Exhibit (g)(2)
FOREIGN CUSTODY MANAGER AGREEMENT
AGREEMENT made as of July 24, 2007, between each mutual fund identified
on Schedule 1 attached hereto (each, a "Fund"; collectively, the "Funds") and
The Bank of New York ("BNY").
W I T N E S S E T H:
WHEREAS, each Fund desires to appoint BNY as a Foreign Custody Manager
on the terms and conditions contained herein;
WHEREAS, BNY desires to serve as a Foreign Custody Manager and perform
the duties set forth herein on the terms and conditions contained herein;
NOW THEREFORE, in consideration of the mutual promises hereinafter
contained in this Agreement, each Fund and BNY hereby agrees as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "Board" shall mean the board of directors or board of trustees, as
the case may be, of each Fund.
2. "Eligible Foreign Custodian" shall have the meaning provided in the
Rule.
3. "Monitoring System" shall mean a system established by BNY to
fulfill the Responsibilities specified in clauses 1(d) and 1(e) of Article III
of this Agreement.
4. "Qualified Foreign Bank" shall have the meaning provided in the
Rule.
5. "Responsibilities" shall mean the responsibilities delegated to BNY
as a Foreign Custody Manager with respect to each Specified Country and each
Eligible Foreign Custodian selected by BNY, as such responsibilities are more
fully described in Article III of this Agreement.
6. "Rule" shall mean Rule 17f-5 under the Investment Company Act of
1940, as amended from time to time.
7. "Securities Depository" shall mean any securities depository or
clearing agency within the meaning of Rule 17f-7.
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8. "Specified Country" shall mean each country listed on Schedule 2
attached hereto and each country, other than the United States, constituting the
primary market for a security with respect to which the relevant Fund has given
settlement instructions to The Bank of New York as custodian (the "Custodian")
under its Custody Agreement with such Fund.
ARTICLE II
BNY AS A FOREIGN CUSTODY MANAGER
1. Each Fund on behalf of its Board hereby delegates to BNY with
respect to each Specified Country the Responsibilities.
2. BNY accepts each Fund's Board's delegation of Responsibilities with
respect to each Specified Country and agrees in performing the Responsibilities
as a Foreign Custody Manager to exercise reasonable care, prudence and diligence
such as a person having responsibility for the safekeeping of the Fund's assets
would exercise.
3. BNY shall provide to each Board at such times as the Board deems
reasonable and appropriate based on the circumstances of the relevant Fund's
foreign custody arrangements written reports notifying the Board of the
placement of assets of the Fund with a particular Eligible Foreign Custodian
within a Specified Country and of any material change in the arrangements
(including, in the case of Qualified Foreign Banks, any material change in any
contract governing such arrangements and in the case of Securities Depositories,
any material change in the established practices or procedures of such
Securities Depositories) with respect to assets of the Fund with any such
Eligible Foreign Custodian.
ARTICLE III
RESPONSIBILITIES
1. Subject to the provisions of this Agreement, BNY shall with respect
to each Specified Country select an Eligible Foreign Custodian. In connection
therewith, BNY shall: (a) determine that assets of the Funds held by such
Eligible Foreign Custodian will be subject to reasonable care, based on the
standards applicable to custodians in the relevant market in which such Eligible
Foreign Custodian operates, after considering all factors relevant to the
safekeeping of such assets, including, without limitation, those contained in
paragraph (c)(1) of the Rule; (b) determine that the Funds' foreign custody
arrangements with each Qualified Foreign Bank are governed by a written contract
with the Custodian (or, in the case of a Securities Depository, by such a
contract, by the rules or established practices or procedures of the Securities
Depository, or by any combination of the foregoing) which will provide
reasonable care for the Funds' assets based on the standards specified in
paragraph (c)(1) of the Rule; (c) determine that each contract with a Qualified
Foreign Bank shall include the provisions specified in paragraph (c)(2)(i)(A)
through (F) of the Rule or, alternatively, in lieu of any or all of such
(c)(2)(i)(A) through (F) provisions, such other provisions as BNY determines
will provide, in their entirety, the same or a greater level of care and
protection for the assets of the Funds as such specified provisions; (d) monitor
pursuant to the Monitoring System the appropriateness of maintaining the assets
of the Funds with a particular Eligible Foreign Custodian pursuant to paragraph
(c)(1) of the Rule and
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in the case of a Qualified Foreign Bank, any material change in the contract
governing such arrangement and in the case of a Securities Depository, any
material change in the established practices or procedures of such Securities
Depository; and (e) advise the Funds whenever an arrangement (including, in the
case of a Qualified Foreign Bank, any material change in the contract governing
such arrangement and in the case of a Securities Depository, any material change
in the established practices or procedures of such Securities Depository)
described in preceding clause (d) no longer meets the requirements of the Rule.
Anything in this Agreement to the contrary notwithstanding, BNY shall in no
event be deemed to have selected any Securities Depository the use of which is
mandatory by law or regulation or because securities cannot be withdrawn from
such Securities Depository, or because maintaining securities outside the
Securities Depository is not consistent with prevailing custodial practices in
the relevant market (each, a "Compulsory Depository"); it being understood
however, that for each Compulsory Depository utilized or intended to be utilized
by the Funds, BNY may provide the Funds from time to time with information
addressing the factors set forth in Section (c)(1) of the Rule and BNY's
opinions with respect thereto in order to assist the Funds in determining the
appropriateness of placing Fund assets therein.
2. (a) For purposes of Clauses (a) and (b) of preceding Section 1 of
this Article, with respect to Securities Depositories, it is understood that
such determination shall be made on the basis of, and limited by, publicly
available information with respect to each such Securities Depository.
(b) For purposes of clause (d) of preceding Section 1 of this Article,
BNY's determination of appropriateness shall not include, nor be deemed to
include, any evaluation of Country Risks associated with investment in a
particular country. For purposes hereof, "Country Risks" shall mean systemic
risks of holding assets in a particular country including, but not limited to,
(a) the use of Compulsory Depositories, (b) such country's financial
infrastructure, (c) such country's prevailing custody and settlement practices,
(d) nationalization, expropriation or other governmental actions, (e) regulation
of the banking or securities industry, (f) currency controls, restrictions,
devaluations or fluctuations, and (g) market conditions which affect the orderly
execution of securities transactions or affect the value of securities.
ARTICLE IV
REPRESENTATIONS
1. Each Fund hereby represents that: (a) this Agreement has been duly
authorized, executed and delivered by the Fund, constitutes a valid and legally
binding obligation of the Fund enforceable in accordance with its terms, and no
statute, regulation, rule, order, judgment or contract binding on the Fund
prohibits the Fund's execution or performance of this Agreement; (b) this
Agreement has been approved and ratified by the Fund's Board at a meeting duly
called and at which a quorum was at all times present; and (c) the Fund's Board
or its investment advisor has considered the Country Risks associated with
investment in each Specified Country and will have considered such risks prior
to any settlement instructions being given to the Custodian with respect to any
other Specified Country.
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2. BNY hereby represents that: (a) BNY is duly organized and existing
under the laws of the State of New York, with full power to carry on its
businesses as now conducted, and to enter into this Agreement and to perform its
obligations hereunder; (b) this Agreement has been duly authorized, executed and
delivered by BNY, constitutes a valid and legally binding obligation of BNY
enforceable in accordance with its terms, and no statute, regulation, rule,
order, judgment or contract binding on BNY prohibits BNY's execution or
performance of this Agreement; and (c) BNY has established the Monitoring
System.
ARTICLE V
CONCERNING BNY
1. BNY shall not be liable for any costs, expenses, damages,
liabilities or claims, including attorneys' and accountants' fees, sustained or
incurred by, or asserted against, any Fund except to the extent the same arises
out of the failure of BNY to exercise the care, prudence and diligence required
by Section 2 of Article II hereof. In no event shall BNY be liable to any Fund,
such Fund's Board, or any third party for special, indirect or consequential
damages, or for lost profits or loss of business, arising in connection with
this Agreement.
2. Each Fund shall indemnify BNY and hold it harmless from and against
any and all costs, expenses, damages, liabilities or claims, including
attorneys' and accountants' fees, sustained or incurred by, or asserted against,
BNY by reason or as a result of any action or inaction, or arising out of BNY's
performance hereunder, provided that no Fund shall indemnify BNY to the extent
any such costs, expenses, damages, liabilities or claims arise out of BNY's
failure to exercise the reasonable care, prudence and diligence required by
Section 2 of Article II hereof.
3. For its services hereunder, each Fund agrees to pay to BNY such
compensation and out-of-pocket expenses as shall be mutually agreed. BNY
understands and agrees that XShares Advisors LLC, the investment adviser to the
Fund (the "Advisor") may pay the fees and expenses under this Agreement directly
to BNY as a result of its contractual arrangements with the Fund and any such
payment by the Advisor will discharge the Fund of its obligations hereunder.
Notwithstanding any such arrangements, nothing herein shall be deemed to relieve
the Fund of its obligations to pay such fees and expenses if such payment is not
made by the Advisor.
4. BNY shall have only such duties as are expressly set forth herein.
In no event shall BNY be liable for any Country Risks associated with
investments in a particular country.
ARTICLE VI
MISCELLANEOUS
1. This Agreement constitutes the entire agreement between each Fund
and BNY, and no provision in the Custody Agreement between such Fund and the
Custodian shall affect the duties and obligations of BNY hereunder, nor shall
any provision in this Agreement affect the duties or obligations of the
Custodian under the Custody Agreement.
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2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to BNY, shall be sufficiently given if received by it
at its offices at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
place as BNY may from time to time designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to a Fund shall be sufficiently given if received by
it at its offices at 000 Xxxxxxxxx Xxx, Xxxxx 0000, Xxx Xxxx, XX 00000 or at
such other place as the Fund may from time to time designate in writing.
4. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
thereby. This Agreement may not be amended or modified in any manner except by a
written agreement executed by the relevant Fund and BNY. This Agreement shall
extend to and shall be binding upon the parties hereto, and their respective
successors and assigns; provided however, that this Agreement shall not be
assignable by any Fund or BNY without the written consent of BNY or the relevant
Fund.
5. This Agreement shall be construed in accordance with the substantive
laws of the State of New York, without regard to conflicts of laws principles
thereof. Each Fund and BNY hereby consents to the jurisdiction of a state or
federal court situated in New York City, New York in connection with any dispute
arising hereunder. Each Fund hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of venue of any such proceeding brought in such a court and any claim
that such proceeding brought in such a court has been brought in an inconvenient
forum. Each Fund and BNY each hereby irrevocably waives any and all rights to
trial by jury in any legal proceeding arising out of or relating to this
Agreement.
6. The parties hereto agree that in performing hereunder, BNY is acting
solely on behalf of the relevant Fund and no contractual or service relationship
shall be deemed to be established hereby between BNY and any other person.
7. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
8. This Agreement shall terminate with respect to any Fund
simultaneously with the termination of the Custody Agreement between such Fund
and the Custodian, and may otherwise be terminated by a Fund (as to such Fund)
or BNY upon not less than thirty (30) days prior written notice.
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IN WITNESS WHEREOF, each Fund and BNY has caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the date
first above written.
TDAX FUNDS, INC.
on behalf of each Fund listed on Schedule 1
By: /s/ Xxxxx X. Xxxxxx
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Title: CFO and Secretary
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. XxXxxx
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Title: Managing Director
fcmstd3.doc
(10-99)
Exhibit (g)(2)
SCHEDULE 1
Name of Fund
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TDAX Independence 2010 Exchange-Traded Fund
TDAX Independence 2020 Exchange-Traded Fund
TDAX Independence 2030 Exchange-Traded Fund
TDAX Independence 2040 Exchange-Traded Fund
TDAX Independence In-Target Exchange-Traded Fund
Exhibit (g)(2)
SCHEDULE 0
Xxxxxxxxx
Xxxxxxx
Xxxxxx
Finland
France
Germany
Italy
Japan
Netherlands
Spain
Sweden
Switzerland
UK
US
