FOREIGN CUSTODY MANAGER AGREEMENT
AGREEMENT made as of June 15, 2001, between The Bank of New York ("BNY")
and each Xxxxxx Xxxxxxx Xxxx Xxxxxx Fund having a Custody Agreement with BNY
and listed on Exhibit A hereto (each a "Fund").
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 conditions 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. "FOREIGN ASSETS" shall have the meaning provided in the Rule.
4. "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, which system shall comply with paragraph (c)(3) of 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 on June 12, 2000.
7. "SPECIFIED COUNTRY" shall mean each country listed on Schedule I
attached hereto, as amended from time to time by BNY, 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
Foreign Assets would exercise.
3. BNY shall provide to the Board and to the Fund's investment adviser at
such times as the Board deems reasonable and appropriate based on the
circumstances of the Fund's foreign custody arrangements written reports
notifying the Board and the Fund's investment adviser 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
the contract governing such arrangements) 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 Foreign 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 paragraph (c)(1) of the Rule; (b) determine that the Fund's
foreign custody arrangements with each Eligible Foreign Custodian are
governed by a written contract with the Custodian 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 an
Eligible Foreign Custodian 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 Foreign Assets of the Fund as such specified
provisions in their entirety; (d) monitor pursuant to the Monitoring System
the appropriateness of maintaining Foreign Assets of the Fund with a
particular Eligible Foreign Custodian pursuant to paragraph (c)(1) of the
Rule and the performance of the contract governing such arrangement; and (e)
advise the Fund and its investment adviser whenever BNY determines under the
Monitoring System that an arrangement (including, any material change in the
contract governing such arrangement) described in preceding clause (d) no
longer meets the requirements of the Rule, or that an Eligible Foreign
Custodian would no longer treat assets of the Fund it holds with reasonable
care based on the standards applicable to custodians in the relevant market.
In the event BNY shall have made either determination described in the
preceding sentence, BNY shall promptly select another Eligible Foreign
Custodian in the Specified Country and shall arrange for transfer of the
Fund's assets to that custodian as soon as practicable; it being understood,
however, that in the event BNY shall have determined that no other Eligible
Foreign Custodian in the Specified Country would afford reasonable care based
on the applicable standards in the relevant marketplace, BNY shall promptly
so advise the Fund and shall act in accordance with the instructions of the
Fund with respect to the disposition of any Fund assets held by that
custodian.
2. 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) an Eligible Foreign Custodian's use of any depositories that act as or
operate a system or a transnational system for the central handling of
securities or any equivalent book-entries; (b) such country's, but not any
selected Eligible Foreign Custodian'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;
and (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.
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) BNY is a U.S. Bank as defined in Section
(a)(7) of the Rule; (c) 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,
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regulation, rule, order, judgment or contract binding on BNY prohibits BNY's
execution or performance of this Agreement; and (d) 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.
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 as a foreign custody manager, and no provision in the Custody Agreement
between the Fund and the Custodian shall be construed so as to affect the
duties and obligations of BNY hereunder or conflict with the terms of this
Agreement, 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 000 Xxxxxx Xxxxxx, 00xx Xxxxx, 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 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 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 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.
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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 by reason
of this Agreement.
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 ninety
(90) days after the date of such notice.
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.
EACH XXXXXX XXXXXXX XXXX
XXXXXX FUND LISTED ON EXHIBIT
A HERETO
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. XxXxxx
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Xxxxxx X. XxXxxx
Title: Vice President
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