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FORM OF
SUBCUSTODY AGREEMENT
Subcustody Agreement, dated _____________, between XXXXXX
XXXXXXX TRUST COMPANY ("MSTC") and [Name of Subcustodian] {the "Subcustodian").
1. Appointment and Acceptance. MSTC hereby appoints the
Subcustodian as subcustodian of the Property (as hereinafter defined), and
instructs the Subcustodian to establish an account or accounts, each identified
as belonging to MSTC for the benefit of MSTC's clients. Each and all such
accounts, as applicable, will be referred to herein as the "Account" and will
be subject to the terms and conditions set forth herein.
2. The Account. The Subcustodian shall hold in the
Account for MSTC such bonds, debentures, notes, shares of stock, and other
securities ("Securities"), such cash and such other property (all such
Securities, cash and other property being collectively the "Property") which
are delivered to the Subcustodian for the Account. Each separate account in
the Account shall be identified on the Subcustodian's books as held solely for
the benefit of MSTC's clients.
3. Use of Depositories, Etc. (a) The Subcustodian may
engage a securities depository to hold Property deposited in the Account;
provided, however, the Subcustodian shall not, without the prior written
approval of MSTC, deposit Securities in any securities depository or utilize a
clearing agency, incorporated or organized under the laws of a country other
than the United States, other than the Euro-clear System or Centrale de
Livraison des Valeurs Mobilieres S.A., unless such depository or clearing
agency operates the central system for handling of securities or equivalent
book-entries in that country.
(b) If the Subcustodian deposits Property in a securities
depository or clearing agency, the Subcustodian shall identify the Property so
deposited on the Subcustodian's books as belonging to MSTC for the benefit of
MSTC's clients and shall require that such securities depository or clearing
agency identify the Property so deposited on its books as belonging to the
Subcustodian for the benefit of MSTC.
4. Representations. (a) The Subcustodian represents
that it is either:
(i) A branch of an institution described in
Section 4(b)(i);
(ii) A majority-owned direct or indirect
subsidiary of an institution described in Section 4(b)(i) or
bank-holding company that is incorporated or organized under
the laws of a country other than the United States and
currently has stockholders' equity in excess of $100 million
(U.S. dollars or the equivalent of U.S. dollars);
(iii) A banking institution or a trust company,
incorporated or organized under the laws of a country other
than the United States,
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regulated as such by that country's government or an agency
thereof and currently has stockholders' equity in excess of
$200 million (U.S. dollars or the equivalent of U.S. dollars);
or
(iv) Eligible to act as an "eligible foreign
custodian" as defined in Rule 17f-5 promulgated under the U.S.
Investment Company Act of 1940 pursuant to an exemption
thereto.
(b) The Subcustodian represents that it and any foreign
securities depository or foreign clearing agency utilized by it are either:
(i) (A) A banking institution organized under
the laws of the United States, (B) a member bank of the United
States Federal Reserve System or (C) any other banking
institution trust company, whether incorporated or not, doing
business under the laws of the United States or of any State
of the United States, a substantial portion of the business of
which consists of receiving deposits or exercising fiduciary
powers similar to those permitted to national banks under the
authority of the United States Comptroller of the Currency,
and which is supervised and examined by State or Federal
authority having supervision over banks, and that, in the case
of clause (A), (B) or (C) above, had, as of the last day of
its most recent fiscal year, equity capital in excess of $1
million; or
(ii) A bank, securities depository or clearing
agency supervised or regulated by a government agency or
regulatory authority in a jurisdiction other than the United
States having authority over such banks, depositories or
clearing agencies.
No less frequently than annually, and upon additional request by MSTC, the
Subcustodian shall certify in writing the name, address and principal place of
business of any entity described in clause (ii) above and the name and address
of the governmental agency or regulatory authority supervising such entity.
(c) The Subcustodian shall notify MSTC immediately in the
event (i) there appears to be a substantial likelihood that its stockholders'
equity will decline below the amounts set forth in Section 4(a) or (b), as
applicable, or (ii) in any event, at such time as any of its representations
may no longer be made.
(d) MSTC and the Subcustodian each represents and
warrants to the other, which representations and warranties shall be deemed to
be repeated on each date of delivery of Property to the Subcustodian, that:
(i) it is duly organized and existing under the
laws of the jurisdiction of its organization with full power
and authority to execute and
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delivery this Agreement and to perform all of the duties and
obligations to be performed by it hereunder;
(ii) the person executing this Agreement on its
behalf has been duly and properly authorized to do so; and
(iii) this Agreement is the legal, valid and
binding obligation of such party, enforceable against such
party in accordance with its terms, except as such
enforceability may be limited by the effect of any bankruptcy,
insolvency or similar laws, or by equitable principles
relating to or limiting creditors' rights generally.
5. Actions Upon Authorized Instructions. Upon
Authorized Instructions (as hereinafter defined), the Subcustodian is
authorized to pay cash from the Account and to sell, assign, transfer, deliver
or exchange, or to receive or purchase for the Account, Property, but only as
provided in such Authorized Instructions.
6. Actions Without Authorized Instructions. Unless the
Subcustodian receives Authorized Instructions to the contrary, the Subcustodian
is authorized to:
(a) make payments to itself or others for expenses of
handling Property or other similar items relating to its duties under this
Agreement, provided that all such payments shall be accounted for to MSTC;
(b) receive and collect all income and principal with
respect to Securities and to credit cash receipts to the Accounts;
(c) exchange Securities when the exchange is purely
ministerial (including, without limitation, the exchange of interim receipts to
temporary securities for securities in definitive form and the exchange of
warrants, or other documents of entitlement to securities, for the securities
themselves);
(d) surrender Securities at maturity or when called for
redemption upon receiving payment therefor;
(e) execute in MSTC's name such ownership and other
certificates as may be required to obtain the payment of income from
Securities;
(f) pay or cause to be paid, from the Accounts, any and
all taxes and levies in the nature of taxes imposed on Property by any
governmental authority in connection with custody of and transactions in such
Property;
(g) endorse for collection, in the name of MSTC, checks,
drafts and other negotiable instruments;
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(h) take non-discretionary action on mandatory corporate
actions; and
(i) in general, attend to all nondiscretionary details in
connection with the custody, sale, purchase, transfer and other dealings with
the Property.
Further, the Subcustodian shall use reasonable efforts promptly to reclaim any
foreign withholding tax relating to the Account.
7. Corporate Action. If the Subcustodian shall receive
any proxies, notices, reports or other communications relative to any of the
Securities in the Account in connection with tender offers, reorganizations,
mergers, consolidations, or similar events which may have an impact upon the
issuer thereof, the Subcustodian shall promptly transmit any such communication
to MSTC by such means as will permit MSTC and its clients to take timely action
with respect thereto.
8. Authorized Instructions. For purposes of this
Agreement, "Authorized Instructions" means (a) instructions issued by MSTC in
writing signed by such persons as are designated by MSTC in writing to the
Subcustodian; (b) telex or tested telex instructions of MSTC; (c) facsimile
transmissions of instructions as set out in clause (a) above; (d) other forms
of instruction issued by MSTC in computer readable form as shall be customarily
utilized for the transmission of like information; and (e) such other forms of
communication issued by MSTC as from time to time shall be agreed upon by MSTC
and the Subcustodian.
9. Reports. (a) The Subcustodian shall supply periodic
reports with respect to the safekeeping of Property held by it under this
Agreement. The content of such reports shall include, but not be limited to,
any transfer of Property to or from the Account held by the Subcustodian
hereunder and such other information in such form and substance as MSTC may
reasonably request or which it may require in order to comply with applicable
reporting requirements.
(b) The Subcustodian shall notify MSTC within ten days of
discovery of any losses due to fraud or dishonesty of its agents or employees,
and shall provide MSTC a description of such incident with sufficient
specificity to enable a claim for reimbursement of such loss to be filed under
any governing surety bond or insurance policy.
(c) The Subcustodian shall use its best endeavors to
notify MSTC promptly of any actual or proposed changes in local laws,
regulations and practices that affect the services provided by the Subcustodian
hereunder.
10. Records. In addition to its obligations under
Section 3(b) hereof, the Subcustodian shall maintain such other records as may
be necessary to identify the Property hereunder as belonging to MSTC's clients
or to enable MSTC to comply with applicable reporting and recordkeeping
requirements.
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11. Inspections. The Subcustodian agrees that its books
and records relating to the Property held under this Agreement shall be open
(and that it will obtain an undertaking from any securities depository or
clearing agency in which it deposits any of the Property that the books and
records of such securities depository or clearing agency relating to such
Property shall be open) to the physical, on-premises inspection and audit at
reasonable times by officers of, auditors employed by or other representatives
of MSTC, and by the respective independent public accountants of MSTC's
clients, and such books and records shall be retained for such period as shall
be agreed by MSTC and the Subcustodian.
12. Compensation. The Subcustodian shall be entitled to
reasonable compensation for its services and expenses as Subcustodian under
this Agreement, as agreed upon in writing from time to time by the Subcustodian
and MSTC.
13. Standard of Care. The Subcustodian shall exercise
all due care in the performance of its duties, as are set forth or contemplated
herein or contained in Authorized Instructions given to the Subcustodian which
are not contrary to this Agreement, shall maintain adequate insurance and
agrees to indemnify and hold harmless MSTC and each Account from and against
any loss, damage, cost, expense, liability or claim arising out of or in
connection with the Subcustodian's performance of its obligations hereunder.
The foregoing indemnity shall be the continuing obligation of the Subcustodian
and shall survive the termination of this Agreement.
14. Liens. The Subcustodian hereby represents and agrees
that (a) the Property is not subject to, and the Subcustodian will not cause or
permit the Property to become subject to, any right, charge, security interest,
lien, encumbrance or other claim of any kind in favor of the Subcustodian, any
securities depository or clearing agency in which the Property is held or any
creditor of any of them, except a claim of payment for their safe custody and
administration and (b) the beneficial ownership of the Property shall be freely
transferable without the payment of money or other value other than for safe
custody or administration; provided, that any lien which may be exercised
hereunder over Property in a particular account in the Account shall secure
only such costs of safe custody and administration which are exclusively due in
respect of that particular account.
15. Termination. This Agreement may be terminated by the
Subcustodian or MSTC by 90 days' prior written notice to the other party but
shall be terminable immediately by MSTC in the event that the representations
required in Section 4(a) or 4(b) may no longer be made. The Subcustodian, on
the date this Agreement terminates pursuant to notice which has been given in a
timely fashion, shall deliver the Property to MSTC, unless the Subcustodian has
received from MSTC, seven (7) days prior to the date on which this Agreement is
to be terminated, Authorized Instructions of MSTC specifying the name(s) of the
person(s) to whom the Property shall be delivered, in which case the
Subcustodian shall deliver such Property on such termination date to such
person(s).
16. Confidentiality. The Subcustodian, and its agents
and employees, shall maintain the confidentiality of information relating to
the Property in the Account and shall not disclose such information to any
person or use such information (other than uses in connection
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with the transactions contemplated by this Agreement). In the event the
Subcustodian is requested or required to disclose any confidential information
concerning the Property, the Subcustodian shall promptly notify MSTC of such
request or requirement so that MSTC may seek a protective order to waive the
Subcustodian's compliance with this Section 16. In the absence of such waiver,
if the Subcustodian is compelled, in the opinion of its counsel, to disclose
any confidential information, the Subcustodian may disclose such information to
such persons as, in the opinion of counsel, is so required.
17. Amendments. This Agreement may not be amended or
modified in any manner except by a written agreement executed by the parties
hereto.
18. Binding Agreement: Assignments. This Agreement shall
extend to and shall be binding upon the parties hereto and their respective
permitted assigns. This Agreement shall not be assignable by any party without
the written consent of the other parties; provided, that MSTC may, without the
consent of the Subcustodian, assign this agreement to any of MSTC's affiliates.
19. Invalidity. The illegality or invalidity of any
provision of this Agreement under the laws of any jurisdiction shall not affect
the legality or validity of any other provision nor shall it affect the
legality or validity of the Agreement under the laws of any other jurisdiction.
20. Remedies and Waivers. No failure by MSTC to
exercise, or delay in exercising its rights hereunder shall operate as a waiver
thereof nor will any single or partial exercise of any such right preclude a
further or other exercise thereof or the exercise of any other right. The
remedies provided herein are cumulative and not exhaustive of any other remedy
provided by law.
21. Entire Agreement. This Agreement and the documents
referred to herein or delivered pursuant hereto which form a part hereof
contain the entire understanding of the parties with respect to the subject
matter contained herein. In the event of a conflict between this Agreement and
any other such documents, the terms of this Agreement shall prevail.
22. Notices. Unless otherwise specified in this
Agreement, all notices with respect to matters contemplated by this Agreement
shall be deemed duly given when sent by registered or certified mail to MSTC or
the Subcustodian at their respective addresses set forth below, or at such
other address as shall be specified in each case in a notice similarly given:
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To MSTC: Xxxxxx Xxxxxxx Trust Company
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Network Management
To the Subcustodian: [Address]
23. GOVERNING LAW: JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
EXCLUDING (TO THE GREATEST EXTENT A NEW YORK COURT WOULD PERMIT) ANY RULE OF
LAW THAT WOULD CAUSE APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK. THE SUBCUSTODIAN AND MSTC HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR UNITED STATES DISTRICT COURT
LOCATED IN NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT
AND HEREBY WAIVE ANY OBJECTION TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM.
XXXXXX XXXXXXX TRUST COMPANY
By:
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[Name of Subcustodian]
By:
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