation, in the event of BNY's negligence or willful misconduct.
3. For its services hereunder, the Fund agrees to pay to BNY such
compensation and out-of-pocket expenses as shall be mutually agreed.
4. BNY shall have only such duties as are expressly set forth herein.
In no event shall BNY be liable for any Country Risks associated with
investments in a particular country.
ARTICLE VI
MISCELLANEOUS
1. This Agreement constitutes the entire agreement between the Fund
and BNY, and no provision in the Custody Agreement between the Fund and the
Custodian shall affect the duties and obligations of BNY hereunder, nor shall
any provision in this Agreement affect the duties or obligations of the
Custodian under the Custody Agreement.
2. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to BNY, shall be sufficiently given if received
by it at its offices at 90
00
Xxxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as BNY may
from time to time designate in writing.
3. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Fund shall be sufficiently given if
received by it at its offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or
at such other place as the Fund may from time to time designate in writing.
4. In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any 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. 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.
5. 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 BNY hereby consent to the exclusive
jurisdiction of a state or federal court situated in New York City, New York
in connection with any dispute arising hereunder. The Fund and BNY each hereby
irrevocably waives any and all rights to trial by jury in any legal proceeding
arising out of or relating to this Agreement.
6. The parties hereto agree that in performing hereunder, BNY is
acting solely on behalf of the Fund and no contractual or service relationship
shall be deemed to be established hereby between BNY and any other person.
7. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
8. This Agreement shall terminate simultaneously with the termination
of the Custody Agreement between the Fund and the Custodian, and may otherwise
be terminated by either party giving to the other party a notice in writing
specifying the date of such termination, which shall be not less than thirty
(30) days after the date of such notice.
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IN WITNESS WHEREOF, the Fund and BNY have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the
date first above written.
WATERHOUSE INVESTORS FAMILY
OF FUNDS, INC., FORMERLY
WATERHOUSE INVESTORS CASH
MANAGEMENT FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: President
Tax Identification No.:
THE BANK OF NEW YORK
By: /s/ Xxxxxxx X. Grunston
-------------------------
Title: Vice President
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SCHEDULE 1
FOREIGN CUSTODY MANAGER AGREEMENT
SCHEDULE I
Argentina Luxembourg
Australia Malaysia
Austria Mauritius
Bangladesh Mexico
Belgium Morocco
Bermuda Namibia
Botswana Netherlands
Brazil New Zealand
Bulgaria Nigeria
Canada Norway
Chile Pakistan
China Peru
Colombia Philippines
Cyprus Poland
Czech Republic Portugal
Denmark Russia
Easdaq Singapore
Ecuador Slovenia
Egypt South Africa
Estonia Spain
Euromarket (Cedel) Sri Lanka
Finland Swaziland
France Sweden
Germany Switzerland
Ghana Taiwan
Greece Thailand
Hong Kong Tunisia
Hungary Turkey
India Ukraine
Indonesia United Kingdom
Ireland United States
Israel Uruguay
Italy Venezuela
Ivory Coast Zambia
Japan Zimbabwe
Jordan
Kenya
Korea
Latvia
Lebanon
Lithuania
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