DELEGATION AGREEMENT
AS SUPPLEMENT TO THE
CUSTODIAN AGREEMENT
AGREEMENT, dated as of May 12, 1998 by and between INVESTORS BANK &
TRUST COMPANY, a Massachusetts trust Company (the "Delegate"), and TIFF
Investment Program, Inc., a Maryland Corporation (the "Fund").
WHEREAS, the Fund and the Delegate entered into a Custodian Agreement
dated as of April 1, 1995, (as amended an in effect from time to time, the
"Custodian Agreement"); and
WHEREAS, the Fund and the custodian desire to supplement certain
provisions of the Custodian Agreement to reflect revisions to Rule 17f-5
promulgated under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, pursuant to the provisions of Rule 17f-5(b) under the 1940
Act, and subject to the terms and conditions set forth herein, the Board of
Directors of the Fund desires to delegate to the Delegate, and the Delegate
hereby agrees to accept and assume, certain responsibilities described herein
concerning Assets held outside of the United States.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Definitions
Capitalized terms in this Agreement have the following meanings:
a. Assets
Assets means 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.
b. Authorized Representative
Authorized Representative means any one of the persons who are
empowered, on behalf of the parties to this Agreement, to receive notices from
the other party, to send notices to the other party, to add or delete
jurisdictions pursuant to Article 3, and to otherwise bind the respective
parties with respect to the subject matter of this Agreement.
c. Board
Board means the Board of Directors (or the body authorized to
exercise authority similar to that of the board of directors of a corporation)
of the Fund.
d. Compulsory Securities Depository
Compulsory Securities Depository means a Securities Depository
the use of which is mandatory (i) by 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cannot be withdrawn from the depository; or (iii) because maintaining securities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.
e. Country Risk
Country Risk means all factors reasonably related to the
systemic risk of holding assets in a particular country including, but not
limited to, such country's financial infrastructure (including any Securities
Depositories operating in such country); prevailing custody and settlement
practices; and laws applicable to the safekeeping and recovery of Assets held in
custody.
f. Eligible Foreign Custodian
Eligible Foreign Custodian has the meaning set forth in Rule
17f-5(a)(1).
g. Foreign Custody Manager
Foreign Custody Manager has the meaning set forth in Rule
17f-5(a)(2).
h. Monitor
Monitor means to re-assess or re-evaluate, at reasonable
intervals, a decision or determination previously made.
i. Permissible Foreign Custodian
Permissible Foreign Custodian means any person with whom
Assets may be placed and maintained outside the United States under (i) the 1940
Act or (ii) an order of the U.S. Securities and Exchange Commission without
regard to Rule 17f-5.
j. Securities Depository
Securities Depository has the meaning set forth in Rule
17f-5(a)(6).
2. Representations
a. Delegate's Representations
Delegate represents that it is a trust company chartered under
the laws of the Commonwealth of Massachusetts. Delegate further represents that
the persons executing this Agreement and any amendment or appendix hereto on its
behalf are duly authorized to so bind the Delegate with respect to the subject
matter of this Agreement.
b. Fund's Representations
Fund represents that the Board has determined that it is
reasonable to rely on the Delegate to perform the responsibilities delegated by
this Agreement. The Fund further represents that the persons executing this
Agreement and any amendment or appendix hereto on its behalf are duly authorized
to so bind the Fund with respect to the subject matter of this Agreement.
3. Jurisdictions Covered
a. Initial Jurisdictions
The authority delegated by this Agreement applies only with
respect to Assets held in the jurisdictions listed in Appendix A.
b. Added Jurisdictions
Jurisdictions may be added to Appendix A by written agreement
in the form of Appendix B. The Delegate's responsibility and authority with
respect to any jurisdiction so added will commence at the later of (i) the time
that the Delegate's Authorized Representative and the Board's Authorized
Representative have both executed a copy of Appendix B listing such
jurisdiction, or (ii) the time that the Delegate's Authorized Representative
receives a copy of such fully executed Appendix B.
c. Withdrawn Jurisdictions
The Board may withdraw its delegation with respect to any
jurisdiction upon written notice to the Delegate. The Delegate may withdraw its
acceptance of delegated authority with respect to any jurisdiction upon written
notice to the Board. Ten days (or such longer period as to which the parties
agree) after receipt of any such notice by the Authorized Representative of the
party other than the party giving notice, the Delegate shall have no further
responsibility or authority under this Agreement with respect to the
jurisdiction or jurisdictions to which authority is withdrawn.
4. Delegation of Authority to Act as Foreign Custody Manager
a. Selection of Eligible Foreign Custodians
Subject to the provisions of this Agreement and the
requirements of Rule 17f-5 (and any other applicable law), the Delegate is
authorized and directed to place and maintain Assets in the care of any Eligible
Foreign Custodian or Custodians selected by the Delegate in each jurisdiction to
which this Agreement applies.
b. Contracts With Eligible Foreign Custodians
Subject to the provisions of this Agreement and the
requirements of Rule 17f-5 (and any other applicable law), the Delegate is
authorized to enter into, on behalf of the Fund, such written contracts
governing the Fund's foreign custody arrangements with such Eligible Foreign
Custodians as the Delegate deems appropriate.
5. Delegation of Authority to Place Assets with Permissible
Foreign Custodians
Subject to the requirements of the 1940 Act (and any other
applicable law or order), the Delegate is authorized to place and maintain
Assets in the care of any Permissible Foreign Custodian or Custodians in each
jurisdiction to which this Agreement applies and to enter into, on behalf of the
fund, such written contracts governing the fund's foreign custody arrangements
with such Permissible Foreign Custodians as the Delegate deems appropriate.
Articles 6, 7b, 7c, 7d, and 8 of this Agreement shall not apply to the
delegate's exercise of authority under this Article 5. The Delegate's exercise
of authority under this Article 5 shall be governed by the terms of the
Custodian Agreement.
6. Monitoring of Eligible Foreign Custodians and Contracts
In each case in which the Delegate has exercised the authority
delegated under this Agreement to place Assets with an Eligible Foreign
Custodian, the Delegate is authorized to, and shall, on behalf of the Fund,
establish a system to Monitor the appropriateness of maintaining Assets with
such Eligible Foreign Custodian. In each case in which the Delegate has
exercised the authority delegated under this Agreement to enter into a written
contract governing the Fund's foreign custody arrangements, the Delegate is
authorized to, and shall, on behalf of the Fund, establish a system to Monitor
the appropriateness of such contract.
7. Guidelines and Procedures for the Exercise of Delegated
Authority
a. Board's Conclusive Determination Regarding Country
Risk
In exercising its delegated authority under this Agreement,
the Delegate may assume, for all purposes, that the Board (or the Fund's
investment advisor, pursuant to authority delegated by the Board) has
considered, and pursuant to its fiduciary duties to the Fund and the Fund's
shareholders, determined to accept, such Country Risk as is incurred by placing
and maintaining Assets in the jurisdictions to which this Agreement applies. In
exercising its delegated authority under this Agreement, the Delegate may also
assume that the Board (or the Fund's investment advisor, pursuant to authority
delegated by the Board) has, and will continue to, Monitor such Country Risk to
the extent the Board deems necessary or appropriate.
Nothing in this Agreement shall require the Delegate to make
any selection or to engage in any Monitoring on behalf of the Fund that would
entail consideration of Country Risk.
b. Selection of Eligible Foreign Custodians
In exercising the authority delegated under this Agreement to
place Assets with an Eligible Foreign Custodian, the Delegate shall determine
that Assets will be subject to reasonable care, based on the standards
applicable to custodians in the market in which the Assets will be held, 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 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 Assets;
iii. The Eligible Foreign Custodian's general reputation
and standing and, in the case of a Securities
Depository, the Securities Depository's operating
history and number of participants;
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 the Eligible Foreign Custodian
in the United States or the Eligible
Foreign Custodian's consent to service of
process in the United States;
v. In the case of an Eligible Foreign Custodian that is
a banking institution or trust company, any
additional factors and criteria set forth in Appendix
C to this Agreement; and
vi. In the case of an Eligible Foreign Custodian that is
a Securities Depository, any additional factors and
criteria set forth in Appendix D to this Agreement.
c. Evaluation of Written Contracts
In exercising the authority delegated under this Agreement to
enter into written contracts governing the Fund's foreign custody arrangements
with an Eligible Foreign Custodian, the Delegate shall determine that such
contracts (or, in the case of a Securities Depository, such contract, the rules
or established practices or procedures of the depository, or any combination of
the foregoing) provide reasonable care for Assets based on the standards
applicable to Eligible Foreign Custodians in the relevant market. In making this
determination, the Delegate shall ensure that the terms of such contracts comply
with the provisions of Rule 17f-5(c)(2).
d. Monitoring
In exercising the authority delegated under this Agreement to
establish a system to Monitor the appropriateness of maintaining Assets with an
Eligible Foreign Custodian or the appropriateness of a written contract
governing the Fund's foreign custody arrangements, the Delegate shall consider
any factors and criteria set forth in Appendix E to this Agreement. If, as a
result of its Monitoring of Eligible Foreign Custodian relationships hereunder
or otherwise, the Delegate determines in its sole discretion that it is in the
best interest of the safekeeping of the Assets to move such Assets to a
different Eligible Foreign Custodian, the Fund shall bear any expense related to
such relocation of Assets.
8. Standard of Care
In exercising the authority delegated under this Agreement, the
Delegate agrees to exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of assets of an investment
company registered under the Investment Company Act of 1940 would exercise.
9. Reporting Requirements
Delegate agrees to provide written reports notifying the Board of the
placement of Assets with a particular Eligible Foreign Custodian and of any
material change in the Fund's foreign custody arrangements. Such reports shall
be provided to the Board quarterly for consideration at the next regularly
scheduled meeting of the Board or earlier if deemed necessary or advisable by
the Delegate in its sole discretion.
10. Provision of Information Regarding Country Risk
With respect to the jurisdictions listed in Appendix A, or added
thereto pursuant to Article 3, the Delegate agrees to provide annually to the
Board, such information relating to Country Risk, if available, as is specified
in Appendix F to this Agreement. Such information relating to Country Risk shall
be updated from time to time as the Custodian deems necessary.
11. Limitation of Liability.
a. Notwithstanding anything in this Agreement to the contrary, in no
event shall the Delegate or any of its officers, directors, employees or agents
(collectively, the "Indemnified Parties") be liable to the Fund or any third
party, and the Fund shall indemnify and hold the Delegate and the Indemnified
Parties harmless from and against any and all loss, damage, liability, actions,
suits, claims, costs and expenses, including legal fees, (a "Claim") arising as
a result of any act or omission of the Delegate or any Indemnified Party under
this Agreement, except for any Claim resulting solely from the negligence,
willful misfeasance or bad faith of the Delegate or any Indemnified Party.
Without limiting the foregoing, neither the Delegate nor the Indemnified Parties
shall be liable for, and the Delegate and the Indemnified Parties shall be
indemnified against, any Claim arising as a result of:
i. Any act or omission by the Delegate or any
Indemnified Party in reasonable good faith reliance
upon the terms of this Agreement, any resolution of
the Board, telegram, telecopy, notice, request,
certificate or other instrument reasonably believed
by the Delegate to genuine;
ii. Any information which the Delegate
provides or does not provide under Section
10 hereof;
iii. Any acts of God, earthquakes, fires,
floods, storms or other disturbances of
nature, epidemics, strikes, riots,
nationalization, expropriation, currency
restrictions, acts of war, civil war or
terrorism, insurrection, nuclear fusion,
fission or radiation, the interruption,
loss or malfunction of utilities,
transportation or computers (hardware or
software) and computer facilities, the
unavailability of energy sources and other
similar happenings or events.
b. Notwithstanding anything to the contrary in this Agreement, in no
event shall the Delegate or the Indemnified Parties be liable to the Fund or any
third party for lost profits or lost revenues or any special, consequential,
punitive or incidental damages of any kind whatsoever in connection with this
Agreement or any activities hereunder.
12. Arbitration of Disputes
To the extent permitted by law, all disputes or claims arising under
this Agreement shall be resolved through arbitration. Arbitration under this
Article shall be conducted according to the Commercial Arbitration Rules of the
American Arbitration Association and shall take place in the City of Boston,
Massachusetts. This Article shall be enforced and interpreted exclusively in
accordance with applicable federal law, including the Federal Arbitration Act.
13. Effectiveness and Termination of Agreement
This Agreement shall be effective as of the later of the date of
execution on behalf of the Board or the Delegate and shall remain in effect
until terminated as provided herein. This Agreement may be terminated at any
time, without penalty, by written notice from the terminating party to the
non-terminating party. Termination will become effective 30 days after receipt
by the non-terminating party of such notice.
14. Authorized Representatives and Notices
The respective Authorized Representatives of the Fund and the Board,
and the addresses to which notices and other documents under this Agreement are
to be sent to each, are as set forth in Appendix G. Any Authorized
Representative of a party may add or delete persons from that party's list of
Authorized Representatives by written notice to an Authorized Representative of
the other party.
15. Governing Law
This Agreement shall be constructed in accordance with the laws of the
Commonwealth of Massachusetts without regard to principals of choice of law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their Authorized Representatives as of the date first written above.
Investors Bank & Trust Company
By: ___________________________________
Name:
Title:
TIFF Investment Program, Inc.
By: ____________________________________
Name:
Title:
List of Appendices
A -- Jurisdictions Covered
B -- Additional Jurisdictions Covered
C -- Additional Factors and Criteria To Be Applied in the Selection of
Eligible Foreign Custodians That
Are Banking Institutions or Trust Companies
D -- Additional Factors and Criteria To Be Applied in the Selection of
Eligible Foreign Custodians that
are Securities Depositories
E -- Factors and Criteria To Be Applied in Establishing Systems For the
Monitoring of Foreign Custody Arrangements and Contracts
F -- Information Regarding Country Risk
G -- Authorized Representatives
APPENDIX A
Jurisdictions Covered
Argentina Estonia Latvia Romania
Austria Euroclear Lebanon Russia
Australia Finland Lithuania Singapore
Bangladesh France Luxembourg Slovak Republic
Belgium Germany Malaysia Slovenia
Bahrain Ghana Mauritius South Africa
Botswana Greece Mexico Spain
Brazil Hong Kong Morocco Sri Lanka
Canada Hungary Namibia Swaziland
Chile Iceland Netherlands Sweden
China India New Zealand Switzerland
Colombia Indonesia Norway Taiwan
Croatia Ireland Oman Thailand
Cyprus Israel Pakistan Turkey
Czech Republic Italy Papau New Guinea United Kingdom
Denmark Japan Peru Uruguay
Ecuador Jordan Philippines Venezuela
Egypt Kenya Poland Zambia
Korea Portugal Zimbabwe
APPENDIX B
Additional Jurisdictions Covered
Pursuant to Article 3 of this Agreement, the Delegate and the Board
agree that the following jurisdictions shall be added to Appendix A:
Xxxxxxx, Xxxxxxxx, Xxxxxxxxxx and Ukraine.
Investors Bank & Trust Company
By: ___________________________________
Name:
Title:
TIFF Investment Program, Inc.
By:____________________________________
Name:
Title:
DATE: ______________________________
APPENDIX C
Additional Factors and Criteria To Be Applied
In the Selection of Eligible Foreign Custodians
That Are Banking Institutions or Trust Companies
In addition to the factors set forth in Rule 17f-5(c)(1), in selecting
Eligible Foreign Custodians that are banking institutions or trust companies,
the Delegate shall consider the following factors, if such information is
available (check all that apply):
_________ None
_________ Other (list below):
APPENDIX D
Additional Factors and Criteria To Be
Applied in the Selection of Eligible Foreign
Custodians that are Securities Depositories
In addition to the factors set forth in Rule 17f-5(c)(1), in selecting
Eligible Foreign Custodians that are Securities Depositories, the Delegate shall
consider the following factors, if
such information is available:
1. Whether use is voluntary or compulsory
2. Ownership
3. Operating history
4. Established rules, practices and procedures
5. Membership
6. Financial strength
7. Governing regulatory body
APPENDIX E
Factors and Criteria To Be Applied
In the Establishing Systems For the Monitoring of
Foreign Custody Arrangements and Contracts
In establishing systems for the Monitoring of foreign custody
arrangements and contracts with Eligible Foreign Custodians, the Delegate shall
consider the following factors, if such information is available:
1. Operating performance
2. Established practices and procedures
3. Relationship with market regulators
4. Contingency planning
APPENDIX F
Information Regarding Country Risk
To aid the Board in its determinations regarding Country Risk, the
Delegate will furnish the Board annually with respect to the jurisdictions
specified in Article 3, the following information:
1. Copy of Addenda or Side Letters to Subcustodian Agreements
2. Legal Opinion, if available, with regard to:
a) Access to books and records by the Fund's accountants
b) Ability to recover assets in the event of bankruptcy of a custodian
c) Ability to recover assets in the event of a loss
d) Likelihood of expropriation or nationalization, if available
e) Ability to repatriate or convert cash or cash equivalents
3. Audit Report
4. Copy of Balance Sheet from Annual Report
5. Summary of Central Depository Information
6. Country Profile Matrix containing market practice for:
a) Delivery versus payment
b) Settlement method
c) Currency restrictions
d) Buy-in practice
e) Foreign ownership limits
f) Unique market arrangements
APPENDIX G
Authorized Representatives
The names and addresses of each party's authorized representatives are set forth
below:
A. Board
With a copy to:
B. Delegate
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: _______________, Director, Client Management
Fax: (000) 000-0000
With a copy to:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, General Counsel
Fax: (000) 000-0000
