CUSTODIAN AND TRANSFER AGENT AGREEMENT
Exhibit 99.28(g)
CUSTODIAN AND TRANSFER AGENT AGREEMENT
THIS AGREEMENT (this Agreement), dated as of __________, 202_, between Investment Managers Series Trust III (the Fund, including its separate series, the Portfolios), an open-end management investment company organized under the laws of the State of Delaware and registered with the Commission under the Investment Company Act of 1940 (the 1940 Act), and BROWN BROTHERS XXXXXXXX & CO., a limited partnership formed under the laws of the State of New York (BBH&Co. or, when referring to BBH&Co. in its capacity as custodian, the Custodian, and when referring to BBH&Co. in its capacity as transfer agent, TA). For purposes of this Agreement, reference hereafter to the “Fund” shall mean the Fund and/or the respective Portfolio(s), as the context requires.
WHEREAS, the Fund wishes to employ BBH&Co. to act as custodian and transfer agent for the 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 Fund and BBH&Co. hereby agree, as follows:
1. Appointment of Custodian and Transfer Agent.
1.1 The Fund hereby appoints BBH&Co. as the Fund’s custodian, and BBH&Co. xxxxxx accepts such appointment. All Investments of the Fund delivered to the Custodian or its agents or Subcustodians shall be dealt with as provided in this Agreement. The duties of the Custodian with respect to the Fund’s Investments shall be only as set forth expressly in this Agreement, including any attachments or schedules thereto, which duties are generally comprised of safekeeping and various administrative duties that will be performed in accordance with Instructions and as reasonably required to effect Instructions. The terms of this Agreement shall apply separately and respectively to each Portfolio for which a separate account is maintained on the books of the Custodian. The Parties agree that Sections 2.1-9 and 11-17 and Schedules I and II of the Agreement contain the provisions related to BBH&Co.’s performance as Custodian.
1.2 The Fund hereby engages BBH as its transfer agent to perform the obligations set forth in this Agreement, and BBH accepts such engagement. The Parties agree that Sections 2.1, 3 and 10-17 and Schedule III of the Agreement and the Transfer Agency Services Schedule attached hereto contain the provisions related to BBH&Co.’s performance as TA.
With respect to BBH&Co’s appointment as Custodian and TA:
2.1 This Agreement has been, and at the time of delivery of each Instruction, such Instruction will have been, duly authorized, executed and delivered by the Fund. Neither this Agreement, nor any Instruction issued hereunder violates any Applicable Law or conflicts with or constitutes a default under the applicable Portfolio’s prospectus, the Fund’s articles of organization or other constitutive documents or any agreement, judgment, order or decree to which the Fund is a party or by which the Fund or its Investments is bound.
With respect to BBH&Co’s appointment as Custodian:
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 Fund shall be deemed to have confirmed to the Custodian that the Fund has (a) assessed and accepted all material Country, Sanctions or Sovereign Risks and accepted responsibility for their occurrence, (b) made all determinations required to be made by the Fund under the 1940 Act, and (iii) appropriately and adequately disclosed to the respective Portfolio’s shareholders, other investors and all persons who have rights in or to such Investments, all material investment risks, including those relating to the custody and settlement infrastructure or the servicing of securities in such jurisdiction.
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2.3 The Fund 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 Fund uses any on-line or similar communications service made available by the Custodian, the Fund 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 by the Custodian. If the Custodian provides any computer software to the Fund relating to the services described in this Agreement, the Fund will only use the software for the purposes for which the Custodian provided the software to the Fund, and will abide by the license agreement accompanying the software and any other security policies which the Custodian provides to the Fund.
2.4 Notwithstanding anything in this Agreement to contrary effect, the Fund specifically represents and warrants to the Custodian that it shall at all times be principally liable for the repayment of any Advance made by the Custodian under this Agreement.
2.5 By providing an Instruction in respect of an Investment (which Instruction may relate to among other things, the processing of orders and/or settlement of transactions in funds), the Fund hereby (i) authorizes BBH&Co. to complete such documentation as may be required or appropriate to carry out the Instruction, and agrees to be contractually bound to the terms of such documentation “as is” without recourse against BBH&Co.; (ii) represents, warrants and covenants that it has accepted and agreed to comply with all Applicable Law, terms and conditions to which it and/or its Investment may be bound, including without limitation, requirements imposed by the Investment prospectus or offering circular, subscription agreement, any application or other documentation relating to an Investment (e.g., compliance with suitability requirements and eligibility restrictions and requirements that all such documentation relating to the investment has been received, read and understood by the Fund (for itself and its Portfolio)); (iii) acknowledges and agrees that BBH&Co. will not be responsible for the accuracy of any information provided to it by or on behalf of the Fund, or for any underlying commitment or obligation inherent to an Investment; (iv) represents, warrants and covenants that it will not effect any sale, transfer or disposition of Investment(s) held in BBH&Co.’s name by any means other than the issuance of an Instruction by the Fund to BBH&Co.; (v) acknowledges that collective investment schemes (and/or their agent(s)) in which the Fund invests may pay to BBH&Co. certain fees (including without limitation, shareholder servicing and/or trailer fees) in respect of the Fund’s investments in such schemes; (vi) agrees that BBH&Co. shall have no obligation or responsibility whatsoever to respond to, or provide capital in connection with any capital calls, letters of intent or other requirements as set out in the prospectus or offering circular of an Investment; (vii) represents, warrants and covenants that it will provide BBH&Co. with such information as is necessary or appropriate to enable BBH&Co.’s performance pursuant to an Instruction or under this Agreement; (viii) undertakes to inform BBH&Co. and to keep the same updated as to any tax withholding or benefit to which an Investment may be subject; (ix) authorizes BBH&Co. to furnish the customer due diligence records maintained by BBH&Co. on the Fund and its beneficial owners upon request of the transfer agent or other agent of an issuer of an Investment; (x) represents and warrants that to the extent the Fund provides BBH&Co. with any personal data or personally identifiable information in connection with an Investment, the Fund will have obtained the consent of the applicable individuals to provide such data and information to BBH&Co. and the fund and to the use of such data and information as described in the applicable account opening, subscription and related fund documentation; (xi) acknowledges that BBH&Co. shall have no obligation to fund any order placed by the Fund for which the Fund does not have sufficient cash on deposit with BBH&Co.; and (xii) agrees that BBH&Co. shall be held harmless for the acts, omissions or any unlawful activity of any agent of the Fund, or any transfer agent or other agent of an Investment in which the Fund may invest.
2.6 The Fund represents and warrants that it is not resident in or organized under the laws of any country with which transactions or dealings are prohibited under a Sanctions Regime. The Fund further warrants that it is not owned or controlled by: (i) the government of any country with which transactions or dealings by any person are prohibited under a Sanctions Regime; (ii) a person or entity resident in or organized under the laws of any country with which transactions or dealings by any person are prohibited under a Sanctions Regime; or (iii) any person or entity on the List of Specially Designated Nationals and Blocked Persons published by OFAC or any comparable Sanctions Regime lists.
2.6.1 The Fund represents and warrants that it conducts ongoing screening of its holdings, relevant transactional activity, and service providers engaged by the Fund, including but not limited to Authorized Participants and distributors, against lists promulgated by a Sanctions Regime, as such lists are amended from time to time.
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2.6.2 The Fund represents and warrants that it has implemented adequate risk management, control and compliance procedures and systems to ensure that it will not instruct or otherwise cause Custodian to hold any assets in custody that would violate a Sanctions Regime. The Fund further represents it will not instruct Custodian to invest in any asset, nor engage in or facilitate any transaction that would cause Custodian to violate any Sanctions Regime, including any transaction or dealing involving: (i) any country with which transactions or dealings by any person are prohibited under a Sanctions Regime; (ii) any person or entity subject to any Sanctions Regime; or (iii) any assets owned or controlled by a person or entity that is subject to any Sanctions Regime (collectively, “Sanctioned Property”). The Fund further represents and warrants that it has confirmed that relevant service providers engaged by the Fund, including but not limited to Authorized Participants and distributors, have implemented equivalent controls as stated above. The Fund further represents and warrants that it will promptly notify the Custodian in writing if either it or any of the above relevant service providers becomes subject to a Sanctions Regime or if any of the assets custodied by BBH subsequently becomes Sanctioned Property.
2.7 The Fund represents and warrants that it has developed and implemented an anti-money laundering (“AML”) program (“AML Program”) that is designed to comply with all applicable AML and terrorist financing laws and regulations, including but not limited to: the United States Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, and the regulations promulgated thereunder; the 4th European Union Anti-Money Laundering Directive; or Financial Action Task Force (“FATF”) standards against money laundering and terrorist financing (collectively, “applicable AML laws”). The Fund represents and warrants that its AML Program includes proper due diligence on relevant service providers, including but not limited to Authorized Participants and distributors, and confirmation that such service providers have implemented their own policies and procedures designed to comply with applicable AML Laws. The Fund further represents and warrants that it creates and maintains all records and documentation required by applicable AML laws, including identification and verification records of the Fund’s customers.
2.7.1 The Fund acknowledges that the Custodian is obligated under applicable US AML Laws to obtain, verify and record identifying information about its customers prior to opening an account.
2.7.2 The Fund represents and warrants that upon request, it will provide the Custodian with information that the Custodian requires to comply with applicable AML Laws and Sanctions Regimes, including but not limited to, verification regarding the AML and Sanctions Regime controls implemented by the above relevant service providers.
2.7.3 The Fund further represents and warrants that it will not instruct or otherwise cause Custodian to hold any assets in custody or engage in or facilitate any transaction that would cause Custodian to violate any applicable AML laws.
2.8 The Fund represents and warrants that neither it nor any Portfolio is a “Plan” (which term includes (1) employee benefit plans that are subject to the United States (“US”) Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the US Internal Revenue Code of 1986, as amended (the “Code”), (2) plans, individual retirement accounts and other arrangements that are subject to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code, and (3) entities the underlying assets of which are considered to include “plan assets” of such plans, accounts and arrangements), or an entity purchasing shares on behalf of, or with the “plan assets” of, a Plan, and further undertakes to inform BBH&Co. and to keep the same updated as to the status under ERISA or Section 4975 of the Code, each as amended, of the Fund, including its Portfolios, or (4) the assets of any plan or other retirement arrangement or account that is not subject to Section 4975 of the Code or Title I of ERISA but is subject to any U.S. federal, state or local law or regulation or any non-U.S. or other law or regulation that contains one or more provisions that are similar to any of the fiduciary responsibility or prohibited transaction provisions under Title I of ERISA or Section 4975 of the Code.
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2.9 The Fund represents and warrants that it will promptly notify the Custodian in writing if any of the above representations cease to be true.
When an Instruction is given by means established under Subsections 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 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. 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. The provisions of Section 4A of the Uniform Commercial Code shall apply to Funds Transfers performed in accordance with Instructions. The Funds Transfer Services Agreement and the BBH Online Terms and Conditions shall each comprise a designation of a means of delivering Instructions for purposes of this Section 4.2.
4.3.1 The transaction date and the date and location of settlement;
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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. Where an Instruction is communicated by electronic means, or otherwise where an Instruction contains an identifying number such as a CUSIP, SEDOL or ISIN number, the Custodian shall be entitled to rely on such number as controlling notwithstanding any inconsistency contained in the Instruction, particularly with respect to Investment description; 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, the Custodian may 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 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, 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.
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With respect to securities issued in the United States of America, the Custodian [ ] may [ ] may not 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. IF NO BOX IS CHECKED, THE CUSTODIAN SHALL RELEASE SUCH INFORMATION UNTIL IT RECEIVES CONTRARY INSTRUCTIONS FROM 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.
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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 of Investments to an account of Fund shall be provisional, until: (a) the debit of the Principal or Agency Account by Custodian for an amount equal to Advance Costs; 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;
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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, the Fund grants 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); and agrees to take, and agrees that the Custodian may take, in respect of the security interest referenced above, any further actions that the Custodian may reasonably require.
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 or Principal Account equal to such Advance Costs, and the Fund authorizes the Custodian, on behalf of the Fund or Portfolio, to pay an amount equal to such Advance Costs irrevocably to such Subcustodian or other person, and to dispose of any property in such Account to the extent necessary to make such payment. Any Investments 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.
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9. Responsibility of the Custodian. In performing its duties and obligations hereunder, the Custodian shall use reasonable care under the facts and circumstances prevailing in the market where performance is effected, but shall not be required to take any action which, in the Custodian’s reasonable judgment, is in contravention of any Applicable Law, rule or regulation or any order or judgment of any court of competent jurisdiction. Subject to the specific provisions of this Section, the Custodian shall be liable to the Fund for any direct damage incurred by the Fund in consequence of the Custodian's negligence, bad faith or willful misconduct. 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 risks inherent in the Fund’s Investments or to provide investment advice with respect to such Investments and that the Fund including its Portfolios as principal shall bear any risks attendant to particular Investments such as failure of counterparty or issuer.
9.1 Limitations of Performance.
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.
Sovereign Risk shall mean, in respect of any jurisdiction, including the United States of America, where an Investment is 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 or cash deposits 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 or cash deposits, (f) any change in the Applicable Law, or (g) any other economic or political risk incurred or experienced.
AML and Sanctions Risk shall mean, with respect to the acquisition, ownership, settlement or custody of Investments, all risks relating to, or arising in consequence of the Custodian complying with one or more Sanctions Regimes or applicable AML Laws, including, but not limited to, the risk that if Custodian reasonably believes it has come in contact with a sanctioned party, or has come into possession or control of any Sanctioned Property as a result of its performance of this Agreement, Custodian may be required by one or more Sanctions Regime to block (i.e. prevent further movement of) such Sanctioned Property and report any related activity to relevant government authorities. The Fund acknowledges that if multiple Sanctions Regimes apply (including OFAC), the Custodian will comply with the most restrictive of the applicable regimes. The Fund also acknowledges that the Custodian shall not be liable hereunder for any loss or damage caused by any delays or refusals to process a transaction that result from Custodian’s obligation to ensure compliance with applicable AML Laws and Sanctions Regimes.
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9.2. Limitations on Liability.
9.2.3 Reliance on Instruction; Restricted Securities. The Custodian shall not be liable for any loss, claim, damage or other liability arising from (a) 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 Fund's trust instrument, certificate of trust or by-laws or other constitutive documents, Applicable Law, or actions by the trustees, directors or shareholders of the Fund, or (b) limitations inherent in the rights, transferability or similar investment characteristics of a given Investment of the Fund.
10.1.1 TA shall not be held accountable or liable to the Fund, or any third party if TA is unable to perform its responsibilities in accordance with this Agreement as a result of (i) any errors in the Services based upon or arising out of information received in a timely or untimely manner by TA either (a) from a source which TA was authorized to rely upon pursuant to a relevant Schedule hereto, or (b) from a source which in TA’s reasonable judgment was as an appropriate source for such information, (ii) relevant information known to the Fund which would impact the Services but which is not communicated by the Fund or its agent to TA, or (iii) the suspension, discontinuance or termination of the transmission of information by information providers for any reason, provided TA shall have made reasonable commercial efforts to procure such transmission. The Fund hereby acknowledges and agrees that TA shall neither guarantee nor make any warranties whatsoever, with respect to the sources referenced above and to the accuracy or completeness of their information.
10.1.2 The Fund acknowledges and agrees that nothing herein is intended to diminish the responsibility of third parties, including without limitation, its clients, custodian banks, brokers, and pricing and administrative agents, under their respective contractual and/or business arrangements with the Fund.
10.1.3 TA shall incur no liability with respect to any telecommunications, equipment or power failures, or any failures to perform or delays in performance by postal or courier services or third-party information providers.
10.1.4 TA shall in no event be required to advance or expend its own funds in connection with the services provided hereunder, or take any action which is in contravention of any applicable law, rule or regulation or any order or judgment of any court of competent jurisdiction.
10.1.5 The Fund shall review the Services performed by TA under this Agreement promptly and periodically and shall notify TA of any improper performance, discrepancy or error therein. Unless the Fund provides written notice of any such discrepancy or error within a reasonable time after such Services are performed, the Services shall be deemed to have met the duties and standards set forth herein.
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10.1.6 In no event shall the TA be liable for the acts or omission of the CNS Clearing Process, DTC, NSCC or any securities depository, clearing corporation, exchange or communications service.
10.1.7 Without limiting the generality of any of the foregoing provisions, in no event shall TA be liable for any taxes, penalties, fines, costs, charges or fees imposed on the Fund in connection with the Services hereunder unless otherwise agreed between the Parties.
10.1.8 In no event shall TA be responsible for providing investment management services or advice or legal advice under this Agreement, nor shall TA be liable for the investment management services and advice received or given by the Fund or the legal advice received by the Fund from its counsel or other legal counsel.
10.1.9 Without limiting the generality of any of the foregoing provisions, the TA shall have no liability for any damages arising out of (i) the failure of any Authorized Participant to perform its obligations under a Participant Agreement (“Participant Agreement” defined for this purpose as any Participant Agreement between the Distributor and an Authorized Participant acknowledged by the Administrator); (ii) activities or statements of sales or wholesaler personnel who are employed by any distributor (or its affiliates); or (iii) the failure of any Authorized Participant to deposit with the Custodian sufficient collateral, or to provide additional collateral upon request by the TA, in connection with the monitoring services provided for herein on Schedule III; or (b) any errors in the computation of collateral requirements based upon or arising out of quotations or information received by the TA from the Fund’s accounting agent or any other source on which the TA reasonably relies.
10.2.1 Instructions shall mean a written request, direction, instruction or certification signed or initialed on behalf of the Fund by one or more Authorized Persons. Authorized Persons may be identified by name, title or position. Telephonic and other oral instructions or instructions given by facsimile transmission may be given by any one of the Authorized Persons. Such instructions shall be considered Instructions if TA reasonably believes them to have been given by an Authorized Person. In no event shall Instructions be in the form of electronic mail.
10.2.2 Where Instructions are conveyed through facsimile transmissions, the Fund hereby acknowledges that (i) receipt of legible instructions cannot be assured, (ii) TA cannot verify that authorized signatures on facsimile Instructions are original, and (iii) TA shall not be responsible for losses or expenses incurred through actions taken in reliance on such Instructions. The Fund agrees that such facsimile Instructions shall be conclusive evidence of the Fund’s Instruction to TA to act or to omit to act.
10.2.3 Instructions given orally will be confirmed by written Instructions in the manner set forth above in Section 10.2.1, including by facsimile, but the lack of such confirmation shall in no way affect any action taken by TA in reliance upon such oral Instructions. The Fund authorizes TA to tape record any and all telephonic or other oral Instructions given to TA by or on behalf of the Fund (including any of its officers, directors, trustees, employees or agents or any investment manager or adviser or person or entity with similar responsibilities which is authorized to give Instructions on behalf of the Fund to TA). The Fund agrees to solicit valid written or other consent from any of its employees in respect to telephonic recordings to the extent such consent is required by applicable law.
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10.3.1 TA represents that it is a registered transfer agent under the Securities Exchange Act of 1934.
10.3.2 TA has established pursuant to the Bank Secrecy Act, and other U.S. laws and regulations applicable to it, Anti-Money Laundering (AML) compliance programs, including but not limited to: (1) the development of internal policies, procedures, and controls; (2) the designation of a compliance officer; (3) the implementation of ongoing employee training programs; and (4) the creation of an independent audit function to test such programs.
10.3.3 TA has a customer identification program (CIP) consistent with the rules under section 326 of the USA Patriot Act. TA. For the avoidance of doubt, DTC is exempt from CIP requirements.
10.3.4 TA: (i) has in place policies and procedures reasonably designed to ensure compliance with the transfer agent rules of the Securities Exchange Act of 1934, as amended; (ii) and will maintain appropriate records in accordance with said transfer agent rules.
12. Reports and Records. BBH&Co. shall:
12.1 create and maintain records relating to the performance of its obligations under this Agreement;
12.2 make available to the Fund, its auditors, agents and employees, upon reasonable request and during normal business hours of the Fund and BBH&Co., all records maintained by BBH&Co. pursuant to Section 12.1 above, subject, however, to all reasonable security requirements of BBH&Co. then applicable to the records of its customers generally; and
12.3 make available to the Fund all Electronic Reports; it being understood that BBH&Co. shall not be liable hereunder for the inaccuracy or incompleteness thereof or for errors in any information included therein.
12.4 The Fund shall examine all records, howsoever produced or transmitted, promptly upon receipt and notify BBH&Co. promptly of any discrepancy or error. Unless the Fund delivers written notice of any such discrepancy or error within a reasonable time after its receipt of the records, the records shall be deemed to be true and accurate.
12.5 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 Fund. The Custodian deems such sources to be reliable but the Fund acknowledges and agrees that the Custodian does not verify such information nor 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.
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13.4 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 IN THE BOROUGH OF MANHATTAN. THE FUND 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.
If to the Fund: | Investment Managers Series Trust III | ||
000 Xxxx Xxxxxx Xxxxxx | |||
Milwaukee, Wisconsin 53212 | |||
Attn: Xxxxxxx Xxxxx, President | |||
Telephone: | [ ] | ||
Facsimile | [ ] | ||
If to BBH&Co.: | Brown Brothers Xxxxxxxx& Co. | ||
00 Xxxx Xxxxxx Xxxxxx | |||
Boston, Massachusetts 02110-1548 | |||
Attn: Office of the General Counsel | |||
Telephone: | (000) 000-0000 | ||
Facsimile: | (000) 000-0000, |
or such other address as the Fund or BBH&Co. may have designated in writing to the other. Notices given by BBH&Co. pursuant to Section 13.13 may also be given by electronic mail to the email address of any Authorized Person. The Fund agrees that such notices given by electronic mail shall be conclusively presumed to have been delivered and received by the Fund as of the date such electronic mail was sent by BBH&Co., as recorded by BBH&Co.’s systems.
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(a) BBH&Co. and/or its associates’ engagement in any such transaction shall not disqualify the Custodian from continuing to perform as the custodian of the Fund, including its Portfolios, under this Agreement;
(b) BBH&Co. and/or its associates shall not be under any duty to disclose any information in connection with any such transaction to the Fund;
(c) BBH&Co. and/or its associates shall not be liable to account to the Fund, including its Portfolios, 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.
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14. Definitions. The following defined terms will have the respective meanings set forth below.
14.1 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.
14.2 Advance Costs shall mean any Advance, interest on the Advance and any related expenses, including without limitation any mark to market loss of the Custodian or Subcustodian on any Investment to which Section 7.6.1 applies.
14.3 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.
14.4 Agent(s) shall have the meaning set forth in Section 6.17 hereof.
14.5 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.
14.7 BBH Online Terms and Conditions shall have the meaning set forth in Section 13.13 hereof
14.8 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.
14.9 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).
14.10 Delegation Schedule shall mean the separate schedule attached hereto 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.
14.11 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.
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14.13 Foreign Custody Manager shall mean the Fund’s foreign custody manager appointed pursuant to Rule 17f-5 of the 1940 Act.
14.14 Foreign Financial Regulatory Authority shall have the meaning given by Section 2(a)(50) of the 1940 Act.
14.15 Funds Transfer Services Agreement shall mean any separate agreement entered into between the Custodian and the Fund with respect to certain matters concerning the processing of payment orders from Principal Accounts of the Fund.
14.16 Global Custody Network Listing shall mean the Countries and Subcustodians approved for Investments in non-U.S. Markets.
14.17 Instruction(s) shall have the meaning assigned in Section 4 hereof.
14.18 Investment Advisor 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.
14.19 Investment(s) shall mean any investment asset of the Fund, including its Portfolios,, 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.
14.20 Margin Account shall have the meaning set forth in Section 6.4 hereof.
14.21 OFAC shall mean the US Treasury Department’s Office of Foreign Assets Control.
14.22 Principal Account(s) shall mean deposit accounts of the Fund or a Portfolio carried on the books of BBH&Co. as principal in accordance with Section 7 hereof.
14.23 Sanctions or Sanctions Regime(s) shall mean any governmental sanctions against countries, persons and entities that are imposed at any time by the US, the European Union and its member states, the UK, the United Nations or any other jurisdiction, which Custodian must comply with.
14.25 Subcustodian(s) shall mean each foreign bank appointed by the Custodian pursuant to Section 8 hereof, but shall not include Securities Depositories.
14.26 Tri-Party Agreement shall have the meaning set forth in Section 6.4 hereof.
14.27 1940 Act shall mean the Investment Company Act of 1940.
15. Compensation. The Fund agrees to pay to BBH&Co. a fee in an amount set forth in the fee letter between the Fund and BBH&Co. as Custodian and between the Fund and BBH&Co. as TA, in effect on the date hereof or as amended from time to time, and (b) all out-of-pocket expenses incurred by BBH&Co, ,. for account or benefit of the Fund, including its Portfolios, and payable from time to time, including the fee and expense of all Subcustodians and other amounts paid by the Custodian to a third party. Amounts payable by the Fund under and pursuant to this section shall be payable by wire transfer to the Custodian at BBH&Co. in New York, New York.
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16.1 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 13.5 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 60 days, in which case termination shall be effective upon written receipt of notice by the non-terminating party, or (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.
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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.
BROWN BROTHERS XXXXXXXX & CO. | INVESTMENT MANAGERS SERIES TRUST III | |||
By: | By: | |||
Name: | Name: | Xxxxxxx Xxxxx | ||
Title: | Title: | President | ||
Date: | Date: |
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SCHEDULE I: 17f-5 DELEGATION SCHEDULE
By its execution of this Delegation Schedule dated as of _____________, 202_, between __________________________, 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 Directors/Trustees or its duly appointed representative (the Fund), hereby appoints BROWN BROTHERS XXXXXXXX & CO., a New York limited partnership with an office in Boston, Massachusetts (the Delegate) as its delegate to perform certain functions with respect to the custody of Fund's Assets outside the United States.
(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.
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The Delegate shall be required to make the foregoing determination to the best of its knowledge and belief based only on information reasonably available to it.
(i) For indemnification or insurance arrangements (or any combination of the foregoing) such that the Fund will be adequately protected 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 Fund's independent 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.
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The Fund 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 Fund and is a legal, valid and binding agreement of the Fund.
a. Country Risk – shall have the meaning set forth in the Custodian Agreement.
d. Instructions - shall have the meaning set forth in the Custodian Agreement.
e. Securities Depository - shall have the meaning set forth in Rule 17f-7 under the 1940 Act.
f. Sovereign Risk - shall have the meaning set forth in the Custodian Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this 17f-5 Delegation Schedule to be duly executed as of the date first above written.
The undersigned acknowledges that (I/we) have received a copy of this document.
BROWN BROTHERS XXXXXXXX & CO. | [FUND] | |||
By: | By: | |||
Name: | Name: | |||
Title: | Title: |
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SCHEDULE II: US MONEY MARKET FUND INVESTMENTS SCHEDULE TO CUSTODIAN AGREEMENT
TERMS & CONDITIONS
FOR PROCESSING ORDERS IN U.S. MONEY MARKET FUNDS (“US MMF T&C”)
This US MMF T&C supplements the Custodian Agreement between ______________ (“Client”) and Brown Brothers Xxxxxxxx & Co. (“BBH”) dated __________, 202_, as amended from time to time (the “Custodian Agreement”), and provides terms and conditions related to Instructions to BBH thereunder to process orders in and custody shares of U.S. registered investment companies that hold themselves out as money market funds (“MMFs”), if any. Capitalized terms used herein and not defined shall have the meanings ascribed to them in the Custodian Agreement.
US MMFs are subject to various requirements under Rule 2a-7 under the Investment Company Act of 1940 (the “1940 Act”), as adopted by the Securities and Exchange Commission on July 23, 2014 (as further amended from time-to-time, “Rule 2a-7”).
The MMFs will disclose in their prospectus and statement of additional information, as amended from time to time, that the MMFs are subject to certain limitations and restrictions pursuant to amendments to Rule 2a-7, including provisions relating to the calculation of net asset values (“NAVs”), imposition of liquidity fees on redemptions (“liquidity fees”) or the temporary suspension of redemptions (a “redemption gate”), and shareholder eligibility requirements.
If Client provides BBH with an Instruction to process orders for transactions in MMFs and/or requires BBH to service shares of MMFs, Client shall assist and cooperate with BBH, the MMFs and the MMFs’ agents to comply with Rule 2a-7. Without limitation on the foregoing, fund order processing and custody of shares of MMFs are subject to the following additional terms and conditions.
1) | Orders in MMFs. |
a) | Any Instruction by the Client to purchase any MMF shall be based on the gross dollar amount of the value of shares to be purchased. |
b) | Any Instruction by the Client for subscriptions, exchanges or redemption orders in any MMF shall be made gross and shall not net any subscription, exchange or redemption orders in any MMF, including any orders originating from underlying customers of the Client, if any. |
2) | Liquidity Fees and Gates. |
a) | Client (and not BBH) will be responsible for reviewing any disclosure on a MMF website providing notice to shareholders and prospective shareholders of liquidity of the MMF and when liquidity fees or redemption gates are imposed or lifted and Client agrees that BBH is not responsible for notifying the Client of the imposition by an MMF of any such event or re-confirming the Client’s intent to transact in a MMF when a liquidity fee or redemption gate is in effect. |
b) | If a liquidity fee is implemented by a MMF, BBH will not be directly responsible for calculating or withholding the liquidity fee, but will apply any liquidity fee calculated and withheld by the MMF from any order as notified by the MMF or Distributor to BBH. |
c) | If a redemption gate is implemented by a MMF, Client acknowledges and agrees that any redemption or exchange orders in the MMF made by Client while the redemption gate is in effect may be rejected by the MMF, and that BBH is responsible for rejecting only those orders that BBH has been notified have been rejected by the MMF or its agents. Client shall endeavor not to instruct BBH to place an order for a redemption in a MMF when a redemption gate is in effect for such MMF. |
3) | Retail MMFs. |
BBH does not support and is not responsible for the order processing, purchase, exchange, redemption, settlement, custody or other servicing of shares of Retail MMFs (as defined in Rule 2a-7(a)(25)). Client shall establish policies, procedures and internal controls reasonably designed to ensure that it does not, and shall not, submit any request or other instruction to BBH to purchase or exchange shares of a Retail MMF.
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4) | No Agency. |
With respect to orders in a MMF:
a) | BBH generally elects not serve as the MMF’s dealer, agent, or designee for purposes of Rule 22c-1 under the 1940 Act in connection with the receipt of orders; |
b) | Accordingly, the MMF will apply a NAV calculation based on the time that the MMF accepts the order in good form from BBH, and not the time the Client instructs BBH to process the order; and |
c) | Neither BBH nor the MMF or its distributor is responsible for any losses arising from orders accepted by BBH before, but received and accepted by the MMF after, a NAV calculation time, or imposition of a liquidity fee or redemption gate. |
Any order for shares in a MMF placed and held in custody by BBH will be made in reliance upon the terms hereof.
*** *** ***
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SCHEDULE III: TRANSFER AGENT SERVICES SCHEDULE
BBH&Co. shall perform the following transfer agency services for the Fund and, where applicable, the Fund’s Portfolios. As used herein, the term Fund incorporates and includes the term Portfolio:
I. Issuance and Redemption of Unit Baskets. It is agreed and understood that the Fund, and TA on the Fund’s behalf, shall issue and redeem Share Baskets of the Fund in blocks of __________ shares (“Shares”) (“Creation Baskets” and “Redemption Baskets,” respectively, and generically, “Baskets”) to and from such persons as are identified by the Fund as “Authorized Participants.”
A. Pursuant to such purchase orders that BBH&Co. as the Index Receipt Agent shall receive from [Insert Distributor Name], LLC (“Distributor”) and pursuant to the procedures set forth in the Authorized Participant Agreement entered into by the Fund, TA shall transfer appropriate trade instructions to the Custodian and pursuant to such orders register the appropriate number of book entry only Shares in the name of The Depository Trust Company (“DTC”) or its nominee as a unitholder (each an Authorized Participant) of the Fund and deliver the Basket.
B. Pursuant to such redemption orders that Index Receipt Agent shall receive from the Distributor, pursuant to the procedures set forth in the Authorized Participant Agreement entered into by the Fund, TA shall transfer appropriate trade instructions to the Custodian and, pursuant to such orders, redeem the appropriate number of Shares that are delivered to the designated DTC Participant Account of the Custodian for redemption and debit such Shares from the account of the Authorized Participant on the register of the Fund.
C. On behalf of the Fund, TA shall issue Creation Baskets for settlement with purchasers through DTC as the purchaser is authorized to receive. Beneficial ownership of Shares shall be shown on the records of DTC and DTC Participants and not on any records maintained by TA. In issuing Shares through DTC to an Authorized Participant, TA shall be entitled to rely upon the latest Instructions that are received from the Distributor by TA as Index Receipt Agent concerning the issuance and delivery of such Shares for settlement.
D. TA shall not issue on behalf of the Fund any Shares where it has received an Instruction from the Fund or the Distributor or written notification from any federal or state authority that the sale of the Shares has been suspended or discontinued, and TA shall be entitled to rely upon such Instructions or written notification.
E. Upon the issuance of Shares as provided herein, TA shall not be responsible for the payment of any original issue or other taxes, if any, required to be paid by the Fund or the Distributor in connection with such issuance.
F. Shares may be redeemed in accordance with the procedures set forth in the relevant Authorized Participant Agreement and TA shall duly process all redemption requests.
G. TA will act only upon Instruction from the Fund and/or the Distributor in addressing any failure in the delivery of cash, securities and/or Shares in connection with the issuance and redemption of Shares.
II. Recordkeeping.
A. In satisfying its obligations under the Agreement, TA shall record the issuance of Creation Baskets and maintain, pursuant to Rule 17Ad6(b) under the Securities Exchange Act of 1934, as amended, a record of the total number of Creation Baskets that are authorized, issued and outstanding based upon data provided to TA by the Fund or the Distributor. TA shall also provide the Fund on a regular basis with the total number of Shares authorized, issued and outstanding; provided however that TA shall not be responsible for monitoring the issuance of such Shares or compliance with any laws relating to the validity of the issuance or the legality of the sale of such Shares.
III. Services Related to the Monitoring of Cash Collateral.
(a) | Monitor the collateralization levels as set forth in Authorized Participant Agreements in connection with cash collateral posted by Authorized Participants in connection with Creation Basket activity. |
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(b) | Mark to market daily the value of such cash collateral using a pricing source from the Fund’s accounting agent or any other source on which the TA reasonably relies. |
(c) | Monitor collateral levels daily and communicate calls for additional collateral to the Authorized Participants as necessary based upon daily collateral requirement calculations using ratios set forth in Participant Agreements. |
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FUNDS TRANSFER SERVICES AGREEMENT
(“FTSA”)
Date: __________, 202_
In accordance with any custodian agreement, administration agreement, and/or any other agreement in which funds transfers are contemplated (as amended, restated, supplemented, modified, and otherwise in effect from time to time, each an “Agreement”, and collectively, the “Agreements”) between [CLIENT] (“Client”), and BROWN BROTHERS XXXXXXXX & CO. and/or any of its affiliates (collectively, “BBH”), the Client acknowledges and accepts the following terms and conditions in respect of all funds transfers effected by BBH and BBH is willing to effect such funds transfers subject to the terms and conditions set forth in this FTSA. References to UCC 4A shall mean Article 4A of the Uniform Commercial Code as currently in effect in the State of New York.
In consideration of the mutual covenants and agreements herein contained, the Client and BBH hereby agree, as follows:
1. Definitions. As used in this FTSA, the following terms shall have the meanings set forth below (such meanings to be equally applicable to both the singular and plural forms of the terms defined). Terms not otherwise defined herein shall have the meanings accorded to them in the applicable Agreement.
“Authorized Instructors” refers to individuals designated by the Client or its agent in the APD as authorized to give FT Instructions.
“Authorized Person” refers collectively to any individual authorized by the Client or its agent to give (i.e., Authorized Instructor) and/or verify (i.e., Authorized Verifier) FT Instructions, on the relevant cash account as set forth in the APD.
“Authorized Persons Document” or “APD” means a form acceptable to BBH whereby the Client or its agent designates Authorized Person(s) and the entitlements the Client or its agent has granted such person(s) with respect to the relevant cash account. The APD includes the names, phone numbers, email addresses, and/or fax numbers of Authorized Instructors and/or Authorized Verifiers (as applicable), and any other information that BBH may require from time to time.
“Authorized Verifiers” refers to individuals designated by the Client or its agent in the APD as authorized to verify FT Instructions.
“BBH Designated Security Procedure” means the security procedures that BBH makes available to the Client as set forth in Appendix A attached hereto (as amended from time to time by BBH, “Appendix A”).
“Callback Procedure” has the meaning set forth in Appendix A.
“Client Designated Security Procedure” means an alternate security procedure, as set forth in Appendix A, that the Client elects to use to transmit and authenticate an FT Instruction in lieu of a BBH Designated Security Procedure.
“Designated Security Procedure” refers, collectively, to Client Designated Security Procedures and BBH Designated Security Procedures.
“FT Instructions” refers to Instructions or Proper Instructions, as applicable and as defined in an applicable Agreement, made in the name of the Client in relation to a payment order as defined in UCC 4A, whether such payment order is a Fed wire payment order or other funds transfer, including a book transfer.
2. Execution of Payment Orders. BBH will execute each FT Instruction, whether denominated in United States dollars or other applicable currency, received by BBH, provided that the Client has sufficient available funds on deposit at BBH and provided that the FT Instruction: (a) is received by BBH in the manner specified herein; (b) complies with any written instructions and restrictions set forth in the APD; (c) is verified in accordance with a Designated Security Procedure; and (d) contains sufficient data to enable BBH to process such FT Instruction.
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3. Transmission of Payment Orders and Designated Security Procedures. An FT Instruction must be transmitted by secured or authenticated means; set forth in Appendix A are the “security procedures” within the meaning of UCC 4A for verifying the authenticity of payment orders within the meaning of UCC 4A. BBH offers to the Client BBH Designated Security Procedures which Client may elect from time to time in a separate election form (each an “Election Form”). Alternatively, the Client may elect in an Election Form to transmit an FT Instruction in accordance with a Client Designated Security Procedure. In electing to transmit an FT Instruction via a Client Designated Security Procedure, Client (a) agrees to be bound by the transaction(s) or payment order(s) specified on said FT Instruction, whether or not authorized, and accepted by BBH in compliance with such Client Designated Security Procedure, and (b) accepts the risk associated with such Client Designated Security Procedure and confirms it is commercially reasonable for the transmission and authentication of the FT Instruction. BBH may accept a Client Designated Security Procedure but takes no responsibility for the reasonableness or security of the means utilized by Client.
The Client and BBH agree that BBH will verify the authenticity of the Client’s FT Instructions pursuant to the Designated Security Procedures elected by the Client. Client agrees that, so long as BBH acts in good faith and complies with the Designated Security Procedure selected by the Client, an FT Instruction issued in the Client’s name and accepted by BBH in compliance with the Designated Security Procedure selected by the Client shall be binding on the Client and the Client shall be responsible for payment of the transferred amount, even if the transfer request was not actually initiated or authorized by the Client or its Authorized Person.
The Client may elect, in the Election Form, to choose the relevant Designated Security Procedures for FT Instructions for itself and each of Client’s Authorized Persons, or to permit its Authorized Persons to select the Designated Security Procedures such Authorized Person(s) will use for FT Instructions in an Election Form, in which case the Client agrees that any such selection by an Authorized Person shall be deemed to have been chosen by the Client, even if the Client had not chosen such Designated Security Procedure for its own use. The Client agrees that the totality of the Designated Security Procedures elected by the Client and its Authorized Persons are authorized by the Client for FT Instructions. Subject to any set-up requirements set forth in the Designated Security Procedure, a new, or changes to an existing, Election Form shall be effective once BBH has a reasonable opportunity to act thereon (which shall be not later than two (2) banking days after receipt by BBH).
4. Rejection of Payment Orders; Rescission of Designated Security Procedure. BBH will notify the Client of BBH’s rejection of an FT Instruction. Such notice may be given in writing, electronically (including via email, BBH’s online portal InfuseTM, etc.) or orally by telephone. In the event BBH fails to execute a properly executable FT Instruction and fails to give the Client notice of BBH’s non-execution, BBH shall be liable only for the Client’s actual damages and only to the extent that such damages are recoverable under UCC 4A. BBH may decide to no longer accept FT Instructions using a particular Designated Security Procedure, or to do so only on revised terms. In such a case, BBH will provide prior written notice to the Client or such Authorized Person of such decision or revision of terms.
5. Cancellation or Amendment of Payment Orders. The Client may cancel or amend an FT Instruction but BBH shall have no liability for BBH’s failure to act on a cancellation or amendment of an FT Instruction unless BBH has received such cancellation FT Instruction or amendment FT Instruction at a time and in a manner affording BBH reasonable opportunity to act prior to BBH’s execution of the original FT Instruction. Any cancellation or amendment of an FT Instruction shall be sent and verified by a Designated Security Procedure elected by the Client or an Authorized Person.
6. Preauthorized Repetitive Payment Orders. The Client may establish with BBH a process to preauthorize certain repetitive payments or transfers. The Client acknowledges that prior to the issuance of any repetitive payment order, an Authorized Person must (a) request that BBH approve and set-up an appropriate repetitive payment order, and (b) complete such documentation as BBH may require, including a separate Preauthorized Repetitive Payment Order (PPO) form. The PPO shall be delivered to BBH in writing through a Designated Security Procedure, and will become effective after (i) the PPO has been authenticated in the manner required under the Designated Security Procedure and (ii) BBH shall have had a reasonable opportunity to act thereon (which shall be no later than two (2) banking days after receipt by BBH). BBH will perform a callback in accordance with the Callback Procedure to verify the authorization and details of the payment order at the time an Authorized Person establishes the repetitive payment order, but shall not perform a callback (or other authentication) prior to executing an individual payment order thereunder.
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The PPO may take the form of either:
(i) | A standing instruction in which the Client provides in the PPO all required information for an FT Instruction (except for the transfer date and amount) on a “standing instructions” basis. The Client may from time-to-time instruct BBH to make a payment under the PPO, through a Designated Security Procedure, which instruction shall reference the repetitive line number (a number assigned to it by BBH after execution of the PPO), details of the payment, the transfer date and the amount of the transfer. BBH will verify the authenticity of this standing instruction in a manner required under the Designated Security Procedure elected by the Client or Authorized Person (but will not perform a callback or other authentication prior to executing individual payments thereunder). An instruction from the Client confirming the transfer date and the amount to be paid pursuant to the PPO shall be an FT Instruction for purposes of this FTSA; or |
(ii) | A recurring instruction in which the Client provides all required information for an FT Instruction with an instruction to process such payments with a specific frequency. Such a recurring instruction shall be an FT Instruction for purposes of this FTSA. BBH will not perform a callback prior to executing a payment under a recurring instruction. |
7. Errors in Payment Orders; Liability of the Parties. The purpose of using a Designated Security Procedure is to verify the authenticity of any FT Instruction and not to detect errors or omissions. Therefore, BBH is not responsible for detecting any Client error or omission contained in any FT Instruction. In the event that the FT Instruction either (a) identifies the beneficiary by both a name and an identifying bank or account number and the name and number identify different persons or entities, or (b) 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, then execution of the relevant payment order, payment to the beneficiary, cancellation of the payment order or actions taken by BBH or any bank in respect of such payment order may be made solely on the basis of the number.
BBH shall not be liable for interest on the amount of any FT Instruction that was not authorized or was erroneously executed unless the Client so notifies BBH within thirty (30) calendar days following the Client’s receipt of notice that such FT Instruction was processed. Any compensation payable in the form of interest shall be payable in accordance with UCC 4A. If BBH receives and acts upon an FT Instruction issued in the name of the Client that was not authorized by the Client, the liability of the parties will be governed by the applicable provisions of UCC 4A. Notwithstanding anything in this FTSA and the Agreements to the contrary, BBH shall in no event be liable for any consequential, indirect, special or punitive damages under this FTSA, including any loss of profits, whether or not such damages relate to services covered by UCC 4A, even if BBH was advised of the possibility of such damages.
8. Cut-Off Time. If an FT Instruction is not received prior to BBH’s respective published deadline for funds transfers or is received on a non-banking day in the country of the currency instructed, it will be treated as received on the next banking day.
9. Miscellaneous. The Client hereby agrees on behalf of itself and its Authorized Persons, including any respective agent, employee, or officer thereof, that BBH may (but has no obligation to) record, without further notice, telephone calls that relate to any FT Instruction. BBH does not recommend the sending of FT Instructions by facsimile, telephonic, e-mail or other Client Designated Security Procedure. In addition, to the extent the Client uses email to transmit FT Instructions or any other information under this FTSA, the Client is solely responsible to ensure emails are sent via secure means, such as by way of example only, via transport layer security. BY ELECTING TO SEND FT INSTRUCTIONS BY FACSIMILE, TELEPHONIC, E-MAIL OR OTHER CLIENT DESIGNATED SECURITY PROCEDURE, THE CLIENT ACKNOWLEDGES THAT THE LIMITATIONS OF LIABLITY APPLICABLE TO BBH, THE INDEMNIFICATION OBLIGATION, AND HOLD HARMLESS TERMS GIVEN BY THE CLIENT IN THIS FTSA AND IN THE AGREEMENTS INCLUDE ALL CLAIMS, LOSSES, DAMAGES AND COSTS (INCLUDING BUT NOT LIMITED TO ATTORNEYS’ FEES) ARISING THEREFROM OR RELATING THERETO.
The Client hereby indemnifies BBH, and its respective agents, nominees and the partners, employees, officers and directors, and agrees to hold each of them harmless from and against all claims and liabilities, including counsel fees and taxes, incurred or assessed against any of them in connection with the performance of this FTSA and the execution of any FT Instruction to the extent not covered under UCC 4A.
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THIS FTSA SHALL BE CONSTRUED IN ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS OF, THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW 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 IN THE BOROUGH OF MANHATTAN. THE CLIENT 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 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 FTSA OR THE TRANSACTIONS CONTEMPLATED HEREBY.
This FTSA, together with the Appendix A and Election Form (as may be amended from time to time), constitutes the entire agreement between the Client and BBH with respect to the subject matter hereof. Accordingly, this FTSA supersedes any other oral or written agreements heretofore in effect among the Client and BBH with respect to any funds transfers.
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BROWN BROTHERS XXXXXXXX & CO. | [CLIENT] | |||
By: | By: | |||
Name: | Name: | |||
Title: | Title: |
5
Appendix A
To The
FUNDS TRANSFER SERVICES AGREEMENT (“FTSA”)
Designated Security Procedures
Prior to the initiation of an FT Instruction, the Client will complete and sign an APD, in which the Client will provide to BBH: (a) required information about each Authorized Person, and (b) the entitlements granted to such person(s) by the Client. This Appendix A to the FTSA may be updated from time to time by BBH by electronic mail to the email address of any Authorized Person, in the event BBH determines it will no longer offer a particular Designated Security Procedure, will do so only on revised terms, or will offer a new Designated Security Procedure. The Client (or its Authorized Person(s)) will choose the Designated Security Procedure(s) in an Election Form. Terms not defined herein shall have the same meaning as set forth in the FTSA.
A. | BBH Designated Security Procedure. BBH offers the following BBH Designated Security Procedures to the Client for use in communicating FT Instructions to BBH: |
1. BBH Infuse™ Payment Products. The Client may submit FT Instructions through BBH Infuse™ Payment Products (or any successor thereto, “BBH Infuse”), which are BBH proprietary on-line payment order authorization facilities with built-in multi-factor authentication procedures. BBH and the Client shall each be responsible for maintaining the confidentiality of passwords or other codes used by them in connection with BBH Infuse. BBH will act on FT Instructions received through BBH Infuse without duty of further verification unless the Client notifies BBH that its password is not secure. Access to, and use of, BBH Infuse are subject to the terms and conditions available at: xxx.xxx.xxx/xxxxxxxxxxx, as updated from time to time and which are incorporated herein by reference.
2. SWIFT (Society for Worldwide Interbank Financial Telecommunication) Transmission. The Client may submit FT Instructions through SWIFT. BBH and the Client shall comply with XXXXX’s authentication procedures. The Client is responsible for maintaining the confidentiality of passwords, codes and credentials, and for securing the systems and applications, used in connection with SWIFT authentication. BBH will act on FT Instructions received via SWIFT provided the instruction is authenticated by the SWIFT system until the Client notifies BBH in writing to cease acting on FT Instructions received via SWIFT.
3. sFTP (Secure File Transmission Protocol). The Client may upload FT Instructions through a secure file transmission protocol (“sFTP”), which includes multi-factor authentication processes and encryption of the complete transmission. The Client is responsible for maintaining the confidentiality of passwords or other codes used in connection with sFTP. BBH will act on FT Instructions received through sFTP without duty of further verification unless the Client notifies BBH in writing that its credentials have been compromised. As a prerequisite to receiving FT Instructions via sFTP, BBH and the Client shall have conducted testing and confirmed that the FT Instructions sent via sFTP can be processed in good time and order; once such testing and confirmation is satisfactory to the Client and BBH, BBH will act on FT Instructions received via sFTP.
4. Written Instruction with PIN Verified Callback. The Client may elect to send an FT Instruction that bears the signature of an Authorized Instructor (a) in an original writing to an address designated by BBH from time-to-time for such purposes, (b) by fax to a fax number designated by BBH from time-to-time for such purposes, or (c) in PDF format by email to an email address designated by BBH from time-to-time for such purposes. The authenticity of that FT Instruction shall be deemed conclusive if verified by BBH as follows:
(i) | Upon BBH’s receipt of the document containing the FT Instruction, BBH shall identify the name of the instructor to verify if it is a named Authorized Instructor. BBH shall rely on the purported identity of the instructor but will not perform signature verification; |
(ii) | BBH will perform a callback to a telephone number set forth in the APD attributable to an Authorized Verifier during which the Authorized Verifier provides a personal identification number, one-time identification code, or password (collectively, a “PIN”) or other authentication information to verify that the FT Instruction is properly authorized and to verify certain FT Instruction details (such as the account name or number, the amount, and/or the beneficiaries account name or number) (such an authentication process, a “Callback Procedure”); |
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(iii) | If, however, (1) the FT Instruction does not on its face appear to originate from an Authorized Instructor (e.g., because the name of the instructor identified by BBH on the FT Instruction is not an Authorized Instructor) or (2) during the Callback Procedure, BBH is unable to reach an individual designated as an Authorized Verifier, or an Authorized Verifier cannot verify relevant FT Instruction details, BBH will reject the FT Instruction and shall notify the Client of the rejection (in accordance with the FTSA). |
B. | Client Designated Security Procedure - Client may send an FT Instruction through such other means, and subject to such additional security procedures, as may be elected by Client (or by an Authorized Person), if such means is acknowledged and accepted by BBH via the issuance of an updated Appendix A to Client (or an Authorized Person) referencing the relevant procedure (each a “Client Designated Security Procedure”); it being understood that BBH’s acknowledgment shall authorize it to accept such means of delivery but shall not represent a judgment by BBH as to the reasonableness or security of the means utilized by Client or such Authorized Person. |
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FUNDS TRANSFER SERVICES AGREEMENT DESIGNATED SECURITY PROCEDURES ELECTION FORM
Reference is made to the Funds Transfer Services Agreement dated as of _________, 202_ by and between [Client] (the “Client”) and BROWN BROTHERS XXXXXXXX & CO. and/or any of its affiliates (“BBH”) (as amended, restated, supplemented, modified, and otherwise in effect from time to time, the “Agreement” or the “FTSA”). Terms not otherwise defined herein shall have the meanings accorded to them in the FTSA.
By making a selection or selections below by affirmatively marking a checkbox, the Client is agreeing to the security procedures, as more fully described in the FTSA related to such method (collectively, the “Designated Security Procedures”), each of which is designed to verify the authenticity of an FT Instruction. By not affirmatively marking a checkbox below, Client is excluding such Designated Security Procedure with respect to FT Instructions.
BBH Designated Security Procedures.
¨ | BBH Infuse™ Payment Products. |
¨ | Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) Transmission. |
¨ | sFTP (Secure File Transmission Protocol). |
¨ | Written Instruction with PIN Verified Callback. |
Client Designated Security Procedures.
Client agrees that there are currently no Client Designated Security Procedures selected.
Client Authorization / Agent Authorization.
Pursuant to Section 3 of the FTSA, the Client hereby confirms to BBH (select only one):
¨ | that Client has chosen all the permitted Designated Security Procedures for FT Instructions for itself and Client’s Authorized Persons; or |
¨ | that Client’s Authorized Persons are permitted to select the Designated Security Procedures such Authorized Person will use for FT Instructions, Client acknowledges and consents to the Designated Security Procedure(s) selected by one or more such Authorized Person(s), and Client authorizes BBH to accept from such Authorized Person(s) the selection and use of such Designated Security Procedure or Designated Security Procedures. |
[CLIENT] | ||
By: | ||
Name: | ||
Title: | ||
Date: |
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FUNDS TRANSFER DESIGNATED SECURITY PROCEDURES ELECTION FORM
Third Party Authorized Persons
Reference is made to the funds transfer services arrangements (the “FT Arrangements”) the undersigned’s underlying client [____________] (the “Client”) has made with BROWN BROTHERS XXXXXXXX & CO. and/or any of its affiliates (“BBH”) under a funds transfer services agreement, custody agreement and/or any other agreement which governs Client’s use of funds transfers (the “Agreements”).
By making a selection or selections below by affirmatively marking a checkbox, the undersigned, as the Client’s third party authorized person (an “Authorized Person”), is agreeing to the security procedures as more fully described in Exhibit A attached hereto (collectively, the “Designated Security Procedures”), each of which is designed to verify the authenticity of a funds transfer instruction delivered to BBH (“FT Instruction(s)”). By not affirmatively marking a checkbox below, the undersigned Authorized Person is excluding such Designated Security Procedure with respect to FT Instructions.
BBH Designated Security Procedures.
☐ | BBH Infuse™ Payment Products. |
☐ | Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) Transmission. |
☐ | sFTP (Secure File Transmission Protocol). |
☐ | Written Instruction with PIN Verified Callback. |
Client Designated Security Procedures.
The undersigned Authorized Person agrees that there are currently no Client Designated Security Procedures selected.
[Insert Legal entity name of Authorized Person] | ||
By: | ||
Name: | ||
Title: | ||
Date: |
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Appendix A
To The
FUNDS TRANSFER DESIGNATED SECURITY PROCEDURES ELECTION FORM
THIRD PARTY AUTHORIZED PERSONS
Designated Security Procedures
Prior to the initiation of an FT Instruction, the Authorized Person will complete and sign an APD (defined below), in which the Authorized Person will provide to BBH: (a) required information about each person authorized to act on behalf of the Authorized Person, and (b) the entitlements granted to such person(s) by the Authorized Person. This Appendix A to the Funds Transfer Designated Security Procedures Election Form (“Election Form”) may be updated from time to time by BBH by electronic mail to the email address of any Authorized Person, in the event BBH determines it will no longer offer a particular Designated Security Procedure, will do so only on revised terms, or will offer a new Designated Security Procedure. The Authorized Person(s) will choose the Designated Security Procedure(s) in an Election Form. Terms not defined herein shall have the same meaning as set forth in the Election Form.
A. | BBH Designated Security Procedure. BBH offers the following BBH Designated Security Procedures to the Authorized Person(s) for use in communicating FT Instructions to BBH: |
1. | BBH Infuse™ Payment Products. The Authorized Person(s) may submit FT Instructions through BBH Infuse™ Payment Products (or any successor thereto, “BBH Infuse”), which are BBH proprietary on-line payment order authorization facilities with built-in multi-factor authentication procedures. BBH and the Authorized Person(s) shall each be responsible for maintaining the confidentiality of passwords or other codes used by them in connection with BBH Infuse. BBH will act on FT Instructions received through BBH Infuse without duty of further verification unless the Authorized Person(s) notifies BBH that its password is not secure. Access to, and use of, BBH Infuse are subject to the terms and conditions available at: xxx.xxx.xxx/xxxxxxxxxxx, as updated from time to time and which are incorporated herein by reference. |
2. | Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) Transmission. The Authorized Person(s) may submit FT Instructions through SWIFT. BBH and the Authorized Person(s) shall comply with XXXXX’s authentication procedures. The Authorized Person(s) is responsible for maintaining the confidentiality of passwords, codes and credentials, and for securing the systems and applications, used in connection with SWIFT authentication. BBH will act on FT Instructions received via SWIFT provided the instruction is authenticated by the SWIFT system until the Authorized Person(s) notifies BBH in writing to cease acting on FT Instructions received via SWIFT. |
3. | sFTP (Secure File Transmission Protocol). The Authorized Person(s) may upload FT Instructions through a secure file transmission protocol (“sFTP”), which includes multi-factor authentication processes and encryption of the complete transmission. The Authorized Person(s) is responsible for maintaining the confidentiality of passwords or other codes used in connection with sFTP. BBH will act on FT Instructions received through sFTP without duty of further verification unless the Authorized Person(s) notifies BBH in writing that its credentials have been compromised. As a prerequisite to receiving FT Instructions via sFTP, BBH and the Authorized Person(s) shall have conducted testing and confirmed that the FT Instructions sent via sFTP can be processed in good time and order; once such testing and confirmation is satisfactory to the Authorized Person(s) and BBH, BBH will act on FT Instructions received via sFTP. |
4. | Written Instruction with PIN Verified Callback. The Authorized Person(s) may elect to send an FT Instruction that bears the signature of an Authorized Instructor (a) in an original writing to an address designated by BBH from time-to-time for such purposes, (b) by fax to a fax number designated by BBH from time-to-time for such purposes, or (c) in PDF format by email to an email address designated by BBH from time-to-time for such purposes. The authenticity of that FT Instruction shall be deemed conclusive if verified by BBH as follows: |
(i) Upon BBH’s receipt of the document containing the FT Instruction, BBH shall identify the name of the instructor to verify if it is a named Authorized Instructor. BBH shall rely on the purported identity of the instructor but will not perform signature verification;
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(ii) BBH will perform a callback to a telephone number set forth in the APD attributable to an Authorized Verifier during which the Authorized Verifier provides a personal identification number, one-time identification code, or password (collectively, a “PIN”) or other authentication information to verify that the FT Instruction is properly authorized and to verify certain FT Instruction details (such as the account name or number, the amount, and/or the beneficiaries account name or number) (such an authentication process, a “Callback Procedure”); and
(iii) If, however, (1) the FT Instruction does not on its face appear to originate from an Authorized Instructor (e.g., because the name of the instructor identified by BBH on the FT Instruction is not an Authorized Instructor) or (2) during the Callback Procedure, BBH is unable to reach an individual designated as an Authorized Verifier, or an Authorized Verifier cannot verify relevant FT Instruction details, BBH will reject the FT Instruction and shall notify the Authorized Person(s) of the rejection.
B. | Client Designated Security Procedure – The Authorized Person(s) may send an FT Instruction through a Client Designated Security Procedure, in lieu of a BBH Designated Security Procedure. |
As used herein, the following terms shall have the meanings set forth below (such meanings to be equally applicable to both the singular and plural forms of the terms defined). Terms not otherwise defined herein shall have the meanings accorded to them in the applicable Agreement.
“Authorized Instructors” refers to individuals designated by the Client or its agent in the APD as authorized to give FT Instructions.
“Authorized Person” refers collectively to any individual authorized by the Client or its agent to give (i.e., Authorized Instructor) and/or verify (i.e., Authorized Verifier) FT Instructions, on the relevant cash account as set forth in the APD.
“Authorized Persons Document” or “APD” means a form acceptable to BBH whereby the Client or its agent designates Authorized Person(s) and the entitlements the Client or its agent has granted such person(s) with respect to the relevant cash account. The APD includes the names, phone numbers, email addresses, and/or fax numbers of Authorized Instructors and/or Authorized Verifiers (as applicable), and any other information that BBH may require from time to time.
“Authorized Verifiers” refers to individuals designated by the Client or its agent in the APD as authorized to verify FT Instructions.
“BBH Designated Security Procedure” means the security procedures that BBH makes available to the Client as set forth in Appendix A attached hereto (as amended from time to time by BBH, “Appendix A”).
“Callback Procedure” has the meaning set forth in Appendix A.
“Client Designated Security Procedure” means an alternate security procedure, as set forth in Appendix A, that the Client elects to use to transmit and authenticate an FT Instruction in lieu of a BBH Designated Security Procedure, which is subject to additional security procedures, if such means is acknowledged by BBH via the issuance of an updated Appendix A to Client (and the Authorized Person) referencing the relevant procedure; it being understood that BBH’s acknowledgment shall authorize it to accept such means of delivery but shall not represent a judgment by BBH as to the reasonableness or security of the means utilized by Client or such Authorized Person.
“Designated Security Procedure” refers, collectively, to Client Designated Security Procedures and BBH Designated Security Procedures.
“FT Instructions” refers to Instructions or Proper Instructions, as applicable, made in the name of the Client in relation to a payment order as defined in UCC 4A, whether such payment order is a Fed wire payment order or other funds transfers, including a book transfer.
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[Investment Adviser Letterhead]
CMS INSTRUCTION
Brown Brothers Xxxxxxxx & Co.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to a Custodian and Transfer Agent Agreement between the entities whose accounts are identified on Exhibit A (each such entity, a Client”) and Brown Brothers Xxxxxxxx & Co. (“BBH”), dated [as of DATE] (the “Custodian Agreement).
The undersigned investment adviser (the “Adviser”), on behalf of each Client, agrees to participate in the Brown Brothers Xxxxxxxx & Co. Cash Management Services Sweep (“CMS Sweep”). The Adviser hereby instructs BBH to place, on each local business day (with respect to the applicable currencies, referred to herein as a “Business Day”), Client end-of-day demand deposit balances in the accounts and currencies identified in Exhibit A (“Excess Cash”) into overnight deposits (each, a “Deposit”) with one or more deposit institutions selected by the Adviser as set forth in Exhibit B, including BBH (the “Eligible Institutions”). Client acknowledges that BBH has other clients that participate in the CMS Sweep (together with Client, the “clients”) and that BBH can use the CMS Sweep to place BBH cash in Deposits.
The Adviser hereby instructs BBH to debit Excess Cash from each Client’s cash account(s) at the end of each Business Day, place the Excess Cash in the Deposits of one or more Eligible Institutions, and then credit Client’s cash account(s) after receipt from the Eligible Institution(s) of the Excess Cash the following Business Day. With respect to each Eligible Institution, Excess Cash debited from each Client’s cash account(s) will be placed in a pooled deposit designated as a client deposit, and will be marked on the books of the Eligible Institution as “Deposit for BBH RIC Customers” or similar name indicating BBH is acting in its capacity as agent for such clients. BBH will use sub-accounting to identify the principal and amount of interest each Client has earned and is payable with respect to each deposit placed with an Eligible Institution.
BBH will place each Client’s Excess Cash with an Eligible Institution based on, among other factors, any limitations identified in Exhibit B, as amended from time-to-time and accepted by BBH, the amount of Excess Cash available, the Eligible Institutions willing to accept Deposits and the deposit-taking capacity of each Eligible Institution. BBH then randomly allocates each Client’s Excess Cash among that Business Day’s participating Eligible Institutions.
Each Business Day, BBH calculates a base rate of return with respect to each currency placed in a Deposit (“Base Rate”). This calculation takes into account a variety of factors, including but not limited to relevant overnight and short-term reference rates, the range of distribution between and among the interest rates paid by each Eligible Institution on their respective Deposits, and the weighted average distribution of interest rates on the Deposits. The net daily return to a Client is the Base Rate, less any then applicable commission charged by BBH to the Client and Client authorizes BBH to make such deductions. On a sweep to an Eligible Institution other than BBH (an agency sweep), BBH’s compensation is the commission, adjusted to reflect any difference between the Deposit yield and the Base Rate. On a sweep to BBH (a principal sweep), BBH earns as a bank of deposit.
At the request of the Adviser or other authorized party of the Client, BBH will credit earnings received (subject to deductions by BBH as authorized by Client in the above paragraph or as otherwise contemplated in connection with the custodian arrangement) on a daily or monthly basis or as otherwise agreed to with the Adviser or other authorized party of the Client. If monthly, BBH will post all daily client earnings to an omnibus demand deposit account (“Omnibus Deposit Account”). BBH will maintain records of the underlying ownership of each deposit representing the earnings due to each client and will transfer the value to each Client once each month or as otherwise instructed by the Adviser or other authorized party of the Client. At all times, each Client’s balance in the Omnibus Deposit Account will constitute a general deposit obligation of BBH.
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The Adviser, on behalf of each Client, acknowledges and agrees that:
(i) | The Adviser has full authority to execute this CMS Instruction on behalf of each Client. Each Client’s Board of Directors or Trustees, as the case may be, has made all determinations and each Client has received all approvals necessary to participate in the CMS Sweep and to hold cash in each account (identified in Exhibit A) with an Eligible Institution to which such Client’s Excess Cash is transferred pursuant to this CMS Instruction. |
(ii) | This CMS Instruction is not in conflict with, or contrary to (a) any provision(s) of the Adviser’s or Client’s documents of formation, and any other corporate or publicly available documents, (b) any contractual agreement or arrangement that may apply to the Excess Cash, or (c) any legal requirements relating to the custody or management of Client assets. |
(iii) | The Adviser is solely responsible for providing the information necessary for BBH to perform the services under this CMS Instruction and for assuring the adequacy, accuracy and timeliness of all such information, including, without limitation, any relevant investment limitations. |
(iv) | The list of Eligible Institutions set forth in Exhibit B represents those deposit institutions with which BBH has arranged the capability to place Deposits. The Adviser, and not BBH, is solely responsible for selecting the Eligible Institutions, and adding or removing an Eligible Institution, in each case, based on the Adviser’s determination as to the credit quality of and other risks associated with the Eligible Institution. BBH makes no representation or warranty with respect to the credit quality or risks associated with any deposit institution other than BBH. |
(v) | BBH can allocate Client’s Excess Cash to one, some or all of Client’s Eligible Institutions, including allocating all of Client’s Excess Cash to BBH, subject to, among other factors, any limitations identified in Exhibit B, as amended from time-to-time and accepted by BBH, as well as the availability of deposit-taking capacity at each Eligible Institution. |
(vi) | BBH is not liable to the Adviser or any Client for (a) any violation of a Client’s investment policies or guidelines, or of other limitations with respect to the Adviser’s or Client’s powers to invest, make expenditures, encumber securities, borrow or take similar actions affecting the Client, or (b) any special, indirect, punitive or consequential damages arising out of, pursuant to or in connection with, this CMS Instruction. |
(vii) | The Eligible Institutions are not serving as Subcustodians or Securities Depositories (each term as defined in the Custodian Agreement) of BBH. |
(viii) | This CMS Instruction (including the Exhibits thereto) is an Instruction (or Proper Instruction) (as defined in the Custodian Agreement) and all representations, warranties and covenants made by the Adviser and/or the Client in the Custodian Agreement with respect to an Instruction (or Proper Instruction) are incorporated herein. Each Deposit constitutes an Investment (as defined in the Custodian Agreement) subject to all provisions applicable to Investments in the Custodian Agreement. BBH’s services pursuant to this CMS Instruction do not constitute investment advice and BBH is not acting as an investment advisor. |
(ix) | The Custodian Agreement’s indemnification provisions are applicable to any actions taken by, or omissions of, BBH under this CMS Instruction (as if each Client was a signatory to the Custodian Agreement and this CMS Instruction). |
(x) | This CMS Instruction is a standing Instruction (or Proper Instruction), and the Adviser will notify BBH in writing of any and all amendments to this CMS Instruction, including but not limited to any changes to Exhibits A and B, which amendment will take effect on the next Business Day after BBH receives and accepts the written amendment. |
(xi) | Notwithstanding any other provision in this CMS Instruction and without limiting the terms under the Custodian Agreement, in addition to the terms and conditions imposed by each Eligible Institution relative to its Deposits, Deposits placed in a particular jurisdiction, whether at BBH or one or more other Eligible Institutions, are subject to any and all risks associated with: opening an account (through BBH as agent) and holding cash in the relevant jurisdiction with one or more Eligible Institutions; creditor rights, banking, currency and related risks in that jurisdiction; and Country and Sovereign Risk (as each term is defined in the Custodian Agreement) in such jurisdiction. These risks are exclusively for, and at all times risks undertaken by, the Client. |
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(xii) | For all Eligible Institutions listed in Exhibit B (other than BBH), Excess Cash placed with any such Eligible Institution is not a liability of, or guaranteed by, BBH, and BBH is not responsible for any losses or other damages incurred by the Client, the Adviser or any shareholder of the Client in the event of the insolvency or failure of any such Eligible Institution, or as a result of delays in repayment of, or failure to pay, principal or interest. Any such losses or damages are exclusively and at all times those of the Client. |
(xiii) | BBH conducts, or in the future may conduct, other activities and have other relationships with Eligible Institutions, and may place its own monies in Deposits at Eligible Institutions. Client may now, or in the future, enter into business relationships with the Eligible Institutions. Nothing in this CMS Instruction prevents BBH, the Adviser or the Client from entering into or maintaining such relationships with Eligible Institutions, even if they were to create an actual or potential conflict with the services provided or received pursuant to this CMS Instruction. |
This CMS Instruction shall be construed in accordance with, and is governed by, the laws of the State of New York, without giving effect to the conflicts of laws of such state. In the event of a conflict between the terms of this CMS Instruction and the Custodian Agreement, this CMS Instruction will prevail. The undersigned irrevocably consents to the exclusive jurisdiction of the courts of the State of New York and the federal courts located in New York City in the Borough of Manhattan. The parties hereby waive the right to trial by jury in any judicial proceedings involving any matter in any way arising out of, related to, or connected with this CMS Instruction.
BBH may terminate the CMS Sweep, and the Adviser may terminate this CMS Instruction, in either case, by providing the other party with prior written notice. Termination will become effective one business day after receipt. Representations (i)-(iv), (vi), (ix), (xi)-(xiii) and the provisions in this CMS Instruction regarding governing law, jurisdiction and dispute resolution will survive the termination of this CMS Instruction. Notices contemplated by this Instruction shall be delivered in accordance with the Notice delivery provisions in the Custodian Agreement and shall be addressed, as follows:
If to Adviser: [ ] [ ] [ ] Telephone: [ ] Attn: [ ] |
If to Custodian: | Brown Brothers Xxxxxxxx & Co. 000 Xxxxxxxx Xxx Xxxx, Xxx Xxxx 00000 Telephone: (000) 000-0000 Attn: Treasury Department |
[NAME OF INVESTMENT ADVISER] | ||
By: | ||
Name: | ||
Title: | ||
Date: |
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Exhibit A: List of Accounts and Currencies
Account Name | Account Number | Currency | |
(1) | |||
(2) | |||
(3) | |||
(4) | |||
(5) | |||
(6) | |||
(7) | |||
(8) | |||
(9) | |||
(10) |
[NAME OF INVESTMENT ADVISER] | ||
By: | ||
Name: | ||
Title: | ||
Date: |
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Exhibit B – Eligible Institutions Selected by the Client
[TO BE PROVIDED BY BBH]
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