Exhibit 8(g)
THE BENCHMARK FUNDS
FOREIGN CUSTODY AGREEMENT
Agreement dated this 1st day of March 1994 between The Benchmark Funds, a
Massachusetts business trust (the "Trust"), and The Northern Trust Company, an
Illinois state bank ("Northern").
1. Appointment of Custodian. The Trust hereby appoints Northern custodian
of all securities (including repurchase agreements), cash, cash equivalents and
other instruments (collectively, "Property") now owned or hereafter acquired by
the Trust on behalf of its International Growth Portfolio and International Bond
Portfolio, and any other investment portfolios of the Trust which may invest in
the securities of foreign issuers and which are specifically authorized by
resolution of the Trust's Board of Trustees to be added to this Agreement
(collectively, the "Portfolios"), and Northern hereby accepts such appointment,
upon the terms and conditions set forth in this Agreement. The Trust agrees
promptly to deliver and pay, or cause to be delivered and paid, to Northern, as
custodian for the Portfolios, or to an agent appointed pursuant to Section 8(a)
hereof or a sub-custodian appointed pursuant to Section 8(b) or 8(c) hereof, all
securities and cash now owned or hereafter acquired by the Trust on behalf of
the Portfolios.
2. Custody of Cash; Separate Accounts.
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(a) Accounts. Northern will hold all cash and cash equivalents of
each Portfolio, in a separate account or accounts in the name of
such Portfolio, subject only to draft or order by Northern in
accordance with the terms of this Agreement. If and when
authorized by proper instructions of the Trustees or Officers of
the Trust in accordance with a vote of the majority of the
Trustees of the Trust, Northern may open and maintain an
additional account or accounts in such other banks or trust
companies as may be designated by such instructions, provided
that such account or accounts shall be in the name of Northern in
its capacity as custodian and subject only to its draft or order
in accordance with the terms of this Agreement.
It is understood that the Property in such account or accounts
may be held in such countries or other jurisdictions as shall be
specified from time to time in "proper instructions" (as defined
in Section 9 hereof).
(b) Proceeds of Sale of Shares of Trust. Upon receipt of funds
for the purchase of shares of any Portfolio, Northern shall
promptly deposit the purchase price in the account or
accounts maintained pursuant to Section 2(a) hereof.
(c) Collections. Unless otherwise directed by proper
instructions from the Trustees or Officers of the Trust,
Northern shall collect, receive and deposit in the account
or accounts maintained pursuant to Section 2(a) hereof all
income, principal and other payments in respect of the
Property held by it under this Agreement and, subject to the
other provisions of this Agreement, do all other things
necessary or proper in connection with the collection of
such income, principal and other payments. Without limiting
the generality of the foregoing, Northern shall:
(i) present for payment by the date of payment all
coupons and other income items requiring
presentation;
(ii) present for payment all securities which may mature
or be called, redeemed, retired or otherwise become
payable by the date such securities become payable;
(iii) endorse and deposit for collection, on behalf of the
Trust, checks, drafts or other negotiable instruments
no later than the next business day as received;
(iv) execute ownership and other certificates and
affidavits for all Federal and State tax purposes in
connection with the collection of income; and
(v) notify the Trust as soon as reasonably practicable
whenever income, principal or other payments due on
securities are not collected in due course.
In any case in which Northern does not receive any such due and unpaid
income, principal or other payment within a
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reasonable time after it has made proper demands for the same, it shall so
notify the Trust in writing, including copies of all demand letters, any written
responses thereto, and memoranda of telephonic demands and oral responses to
written and telephonic demands, and await proper instructions from the Trustees
or Officers of the Trust. Northern shall not be obliged to take legal action for
collection unless and until reasonably indemnified to its satisfaction.
3. Custody of Securities.
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(a) Receipt of Securities. Northern will hold in a separate
account, and physically segregated at all times from those
of any other persons, firms, corporations or other
Portfolios, pursuant to the provisions hereof, all
securities received by it for or for the account of a
Portfolio, subject to Sections 3(d), 8(a), 8(b) and 8(c)
hereof, which shall include securities the Portfolio desires
to be held in places within the United States ("domestic
securities") and "foreign securities," as defined in
paragraph (c)(1) of Rule 17f-5 ("Rule 17f-5") under the
Investment Company Act of 1940, as amended (hereinafter
collectively called "Securities"). All Securities shall be
held or disposed of by Northern for the Trust pursuant to
the terms of this Agreement. Northern shall have no power
or authority to assign, hypothecate, pledge or otherwise
dispose of any such Securities, except pursuant to proper
instructions and only for the account of the Trust as set
forth in Section 5 hereof. Any Securities delivered to
Northern other than in bearer form shall be properly
endorsed and in form for transfer or shall be in the name of
Northern, the Trust or a nominee of Northern or the Trust,
subject to Sections 3(d), 8(a), 8(b) and (c) hereof.
(b) Registered Name; Nominees. Northern shall register
Securities of the Trust held by it under this Agreement,
other than those in bearer from, in the name of the Trust or
Northern or a nominee of the Trust or Northern. Securities
held by an agent appointed pursuant to Section 8(a) hereof
or a sub-custodian appointed pursuant to Section 8(b) or
8(c) hereof may be registered in the name of such agent or
sub-custodian or a
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nominee of such agent or sub-custodian.
(c) Record Keeping and Inventory. Northern shall maintain
records of all receipts, deliveries and locations of
Securities held by it under this Agreement, together with a
current inventory thereof. Without limiting the generality
of the foregoing, Northern shall comply with such proper
instructions from the Trustees or Officers of the Trust as
may be issued from time to time in this regard. With
respect to Securities held by any agent appointed pursuant
to Section 8(a) hereof or any sub-custodian appointed
pursuant to Section 8(b) or 8(c) hereof, Northern may rely
upon certificates of the agent or sub-custodian as to its
holdings, it being understood that such reliance in no way
relieves Northern of its responsibilities under this
Agreement. Northern will promptly report to the Trust the
results of such inspections, indicating any shortages or
discrepancies uncovered thereby, and will take appropriate
action to remedy any such shortages or discrepancies.
(d) Use of Securities Depositories. Northern, each agent
appointed pursuant to Section 8(a) hereof and each sub-
custodian appointed pursuant to Section 8(b) or 8(c) hereof
may deposit all or any part of the Securities held by it
hereunder and eligible therefor in the depository systems
covered by Rule 17f-4(b) under the 1940 Act; provided that
Northern, each such agent and each such sub-custodian shall
comply in all respects with clauses (d)(1) through (d)(4) of
Rule 17f-4 under the 1940 Act and, with respect to foreign
securities depositories, Rule 17f-5 under the 1940 Act; and
provided further, that no such deposit may be made prior to
the approval by the Trust of such depository system, which
approval may be subject to such conditions as the Trust may
from time to time determine; and provided further that with
respect to domestic depository systems, (1) all books and
records maintained by Northern and each such agent and sub-
custodian which relate to the Trust's participation in such
depository systems will at all times during regular business
hours be open to inspection by the Trust's duly authorized
officers,
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employees, agents and auditors, and the Trust will be
furnished with all the information in respect of the
services rendered to it as it may require, (2) in connection
with the use of such depository systems, Northern will
cooperate with the Trust in enforcing such rights as may
exist against such depository systems with respect to
transactions or Securities of a Portfolio, (3) payment for
Securities purchased for the account of any Portfolio shall
be made only upon (i) receipt of advice from the depository
system that such Securities have been transferred to the
account (the "Account") contemplated by clause (d)(2) of
Rule 17f-4 under the 1940 Act and (ii) the making of an
entry on the records of Northern or such agent or sub-
custodian, as the case may be, to reflect such payment and
transfer for the Account of such Portfolio, and (4) transfer
of Securities sold for the Account of any Portfolio shall be
made only upon (i) receipt of advice from the depository
system that payment for such Securities has been transferred
to the Account, and (ii) the making of an entry on the
records of Northern or such agent or sub-custodian, as the
case may be, to reflect such transfer and payment for the
Account of such Portfolio. Except as may otherwise be agreed
upon in writing by Northern and the Trust, Securities of a
Portfolio shall be maintained in foreign securities
depositories only through arrangements implemented by the
foreign banking institutions serving as sub-custodians
pursuant to Section 8(c) hereof.
(e) Use of Sub-Custodians. With respect to Property which is
maintained by Northern in the custody of a sub-custodian
pursuant to Section 8(b) or 8(c): (1) Northern will
identify on its books as belonging to the particular
Portfolio any Property held by such sub-custodian; (2) any
Property held by a sub-custodian of Northern will be subject
only to the instructions of Northern or its agents, and any
Securities held in an eligible foreign securities depository
(as defined in Section 8(c)) for the account of a sub-
custodian will be subject only to the instructions of such
sub-custodian; (3) any agreement Northern shall enter into
with a
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foreign sub-custodian shall require that (i) the Property is
not subject to any right, charge, security interest, lien or
claim of any kind in favor of such sub-custodian or its
creditors except for a claim of payment for its safe custody
or administration and (ii) beneficial ownership of such
Property is freely transferable without the payment of money
or value other than for safe custody or administration;
provided, however, that the foregoing shall not apply to the
extent that any of the above-mentioned rights, charges, etc.
result from any compensation or other expenses arising with
respect to the safekeeping of Property pursuant to such
agreement; (4) Northern will supply to the Trust at least
monthly a statement in respect to any Property held by each
sub-custodian, including an identification of the entity
having possession of such Property, and Northern will send
to the Trust an advice or notification of any transfers of
Property indicating, as to Property acquired for a
Portfolio, the identity of the entity having physical
possession of such Property. In the absence of the filing in
writing with Northern by the Trust of exceptions or
objections to any such statement within sixty (60) days of
the Trust's receipt of such statement, or within sixty (60)
days after the date that a material defect is reasonably
discoverable, the Trust shall be deemed to have approved
such statement; and in such case or upon written approval of
the Trust of any such statement Northern shall, to the
extent permitted by law and provided Northern has used
reasonable care with respect to its obligations under this
Agreement, be released, relieved and discharged with respect
to all matters and things set forth in such statement as
though such statement has been settled by the decree of a
court of competent jurisdiction in an action in which the
Trust and all persons having any equity interest in the
Trust were parties; and (5) Northern hereby warrants to the
Trust that in its opinion, after due inquiry, the
established procedures to be followed by each of its
branches, each branch of a "qualified U.S. bank" and each
eligible "foreign custodian" (as defined in Section 8(c))
holding Property of the Trust pursuant to
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this Agreement afford protection for such Property at least
equal to that afforded by Northern's established procedures
with respect to similar Property held by Northern (and its
securities depositories) in Chicago, Illinois.
(f) Distributions, Rights, Etc. Northern shall receive and
collect all distributions, rights and other items of like
nature in respect of Property held by it or by an agent
appointed pursuant to Section 8(a) or a sub-custodian
appointed pursuant to Section 8(b) or 8(c) of this Agreement
and deal with the same in accordance with this Agreement and
its other obligations to the Trust.
(g) Proxies, Notices, Voting, Etc. Northern shall arrange for
the receipt by it of all forms of proxies and all notices of
meetings, calls, maturities, tender offers, exchange offers
and expirations of rights and any other notices, consents,
or announcements affecting or relating to Property held by
Northern, its agents appointed pursuant to Section 8(a)
hereof and all sub-custodians appointed pursuant to Section
8(b) and 8(c) hereof, and upon issuance of proper
instructions, Northern shall execute and deliver or cause
its nominee to execute and deliver such proxies or other
authorizations as may be necessary or appropriate.
(h) Nondiscretionary Details. In general, Northern shall attend
to all nondiscretionary details in connection with the sale,
exchange, substitution, purchase, transfer or other dealing
with Property of the Trust except as otherwise from time to
time directed by proper instructions from the Trustees or
Officers of the Trust.
4. Disbursements of Cash. Upon the issuance of proper instructions,
Northern shall make payments or disbursements of cash of each Portfolio held by
it or subject to its draft or order under this Agreement, insofar as such cash
is available, only for the following purposes:
(a) Purchases Generally. To pay for and receive Property
purchased for the account of such Portfolio, payment to be
made only (1) in accordance with the customary or
established
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securities trading or securities processing practices and
procedures in the jurisdiction or market in which the
transaction occurs, (2) in the case of a purchase effected
through a depository system, in accordance with the
conditions set forth in Section 3(d) hereof, or (3) in the
case of repurchase agreements, against delivery of the
Securities which are the subject of such repurchase
agreement in certificate form or receipt of advice from a
depository system that such Securities have been transferred
to the Portfolio's Account (except that in the case of a
repurchase agreement Northern may transfer funds to the
Account of the other party to the repurchase agreement
(i.e., the seller of the Securities) prior to the receipt of
written evidence that the Securities subject to such
repurchase agreement have been transferred by book-entry
into the Portfolio's Account, provided that Northern shall
be responsible to the Trust in the event that such
Securities are not so transferred by book-entry), the making
of an entry on the records of Northern reflecting such
transfer, and receipt of written evidence of the agreement
by such person to repurchase such Securities from such
Portfolio. All Securities accepted by Northern either shall
be accompanied by payment of, or a "due xxxx" for, any
dividends, interest or other distributions of the issuer,
due the purchaser or Northern shall take such action as may
be necessary to obtain the same.
(b) Dividends and Distributions. To release or otherwise apply
cash for the payment of dividends or other distributions to
shareholders of such Portfolio which are payable in cash.
(c) Disbursements and Liabilities. To make or cause to be made
disbursements for the payment on behalf of the Trust with
respect to such Portfolio of interest, taxes, investment
advisory, agency, professional, custodial and administration
fees and all other operating expenses, including
registration and qualification costs and other expenses of
issuing and selling shares of such Portfolio or changing its
capital
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structure, whether or not such expenses shall be in whole or
in part capitalized or treated as deferred expenses.
(d) Redemptions of Trust Shares. Subject to the Trust Agreement,
the Trust's then current Prospectus and applicable
resolutions of the Trust's Trustees, to make funds available
for payment to shareholders who have duly requested
redemption of their shares by the Trust pursuant to such
Prospectus.
(e) Conversions. To convert monies received with respect to
Securities of foreign issue into United States dollars or
any other currency necessary to effect any transaction
involving the Securities whenever it is practicable to do so
through customary banking channels, using any method or
agency available, including, but not limited to, the
facilities of Northern, its subsidiaries, affiliates or sub-
custodians.
(f) Other Purposes. To make or cause to be made disbursements
for any other purpose which is declared in such instructions
to be a proper trust purpose; provided, however, that before
making any such disbursement Northern shall have received a
copy of a resolution of the Trustees certified by the
Secretary of the Trust specifying the amount of such
disbursement, setting forth the purpose for which such
disbursement is to be made, declaring such purpose to be a
proper trust purpose and naming the person(s) to whom the
disbursement is to be made.
5. Release and Delivery of Securities. Northern shall have sole
power to release or deliver any Securities of a Portfolio held by it pursuant to
this Agreement. Upon issuance of proper instructions, Northern will transfer,
exchange, or deliver Securities held by it hereunder only for the following
purposes:
(a) Sales. To deliver Securities which have been sold for the
account of such Portfolio in accordance with the customary
or established securities trading or securities processing
practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation,
delivering Securities to the purchaser thereof or to a
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dealer therefor (or an agent for such purchaser or dealer)
against a receipt with the expectation of receiving later
payment for such Securities from such purchaser or dealer.
(b) Securities Loans. Upon receipt of the collateral required by
the Trust's then current Prospectus, to deliver Securities
which have been lent for the account of such Portfolio.
(c) Redemption or Maturity. To deliver Securities owned for the
account of such Portfolio to the issuer thereof or its agent
when such Securities are called, redeemed, retired or
otherwise become payable; provided, that in any such case,
the cash or other consideration payable in respect thereof
is to be delivered to Northern.
(d) Changes of Name and Denomination. To deliver Securities
owned for the account of such Portfolio to the issuer
thereof or its agent for transfer into the name of the Trust
or Northern or a nominee of either or a permitted sub-
custodian or agent or a nominee of such sub-custodian or
agent, or for exchange for a different number of bonds,
certificates, or other evidence representing the same
aggregate face amount or number of units bearing the same
interest rate, maturity dates and call/put provisions, if
any; provided, that in any such case, the new Securities are
to be delivered to Northern.
(e) Street Delivery. To deliver Securities owned for the account
of such Portfolio to the broker or dealer selling the same
for examination in accordance with the then current "street
delivery" custom.
(f) Securities as Collateral. To deliver Securities owned for
the account of such Portfolio for the purpose of pledge or
hypothecation to secure any loan (including a reverse
repurchase agreement) incurred by the Trust; provided that
Securities shall be released only upon payment to Northern
of the monies borrowed, except that in cases where
additional collateral is required to secure a borrowing
already made, subject to proper
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prior authorization, further Securities may be delivered for
that purpose. Upon issuance of proper instructions, Northern
shall pay such loan upon redelivery to it of the Securities
pledged or hypothecated therefor and upon surrender of the
note or notes, if any, evidencing the loan.
(g) Exchanges, Deposits, Tenders, Etc. To exchange Securities or
interim receipts or temporary Securities held by it or by
any agent appointed pursuant to Section 8(a) hereof or any
sub-custodian appointed pursuant to Section 8(b) or 8(c)
hereof for the account of such Portfolio for other
Securities alone or for other Securities and cash, and to
expend cash, insofar as cash is available, in connection
with any merger, consolidation, reorganization,
recapitalization, conversion or in connection with the
exercise of subscription or purchase rights, or otherwise;
to deposit any such Securities and cash in accordance with
the terms of any reorganization or protective plan or
otherwise, and to deliver Securities and related documents
to the designated depository or other receiving agent in
response to tender offers or similar offers to purchase
received in writing.
(h) Other Purposes. To release or deliver any Securities held by
it for the account of such Portfolio for any other purpose
which such instructions declare to be a proper trust
purpose; provided, however, that before making any such
release or delivery Northern shall have received a copy of
the resolution of the Trustees certified by the Secretary of
the Trust specifying the Securities to be delivered, setting
forth the purpose for which such release or delivery is to
be made, declaring such purpose to be a proper trust purpose
and naming the person(s) to whom such release or delivery is
to be made.
6. Records; Accounts and Reporting.
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(a) Records. Northern shall create, maintain and retain all
records relating to its activities and obligations under
this Agreement in such manner as will enable the Trust and
Northern to meet their respective obligations under:
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(i) the 1940 Act, particularly Sections 30 and 31 thereof,
and the rules and regulations thereunder including the
preparation and filing of all required periodic and other
reports, (ii) applicable Federal and State tax laws, and
(iii) any other law or administrative rule or procedure
which may be applicable to the Trust or Northern. All
records maintained by Northern in connection with the
performance of its duties under this Agreement will remain
the property of the Trust, shall be returned to the Trust
promptly upon request and, in the event of termination of
this Agreement, will be delivered in accordance with Section
16 hereof.
(b) Accounts and Reporting. Northern shall keep the books of
account for the Trust and each of its Portfolios, including
all books necessary to permit prompt determinations of the
Federal and State tax status and origin of the Trust, each
such Portfolio and the dividends and other distributions
declared and/or paid thereby as and to the extent provided
in or contemplated by the Trust's current Prospectus as in
effect from time to time (such determination being
collectively referred to herein as "Tax Determinations").
Northern shall render statements or copies thereof and shall
make Tax Determinations from time to time as contemplated by
proper instructions from the Trustees or Officers of the
Trust.
(c) Access to Records. Without limiting Section 3(d) hereof,
subject to security requirements of Northern applicable to
its own employees having access to similar records within
Northern and such regulations as to the conduct of such
matters as may be reasonably imposed by Northern after prior
consultation with an officer of the Trust or its
administrator, the books and records of Northern pertaining
to its actions under this Agreement shall be open to
inspection and audit at reasonable times by those persons or
classes of persons designated in proper instructions from
the Trustees or Officers of the Trust.
(d) Cooperation with the Trust and its Auditors.
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Northern shall cooperate with the Trust and the Trust's
independent public accountants in connection with: (1) the
preparation of reports to shareholders of the Trust, to the
Securities and Exchange Commission (including all required
periodic and other reports), to State securities
commissioners, and to others, (2) annual and other audits of
the books and records of the Trust (including, without
limitation, such procedures as may be designated in proper
instructions from the Trustees or Officers of the Trust),
and (3) other matters of a like nature. Northern shall,
subject to restrictions under applicable law, obtain from
any sub-custodian appointed pursuant to Section 8(c) hereof
an undertaking to permit independent public accountants of
the Trust such reasonable access to the records of such sub-
custodian as may be required in connection with their
examination of the books and records pertaining to the
affairs of the Trust or to supply a verifiable confirmation
of the contents of such records.
7. Additional Duties of Northern.
(a) Valuations; Net Income Computation. Unless otherwise
directed by proper instructions from the Trustees or
Officers of the Trust, Northern shall compute and determine
on the days and at the times specified in the Trust's then
current Prospectus, the net asset value of a share of each
Portfolio, such computation and determination to be made in
accordance with the Trust's then current Prospectus, and
shall promptly notify the Administrator of the Trust of the
result of such computation and determination.
Unless advised otherwise by proper instructions from the
Trustees or Officers of the Trust, Northern shall also
calculate at the times specified in the Trust's then current
Prospectus the net income of each Portfolio and shall
promptly advise the Administrator of the Trust of the
results of such calculation. Such calculation shall be made
in accordance with the Trust's then current Prospectus.
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8. Appointment of Agents and Sub-Custodians.
(a) Appointment of Agents. Northern, as custodian, may at any
time or times appoint (and may at any time remove) in
accordance with the 1940 Act any other bank, trust company
or responsible commercial agent as its agent to carry out
such of the provisions of this Agreement as Northern may
from time to time direct, provided that the appointment of
such agent shall not relieve Northern of any of its
responsibilities under this Agreement.
(b) Appointment of Sub-Custodians Generally.
Northern, as custodian, may from time to time employ one or
more sub-custodians, but only in accordance with the terms
and conditions set forth in a resolution of the Trustees of
the Trust authorizing the appointment of each particular
sub-custodian, it being understood and agreed that: (1)
Northern shall have no more responsibility or liability to
the Trust on account of any actions or omissions of any sub-
custodian so employed than such sub-custodian has to
Northern; (2) the responsibility or liability of the sub-
custodian to Northern shall conform to any resolution of the
Trustees of the Trust authorizing the appointment of the
particular sub-custodian or to the terms of any agreement
entered into between Northern and such sub-custodian to
which such resolution relates; provided, that Northern shall
not be responsible for the solvency of any sub-custodian
appointed by it with reasonable care; and (3) in no event
shall Northern be responsible for any act, omission, default
or for the solvency of any eligible foreign securities
depository approved by the Board of Trustees pursuant to
Section 3(d) hereof. Any determination of whether Northern
or a sub-custodian has exercised reasonable care under the
terms of any such agreement or otherwise shall be made in
light of prevailing standards applicable to professional
custodians in the jurisdiction in which such custodial
services are performed.
Northern shall be liable for the acts or omissions of a
foreign banking institution to
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the same extent as set forth above with respect to sub-
custodians generally and, regardless of whether assets are
maintained in the custody of a foreign banking institution,
a foreign securities depository or a branch of Northern or
another U.S. bank, Northern shall not be liable for any
loss, damage, cost, expense, liability or claim resulting
from nationalization, expropriation, currency restrictions,
or acts of war or terrorism or any loss where the sub-
custodian has otherwise exercised reasonable care.
Northern may only deposit Securities in an account with a
sub-custodian which includes exclusively the assets held by
Northern for its customers, and Northern will cause such
account to be designated by such sub-custodian as a special
custody account for the exclusive benefit of customers of
Northern.
(c) Appointment of Foreign Sub-Custodians.
Northern may hold the Portfolios' foreign securities and
cash and cash equivalents in such amounts as Northern may
determine to be reasonably necessary to effect a Portfolio's
foreign securities transactions in accounts established by
Northern with one of its branches, a branch of a qualified
U.S. bank, an eligible foreign custodian or an eligible
foreign securities depository; provided, however, that the
Board of Trustees of the Trust has approved the use of such
eligible foreign custodian (and Northern's contract with
such custodian) or eligible foreign securities depository by
resolution, and proper instructions to such effect have been
provided to Northern. Furthermore, if a branch of Northern,
a branch of a qualified U.S. bank or an eligible foreign
custodian is selected to act as Northern's sub-custodian to
hold any Property, such entity is authorized to hold such in
its Account with any eligible foreign securities depository
in which it participates so long as such foreign securities
depository has been approved by the Board of Trustees of the
Trust. For purposes of this Agreement (1) "qualified U.S.
bank" shall mean a qualified U.S. bank as defined in Rule
17f-5 under the 1940 Act
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("Rule 17f-5"); (2) "eligible foreign custodian" shall mean
an eligible foreign custodian as defined in Rule 17f-5; and
(3) "eligible foreign securities depository" shall mean a
securities depository or clearing agency, incorporated or
organized under the laws of a country other than the United
States, which operates (i) the central system for handling
of securities or equivalent book-entries in that country or
(ii) a transnational system for the central handling of
securities or equivalent book-entries, or is otherwise
authorized by the Securities and Exchange Commission to hold
the portfolio securities of registered investment companies.
For purposes of this Section 8(c), the term "sub-custodian" will refer
to (i) any branch of Northern, (ii) any branch of a qualified U.S. bank or any
eligible foreign custodian with which Northern has entered into an agreement of
the type contemplated hereunder or (iii) any eligible foreign securities
depository.
If, after the initial approval of the sub-custodians by the Board of
Trustees of the Trust in connection with this Agreement, Northern wishes to
appoint other sub-custodians to hold Property of the Portfolios, it will so
notify the Trust and will provide it with information reasonably necessary to
determine any such new sub-custodian's eligibility under Rule 17f-5, including a
copy of the proposed agreement with such sub-custodian. The Trust shall within
30 days after receipt of such notice give a written approval or disapproval of
the proposed action.
If Northern intends to remove any sub-custodian previously approved,
it shall so notify the Trust and shall move the Property deposited with such
sub-custodian to another sub-custodian previously approved or to a new sub-
custodian, provided that the appointment of any new sub-custodian will be
subject to the requirements set forth in the preceding paragraph. Northern shall
take steps as may be required to remove any sub-custodian which has ceased to
meet the requirements of Rule 17f-5.
Northern shall provide to the Trust on at least an annual basis, a
report confirming that its arrangements hereunder with respect to foreign sub-
custodians remain in compliance with the rules of the Securities and Exchange
Commission governing such arrangements.
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9. Proper Instructions.
(a) Proper Instructions Generally. Proper instructions shall be
deemed to have been issued upon issuance of written
instructions signed by not less than one officer and one
responsible employee of Northern which in the case of each
such officer and employee Northern's Board of Directors
shall have from time to time authorized to give the
particular class of instructions in question. Different
persons may be authorized to give instructions for different
purposes.
(b) Proper Instructions from the Trustees or Officers of the
Trust. Proper instructions from the Trustees or Officers of
the Trust shall be deemed to have been issued upon receipt
by Northern of written instructions (including receipt of
facsimile) signed by a majority of the Trustees of the Trust
or by not less than two of the Officers or Trustees of the
Trust designated from time to time by resolution of the
Trustees. Such instructions shall be deemed proper
instructions as that term is used in this Agreement in
addition to also being deemed proper instructions from the
Trustees or Officers of the Trust. A certificate executed by
the Secretary or Assistant Secretary of the Trust as to the
persons serving as Trustees and/or who are Officers of the
Trust designated as set forth above may be received and
accepted by Northern as conclusive evidence of those persons
who are such Trustees and/or Officers and may be considered
to be accurate until receipt of written notice (or oral
notice followed by written confirmation within seven days)
to the contrary. In the case of conflict between
instructions under Section 9(a) and under this Section 9(b),
those given pursuant to this Section 9(b) shall prevail upon
receipt by Northern.
10. Delivery of Documents. The Trust has furnished Northern with
copies, properly certified or authenticated, of the following: before any
Portfolio engages in any transactions regulated by the Commodity Futures Trading
Commission ("CFTC"), a copy of either (i) a filed notice of eligibility to claim
the exclusion from the definition of "commodity pool operator" contained in
Section 2(a)(1)(A) of the Commodity Exchange Act
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("CEA") that is provided in Rule 4.5 under the CEA, together with all
supplements as are required by the CFTC, or (ii) a letter which has been granted
the Trust by the CFTC which states that the Trust will not be treated as a
"pool" as defined in Section 4.10(d) of the CFTC's General Regulations, or (iii)
a letter which has been granted the Trust by the CFTC which states that the CFTC
will not take any enforcement action if the Trust does not register as a
"commodity pool operator."
The Trust will furnish Northern from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
11. Segregated Accounts.
(a) Northern shall upon receipt of proper instructions
establish and maintain a segregated account or accounts on its
records for and on behalf of each Portfolio of the Trust, into
which account or accounts may be transferred cash and/or
Securities, including securities in a depository system (i) for
the purposes of compliance by the Trust with the procedures
required by a securities or option exchange, providing such
procedures comply with the 1940 Act and Release No. 10666 or any
subsequent release or releases of the Securities and Exchange
Commission ("SEC") relating to the maintenance of segregated
accounts by registered investment companies, and (ii) for other
proper corporate purposes, but only, in the case of clause (ii),
upon receipt of proper instructions.
(b) Northern may enter into separate procedural, safekeeping
or other agreements with various futures commission merchants
("FCMs") and banks that are unaffiliated with the Trust (each a
"Safekeeping Arrangement"), pursuant to which the banks will act
as the Trust's custodian with respect to the Trust's margin
deposits in transactions involving futures contracts and options
on futures contracts. Such margin deposits will be held in
segregated accounts (each an "FCM Account") subject to the
disposition by the FCM involved in accordance with the customer
contract between FCM and the Trust ("FCM Contract"), SEC rules
governing such segregated accounts, CFTC rules and the rules of
the applicable commodities exchange. Transfers of initial and
variation margin and premiums shall be made from the Trust's
custodial accounts under the Custodian Agreement upon proper
instructions.
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12. Compensation; Reimbursement. The Trust shall pay to Northern, as
custodian, the compensation and expense reimbursement set forth in Exhibit A
hereto.
13. Duration and Termination. This Agreement shall continue, unless
sooner terminated as provided herein, until February 29, 1996, and for each
Portfolio thereafter shall continue automatically for periods of one year so
long as each such latter continuance is approved at least annually (a) by the
vote of a majority of the Trustees of the Trust who are not parties to this
Agreement or interested persons (as defined by the 0000 Xxx) of any such party,
cast in person at a meeting called for the purpose of voting on such approval,
and (b) by the Trustees of the Trust or by a majority of the outstanding Shares
(as defined with respect to voting securities in the 1940 Act) representing the
interests in such Portfolio; provided, however, that this Agreement may be
terminated by the Trust at any time, without the payment of any penalty, by vote
of a majority of the Trustees of the Trust or by vote of a majority of the
outstanding Shares (as so defined) of the Trust on 60 days' written notice to
Northern, or by Northern at any time, without the payment of any penalty, on 60
days' written notice to the Trust.
14. Amendment of Agreement. This Agreement may be amended by mutual
consent, but the consent of the Trust must be approved by vote of a majority of
those Trustees of the Trust who are not parties to this Agreement or interested
persons (as defined in the 0000 Xxx) of any such party.
15. Interpretative and Additional Provisions. In connection with the
operation of this Agreement, Northern and the Trust may agree from time to time,
by written instrument signed by both parties, on such provisions interpretative
of or in addition to the provisions of this Agreement as may in their joint
opinion be consistent with the general tenor of this Agreement, provided that no
such interpretative or additional provisions shall contravene any applicable
Federal or State laws or regulations, or any provision of the Trust Agreement or
the Trust's By-laws, as the same may from time to time be amended. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
16. Successor Custodian.
(a) Appointment of Successor by Trust. If a successor custodian
is appointed by the Trust and a certified copy of the
related appointing resolutions is delivered to Northern,
Northern shall, upon termination of this Agreement or
substitution of such
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successor for Northern, deliver to such successor custodian,
duly endorsed and in proper form for transfer, all
Securities then held by Northern hereunder (or by any agent
or sub-custodian of Northern) and all funds or other
Property of the Trust deposited with or held by Northern
hereunder (or by any agent or sub-custodian of Northern).
(b) Delivery Pursuant to Shareholder Resolution. In the event
that this Agreement is to be terminated but no new custodian
can be found by the Trust, the Trust shall, before
authorizing the delivery of the Securities, funds and other
Property to anyone other than a successor custodian, submit
to its Shareholders the question of whether the Trust shall
be liquidated or shall function without a custodian. Upon
approval by the Shareholders for the Trust to liquidate or
function without a custodian Northern shall, in like manner,
upon receipt of a certified copy of a resolution of the
Shareholders of the Trust deliver such Securities, funds and
other Property in accordance with such resolution.
(c) Selection of Successor by Northern. In the event that this
Agreement is terminated and no successor custodian has been
appointed by the Trust or certified copy of a resolution of
the Shareholders has been delivered to Northern on or before
the date when such termination shall become effective, then
Northern shall have the right to deliver to a bank or trust
company of its own selection, having an aggregate capital,
surplus, and undivided profits, as shown by its last
published report, of not less than $200 million, all
Securities, funds, property and instruments of the Trust
held by Northern under this Agreement (or any agent or sub-
custodian of Northern) and all instruments held by Northern
(or such agent or sub-custodian) relative thereto.
Thereafter, such bank or trust company shall be the
successor custodian to Northern under this Agreement.
17. Communications. Notices and other writings delivered or mailed
postage prepaid to the Trust in care of The Benchmark Funds, 0000 Xxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx, 00000, or
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to The Northern Trust Company at 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, Attention: Fund Accounting, Canal Center, or to such other address as the
Trust or Northern may hereafter specify by written notice to the most recent
address specified by the party to whom such notice is addressed, shall be deemed
to have been properly delivered or given hereunder to the respective addressee.
18. Miscellaneous. The Trust's Declaration of Trust as amended to date
is on file with the Secretary of The Commonwealth of Massachusetts. The captions
in this Agreement are included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. Any provision in this Agreement
requiring compliance with any statute or regulation shall mean such statute or
regulation as amended and in effect from time to time. This Agreement shall be
construed in accordance with the laws of the State of Illinois (except as to
Section 19 hereof which shall be construed in accordance with the laws of The
Commonwealth of Massachusetts) and shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
19. Shareholder Liability. This Agreement is executed by or on behalf
of the Trust and the obligations hereunder are not binding upon any of the
Trustees, Officers or Shareholders of the Trust individually but are binding
only upon the Trust and its assets and property. All obligations of the Trust
under this Agreement shall apply only on a Portfolio by Portfolio basis, and the
assets of one Portfolio shall not be liable for the obligations of another
Portfolio.
THE BENCHMARK FUNDS
By /s/ Xxxxx X. Xxxxxx
---------------------------------
As its
-----------------------------
THE NORTHERN TRUST COMPANY
By /s/ Jen Sheridi
---------------------------------
As its
-----------------------------
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benchmar/agrmts/intcust.agr
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EXHIBIT A
---------
A. Basic Fee
---------
Each Portfolio:
--------------
Flat Fee of $35,000
- plus -
9/100th of 1% of the Portfolio's average daily net assets
The basic fee is an annual fee which will be billed and payable monthly.
B. Out-of-Pocket Expenses Reimbursable by the Trust
------------------------------------------------
The Trust will reimburse Northern monthly for the following out-of-pocket
expenses incurred by Northern during such month in the performance of its duties
under this Foreign Custody Agreement: (i) telephone; (ii) postage; (iii) courier
fees of independent courier services; (iv) office supplies used in maintaining
the Trust's records; and (v) duplicating.
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