CUSTODIAN AGREEMENT
Exhibit
(g)(1)
THIS
AGREEMENT,
dated
as of May 5, 2005, between XXXXXXX
INVESTORS TRUST,
a
management investment company organized under the laws of the State of Delaware
(the Trust)
and
registered with the Commission under the Investment Company Act of 1940, as
amended (the 1940
Act),
and
XXXXX
BROTHERS XXXXXXXX & CO.,
a
limited partnership formed under the laws of the State of New York (BBH&Co.
or the
Custodian).
This
Agreement shall be effective as of May 5, , 2005.
W
I T N E S S E T H:
WHEREAS,
the
Trust wishes to employ BBH&Co. to act as custodian for each of its series,
from time to time set forth on Appendix
A
hereto
(each, a Fund) and
to
provide related services, all as provided herein, and BBH&Co. is willing to
accept such employment, subject to the terms and conditions herein set forth;
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements herein contained, the
Trust
and BBH&Co. hereby agree, as follows:
1.
Appointment of Custodian.
The
Trust hereby appoints BBH&Co. as each Fund’s Custodian, and BBH&Co.
hereby accepts such appointment. All Investments (as defined in Section 13.18)
of the Funds delivered to the Custodian or its agents or Subcustodian(s) (as
defined in Section 13.23) shall be dealt with as provided in this Agreement.
The
duties of the Custodian with respect to the Funds’ Investments shall be only as
set forth expressly in this Agreement, which duties are generally comprised
of
safekeeping and various administrative duties that will be performed in
accordance with Instructions (as defined in Section 4) and as reasonably
required to effect Instructions.
2. Representations,
Warranties and Covenants of the Trust.
The
Trust hereby represents, warrants and covenants each of the
following:
2.1
This
Agreement has been duly authorized, executed and delivered by the Trust, and
at
the time of delivery of each Instruction such Instruction will have been, duly
authorized by the Trust. Neither this Agreement nor any Instruction issued
thereunder violates any Applicable Law (as defined in Section 13.5) or conflicts
with or constitutes a default under the Trust’s prospectus, certificate of
trust, declaration of trust and by-laws or other constitutive document or any
agreement, judgment, order or decree to which the Trust, on behalf of a Fund,
is
a party or by which it or its Investments is bound.
2.2
By
providing an Instruction with respect to the first acquisition of an Investment
in a jurisdiction other than the United States of America, the Trust shall
be
deemed to have confirmed to the Custodian that the Trust, with regard to the
applicable Fund, has (a) assessed and accepted all material Country Risk or
Sovereign Risk (as defined in Sections 9.1.2 and 9.1.3, respectively) and
accepted responsibility for their occurrence; (b) made all determinations
required to be made by the Fund under the 1940 Act; and (c) appropriately and
adequately disclosed to its shareholders, other investors and all persons who
have rights in or to such Investments, all material investment
risks.
2.3
The
Trust shall safeguard and shall solely be responsible for the safekeeping of
any
testkeys, identification codes, passwords, other security devices or statements
of account with which the Custodian provides it. If the Trust uses any on-line
or similar communications service made available by the Custodian, the Trust
shall be solely responsible for ensuring the security of its access to the
service and for the use of the service, and shall only attempt to access the
service and the Custodian’s computer systems as directed or permitted by the
Custodian. If the Custodian provides any computer software to the Trust relating
to the services described in this Agreement, the Trust will only use the
software for the purposes for which the Custodian provided the software to
the
Trust, and will abide by the license agreement accompanying the software and
any
other security policies which the Custodian provides to the Trust.
3.
Representation
and Warranty of BBH&Co.
BBH&Co. hereby represents and warrants that this Agreement has been duly
authorized, executed and delivered by BBH&Co. and does not and will not
violate any Applicable Law or conflict with or constitute a default under
BBH&Co.’s limited partnership agreement or any agreement, instrument,
judgment, order or decree to which BBH&Co. is a party or by which it is
bound. BBH&Co.
hereby represents and warrants that it has a business continuity plan
that
is
reasonably designed to ensure the continuity of services by BBH&Co. in
adverse circumstances and
whose
purpose and objective is to develop
on an on-going basis, document, test and maintain a strategic, comprehensive,
and reasonable plan
which
addresses the requirements of all offices and business units.
4.
Instructions.
Unless
otherwise indicated herein, the Custodian shall perform its duties pursuant
to
Instructions. As used herein, the term Instruction
shall
mean a directive initiated by the Trust, on behalf of a Fund, acting through
its
board of trustees or other Authorized Person (as defined in Section 4.1), which
directive shall conform to the requirements of this Section 4.
4.1
Authorized
Persons.
For
purposes hereof, an Authorized
Person
shall be
a person or entity authorized to give Instructions to the Custodian by written
notices or otherwise for or on behalf of a Fund in accordance with procedures
delivered to and acknowledged by the Custodian. Such Authorized Persons may
be
identified by the board of trustees of the Trust by name, title or position,
may
include officers of the Trust authorized by the board of trustees to name
additional Authorized Persons and may include officers or employees of a Fund’s
Investment Adviser (as defined in Section 13.17) or affiliates. A person may
be
an Authorized Person with respect to one or more Funds as indicated by the
Trust. The Custodian may treat any Authorized Person as having the full
authority of the applicable Fund to issue Instructions hereunder unless the
notice of authorization or other communication by the Trust contains explicit
limitations as to said authority. The Custodian shall not treat any Instruction
from any person directing the delivery of securities or payment to such person
to be valid for any purpose. The Custodian shall be entitled to rely upon the
authority of Authorized Persons until it receives appropriate written notice
from the Trust to the contrary.
4.2
Form
of Instruction.
Each
Instruction shall be transmitted by such secured or authenticated
electro-mechanical means as the Custodian shall make available to the Trust
from
time to time unless the Trust shall elect to transmit such Instruction in
accordance with Sections 4.2.1 through 4.2.3.
4.2.1
Fund
Designated Secured-Transmission Method. Instructions
may be transmitted through a secured or tested electro-mechanical means
identified by the Trust or by an Authorized Person entitled to give Instructions
and acknowledged and accepted by the Custodian, it being understood that such
acknowledgment shall authorize the Custodian to accept such means of delivery
but shall not represent a judgment by the Custodian as to the reasonableness
or
security of the means utilized by the Authorized Person.
4.2.2
Written
Instructions.
Instructions may be transmitted in a writing that bears the manual signature
of
Authorized Persons.
4.2.3
Other
Forms of Instruction.
Instructions may also be transmitted by another means determined by the Trust
or
Authorized Persons and acknowledged and accepted by the Custodian (subject
to
the same limits as to acknowledgements as are contained in Section 4.2.1, above)
including Instructions given orally or by SWIFT, telex or telefax (whether
tested or untested).
When
an
Instruction is given by means established under Sections 4.2.1 through 4.2.3,
it
shall be the responsibility of the Custodian to use reasonable care to adhere
to
any security or other procedures established in writing between the Custodian
and the Authorized Person and such other internal procedures of the Custodian
as
are consistent with banking practice in the US with
respect to such means of Instruction, but the Authorized Person shall be solely
responsible for determining that the particular means chosen is reasonable
under
the circumstances. Telephonic or oral Instructions shall be considered proper
Instructions if the Custodian reasonably believes them to have been given by
the
Authorized Person. Telephonic or oral Instructions shall be confirmed by methods
established in accordance with Section 4.2.1. Oral Instructions shall be binding
upon the Custodian only if and when the Custodian takes action with respect
thereto. With respect to telefax instructions, the parties agree and acknowledge
that receipt of legible instructions cannot be assured, that the Custodian
cannot verify that authorized signatures on telefax instructions are original
or
properly affixed, and that the Custodian shall not be liable for losses or
expenses incurred through actions taken in reliance on inaccurately stated,
illegible or unauthorized telefax instructions; provided,
however,
that if
the Custodian receives Instructions that it determines to be illegible, the
Custodian shall promptly seek confirmation of such Instructions from the
Authorized Person sending such instructions. The provisions of Section 4A of
the
Uniform Commercial Code shall apply to funds transfers performed in accordance
with Instructions. The Funds Transfer Services Schedule (as defined in Section
13.14) and any Electronic and Online Services Schedule (as defined in Section
13.10) to this Agreement shall each comprise a designation of a means of
delivering Instructions for purposes of this Section 4.2.
4.3
Completeness
and Contents of Instructions.
The
Authorized Person shall be responsible for assuring the adequacy and accuracy
of
Instructions. Particularly, upon any acquisition or disposition or other dealing
in a Fund’s Investments and upon any delivery and transfer of any Investment or
moneys, the Authorized Person initiating the Instruction shall give the
Custodian an Instruction with appropriate detail, including, without
limitation:
4.3.1
The
transaction date and the date and location of settlement;
4.3.2
The
specification of the type of transaction;
4.3.3
A
description of the Investments or moneys in question, including, as appropriate,
quantity, price per unit, amount of money to be received or delivered and
currency information;
and
4.3.4
The
name of the broker or similar entity concerned with execution of the
transaction.
If
the
Custodian determines that an Instruction is either unclear or incomplete or
inconsistent on its face,
the
Custodian shall give prompt notice of such determination to the Fund, and the
Fund shall thereupon amend or otherwise reform the Instruction. In such event,
the Custodian shall have no obligation to take, and shall not take, any action
in response to the Instruction initially delivered until the redelivery of
an
amended or reformed Instruction.
4.4
Timeliness
of Instructions.
In
giving an Instruction, the Fund shall take into consideration delays which
may
occur due to the involvement of a Subcustodian or agent, differences in time
zones, and other factors particular to a given market, exchange or issuer.
When
the Custodian has established specific timing requirements or deadlines with
respect to particular classes of Instruction and adequate notice thereof has
been provided to the Fund, or when an Instruction is received by the Custodian
at such a time that it could not reasonably be expected to have acted on such
Instruction due to time zone differences or other factors beyond its reasonable
control, the execution of any Instruction received by the Custodian after such
deadline or at such time (including any modification or revocation of a previous
Instruction) shall be at the risk of the Fund.
5. Safekeeping
of Fund Assets. The
Custodian shall hold Investments delivered to it or Subcustodians for the Fund
in accordance with the provisions of this Section. The Custodian shall not
be
responsible for (a) the safekeeping of Investments not delivered or that are
not
caused to be issued to it or its Subcustodians; or (b) pre-existing faults
or
defects in Investments that are delivered to the Custodian or its Subcustodians.
The Custodian is hereby authorized to hold with itself or a Subcustodian, and
to
record in one or more accounts, all Investments delivered to and accepted by
the
Custodian, any Subcustodian or their respective agents pursuant to an
Instruction or in consequence of any corporate action or income event. The
Custodian shall hold Investments for the account of the Fund and shall segregate
Investments from assets belonging to the Custodian and shall cause its
Subcustodians to segregate Investments from assets belonging to the Subcustodian
in an account held for the Fund or in an account maintained by the Subcustodian
generally for non-proprietary assets of the Custodian.
5.1
Use
of Securities Depositories. The
Custodian may deposit and maintain Investments in any Securities Depository
(as
defined in Section 13.22), either directly or through one or more Subcustodians
appointed by the Custodian. Investments held in a Securities Depository shall
be
held (a) subject to the agreement, rules, statement of terms and conditions
or
other document or conditions effective between the Securities Depository and
the
Custodian or the Subcustodian, as the case may be; and (b) in an account for
the
Fund or in bulk segregation in an account maintained for the non-proprietary
assets of the entity holding such Investments in the Securities Depository.
If
market practice or the rules and regulations of the Securities Depository
prevent the Custodian, the Subcustodian or (any agent of either) from holding
its clients’ assets held in such Securities Depository in such a separate
account, the Custodian, the Subcustodian or other agent shall as appropriate
segregate such Investments for benefit of the Fund or for benefit of clients
of
the Custodian generally on its own books.
5.2
Certificated
Assets.
Investments which are certificated may be held in registered or bearer form:
(a)
in the Custodian’s vault; (b) in the vault of a Subcustodian or a Subcustodian;
or (c) in an account maintained by the Custodian, Subcustodian at a Securities
Depository; all in accordance with customary market practice in the jurisdiction
in which any Investments are held, provided that Securities are held in the
name
of the Fund or in an account of the Custodian containing only the assets of
the
Fund or only assets held as custodian for customers.
5.3
Registered
Assets.
Investments which are registered may be registered in the name of the Custodian,
a Subcustodian, or in the name of the Fund or a nominee for any of the
foregoing, and may be held in any manner set forth in Section 5.2 above with
or
without any identification of fiduciary capacity in such
registration.
5.4
Book
Entry Assets.
Investments which are represented by book-entry may be so held in an account
maintained by the Book-Entry Agent (as defined in Section 13.7) on behalf of
the
Custodian, a Subcustodian [or
another Agent (as defined in Section 6.18) of the Custodian,]
or a
Securities Depository.
5.5
Replacement
of Lost Investments.
In the
event of a loss of Investments for which loss the Custodian is responsible
under
the terms of this Agreement, the Custodian shall replace such Investment, or
in
the event that such replacement cannot be effected, the Custodian shall pay
to
the Fund the fair market value of such Investment based on the last available
price as of the close of business in the relevant market on the date that a
claim was first made to the Custodian with respect to such loss, or such other
amount as shall be agreed by the parties.
6.
Administrative
Duties of the Custodian. The
Custodian shall perform the following administrative duties with respect to
Investments of the Fund.
6.1
Purchase
of Investments. Pursuant
to Instruction, Investments purchased for the account of the Fund shall be
paid
for (a) against delivery thereof to the Custodian or a Subcustodian, as the
case
may be, either directly or through a Clearing Corporation (as defined in Section
13.8) or a Securities Depository (in accordance with the rules of such
Securities Depository or such Clearing Corporation); or (b) otherwise in
accordance with an Instruction, Applicable Law, generally accepted trade
practices, or the terms of the instrument representing such
Investment.
6.2
Sale
of Investments.
Pursuant
to Instruction, Investments sold for the account of the Fund shall be delivered
(a) against payment therefor in cash, by check or by bank wire transfer; (b)
by
credit to the account of the Custodian or the applicable Subcustodian, as the
case may be, with a Clearing Corporation or a Securities Depository (in
accordance with the rules of such Securities Depository or such Clearing
Corporation); or (c) otherwise in accordance with an Instruction, Applicable
Law, generally accepted trade practices, or the terms of the instrument
representing such Investment.
6.3
Delivery
and Receipt in Connection with Borrowings of the Fund or other Collateral and
Margin Requirements.
Pursuant
to Instruction, the Custodian may deliver or receive Investments or cash of
the
Fund in connection with borrowings or loans by the Fund and other collateral
and
margin requirements.
6.4
Futures and Options.
If,
pursuant to an Instruction, the Custodian shall become a party to an agreement
with the Fund and a futures commission merchant regarding margin accounts
(Tri-Party
Agreement),
the
Custodian shall (a) receive and retain, to the extent the same are provided
to
the Custodian, confirmations or other documents evidencing the purchase or
sale
by the Fund of exchange-traded futures contracts and commodity options; (b)
when
required by such Tri-Party Agreement, deposit and maintain in an account opened
pursuant to such Agreement (Margin
Account),
segregated either physically or by book-entry in a Securities Depository for
the
benefit of any futures commission merchant, such Investments as the Fund shall
have designated as initial, maintenance or variation “margin” deposits or other
collateral intended to secure the Fund’s performance of its obligations under
the terms of any exchange-traded futures contracts and commodity options; and
(c) thereafter pay, release or transfer Investments into or out of the margin
account in accordance with the provisions of such Agreement. Alternatively,
the
Custodian may deliver Investments, in accordance with an Instruction, to a
futures commission merchant for purposes of margin requirements in accordance
with Rule 17f-6 under the 1940 Act. The Custodian shall in no event be
responsible for the acts and omissions of any futures commission merchant to
whom Investments are delivered pursuant to this Section; for the sufficiency
of
Investments held in any Margin Account; or, for the performance of any terms
of
any exchange-traded futures contracts and commodity options.
6.5 Contractual
Obligations and Similar Investments.
From
time to time, a Fund’s Investments may include Investments that are not
ownership interests as may be represented by certificate (whether registered
or
bearer), by entry in a Securities Depository or by Book-Entry Agent, registrar
or similar agent for recording ownership interests in the relevant Investment.
If the Fund shall at any time acquire such Investments, including without
limitation deposit obligations, loan participations, repurchase agreements
and
derivative arrangements, the Custodian shall (a) receive and retain, to the
extent the same are provided to the Custodian, confirmations or other documents
evidencing the arrangement; and (b) perform on the Fund’s account in accordance
with the terms of the applicable arrangement, but only to the extent directed
to
do so by Instruction. The Custodian shall have no responsibility for agreements
running to the Fund as to which it is not a party other than to retain, to
the
extent the same are provided to the Custodian, documents or copies of documents
evidencing the arrangement and, in accordance with Instruction, to include
such
arrangements in reports made to the Fund.
6.6
Exchange
of Securities.
Unless
otherwise directed by Instruction, the Custodian shall: (a) exchange securities
held for the account of the Fund for other securities in connection with any
reorganization, recapitalization, conversion, stock split, change of par value
of shares or similar event; and (b) deposit any such securities in accordance
with the terms of any reorganization or protective plan. The Custodian shall
provide prior notice of each such action to the Trust.
6.7
Surrender
of Securities.
Unless
otherwise directed by Instruction, the Custodian may surrender securities:
(a)
in temporary form for definitive securities; (b) for transfer into the name
of
an entity allowable under Section 5.3; and (c) for a different number of
certificates or instruments representing the same number of shares or the same
principal amount of indebtedness.
6.8
Rights,
Warrants, Etc.
Pursuant
to Instruction, the Custodian shall (a) deliver warrants, puts, calls, rights
or
similar securities to the issuer or trustee thereof, or to any agent of the
issuer or trustee, for purposes of exercising such rights or selling such
securities, and (b) deliver securities in response to any tender
offer.
6.9
Mandatory
Corporate Actions. Unless
otherwise directed by Instruction, the Custodian shall: (a) comply with the
terms of all mandatory or compulsory exchanges, calls, tenders, redemptions
or
similar rights of securities ownership affecting securities held on the Fund’s
account and promptly notify the Fund of such action; and (b) collect all stock
dividends, rights and other items of like nature with respect to such
securities. The Custodian shall provide prior notice of each such action to
the
Trust.
6.10
Income
Collection.
Unless
otherwise directed by Instruction, the Custodian shall collect any amount due
and payable to the Fund with respect to Investments and promptly credit the
amount collected to a Principal Account or Agency Account (each as defined
in
Section 7.1); provided,
however,
that
the Custodian shall not be responsible for: (a) the collection of amounts due
and payable with respect to Investments that are in default or (b) the
collection of cash or share entitlements with respect to Investments that are
not registered in the name of the Custodian or its Subcustodians or the Fund.
The Custodian is hereby authorized to endorse and deliver any instrument
required to be so endorsed and delivered to effect collection of any amount
due
and payable to the Fund with respect to Investments.
6.11
Corporate
Action Information. In
fulfilling the duties set forth in Sections 6.6 through 6.10 above, the
Custodian shall provide to the Trust such information pertaining to a corporate
action which the Custodian actually receives; provided that the Custodian shall
not be responsible for the completeness or accuracy of such information.
Information relative to any pending corporate action made available to the
Trust
via any of the services described in any Electronic and Online Services Schedule
shall constitute the delivery of such information by the Custodian. Any advance
credit of cash or shares expected to be received as a result of any corporate
action shall be subject to actual collection and may be reversed by the
Custodian.
6.12
Proxy
Materials. The
Custodian shall deliver, or cause to be delivered, to the Trust proxy forms,
notices of meeting, and any other notices or announcements affecting or relating
to Investments received by the Custodian. Information relative to any pending
corporate action made available to the Trust via any of the services described
in the Electronic and Online Services Schedule shall constitute the delivery
of
such information by the Custodian.
6.13
Ownership Certificates and Disclosure of the Fund’s
Interest.
The
Custodian is hereby authorized to execute on behalf of the Fund ownership
certificates, affidavits or other disclosure required under Applicable Law
or
established market practice in connection with the receipt of income, capital
gains or other payments by the Fund with respect to Investments, or in
connection with the sale, purchase or ownership of Investments.
With
respect to securities issued in the United States of America, the 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 the Fund. With respect to
securities issued outside of the United States of America, information shall
be
released in accordance with law or custom of the particular country in which
such security is located.
6.14.
Taxes.
The
Custodian shall, where applicable, assist the Fund in the reclamation of taxes
withheld on dividends and interest payments received by the Fund. In the
performance of its duties with respect to tax withholding and reclamation,
the
Custodian shall be entitled to rely on the advice of counsel and upon
information and advice regarding the Fund’s tax status that is received from or
on behalf of the Fund without duty of separate inquiry.
6.15
Use
of Segregated Accounts. Upon
receipt of Instructions from a Fund, the Custodian shall establish and maintain
on its books a segregated account or accounts on behalf of the Fund into which
account or accounts may be transferred cash and/or securities of the Fund (i)
in
accordance with the provisions of any agreement among the Fund, the Custodian
and a broker-dealer registered under the Securities Exchange Act of 1934 and
a
member of the National Association of Securities Dealers, Inc. relating to
compliance with the rules of the Options Clearing Corporation and of any
registered national securities exchange, or any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Fund; (ii) for purposes of segregating cash or securities
in
connection with options purchased, sold or written by the Fund; (iii) for the
purposes of compliance by the Fund with the procedures required by the 1940
Act;
and (iv) as mutually agreed from time to time between the Trust and the
Custodian. The
terms
and conditions upon which such segregated account or accounts shall be
maintained shall be further subject to such additional terms as mutually agreed
by the Trust, the Custodian and the respective broker-dealer.
6.16
Other
Dealings.
The
Custodian shall otherwise act as directed by Instruction, including without
limitation effecting the free payments of moneys or the free delivery of
securities, provided that such Instruction shall indicate the purpose of such
payment or delivery and that the Custodian shall record the party to whom the
payment or delivery is made.
6.17
Nondiscretionary
Details and Minor Expenses. The
Custodian shall attend to all nondiscretionary details in connection with the
sale or purchase or other administration of Investments, except as otherwise
directed by Instruction, and may, upon prior notice to the Trust, make payments
to itself or others for minor undisputed expenses of administering Investments
under this Agreement, provided that the Fund shall have the right to request
an
accounting with respect to such expenses.
6.18
Use
of Agents. Upon
prior written notice to the Trust (if
practicable) and
unless otherwise objected to by the Trust, the Custodian may at any time in
its
discretion appoint (and may at any time remove) agents (other than
Subcustodians) to carry out some or all of the administrative provisions of
this
Agreement (Agents),
provided,
however,
that
the appointment of an Agent shall not relieve the Custodian of its
administrative obligations under this Agreement.
7. Cash
Accounts, Deposits and Money Movements. Subject
to the terms and conditions set forth in this Section 7, the Trust, on behalf
of
each Fund, hereby authorizes the Custodian to open and maintain, with itself
or
with Subcustodians, cash accounts in United States Dollars, in such other
currencies as are the currencies of the countries in which the Fund maintains
Investments or in such other currencies as the Fund shall from time to time
request by Instruction.
7.1
Types
of Cash Accounts.
Cash
accounts opened on the books of the Custodian (Principal
Accounts)
shall
be opened in the name of the Fund. Such accounts collectively shall be a deposit
obligation of the Custodian and shall be subject to the terms of this Section
7
and the general liability provisions contained in Section 9. Cash accounts
opened on the books of a Subcustodian may be opened in the name of the Fund
or
the Custodian or in the name of the Custodian for its customers generally
(Agency
Accounts).
Such
deposits shall be obligations of the Subcustodian and shall be treated as an
Investment of the Fund. Accordingly, the Custodian shall be responsible for
exercising reasonable care in the administration of all such accounts, but
shall
not be liable for their repayment in the event the Subcustodian, by reason
of
its bankruptcy, insolvency or otherwise, fails to make repayment.
7.2
Payments
and Credits with Respect to the Cash Accounts.
The
Custodian shall make payments from or deposits to any of the cash accounts
in
the course of carrying out its administrative duties, including but not limited
to income collection with respect to the Fund’s Investments, and otherwise in
accordance with Instructions. The Custodian and its Subcustodians shall be
required to credit amounts to the cash accounts only when moneys are actually
received in cleared funds in accordance with banking practice in the country
and
currency of deposit. Any credit made to any Principal Account or Agency Account
before actual receipt of cleared funds shall be provisional and may be reversed
by the Custodian in the event such payment is not actually collected. Unless
otherwise specifically agreed in writing by the Custodian or any Subcustodian,
all deposits shall be payable only at the branch of the Custodian or
Subcustodian where the deposit is made or carried.
7.3
Currency
and Related Risks.
The Fund
bears the risks of holding or transacting in any currency, including any xxxx
to
market exposure associated with a foreign exchange transaction undertaken with
the Custodian. The Custodian shall not be liable for any loss or damage arising
from the applicability of any law or regulation now or hereafter in effect,
or
from the occurrence of any event, which may delay or affect the transferability,
convertibility or availability of any currency in the country (a) in which
such
Principal Account or Agency Accounts are maintained or (b) in which such
currency is issued, and in no event shall the Custodian be obligated to make
payment of a deposit denominated in a currency during the period during which
its transferability, convertibility or availability has been affected by any
such law, regulation or event. Without limiting the generality of the foregoing,
neither the Custodian nor any Subcustodian shall be required to repay any
deposit made at a foreign branch of either the Custodian or Subcustodian if
such
branch cannot repay the deposit due to a cause for which the Custodian would
not
be responsible in accordance with the terms of Section 9 of this Agreement
unless the Custodian or such Subcustodian expressly agrees in writing to repay
the deposit under such circumstances. All currency transactions in any account
opened pursuant to this Agreement are subject to exchange control regulations
of
the United States and of the country where such currency is the lawful currency
or where the account is maintained. Any taxes, costs, charges or fees imposed
on
the convertibility of a currency held by the Fund shall be for the account
of
the Fund.
7.4
Foreign Exchange Transactions.
The
Custodian shall, subject to the terms of this Section, settle foreign exchange
transactions (including contracts, futures, options and options on futures)
on
behalf and for the account of the Fund with such currency brokers or banking
institutions, including Subcustodians, as the Fund may direct pursuant to
Instructions. The Custodian may act as principal in any foreign exchange
transaction with the Fund in accordance with Section 7.4.2 of this Agreement.
The obligations of the Custodian in respect of all foreign exchange transactions
(whether or not the Custodian shall act as principal in such transaction) shall
be contingent on the free, unencumbered transferability of the currency
transacted on the actual settlement date of the transaction.
7.4.1
Third
Party Foreign Exchange Transactions.
The
Custodian shall process foreign exchange transactions (including without
limitation contracts, futures, options, and options on futures), where any
third
party acts as principal counterparty to the Fund on the same basis it performs
duties as agent for the Fund with respect to any other of the Fund’s
Investments. Accordingly, the Custodian shall only be responsible for delivering
or receiving currency on behalf of the Fund in respect of such contracts
pursuant to Instructions. The Custodian shall not be responsible for the failure
of any counterparty (including any Subcustodian) in such agency transaction
to
perform its obligations thereunder. The Custodian (a) shall transmit cash and
Instructions to and from the currency broker or banking institution with which
the Trust, on behalf of a Fund, has executed a foreign exchange contract or
option, (b) may make free outgoing payments of cash in the form of U.S. Dollars
or foreign currency without receiving confirmation of a foreign exchange
contract or option or confirmation that the countervalue currency completing
the
foreign exchange contract has been delivered or received or that the option
has
been delivered or received, and (c) shall hold in safekeeping all confirmations,
certificates and other documents and agreements received by the Custodian and
evidencing or relating to such foreign exchange transactions. The Fund accepts
full responsibility for its use of third-party foreign exchange dealers and
for
execution of the foreign exchange contracts and options and understands that
the
Fund shall be responsible for any and all costs and interest charges which
may
be incurred by the Fund or the Custodian as a result of the failure or delay
of
third parties to deliver foreign exchange.
7.4.2
Foreign
Exchange with the Custodian as Principal.
The
Custodian, as principal, may undertake such foreign exchange transactions with
the Fund as the Custodian and the Trust may agree from time to time. In this
event, the foreign exchange transaction will be performed in accordance with
the
particular agreement of the parties, or in the event a principal foreign
exchange transaction is initiated by Instruction in the absence of specific
agreement, the transaction will be performed in accordance with the usual
commercial terms of the Custodian. In the event that a party defaults on the
settlement of any such foreign exchange transaction with the other party, the
defaulting party shall be liable for contracted currency of the transaction
together with any xxxx to market exposure associated with the replacement
purchase of the contracted currency undertaken with the non-defaulting party.
7.5
Delays.
If no
event of Force Majeure (as defined in Section 9.1.1) shall have occurred and
be
continuing and in the event that a delay shall have been caused by the
negligence or willful misconduct of the Custodian in carrying out an Instruction
to credit or transfer cash, the Custodian, without limiting the Custodian’s
obligations under Section 9, shall be liable to the Fund: (a) with respect
to
Principal Accounts, for interest to be calculated at the rate customarily paid
on such deposit and currency by the Custodian on overnight deposits at the
time
the delay occurs for the period from the day when the transfer should have
been
effected until the day it is in fact effected; and (b) with respect to Agency
Accounts, for interest to be calculated at the rate customarily paid on such
deposit and currency by the Subcustodian on overnight deposits at the time
the
delay occurs for the period from the day when the transfer should have been
effected until the day it is in fact effected. The Custodian shall not be liable
for delays in carrying out Instructions to transfer cash which are not due
to
the Custodian’s own negligence or willful misconduct unless otherwise provided
in this Agreement.
7.6
Advances.
If, for
any reason in connection with this Agreement the Custodian or any Subcustodian
makes an Advance (as defined in Section 13.1) to facilitate settlement or
otherwise for the benefit of the Fund (whether or not any Principal Account
or
Agency Account shall be overdrawn either during, or at the end of, any Business
Day) and except as otherwise agreed, the Trust hereby does:
7.6.1
acknowledge that the Fund shall have no right, title or interest in or to any
Investments purchased with such Advance or proceeds of such Investments, and
that any credit to an account of Fund shall be provisional, until: (a) the
debit
of the Principal Account or Agency Account by Custodian for an amount equal
to
Advance Costs (as defined in Section 13.2); and/or (b) if such debit produces
an
overdraft in such account, reimbursement to the Custodian or Subcustodian for
the amount of such overdraft;
7.6.2
acknowledge
that the Custodian has an automatically perfected statutory security interest
in
Investments purchased with any such Advance pursuant to Section 9-206 of
the Uniform Commercial Code as in effect in the State of New York from time
to
time; and
7.6.3
in
addition, in order to secure the obligations of the Fund to pay or perform
any
and all obligations of the Fund pursuant to this Agreement, including without
limitation to repay any Advance made pursuant to this Agreement, grant to the
Custodian a security interest in all Investments and proceeds thereof (as
defined in the Uniform Commercial Code as currently in effect in the State
of
New York) held by the Custodian and/or
any Subcustodian;
and
agree to take, and agree that the Custodian may take, in respect of the security
interest referenced above, any further actions that the Custodian may reasonably
require to perfect such security interest.
7.7
Custodian’s
Rights Neither
the Custodian nor any Subcustodian shall be obligated to make any Advance or
to
allow an Advance to occur to the Fund, and in the event that the Custodian
or
any Subcustodian does make or allow an Advance, any such Advance and any
transaction giving rise to such Advance shall be for the account and risk of
the
Fund and shall not be deemed to be a transaction undertaken by the Custodian
for
its own account and risk. If such Advance shall have been made or allowed by
a
Subcustodian or any other person, the Custodian may assign all or part of its
security interest referenced above and any other rights granted to the Custodian
hereunder to such Subcustodian or other person. If the Fund shall fail to repay
the Advance Costs when due, the Custodian or its assignee, as the case may
be,
shall be entitled to a portion of the available cash balance in any Agency
Account or Principal Account equal to such Advance Costs, and the Fund
authorizes the Custodian, on behalf of the Fund, to pay an amount equal to
such
Advance Costs irrevocably to such Subcustodian or other person, and, after
notice to the Trust, to dispose of any property in such Account to the extent
necessary to make such payment. Any Investments and funds credited to accounts
subject to this Agreement created pursuant hereto shall be treated as financial
assets credited to securities accounts under Articles 8 and 9 of the Uniform
Commercial Code as in effect in the State of New York from time to time.
Accordingly, the Custodian and any Subcustodian shall have the rights and
benefits of a secured creditor that is a securities intermediary under such
Articles 8 and 9.
7.8
Integrated
Account.
For
purposes hereof, deposits maintained in all Principal Accounts (whether or
not
denominated in Dollars) shall collectively constitute a single and indivisible
current account with respect to the Fund’s obligations to the Custodian or its
assignee, and balances in the Principal Accounts shall be available for
satisfaction of the Fund’s obligations under this Section 7. The Custodian shall
further have a right of offset against the balances in any Agency Account
maintained hereunder to the extent that the aggregate of all Principal Accounts
is overdrawn.
8. Subcustodians
and Securities Depositories.
Subject
to the provisions hereinafter set forth in this Section 8, the Trust hereby
authorizes the Custodian to utilize Securities Depositories to act on behalf
of
the Fund and to appoint from time to time and to utilize Subcustodians. With
respect to securities and funds held by a Subcustodian, either directly or
indirectly (including by a Securities Depository or Clearing Corporation),
notwithstanding any provisions of this Agreement to the contrary, payment for
securities purchased and delivery of securities sold may be made prior to
receipt of securities or payment, respectively, and securities or payment may
be
received in a form in accordance with (a) governmental regulations, (b) rules
of
Securities Depositories and Clearing Corporations, (c) generally accepted trade
practice in the applicable local market, (d) the terms and characteristics
of
the particular Investment, or (e) the terms of Instructions.
8.1
Domestic
Subcustodians and Securities Depositories.
The
Custodian may deposit and/or maintain, either directly or through one or more
Subcustodians appointed by the Custodian, Investments of the Fund in any
Securities Depository in the United States, including The Depository Trust
Company, provided such Depository meets applicable requirements of the Federal
Reserve Bank or of the Securities and Exchange Commission. Subcustodians
appointed by the Custodian for the purposes of holding investments in the United
States shall be a bank
as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder.
8.2
Foreign
Subcustodians and Securities Depositories.
Unless
instructed otherwise by the Trust, the Custodian may deposit and/or maintain
non-U.S. Investments of the Fund in any non-U.S. Securities Depository provided
such Securities Depository meets the requirements of an “eligible securities
depository” under Rule 17f-7 promulgated under the 1940 Act, or any successor
rule or regulation (Rule
17f-7)
or
which by order of the Securities and Exchange Commission is exempted therefrom.
Prior to the time that securities are placed with such depository, but subject
to the provisions of Section 8.2.4 below, the Custodian shall have prepared
an
assessment of the custody risks associated with maintaining assets with the
Securities Depository and shall have established a system to monitor such risks
on a continuing basis in accordance with Section 8.2.3 of this Section.
The
Custodian shall provide reports from time to time to the Trust regarding market
infrastructure and developments of which the Custodian is aware. Additionally,
the Custodian may, from time to time, appoint (a) any bank, trust company or
other entity meeting the requirements of an “eligible foreign
custodian”
under
Rule 17f-5 or which by order of the Securities and Exchange Commission is
exempted therefrom, or (b) any bank as defined in Section 2(a)(5) of the 1940
Act meeting the requirements of a custodian under Section 17(f) of the 1940
Act
and the rules and regulations thereunder, to act on behalf of the Fund as a
Subcustodian for purposes of holding Investments of the Fund outside the United
States.
8.3
Delegation of Board Review of Subcustodians.
From
time to time, the Custodian may agree to perform certain reviews of
Subcustodians and of Subcustodian contracts as the delegate of the Trust’s
Board. In such event, the Custodian’s duties and obligations with respect to
this delegated review will be performed in accordance with the terms of the
attached 17f-5 Delegation Schedule (as defined in Section 13. 9) to this
Agreement.
8.4
Board Approval of Foreign Subcustodians.
Unless
and except to the extent that the Board has delegated to the Custodian and
the
Custodian has accepted delegation of review of certain matters concerning the
appointment of Subcustodians pursuant to Section 8.3, the Custodian shall,
prior
to the appointment of any Subcustodian for purposes of holding Investments
of
the Fund outside the United States, obtain written confirmation of the approval
of the board of trustees of the Trust with respect to (a) the identity of a
Subcustodian, and (b) the Subcustodian agreement which shall govern such
appointment, such approval to be signed by an Authorized Person. An Instruction
to open an account in a given country shall comprise authorization of the
Custodian to hold assets in such country in accordance with the terms of this
Agreement. The Custodian shall not be required to make independent inquiry
as to
the authorization of the Trust to invest in such country.
8.5
Monitoring
and Risk Assessment of Securities Depositories.
Prior to
the placement of any assets of the Fund with a non-U.S. Securities Depository,
the Custodian: (a) shall provide to the Fund or its authorized representative
an
assessment of the custody risks associated with maintaining assets within such
Securities Depository; and (b) shall have established a system to monitor the
custody risks associated with maintaining assets with such Securities Depository
on a continuing basis and to promptly notify the Fund or its Investment Adviser
of any material changes in such risk. In performing its duties under this
Subsection, the Custodian shall use reasonable care and may rely on such
reasonable sources of information as may be available including but not limited
to: (i) published ratings; (ii) information supplied by a Subcustodian that
is a
participant in such Securities Depository; (iii) industry surveys or
publications; or (iv) information supplied by the depository itself, by its
auditors (internal or external) or by the relevant Foreign Financial Regulatory
Authority (as defined in Section 13.13). It is acknowledged that information
procured through some or all of these sources may not be independently
verifiable by the Custodian and that direct access to Securities Depositories
is
limited under most circumstances. Accordingly, the Custodian shall not be
responsible for errors or omissions in its duties hereunder provided that it
has
performed its monitoring and assessment duties with reasonable care. The risk
assessment shall be provided to the Fund or its Investment Adviser by such
means
as the Custodian shall reasonably establish. Advices of material change in
such
assessment may be provided by the Custodian in the manner established as
customary between the Fund and the Custodian for transmission of material market
information.
8.6
Responsibility
for Subcustodians. The
Custodian shall be liable to the Fund for any loss or damage to the Fund caused
by or resulting from the acts or omissions of any Subcustodian to the extent
that such acts or omissions would be deemed to be negligence, bad faith or
willful misconduct or a violation of law in accordance with the terms of the
relevant subcustodian agreement under the laws, circumstances and practices
prevailing in the place where the act or omission occurred. The Custodian shall
also be liable to the Fund for its own negligence in connection with the
Custodian’s delivery of any Investments or funds held by it to any Subcustodian.
8.7
New
Countries.
The Fund
shall be responsible for informing the Custodian sufficiently in advance of
a
proposed investment which is to be held in a country in which no Subcustodian
is
authorized to act in order that the Custodian shall, if it deems appropriate
to
do so, have sufficient time to establish a subcustodial arrangement in
accordance herewith. In the event, the Custodian is unable to establish such
arrangements prior to the time the investment is to be acquired, the Custodian
is authorized to designate at its discretion a local safekeeping agent, and
the
use of the local safekeeping agent shall be at the sole risk of the Fund, and
accordingly the Custodian shall be responsible to the Fund for the actions
of
such agent if and only to the extent the Custodian shall have recovered from
such agent for any damages caused the Fund by such agent. The Custodian shall
provide the Fund prompt notice if it receives Instruction with respect to an
Investment to be settled in a country for which a Subcustodian has not been
appointed.
9. Responsibility
of the Custodian.
In
performing its duties and obligations hereunder, the Custodian shall use
reasonable care, prudence and diligence under the facts and circumstances
prevailing in the market where performance is effected. Subject to the specific
provisions of this Section, the Custodian shall be liable for any direct damage
incurred by the Fund in consequence of (i) the Custodian’s negligence, bad faith
or willful misconduct or violation of law or
(ii)
any material breach by the Custodian of its representations, warranties or
agreements hereunder.
In no
event shall the Custodian be liable hereunder for any special, indirect,
punitive or consequential damages arising out of, pursuant to or in connection
with this Agreement even if the Custodian has been advised of the possibility
of
such damages. It is agreed that the Custodian shall have no duty to assess
the
investment risks inherent in the Fund’s Investments or to provide investment
advice with respect to such Investments and that the Fund as principal shall
bear any investment risks attendant to particular Investments, such as failure
of counterparty or issuer. It is understood that the Fund is a mutual fund,
which specifically includes, among other things, its buying and selling of
securities and its offering of shares for purchase and redemption by investors.
As such and for avoidance of doubt, the limitations herein against indirect
or
consequential damages (or, stated in the opposite, to actual or direct damages)
do not apply to, and shall not relieve BBH&Co. of, any liabilities that
BBH&Co. may otherwise have to the Fund pursuant to the terms of this
Agreement resulting from the Fund’s “buying in” (or other similar action) with
respect to a failed trade or in connection with the Fund’s incorrect net asset
value, both of which are examples of direct and actual damages of the
Fund.
9.1 Limitations
of Performance.
The
Custodian shall not be responsible under this Agreement for any failure to
perform its duties, and shall not be liable hereunder for any loss or damage
in
association with such failure to perform for or in consequence of the following
causes:
9.1.1
Force
Majeure. Force
Majeure
shall
mean any circumstance or event which is beyond the reasonable control of the
Custodian, a Subcustodian or any Agent of the Custodian or a Subcustodian and
which adversely affects the performance by the Custodian of its obligations
hereunder, by the Subcustodian of its obligations under its Subcustody Agreement
or by any other Agent of the Custodian or the Subcustodian, including any event
caused by, arising out of or involving the following but only to the extent
beyond the reasonable control of the Custodian: (a) an act of God, (b) accident,
fire, water or wind damage or explosion, (c) any computer, system or other
equipment failure or malfunction caused by any computer virus or the malfunction
or failure of any communications medium, (d) any interruption of the power
supply or other utility service, (e) any strike or other work stoppage, whether
partial or total, (f) any delay or disruption resulting from or reflecting
the
occurrence of any Country Risk or Sovereign Risk, (g) any disruption of, or
suspension of trading in, the securities, commodities or foreign exchange
markets, whether or not resulting from or reflecting the occurrence of any
Country Risk or Sovereign Risk, (h) any encumbrance on the transferability
of a
currency or a currency position on the actual settlement date of a foreign
exchange transaction, whether or not resulting from or reflecting the occurrence
of any Country Risk or Sovereign Risk, or (i) any other cause similarly beyond
the reasonable control of the Custodian.
9.1.2
Country
Risk. Country
Risk
shall
mean, with respect to the acquisition, ownership, settlement or custody of
Investments in a jurisdiction, all risks relating to, or arising in consequence
of, systemic and markets factors affecting the acquisition, payment for or
ownership of Investments including (a) the prevalence of crime and corruption,
(b) the inaccuracy or unreliability of business and financial information,
(c)
the instability or volatility of banking and financial systems, or the absence
or inadequacy of an infrastructure to support such systems, (d) custody and
settlement infrastructure of the market in which such Investments are transacted
and held, (e) the acts, omissions and operation of any Securities Depository,
(f) the risk of the bankruptcy or insolvency of banking agents, counterparties
to cash and securities transactions, registrars or transfer agents, and (g)
the
existence of market conditions which prevent the orderly execution or settlement
of transactions or which affect the value of assets.
9.1.3
Sovereign
Risk. Sovereign
Risk
shall
mean, in respect of any jurisdiction, including the United States of America,
where Investments are acquired or held hereunder or under a Subcustody
Agreement, (a) any act of war, terrorism, riot, insurrection or civil commotion;
(b) the imposition of any investment, repatriation or exchange control
restrictions by any governmental authority; (c) the confiscation, expropriation
or nationalization of any Investments by any governmental authority, whether
de
facto or de jure; (d) any devaluation or revaluation of the currency; (e) the
imposition of taxes, levies or other charges affecting Investments; (f) any
change in the Applicable Law; or (g) any other economic or political risk
incurred or experienced.
9.2.
Limitations on Liability.
The
Custodian shall not be liable for any loss, claim, damage or other liability
arising from the following causes:
9.2.1
Failure of Third Parties.
The
failure of any third party including: (a) any issuer of Investments or
Book-Entry Agent or other agent of an issuer; (b) any counterparty with respect
to any Investment, including any issuer of exchange-traded or other futures,
option, derivative or commodities contract; (c) failure of an Investment
Adviser, Foreign Custody Manager (as defined in Section 13.12) or other agent
of
the Fund; or (d) failure of other third parties similarly beyond the control
or
choice of the Custodian.
9.2.2
Information Sources.
The
Custodian may rely upon information received from issuers of Investments or
agents of such issuers, information received from Subcustodians and from other
commercially reasonable sources deemed reliable by the Custodian (such as
commercial data bases and the like), but shall not be responsible for specific
inaccuracies in such information, provided that such reliance was reasonable
and
the Custodian has relied upon such information in good faith, or for the failure
of any commercially reasonable information provider.
9.2.3 Reliance
on Instruction.
Action
by
the Custodian or the Subcustodian in accordance with an Instruction, even when
such action conflicts with, or is contrary to any provision of, the Trust’s
certificate of trust, declaration of trust or by-laws, or actions by the
trustees of the Trust or shareholders of the Fund.
9.2.4
Restricted Securities.
The
limitations inherent in the rights, transferability or similar investment
characteristics of a given Investment of the Fund.
10. Indemnification.
10.1 The
Fund
hereby indemnifies the Custodian and each Subcustodian, and their respective
Agents, nominees and the partners, employees, officers and trustees
(Indemnified
Persons),
and
agrees to hold each of them harmless from and against all claims and
liabilities, including reasonable counsel fees and taxes, incurred or assessed
against any of them in connection with the performance of this Agreement and
any
Instruction, except as may arise from the Indemnified Person’s breach of the
relevant standard of care set forth in this Agreement or as a result of the
Indemnified Person’s negligence, bad faith, willful misconduct or violation of
applicable law.
10.2 The
Custodian shall give written notification to the Fund of any claim pursuant
to
which an Indemnified Person may be entitled to indemnification. Such
notification shall be given by the Custodian within 20 days after it is
reasonably likely that the Indemnified Person may be entitled to indemnification
hereunder, and shall describe in reasonable detail (to the extent known by
the
Indemnified Person and the Custodian) the facts constituting the basis for
such
claim and the amount of the claimed damages; provided,
however,
that no
delay or failure on the part of the Custodian in so notifying the Fund shall
relieve the Fund of any liability or obligation hereunder.
10.3 Within
45
days after delivery of such notification and if the claim relates to an action
by a third party, the Fund may, upon written notice thereof to the Custodian,
assume control of the defense of such action with counsel reasonably
satisfactory to the Custodian. If the Fund does not so assume control of the
defense of such action, the Indemnified Party shall control such defense. The
non-controlling party may participate in such defense at its own expense. The
controlling party shall keep the non-controlling party advised of the status
of
such third party action and the defense thereof and shall consider in good
faith
recommendations made by the non-controlling party with respect thereto. The
non-controlling party shall furnish the controlling party with such information
as it may have with respect to such third party action (including copies of
any
summons, complaint or other pleading which may have been served on such party
and any written claim, demand, invoice, billing or other document evidencing
or
asserting the same) and shall otherwise cooperate with and assist the
controlling party in the defense of such third party action. The Fund shall
not
agree to any settlement of, or the entry of any judgment arising from, any
such
third party action without the prior written consent of the Custodian, which
shall not be unreasonably withheld, conditioned or delayed.
10.4 Within
45
days after delivery of a notice of claim, the Fund shall deliver to the
Custodian a response, in which the Fund shall: (i) agree that the
Indemnified Party is entitled to receive all of the claimed amount (in which
case the response shall be accompanied by a payment by the Fund to the
Indemnified Party of the claimed amount, by check or by wire transfer);
(ii) agree that the Indemnified Party is entitled to receive an agreed upon
amount (in which case the response shall be accompanied by a payment by the
Fund
to the Indemnified Party of the agreed upon amount, by check or by wire
transfer); or (iii) dispute that the Indemnified Party is entitled to
receive any of the claimed amount.
10.5 The
Custodian and the Fund shall resolve all such disputes, differences,
controversies or claims arising in connection with, or questions occurring
under, Section 10.4(ii) and (iii) above shall be finally settled under the
Commercial Arbitration Rules of the American Arbitration Association (“AAA”)
then in effect (the “Commercial Rules”) by an arbitral tribunal composed of
three arbitrators appointed in accordance with said Rules and this Agreement
as
provided below. In the event of any conflict between the Commercial Rules and
the provisions of this Agreement, the provisions of this Agreement shall prevail
and be controlling.
10.5.1.
Either party may commence the arbitration by filing a written submission with
the New York City, New York office of the AAA (or closest office thereto) in
accordance with its Commercial Rules. Each party shall nominate one neutral
and
impartial arbitrator. If a party fails to nominate an arbitrator within thirty
(30) days from the date when the claimant's request for arbitration has been
communicated to the other party, such appointment shall be made by the AAA
in
accordance with the listing, striking and ranking procedure in the Commercial
Rules. Any arbitrator appointed by the AAA shall be a retired judge or a
practicing attorney with no less than fifteen years of experience with large
commercial cases and an experienced arbitrator.
10.5.2.
The two arbitrators so appointed shall agree upon the third arbitrator who
shall
act as Chair of the arbitral tribunal. If said two arbitrators fail to nominate
a Chair within forty-five (45) days from the second of the two appointments,
the
Chair shall be selected by the AAA in accordance with the listing, striking
and
ranking procedure in the Commercial Rules and the last sentence of the
immediately preceding paragraph.
10.5.3.
In all cases the Chair of the arbitral tribunal shall be a lawyer fluent in
English.
10.5.5.
The language of the arbitration shall be English.
10.5.6.
In the absence of agreement by the parties as to pre-hearing discovery, the
arbitral tribunal shall order such discovery (including document discovery
and
depositions) as it determines to be consistent with the reasonable needs of
the
parties taking in to account the expedited nature of arbitration.
10.5.7. Not
later
than 30 days after the conclusion of the arbitration hearing, the arbitral
tribunal shall prepare and distribute to the parties a writing setting forth
the
arbitral award and the arbitral tribunal’s reasons therefor.
10.5.8. Any
award
rendered by the arbitral tribunal shall be final, conclusive and binding upon
the parties, judgment thereon may be entered and enforced in any court of
jurisdiction over the award or any of the parties or their assets and the award
may grant any relief appropriate under the applicable law, including without
limitation declaratory relief and/or specific performance, provided that the
arbitrators shall have no power or authority to (x) award damages in excess
of
the amount claimed by claiming party or (y) award multiple, punitive or
exemplary damages. The parties hereby exclude any right of appeal to any court
on the merits of the dispute.
10.5.9.
Any dispute relating to this arbitration provision shall be governed by the
laws
of the State of New York and provided further that performance of duties and
obligations shall be determined in accordance with the provisions of Section
9
of this Agreement
10.5.10
Nothing contained in this arbitration provision shall prevent either party
from
seeking interim measures of protection in the form of pre-award attachment
of
assets nor from seeking injunctive relief. The parties further agree to the
jurisdiction of the courts provided in Section 12.4 hereof for enforcement
of
any arbital decision.
10.5.11. The
arbitrators shall have no power or authority, under the Commercial Rules or
otherwise, to modify or disregard any provision of this Agreement, including
the
provisions of this Section 10.5.
10.5.12. In
connection with any arbitration proceeding pursuant to this Section 10.5, each
party shall bear its own costs and expenses, except that the fees and costs
of
the AAA and the arbitrators, the costs and expenses of obtaining the facility
where the arbitration hearing is held, and such other costs and expenses as
the
arbitrators may determine to be directly related to the conduct of the
arbitration and appropriately borne jointly by the parties (which shall not
include any party’s attorneys’ fees or costs, witness fees (if any), costs of
investigation and similar expenses) shall be shared equally by the
parties.
11. Reports
and Records.
The
Custodian shall:
11.1
create and maintain records relating to the performance of its obligations
under
this Agreement and as required by Applicable Law, including without limitation
by the 1940 Act and rules and regulations thereunder. All such records shall
be
the property of the Trust and in the event of the termination of this Agreement,
shall be delivered to the successor custodian as directed by the
Trust;
11.2
make
available to the Trust, its auditors, counsel, agents and employees, upon
reasonable request and during normal business hours of the Custodian, all
records maintained by the Custodian pursuant to Section 11.1 above, subject,
however, to all reasonable security requirements of the Custodian then
applicable to the records of its custody customers generally; and
11.3
make
available to the Trust all Electronic Reports (as defined in Section
13.11);
it
being understood that the Custodian shall not be liable for the interception
or
alteration of such Electronic Reports by a third party.
11.4
The
Trust shall examine all records, however produced or transmitted, upon receipt
and notify the Custodian promptly of any discrepancy or error known to the
Trust.
11.5
The
Fund acknowledges that the Custodian obtains information on the value of assets
from outside sources which may be utilized in certain reports made available
to
the Trust. The Custodian deems such sources to be reliable, but the Fund
acknowledges and agrees that the Custodian does not verify such information
or
make any representations or warrantees as to its accuracy or completeness and
accordingly shall be without liability in selecting and using such sources
and
furnishing such information.
12. Miscellaneous.
12.1 Powers
of Attorney, etc.
The
Trust will promptly execute and deliver, upon request, such proxies, powers
of
attorney or other instruments as may be reasonable and necessary or desirable
for the Custodian to provide, or to cause any Subcustodian to provide, its
performance of custody services.
12.2 Entire
Agreement; Amendment. This
Agreement constitutes the entire understanding and agreement of the parties
hereto and supersedes any other oral or written agreements heretofore in effect
between the Trust and the Custodian with respect to the subject matter hereof.
No provision of this Agreement may be amended or terminated except by a
statement in writing signed by the party against which enforcement of the
amendment or termination is sought, provided,
however,
that an
Instruction shall, whether or not such Instruction shall constitute a waiver,
amendment or modification for purposes hereof, be deemed to have been accepted
by the Custodian when it commences actions pursuant thereto or in accordance
therewith. In the event of a conflict between the terms of this Agreement and
the terms of a service level agreement or other operating agreement in place
between the parties from time to time, the terms of this Agreement shall
control.
12.3
Binding
Effect; Assignment. This
Agreement shall be binding upon and shall inure to the benefit of the Custodian
and the Trust and their successors and permitted assignees. Neither the
Custodian nor the Trust may assign this Agreement without the prior written
consent of the other party. Each party agrees that only the parties to this
Agreement and/or their successors in interest shall have a right to enforce
the
terms of this Agreement. Accordingly, no client of the Fund or other third
party
shall have any rights under this Agreement and such rights are explicitly
disclaimed by the parties.
12.4
GOVERNING
LAW, JURISDICTION AND VENUE.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES
OF
SUCH STATE. THE PARTIES HERETO IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS LOCATED IN NEW
YORK CITY.
EACH
PARTY IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY ACTION OR PROCEEDING IN ANY OF THE AFORESAID COURTS
AND
ANY CLAIM THAT ANY SUCH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. FURTHERMORE,
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.5 Notices.
Notices
and other writings contemplated by this Agreement, other than Instructions,
shall be delivered (a) by hand, (b) by first class registered or certified
mail,
postage prepaid, return receipt requested, (c) by a nationally recognized
overnight courier, or (d) by facsimile transmission, provided that any notice
or
other writing sent by facsimile transmission shall also be mailed, postage
prepaid, to the party to whom such notice is addressed. All such notices shall
be addressed, as follows:
If
to the
Trust or any Fund:
Xxxxxxx
Investors Trust
0000
Xxxxxx xx Xxxxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxx
X. Xxxxxxxx, First Vice President and Treasurer Facsimile: (000)
000-0000
Telephone: (000)
000-0000
If
to the
Custodian:
Xxxxx
Brothers Xxxxxxxx & Co.
00
Xxxxx
Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attn:
Senior Legal Officer, Investor Services
Telephone: (000)
000-0000
Facsimile:
(000)
000-0000
or
such
other address as the Fund or the Custodian may have designated in writing to
the
other.
12.6
Headings.
Paragraph headings included herein are for convenience of reference only and
shall not modify, define, expand or limit any of the terms or provisions
hereof.
12.7
Severability. In
the
event any provision of this Agreement is determined to be void or unenforceable,
such determination shall not affect the remainder of this Agreement, which
shall
continue to be in force.
12.8
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original. This Agreement shall become effective when one or more
counterparts have been signed and delivered by the Trust and the Custodian.
A
photocopy or telefax of the Agreement shall be acceptable evidence of the
existence of the Agreement and the Custodian shall be protected in relying
on
the photocopy or telefax until the Custodian has received the original of the
Agreement.
12.9
Confidentiality.
The
parties hereto agree that each shall treat confidentially all information
provided by each party to the other regarding its business and operations.
All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering or obtaining services pursuant
to this Agreement and, except as may be required in carrying out this Agreement,
shall not be disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any information that
is publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by or to any bank examiner of the Custodian or any Subcustodian,
any
regulatory authority, any auditor or counsel of the parties hereto, or by
judicial or administrative process or otherwise by Applicable Law or regulatory
request.
12.10
Tape-recording. The
Trust, on behalf of each Fund, authorizes the Custodian to tape record any
and
all telephonic or other oral instructions given to the Custodian by or on behalf
of the Fund, including from any Authorized Person. This authorization will
remain in effect until and unless revoked by the Trust in writing.
12.11
Counsel/
Independent Registered Public Accounting Firm.. In
fulfilling its duties hereunder, the Custodian shall be entitled to receive
and
act upon the advice of (i) counsel and/or an independent registered public
accountant regularly retained by the Custodian of good national or international
reputation in respect of such matters, (ii) counsel and/or a independent
registered public accountant for the Trust or (iii) such counsel or independent
registered public accountant as the Trust and the Custodian may agree upon,
with
respect to all matters, and the Custodian shall be without liability for any
action reasonably taken or omitted in good faith consistent in all respects
with
such advice.
12.12 The
Custodian and the Trust may from time to time be parties to agreements in
addition to this Agreement. The terms of this Agreement shall not be applicable
to, or otherwise affect the relationship of the Custodian and the Trust under,
such other agreements unless specifically agreed to therein by the Custodian
and
the Trust.
12.13
Conflict.
Nothing
contained in this Agreement shall prevent the Custodian and its associates
from
(i) dealing as a principal or an intermediary in the sale, purchase or loan
of
the Fund’s Investments to, or from the Custodian or its associates; (ii) acting
as a custodian, a subcustodian, a trustee, an agent, securities dealer, an
investment manager or in any other capacity for any other client whose interests
may be adverse to the interest of the Fund; or (iii) buying, holding, lending,
and dealing in any way in any assets for the benefit of its own account, or
for
the account of any other client whose interests may be adverse to the Fund
notwithstanding that the same or similar assets may be held or dealt in by,
or
for the account of the Fund by the Custodian. To the extent permitted by
Applicable Law, the Trust hereby voluntarily consents to, and waives any such
potential conflict of interest between the Custodian and/or its associates
and
the Trust, and agrees, to the extent permitted by Applicable Law,
that:
| (a) |
the
Custodian’s and/or its associates’ engagement in any such transaction
shall not disqualify the Custodian from continuing to perform as
the
custodian of the Fund under this
Agreement;
|
| (b) |
the
Custodian and/or its associates shall not be under any duty to disclose
any information in connection with any such transaction to the Fund;
|
| (c) |
the
Custodian and/or its associates shall not be liable to account to
the Fund
for any profits or benefits made or derived by or in connection with
any
such transaction; and
|
| (d) |
the
Fund shall use all reasonable efforts to disclose this provision,
among
other provisions in this Agreement, to its
shareholders.
|
13. Definitions.
The
following defined terms will have the respective meanings set forth
below.
13.1 Advance(s)
shall
mean any extension of credit by or through the Custodian or by or through any
Subcustodian and shall include, without limitation, amounts due to the Custodian
as the principal counterparty to any foreign exchange transaction with the
Fund
as described in Section 7.4.2 hereof, or paid to third parties for account
of
the Fund or in discharge of any expense, tax or other item payable by the
Fund.
13.2 Advance
Costs shall
mean any Advance, interest on the Advance and any related expenses, including
without limitation any xxxx to market loss of the Custodian or Subcustodian
on
any Investment to which Section 7.6.1 applies.
13.3 Agency
Account(s)
shall
mean any deposit account opened on the books of a Subcustodian or other banking
institution in accordance with Section 7.1 hereof.
13.4 Agent(s)
shall
have the meaning set forth in the last sentence of Section 6
hereof.
13.5 Applicable
Law
shall
mean with respect to each jurisdiction, all (a) laws, statutes, treaties,
regulations, guidelines (or their equivalents); (b) orders, interpretations,
licenses and permits; and (c) judgments, decrees, injunctions, writs, orders
and
similar actions by a court of competent jurisdiction; compliance with which
is
required or customarily observed in such jurisdiction.
13.6 Authorized
Person(s)
shall
mean any person or entity authorized to give Instructions on behalf of the
Fund
in accordance with Section 4.1 hereof.
13.7
Book-Entry
Agent(s)
shall
mean an entity acting as agent for the issuer of Investments for purposes of
recording ownership or similar entitlement to Investments, including without
limitation a transfer agent or registrar.
13.8
Clearing
Corporation
shall
mean any entity or system established for purposes of providing securities
settlement and movement and associated functions for a given
market(s).
13.9 Delegation
Schedule
shall
mean any separate schedule entered into between the Custodian and the Trust,
on
behalf of a Fund, or its authorized representative with respect to certain
matters concerning the appointment and administration of Subcustodians delegated
to the Custodian pursuant to Rule 17f-5 under the 1940 Act.
13.10 Electronic
and Online Services Schedule
shall
mean any separate agreement entered into between the Custodian and the Trust,
on
behalf of a Fund, or its authorized representative with respect to certain
matters concerning certain electronic and online services as described therein
and as may be made available from time to time by the Custodian to the
Trust
13.11
Electronic Reports
shall
mean any reports prepared by the Custodian and remitted to the Fund or its
authorized representative via the internet or electronic mail.
13.12 Foreign
Custody Manager
shall
mean the Fund’s foreign custody manager appointed pursuant to Rule 17f-5 of the
1940 Act.
13.13 Foreign
Financial Regulatory Authority
shall
have the meaning given by Section 2(a)(50) of the 0000 Xxx.
13.14
Funds
Transfer Services Schedule
shall
mean any separate schedule entered into between the Custodian and the Trust,
on
behalf of a Fund, or its authorized representative with respect to certain
matters concerning the processing of payment orders from Principal Accounts
of a
Fund.
13.15 Global
Custody Network Listing
shall
mean the Countries and Subcustodians approved for Investments in non-U.S.
Markets.
13.16 Instruction(s)
shall
have the meaning assigned in Section 4 hereof.
13.17
Investment
Adviser
shall
mean any person or entity who is an Authorized Person to give Instructions
with
respect to the investment and reinvestment of the Fund’s
Investments.
13.18 Investment(s)
shall
mean any investment asset of the Fund, including without limitation securities,
bonds, notes, and debentures as well as receivables, derivatives, contractual
rights or entitlements and other intangible assets, but shall not include any
Principal Account.
13.19
Margin
Account shall
have the meaning set forth in Section 6.4 hereof.
13.20 Principal
Account(s)
shall
mean deposit accounts of the Fund carried on the books of BBH&Co. as
principal in accordance with Section 7 hereof.
13.21 Safekeeping
Account shall
mean an account established on the books of the Custodian or any Subcustodian
for purposes of segregating the interests of the Fund (or clients of the
Custodian or Subcustodian) from the assets of the Custodian or any
Subcustodian.
13.22
Securities
Depository
shall
mean a central or book entry system or agency established under Applicable
Law
for purposes of recording the ownership and/or entitlement to investment
securities for a given market that, if a foreign Securities Depository, meets
the definitional requirements of Rule 17f-7 under the 1940 Act.
13.23
Subcustodian(s)
shall
mean each foreign bank appointed by the Custodian pursuant to Section 8 hereof,
but shall not include Securities Depositories.
13.24 Tri-Party
Agreement
shall
have the meaning set forth in Section 6.4 hereof.
13.25 1940
Act shall
mean the Investment Company Act of 1940, as amended.
14. Compensation.
The Fund
agrees to pay to the Custodian (a) a fee in an amount set forth in the fee
letter between the Trust, on behalf of the Fund, and the Custodian in effect
on
the date hereof or as amended from time to time, and (b) all out-of-pocket
expenses reasonably incurred by the Custodian, including the fees and expenses
of all Subcustodians and other amounts paid by the Custodian to a third party
for account or benefit of the Fund, and payable from time to time. Amounts
payable by the Fund under and pursuant to this Section 14 shall be payable
by
wire transfer to the Custodian at BBH&Co. in New York, New
York.
15. Termination. This
Agreement may be terminated by either party in accordance with the provisions
of
this Section. The provisions of this Agreement and any other rights or
obligations incurred or accrued by any party hereto prior to termination of
this
Agreement shall survive any termination of this Agreement.
15.1 Term,
Notice and Effect.
This
Agreement shall have an initial term of three (3) years from the date hereof.
Thereafter, this Agreement shall automatically renew for successive one (1)
year
periods unless either party terminates this Agreement by written notice
effective no sooner than seventy-five (75) days following the date that notice
to such effect shall be delivered to the other party at its address set forth
in
Section 12.5 hereof. Notwithstanding the foregoing provisions, either party
may
terminate this Agreement at any time (a) for cause, which is a material breach
of the Agreement not cured within thirty (30) days after notice of such breach,
in which case termination shall be effective upon written receipt of notice
by
the non-terminating party; (b) upon thirty (30) days written notice to the
other
party in the event that either party is adjudged bankrupt or insolvent, or
there
shall be commenced against such party a case under any applicable bankruptcy,
insolvency, or other similar law now or hereafter in effect; or (c) at any
time
after the initial 3-year term upon sixty (60) days written notice to the other
party.
15.2
Notice
and Succession. In
the
event a termination notice is given by a party hereto, all reasonable costs
and
expenses associated with any required systems, facilities, procedures, personnel
and other resourced modifications as well as the movement of records and
materials and the conversion thereof shall be paid by the terminating
party in the event of a termination pursuant to clause (c) of the immediately
preceding sentence and by the non-terminating party in the event of a
termination pursuant to either clause (a) or (b); provided,
however,
that
the Custodian shall not be liable in any event for the conversion costs of
the
Trust or any costs associated with required systems, facilities, procedures,
personnel and other resource modifications of the Trust, and provided further,
that
the Trust shall not be liable in any event for the conversion costs of the
Custodian or any costs associated with required systems, facilities, procedures,
personnel and other resource modifications of the Custodian. Furthermore,
to the extent that it appears impracticable given the circumstances to effect
an
orderly delivery of the necessary and appropriate records of BBH to a successor
within the time specified in the notice of termination as aforesaid, BBH and
the
Trust agree that this Agreement shall remain in full force and effect for such
reasonable period as may be required to complete necessary arrangements with
a
successor.
15.3
Successor Custodian.
In
the
event of the appointment of a successor custodian, it is agreed that the
Investments of the Fund held by the Custodian or any Subcustodian shall be
delivered to the successor custodian in accordance with reasonable Instructions.
The Custodian agrees to cooperate with the Trust in the execution of documents
and performance of other actions necessary or desirable in order to facilitate
the succession of the new custodian. If no successor custodian shall be
appointed, the Custodian shall in like manner transfer the Fund’s Investments in
accordance with Instructions.
15.4
Delayed
Succession.
If no
Instruction has been given as of the effective date of termination, Custodian
may at any time on or after such termination date and upon ten (10) consecutive
calendar days written notice to the Fund either (a) deliver the Investments
of
the Fund held hereunder to the Fund at the address designated for receipt of
notices hereunder; or (b) deliver any investments held hereunder to a bank
or
trust company having a capitalization of $2,000,000 USD equivalent and operating
under the Applicable Law of the jurisdiction where such Investments are located,
such delivery to be at the risk of the Fund. In the event that Investments
or
moneys of the Fund remain in the custody of the Custodian or its Subcustodians
after the date of termination owing to the failure of the Fund to issue
Instructions with respect to their disposition or owing to the fact that such
disposition could not be accomplished in accordance with such Instructions
despite diligent efforts of the Custodian, the Custodian shall be entitled
to
compensation for its services with respect to such Investments and moneys during
such period as the Custodian or its Subcustodians retain possession of such
items and the provisions of this Agreement shall remain in full force and effect
until disposition in accordance with this Section is accomplished.
16. Master
Agreement. For
convenience purposes, this Agreement is being entered into as a master agreement
between the Custodian and the Trust on behalf of each series of the Trust from
time to time set forth on Appendix
A
hereto.
However, this Agreement shall be interpreted as applying solely to each Fund
individually, and no Fund shall be liable for the obligations or any other
Fund.
The obligations of the Trust and each Fund are not personally binding upon,
nor
shall resort be had to the property of, any of the Trustees, shareholders,
officers, employees or agents of the Trust or any Fund, but only the relevant
Fund’s property shall be bound.
17.
Compliance Policies and Procedures.
To
assist
the Trust in complying with Rule 38a-1 under the 1940 Act, BBH&Co.
represents that it has (i) adopted written policies and procedures that are
reasonably designed to prevent, and promptly detect and correct, violations
of
the federal securities laws in BBH&Co.’s fulfilling its obligations under
this Agreement, (ii) a compliance program in place to monitor its
compliance with those policies and procedures, (iii) designate a chief
compliance officer to be responsible for administering those policies and
procedures, and (iv) reviewed, and periodically reviews, those policies and
procedures for their continued adequacy and effectiveness. BBH&Co. further
agrees that it will, annually and at such other frequency as reasonably
requested by the Trust, provide to the Trust a certificate as to the continuing
accuracy of the foregoing representation and such other certifications regarding
BBH&Co.’s compliance program as the Trust and BBH&Co. shall mutually
agree. BBH&Co. shall provide the Trust with copies of periodic reports
setting forth material changes in BBH&Co.’s compliance program and shall
provide such other information as the Trust may reasonably request in connection
with BBH&Co.’s compliance program.
IN
WITNESS WHEREOF,
each of
the parties hereto has caused this Agreement to be duly executed as of the
date
first above written.
The
undersigned acknowledges that (I/we) have received a copy of this
document.
XXXXX
BROTHERS XXXXXXXX & CO. XXXXXXX
INVESTORS TRUST
On
behalf of each Fund set forth on Appendix A
By:
/s/
Xxxxx X. Xxxx By:
/s/
Xxxxxxx X. Xxxxx
Name: Xxxxx
X.
Xxxx Name:
Xxxxxxx
X. Xxxxx
Title: Managing
Director Title:
Executive
Vice President
FUNDS
TRANSFER SERVICES SCHEDULE TO CUSTODIAN AGREEMENT
1. Execution
of Payment Orders.
Xxxxx
Brothers Xxxxxxxx & Co. (the Custodian)
is
hereby instructed by Xxxxxxx
Investors Trust
(the
Trust),
on
behalf
of each of its series from
time
to time set forth on Appendix
A
hereto
(each, a “Fund”),
to
execute each payment order, whether denominated in United States dollars or
other applicable currencies, received by the Custodian in the Fund’s name as
sender and authorized and confirmed by an Authorized Person as defined in a
Custodian Agreement dated as of May 5, 2005 by and between the Custodian and
the
Trust, as amended or restated from time thereafter (the Agreement),
provided that the Fund has sufficient available funds on deposit in a Principal
Account as defined in the Agreement and provided that the order (i) is received
by the Custodian in the manner specified in this Funds Transfer Services
Schedule or any amendment hereafter; (ii) complies with any written instructions
and restrictions of the Trust as set forth in this Funds Transfer Services
Schedule or any amendment hereafter; (iii) is authorized by the Trust or is
verified by the Custodian in compliance with a security procedure set forth
in
Paragraph 2 below for verifying the authenticity of a funds transfer
communication sent to the Custodian in the name of the Fund or for the detection
of errors set forth in any such communication; and (iv) contains sufficient
data
to enable the Custodian to process such transfer.
2. Security
Procedure.
The
Trust hereby elects to use the procedure selected below as its security
procedure (the Security
Procedure).
The
Security Procedure will be used by the Custodian to verify the authenticity
of a
payment order or a communication amending or canceling a payment order. The
Custodian will act on instructions received provided the instruction is
authenticated by the Security Procedure. The Trust agrees and acknowledges
in
connection with (i) the size, type and frequency of payment orders normally
issued or expected to be issued by the Fund to the Custodian, (ii) all of the
security procedures offered to the Trust by the Custodian, and (iii) the usual
security procedures used by customers and receiving banks similarly situated,
that authentication through the Security Procedure shall be deemed commercially
reasonable for the authentication of all payment orders submitted to the
Custodian. The Trust hereby elects (please
choose one)
the
following Security Procedure as described below:
[
]
BIDS
and BIDS Worldview Payment Products.
BIDS
and BIDS Worldview Payment Products, are on-line payment order authorization
facilities with built-in authentication procedures. The Custodian and the Trust
shall each be responsible for maintaining the confidentiality of passwords
or
other codes to be used by them in connection with BIDS. The Custodian will
act
on instructions received through BIDS without duty of further confirmation
unless the Trust notifies the Custodian that its password is not secure.
[
]
SWIFT.
The
Custodian and the Trust shall comply with SWIFT’s authentication procedures. The
Custodian will act on instructions received via SWIFT provided the instruction
is authenticated by the SWIFT system.
[
]
Tested
Telex.
The
Custodian will accept payment orders sent by tested telex, provided the test
key
matches the algorithmic key the Custodian and Trust have agreed to use.
[
] Computer
Transmission.
The
Custodian is able to accept transmissions sent from the Trust’s computer
facilities to the Custodian’s computer facilities provided such transmissions
are encrypted and digitally certified or are otherwise authenticated in a
reasonable manner based on available technology. Such procedures shall be
established in an operating protocol between the Custodian and the
Trust.
[
] Telefax
Instructions.
A
payment order transmitted to the Custodian by telefax transmission shall
transmitted by the Trust to a telephone number specified from time to time
by
the Custodian for such purposes. If it detects no discrepancies, the Custodian
will follow one of the procedures below.
| 1. |
If
the telefax requests a repetitive payment order, the Custodian may
call
the Trust at its last known telephone number, request to speak to
the
Trust or Authorized Person, and confirm the authorization and the
details
of the payment order (a Callback);
or
|
| 2. |
If
the telefax requests a non-repetitive order, the Custodian will perform
a
Callback.
|
All
faxes
must be accompanied by a fax cover sheet which indicates the sender’s name,
company name, telephone number, fax number, number of pages, and number of
transactions or instructions attached.
|
[
]
|
Telephonic.
A
telephonic payment order shall be called into the Custodian at the
telephone number designated from time to time by the Custodian for
that
purpose. The caller shall identify herself/himself as an Authorized
Person. The Custodian shall obtain the payment order data from the
caller.
The Custodian shall then:
|
|
1.
|
If
a telephonic repetitive payment order, the Custodian may perform
a
Callback; or
|
2. If
a
telephonic non-repetitive payment order, the Custodian will perform a Callback.
In
the
event the Trust chooses a procedure which is not a Security Procedure as
described above, the Trust agrees to be bound by any payment order (whether
or
not authorized) issued in its name and accepted by the Custodian in compliance
with the procedure selected by the Trust.
3. Rejection
of Payment Orders.
The
Custodian shall give the Trust timely notice of the Custodian’s rejection of a
payment order. Such notice may be given in writing or orally by telephone,
each
of which is hereby deemed commercially reasonable. In the event the Custodian
fails to execute a properly executable payment order and fails to give the
Trust
notice of the Custodian’s non-execution, the Custodian shall be liable only to
the extent provided in Section 9 of the Agreement.
4. Cancellation
of Payment Orders.
The
Trust may cancel a payment order but the Custodian shall have no liability
for
the Custodian’s failure to act on a cancellation instruction unless the
Custodian has received such cancellation instruction at a time and in a manner
affording the Custodian reasonable opportunity to act prior to the Custodian’s
execution of the order. Any cancellation shall be sent and confirmed in the
manner set forth in Paragraph 2 above.
5. Responsibility
for the Detection of Errors and Unauthorized Payment Orders.
Except
as may be provided, the Custodian is not responsible for detecting any Fund
error contained in any payment order sent by the Fund to the Custodian. In
the
event that the Fund’s payment order to the Custodian either (i) identifies the
beneficiary by both a name and an identifying or bank account number and the
name and number identify different persons or entities, or (ii) identifies
any
bank by both a name and an identifying number and the number identifies a person
or entity different from the bank identified by name, execution of the payment
order, payment to the beneficiary, cancellation of the payment order or actions
taken by any bank in respect of such payment order may be made solely on the
basis of the number. The Custodian shall not be liable for interest on the
amount of any payment order that was not authorized or was erroneously executed
unless the Trust so notifies the Custodian within thirty (30) business days
following the Trust’s receipt of notice that such payment order had been
processed.
.
If a
payment order in the name of the Fund and accepted by the Custodian was not
authorized by the Trust, the liability of the parties will be governed by the
applicable provisions of UCC 4A.
6. Laws
and Regulations.
The
rights and obligations of the Custodian and the Trust with respect to any
payment order executed pursuant to this Funds Transfer Services Schedule will
be
governed by any applicable laws, regulations, circulars and funds transfer
system rules, the laws and regulations of the United States of America and
of
other relevant countries including exchange control regulations and limitations
on dealings or other sanctions, and including without limitation those sanctions
imposed under the law of the United States of America by the Office of Foreign
Assets Control. Any taxes, fines, costs, charges or fees imposed by relevant
authorities on such transactions shall be for the account of the Fund.
7.
Miscellaneous.
All
accounts opened by the Fund or its authorized agents at the Custodian subsequent
to the date hereof shall be governed by this Funds Transfer Schedule. All terms
used in this Funds Transfer Services Schedule shall have the meaning set forth
in Article 4A of the Uniform Commercial Code as currently in effect in the
State
of New York (UCC 4A) unless otherwise set forth herein. The terms and conditions
of this Funds Transfer Services Schedule are in addition to, and do not modify
or otherwise affect, the terms and conditions of the Agreement and any other
agreement or arrangement between the parties hereto.
8. Indemnification.
The
Custodian does not recommend the sending of instructions by telefax or
telephonic means as provided in Paragraph 2. BY
ELECTING TO SEND INSTRUCTIONS BY TELEFAX OR TELEPHONIC MEANS, THE TRUST AGREES
TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL
LOSSES THEREFROM EXCEPT TO THE EXTENT THAT THE CUSTODIAN HAS BEEN NEGLIGENT,
ACTED IN BAD FAITH OR WITH WILLFUL MISCONDUCT IN THE EXECUTION OF SUCH
INSTRUCTIONS.
_____________________________________________
OPTIONAL:
The
Custodian will perform a Callback if instructions are sent by telefax or
telephonic means as provided in Paragraph 2 above. THE
TRUST MAY, AT ITS OWN RISK AND BY HEREBY AGREEING TO INDEMNIFY THE CUSTODIAN
AND
ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL LOSSES THEREFROM, EXCEPT TO THE
EXTENT THAT THE CUSTODIAN HAS BEEN NEGLIGENT, ACTED IN BAD FAITH OR WITH WILLFUL
MISCONDUCT IN THE EXECUTION OF SUCH INSTRUCTIONS ELECT TO WAIVE A CALLBACK
BY
THE CUSTODIAN BY INITIALING HERE:____
_____________________________________________
9. Master
Agreement.
For
convenience purposes, this Funds Transfer Services Schedule is being entered
into as a master agreement between the Custodian and the Trust on behalf of
each
series of the Trust from time to time set forth on Appendix
A
hereto.
However, this Funds Transfer Services Schedule shall be interpreted as applying
solely to each Fund individually, and no Fund shall be liable for the
obligations or any other Fund. The obligations of the Trust and each Fund are
not personally binding upon, nor shall resort be had to the property of, any
of
the Trustees, shareholders, officers, employees or agents of the Trust or any
Fund, but only the relevant Fund’s property shall be bound.
10.
The
Custodian and the Trust may from time to time be parties to agreements in
addition to this Schedule. The terms of this Schedule shall not be applicable
to, or otherwise affect the relationship of the Custodian and the Trust under,
such other agreements unless specifically agreed to therein by the Custodian
and
the Trust.
The
undersigned acknowledges that (I/we) have received a copy of this
document.
Accepted
and agreed:
XXXXX
BROTHERS XXXXXXXX & CO. XXXXXXX
INVESTORS TRUST
on
behalf of each Fund set forth on Appendix A
By:
/s/
Xxxxx X. Xxxx By:
/s/
Xxxxxxx X. Xxxxx
Name: Xxxxx
X.
Xxxx Name:
Xxxxxxx
X. Xxxxx
Title: Managing
Director Title:
Executive
Vice President
Date: May
6,
2005 Date: May
6,
2005
ELECTRONIC
AND ON-LINE SERVICES
SCHEDULE
This
Electronic and On-Line Services Schedule (this Schedule)
to a
Custodian Agreement dated as of May 5, 2005 (as amended from time to time
hereafter, the Agreement)
by and
between Xxxxx Brothers Xxxxxxxx & Co. (we,
us, our)
and
Xxxxxxx
Investors Trust, on
behalf
of each of its series from
time
to time set forth on Appendix
A
hereto
(you,
your),
provides general provisions governing your use of and access to the Services
(as
hereinafter defined) provided to you by us via the Internet (at xxx.xxxxx.xxx
or
such other URL as we may instruct you to use to access our
products)
and via
a direct dial-up connection between your computer and our computers, as of
________________, _____, 2005 (the Effective
Date). Use
of
the Services constitutes acceptance of the terms and conditions of this
Schedule, any Appendices hereto, the Terms and Conditions posted on our web
site, and any terms and conditions specifically governing a particular Service
or our other products, which may be set forth in the Agreement or in a separate
related agreement (collectively, the Related
Agreements).
1. General
Terms.
You
will
be granted access to our suite of online products, which may include, but shall
not be limited to the following services via the Internet or dial-up connection
(each separate service is a Service;
collectively referred to as the Services):
| 1.1. |
BIDS®
and BIDS WorldView, a system for effectuating securities and fund
trade
instruction and execution, processing and handling instructions,
and for
the input and retrieval of other information;
|
| 1.2. |
F/X
WorldView, a system for executing foreign exchange
trades;
|
| 1.3. |
Fund
WorldView, a system for receiving fund and prospectus
information;
|
| 1.4. |
BBHCOnnect,
a system for placing securities trade instructions and following
the
status and detail of trades;
|
| 1.5. |
ActionViewSM,
a
system for receiving certain corporate action information;
|
| 1.6. |
Risk
View, an interactive portfolio risk analysis tool; and
|
| 1.7. |
Such
other services as we shall from time to time
offer.
|
| 2. |
Security
/ Passwords.
|
| 2.1. |
A
digital certificate and/or an encryption key may be required to access
certain Services. You may apply for a digital certificate and/or
an
encryption key by following the procedures set forth at . You
also will need an identification code (ID)
and password(s) (Password)
to access the Services.
|
| 2.2. |
You
agree to safeguard your digital certificate and/or encryption key,
ID, and
Password and not to give or make available, intentionally or otherwise,
your digital certificate, ID, and/or Password to any unauthorized
person.
You must immediately notify us in writing if you believe that your
digital
certificate and/or encryption key, Password, or ID has been compromised
or
if you suspect unauthorized access to your account by means of the
Services or otherwise, or when a person to whom a digital certificate
and/or an encryption key, Password, or ID has been assigned leaves
or is
no longer permitted to access the Services.
|
| 2.3. |
We
will not be responsible for any breach of security, or for any
unauthorized trading or theft by any third party, caused by your
failure
(be it intentional, unintentional, or negligent) to maintain the
confidentiality of your ID and/or Password and/or the security of
your
digital certificate and/or encryption key.
|
| 3. |
Instructions.
|
| 3.1. |
Proper
instructions under this Schedule shall be provided as designated
in the
Related Agreements (Instructions).
|
| 3.2. |
The
following additional provisions apply to Instructions provided via
the
Services:
|
| a. |
Instructions
sent by electronic mail will not be accepted or acted
upon.
|
| b. |
You
authorize us to act upon Instructions received through the Services
utilizing your digital certificate, ID, and/or Password as though
they
were duly authorized written instructions, without any duty of
verification or inquiry on our part, and agree to hold us harmless
for any
losses you experience as a result to the extent provided by Section
9 of
the Custody Agreement between us (the “Custody Agreement”).
|
| c. |
From
time to time, the temporary unavailability of third party
telecommunications or computer systems required by the Services may
result
in a delay in processing Instructions. In such an event, we shall
not be
liable to you or any third party for any liabilities, losses, claims,
costs, damages, penalties, fines, obligations, or expenses of any
kind
(including without limitation, reasonable attorneys’, accountants’,
consultants’, or experts’ fees and disbursements) that you experience due
to such a delay to the extent provided by Section 9.1.1 of the Custody
Agreement.
|
| 4. |
Electronic
Documents.
|
We
may
make periodic statements, disclosures, notices, and other documents available
to
you electronically, and, subject to any delivery and receipt verification
procedures required by law, you agree to receive such documents electronically
and to check the statements for accuracy. If you believe any such statement
contains incorrect information, you must follow the procedures set forth in
the
Related Agreement(s).
| 5. |
Malicious
Code.
|
You
understand and agree that you will be responsible for the introduction (by
you,
your employees, agents, or representatives) into the Services, whether
intentional or unintentional, of (i) any virus or other code, program, or
sub-program that damages or interferes with the operation of the computer system
containing the code, program or sub-program, or halts, disables, or interferes
with the operation of the Services themselves; or (ii) any device, method,
or
token whose knowing or intended purpose is to permit any person to circumvent
the normal security of the Services or the system containing the software code
for the Services (Malicious
Code).
You
agree to take all commercially reasonable actions and precautions to prevent
the
introduction and proliferation of any Malicious Code into those systems that
interact with the Services.
| 6. |
Indemnification.
|
For
avoidance of doubt, you hereby agree that the provisions in the Related
Agreement(s), including the Custody Agreement, related to your indemnification
of us and any limitations on our liability and responsibilities to you shall
be
applicable to this Agreement, and are hereby expressly incorporated herein.
You
agree that the Services are comprised of telecommunications and computer
systems, and that it is possible that Instructions, information, transactions,
or account reports might be added to, changed, or omitted by electronic or
programming malfunction, unauthorized access, or other failure of the systems
which comprise the Services, despite the security features that have been
designed into the Services. You agree that we will not be liable for any action
taken or not taken in complying with the terms of this Schedule, except for
our
bad faith, willful misconduct or gross negligence, violation of law or violation
of any other standard of care set forth in the Related Agreements. The
provisions of this paragraph shall survive the termination of this Schedule
and
the Related Agreements.
| 7. |
Payment.
|
You
may
be charged for services hereunder as set forth in a fee schedule from time
to
time agreed by us.
| 8. |
Term/Termination.
|
| 8.1. |
This
Schedule is effective as of the date you sign it or first use the
Services, whichever is first, and continues in effect until such
time as
either you or we terminate the Schedule in accordance with this Section
8
and/or until your off-line use of the Services is
terminated.
|
| 8.2. |
We
may terminate your access to the Services at any time, for any reason,
with five (5) business days prior notice; provided that we may terminate
your access to the Services with no prior notice (i) if your account
with
us is closed, (ii) if you fail to comply with any of the terms of
this
Agreement, (iii) if we believe that your continued access to the
Services
poses a security risk, or (iv) if we believe that you are violating
or
have violated applicable laws, and we will not be liable for any
loss you
may experience as a result of such termination. You may terminate
your
access to the Services at any time by giving us ten (10) business
days
notice. Upon termination, we will cancel all your Passwords and IDs
and
any in-process or pending Instructions will be carried out or cancelled,
at our sole discretion.
|
| 9. |
Miscellaneous.
|
| 9.1. |
Notices.
All notices, requests, and demands (other than routine operational
communications, such as Instructions) shall be in such form and effect
as
provided in the Related Agreement(s).
|
| 9.2. |
Inconsistent
Provisions.
Each Service may be governed by separate terms and conditions in
addition
to this Schedule and the Related Agreement(s). Except where specifically
provided to the contrary in this Schedule, in the event that such
separate
terms and conditions conflict with this Schedule and the Related
Agreement(s), the provisions of this Schedule shall prevail to the
extent
this Schedule applies to the transaction in
question.
|
| 9.3. |
Binding
Effect; Assignment; Severability.
This Schedule shall be binding on you, your employees, officers and
agents. Neither party may assign or delegate its rights and duties
under
this Schedule without the prior written consent of the other party.
In the
event that any provision of this Schedule conflicts with the law
under
which this Schedule is to be construed or if any such provision is
held
invalid or unenforceable by a court with jurisdiction over you and
us,
such provision shall be deemed to be restated to effectuate as nearly
as
possible the purposes of the Schedule in accordance with applicable
law.
The remaining provisions of this Schedule and the application of
the
challenged provision to persons or circumstances other than those
as to
which it is invalid or unenforceable shall not be affected thereby,
and
each such provision shall be valid and enforceable to the full extent
permitted by law.
|
| 9.4. |
Choice
of Law; Jury Trial.
This Schedule shall be governed by and construed, and the legal relations
between the parties shall be determined, in accordance with the laws
of
the State of New York, without giving effect to the principles of
conflicts of laws. Each party agrees to waive its right to trial
by jury
in any action or proceeding based upon or related to this Agreement.
The
parties agree that all actions and proceedings based upon or relating
to
this Schedule shall be litigated exclusively in the federal and state
courts located within New York City, New York.
|
| 10. |
Master
Agreement.
For convenience purposes, this Schedule is being entered into as
a master
agreement between the Custodian and the Trust on behalf of each series
of
the Trust from time to time set forth on Appendix
A
hereto. However, this Schedule shall be interpreted as applying solely
to
each Fund individually, and no Fund shall be liable for the obligations
or
any other Fund. The obligations of the Trust and each Fund are not
personally binding upon, nor shall resort be had to the property
of, any
of the Trustees, shareholders, officers, employees or agents of the
Trust
or any Fund, but only the relevant Fund’s property shall be
bound.
|
| 11. |
The
Custodian and the Trust may from time to time be parties to agreements
in
addition to this Schedule. The terms of this Schedule shall not be
applicable to, or otherwise affect the relationship of the Custodian
and
the Trust under, such other agreements unless specifically agreed
to
therein by the Custodian and the
Trust.
|
The
undersigned acknowledges that (I/we) have received a copy of this
document.
XXXXX
BROTHERS XXXXXXXX & CO. (“we”) XXXXXXX
INVESTORS TRUST, on behalf of
each
Fund set forth on Appendix A (“you”)
By:
/s/
Xxxxx X. Xxxx By:
/s/
Xxxxxxx X. Xxxxx
Name: Xxxxx
X.
Xxxx Name:
Xxxxxxx
X. Xxxxx
Title: Managing
Director Title:
Executive
Vice President
Date: May
6,
2005 Date: May
6,
2005
17f-5
DELEGATION SCHEDULE
By
its
execution of this Delegation Schedule dated as of May 5, 2005, Xxxxxxx Investors
Trust (the “Trust”), on behalf of each of its series from
time
to time set forth on Appendix
A
hereto
(each, a
“Fund”), a management investment company registered with the Securities and
Exchange Commission (the “Commission”) under the Investment Company Act of 1940,
as amended, (the”1940 Act”), acting through its Board of Trustees, hereby
appoints XXXXX BROTHERS XXXXXXXX & CO., a New York limited partnership
formed
under the laws of the State of New York (the
“Delegate”) as its delegate to perform certain functions with respect to the
custody of a Fund’s Assets outside the United States.
| 1. |
Maintenance
of Fund’s Assets Abroad.
The Trust, acting through its Board of Trustees or its duly authorized
representative, hereby instructs Delegate pursuant to the terms of
the
Custodian Agreement dated as of the date hereof executed by and between
the Trust and the Delegate (the “Custodian Agreement”) to place and
maintain the Fund’s Assets in countries outside the United States in
accordance with Instructions received from the Fund’s investment adviser.
Such instruction shall represent a Proper Instruction under the terms
of
the Custodian Agreement. The Fund acknowledges that: (a) the Delegate
shall perform services hereunder only with respect to the countries
where
it accepts delegation as Foreign Custody Manager as indicated on
your
Global Custody Network Listing; (b) depending on 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 Delegation Schedule shall require
the
Delegate to provide delegated or custodial services in any country,
and
there may from time to time be countries as to which the Delegate
determines it will not provide delegation
services.
|
| 2. |
Delegation.
Pursuant to the provisions of Rule 17f-5 under the 1940 Act, 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
Delegation Schedule concerning the safekeeping of the Fund’s Assets in
each of the countries as to which it acts as the Board’s delegate. The
Trust appoints the Delegate as each Fund’s “Foreign Custody Manager” as
such term is used in Rule 17f-5 under the 1940 Act. 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 Delegation
Schedule, including, without limitation, to cause the Fund’s Assets to be
placed with a particular Eligible Foreign Custodian in accordance
herewith.
|
| 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;
|
| (iii) |
The
Eligible Foreign Custodian’s general reputation and standing;
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.
|
| (b) |
Contract
Administration.
The Delegate shall cause that the foreign custody arrangements with
an
Eligible Foreign Custodian shall be governed by a written contract
that
the Delegate has determined will provide reasonable care for Fund
assets
based on the standards specified in paragraph (c)(1) of Rule 17f-5
under
the 1940 Act. 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) that will adequately protect the Fund 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 Trust’s independent registered 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 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 Delegation Schedule to the contrary,
the
duties under this Section 3 shall apply only to Eligible Foreign
Custodians selected by the Delegate and shall not apply to 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 Delegation Schedule. 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 Delegation Schedule. 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
Delegation Schedule.
|
| 5. |
Reporting.
At least annually and more frequently as mutually agreed between
the
parties, the Delegate shall provide to the Board written reports
specifying placement of the Fund’s Assets with each Eligible Foreign
Custodian selected by the Delegate pursuant to Section 3 of this
Delegation Schedule 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
Delegation Schedule 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 provide information
regarding the particular circumstances and to act only in accordance
with
Proper Instructions with respect to such liquidation or other
withdrawal.
|
| 7. |
Direction
as to Eligible Foreign Custodian.
Notwithstanding this Delegation Schedule, 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, including without limitation
with
respect to investment in countries as to which the Custodian will
not
provide delegation services. 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
Schedule 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 Delegation Schedule, 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 Delegation Schedule has been duly authorized, executed
and
delivered by the Delegate and is a legal, valid and binding agreement
of
the Delegate.
|
The
Trust
hereby represents and warrants that its Board of Trustees has determined that
it
is reasonable to rely on the Delegate to perform the delegated responsibilities
provided for herein and that this Delegation Schedule has been duly authorized,
executed and delivered by the Trust and is a legal, valid and binding agreement
of the Trust.
| 10. |
Effectiveness;
termination.
This Delegation Schedule shall be effective as of the date on which
this
Delegation Schedule shall have been accepted by the Delegate, as
indicated
by the date set forth below the Delegate’s signature. This Delegation
Schedule 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 Delegation Schedule shall be deemed
to
have been terminated concurrently with the termination of the Custodian
Agreement.
|
| 11. |
Notices.
Notices and other communications under this Delegation Schedule are
to be
made in accordance with the arrangements designated for such purpose
under
the Custodian Agreement unless otherwise indicated in a writing
referencing this Delegation Schedule and executed by both
parties.
|
| 12. |
Definitions.
Capitalized terms in this Delegation Schedule have the following
meanings:
|
| (a) |
Eligible
Foreign Custodian - shall have the meaning set forth in Rule 17f-5(a)(1)
and shall also include a U.S. Bank.
|
| (b) |
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.
|
| (c) |
Instructions
- shall have the meaning set forth in the Custodian
Agreement.
|
| (d) |
Securities
Depository - shall have the meaning set forth in Rule
17f-7.
|
| (e) |
Sovereign
Risk - shall have the meaning set forth in Section 9.1.3 of the Custodian
Agreement.
|
| (f) |
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 Delegation Schedule shall be construed in 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 either such
State.
|
| 14. |
Fees.
Delegate shall perform its functions under this Delegation Schedule
for
the compensation determined under the Custodian
Agreement.
|
| 15. |
Integration.
This Delegation Schedule 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 shall apply generally as to matters not expressly covered
in
this Delegation Schedule, including dealings with the Eligible Foreign
Custodians in the course of discharge of the Delegate’s obligations under
the Custodian Agreement.
|
| 16. |
Master
Agreement.
For convenience purposes, this Delegation Schedule is being entered
into
as a master agreement between the Custodian and the Trust on behalf
of
each series of the Trust from time to time set forth on Appendix
A
hereto. However, this Delegation Schedule shall be interpreted as
applying
solely to each Fund individually, and no Fund shall be liable for
the
obligations or any other Fund. The obligations of the Trust and each
Fund
are not personally binding upon, nor shall resort be had to the property
of, any of the Trustees, shareholders, officers, employees or agents
of
the Trust or any Fund, but only the relevant Fund’s property shall be
bound.
|
IN
WITNESS WHEREOF,
each of
the parties hereto has caused this Agreement to be duly executed as of the
date
first above written.
|
XXXXX
BROTHERS XXXXXXXX & CO.
|
XXXXXXX
INVESTORS TRUST,
On
behalf of each Fund set forth on Appendix A
|
|
By:
/s/
Xxxxx X. Xxxx
Name: Xxxxx
X. Xxxx
Title: Managing
Director
|
By:
/s/
Xxxxxxx X. Xxxxx
Name:
Xxxxxxx
X. Xxxxx
Title:
Executive
Vice President
|
Appendix
A
Funds
Xxxxxxx
Fund
Xxxxxxx
Financial Services Fund
Xxxxxxx
Financial Industries Fund
Xxxxxxx
Money Market Fund
Xxxxxxx
U.S. Government Money Market Fund
Dated
as
of May 5, 2005
