CUSTODY AGREEMENT
AGREEMENT dated as of February 8, 2007, between THE ADVISORS' INNER
CIRCLE FUND II, a business trust organized under the laws of the State of
Massachusetts, having its principal office and place of business at 0 Xxxxxxx
Xxxxxx Xxxxx, Xxxx, XX 00000 (the "Fund"), and THE NORTHERN TRUST COMPANY (the
"Custodian"), an Illinois company with its principal place of business at 00
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set
forth, the Fund and the Custodian agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement or in any Schedules to this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
(a) "Articles of Incorporation " shall mean the Declaration of Trust of
the Fund, including all amendments thereto.
(b) "Authorized Person" shall mean any person duly authorized by the
Board of Directors to give Instructions on behalf of the Fund and
listed in the certification annexed hereto as Schedule A or such other
certification as may be received by the Custodian from time to time
pursuant to Section 18(a).
(c) "Board of Directors" shall mean the Board of Directors or Trustees
of the Fund.
(d) "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency securities, its
successor or successors and its nominee or nominees.
(e) "Delegate of the Fund" shall mean and include any entity to whom
the Board of Directors of the Fund has delegated responsibility under
Rule 17f-5 of the 1940 Act.
(f) "Depository" shall include the Book-Entry System and the Depository
Trust Company, a clearing agency registered with the Securities and
Exchange Commission under Section 17(a) of the Securities Exchange Act
of 1934, as amended, its successor or successors and its nominee or
nominees, the use of which is hereby specifically authorized. The term
"Depository" shall further mean and include any other person named in
an Instruction and approved by the Fund to act as a depository in the
manner required by Rule 17f-4 of the 1940 Act, its successor or
successors and its nominee or nominees.
(g) "Foreign Assets" shall mean the Fund's investments (including
foreign currencies) for which the primary market is outside the United
States and such cash and cash equivalents as are reasonably necessary
to effect the Fund's transactions in such investments.
(h) "Foreign Custody Manager" shall mean a Foreign Custody Manager as
defined in Rule 17f-5(a)(3) under the 1940 Act.
(i) "Instruction" shall mean written (including telecopied, telexed, or
electronically transmitted in a form that can be converted to print) or
oral instructions actually received by the Custodian which the
Custodian reasonably believes (based on internal authentication
policies and procedures) were given by an Authorized Person. An
Instruction shall also include any instrument in writing actually
received by the Custodian which the Custodian reasonably believes to be
genuine and to be signed by any two officers of the Fund, whether or
not such officers are Authorized Persons. Except as otherwise provided
in this Agreement, "Instructions" may include instructions given on a
standing basis.
(j) "1940 Act" shall mean the Investment Company Act of 1940, and the
Rules and Regulations thereunder, all as amended from time to time.
(k) "Portfolio" refers to each of the separate and distinct investment
portfolios of the Fund which the Fund and the Custodian shall have
agreed in writing shall be subject to this Agreement, as identified in
Schedule B hereto.
(l) "Prospectus" shall include each current prospectus and statement of
additional information of the Fund with respect to a Portfolio.
(m) "Rule 17f-5" shall mean Rule 17f-5 under the 1940 Act.
(n) "Rule 17f-7" shall mean Rule 17f-7 under the 0000 Xxx.
(o) "Shares" refers to the shares of the Fund.
(p) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and other
securities, commodity interests and investments from time to time owned
by the Fund and held in a Portfolio.
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(q) "Sub-Custodian" shall mean and include (i) any branch of the
Custodian, and (ii) any "Eligible Foreign Custodian," as that term is
defined in Rule 17f-5(a)(1) under the 1940 Act, approved by the Fund or
a Delegate of the Fund in the manner required by Rule 17f-5. For the
avoidance of doubt, the term "Sub-Custodian" shall not include any
central securities depository or clearing agency.
(r) "Eligible Securities Depository" shall have the same meaning as set
forth in Rule 17f-7(b)(1).
(s) "Transfer Agent" shall mean the person which performs as the
transfer agent, dividend disbursing agent and shareholder servicing
agent for the Fund.
2. APPOINTMENT OF CUSTODIAN.
(a) The Fund hereby constitutes and appoints the Custodian as custodian
of all the Securities and monies owned by or in the possession of a
Portfolio during the period of this Agreement.
(b) The Fund hereby appoints the Custodian as a Foreign Custody Manager
to perform the responsibilities as set forth in Section 3A.
(c) The Custodian hereby accepts appointment as such custodian and
agrees to perform the duties thereof as hereinafter set forth.
3. APPOINTMENT AND REMOVAL OF SUB-CUSTODIANS.
(a) The Custodian may appoint one or more Sub-Custodians to act as
sub-custodian or sub-custodians of Securities and monies at any time
held in any Portfolio, upon the terms and conditions specified in this
Agreement. The Custodian shall oversee the maintenance by any
Sub-Custodian of any Securities or monies of any Portfolio.
(b) The Agreement between the Custodian and each Sub-Custodian
described in clause (ii) of Section 1(q) and acting hereunder shall
contain any provisions necessary to comply with Rule 17f-5 under the
1940 Act.
(c) Prior to the Custodian's use of any Sub-Custodian described in
clause (ii) of Section 1(q), the Fund or a Delegate of the Fund must
approve such Sub-Custodian in the manner required by Rule 17f-5.
(d) The Custodian shall promptly take such steps as may be required to
remove any Sub-Custodian that has ceased to be an "Eligible Foreign
Custodian" or has otherwise ceased to meet the requirements under Rule
17f-5.
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(e) The Custodian hereby represents to the Fund that in its opinion,
after due inquiry, the established procedures to be followed by each
Sub-Custodian in connection with the safekeeping of property of a
Portfolio pursuant to this Agreement afford reasonable care for the
safekeeping of such property based on the standards applicable in the
relevant market.
3A. DELEGATION OF FOREIGN CUSTODY MANAGEMENT.
(a) The Fund hereby delegates to Custodian the responsibilities set
forth in subparagraph (b) below of this Section 3A, in accordance with Rule
17f-5 with respect to foreign custody arrangements for the Fund's existing and
future investment portfolios, For the avoidance of doubt, subparagraph (b) below
relates only to custody arrangements with foreign sub-custodians and the term
"Foreign Custodian" shall not include any central securities depositories or
clearing agencies.
(b) With respect to each arrangement with any Sub-Custodian regarding
the assets of any investment portfolio of the Fund for which Custodian has
responsibility under this Section 3A (a "Foreign Custodian"), Custodian shall:
(i) determine that the Fund's assets will be subject to reasonable
care, based on the standards applicable to custodians in the
relevant market, if maintained with the Foreign Custodian, after
considering all factors relevant to the safekeeping of such
assets, including without limitation: (1) the Eligible Foreign
Custodian's practices, procedures, and internal controls,
including but not limited to, the physical protections available
for certified securities (if applicable), the method of keeping
custodial records, and the security and data protection practice;
(2) whether the Eligible Foreign Custodian has the requisite
financial strength to provide reasonable care for Foreign Assets;
(3) the Eligible Foreign Custodian's general reputation and
standing; and (4) 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 offices in the
United States or consent to service of process in the United
States;
(ii) determine that the written contract with such Foreign
Custodian governing the foreign custody arrangements complies with
the requirements of Rule 17f-5 and will provide reasonable care
for the Fund's assets;
(iii) establish a system to monitor the appropriateness of
maintaining the Fund's assets with such Foreign Custodian and the
contract governing the Fund's foreign custody arrangements;
(iv) provide to the Fund's Board of Directors written reports
notifying the Board of the placement of the Fund's assets with a
particular Foreign Custodian and periodic reports of any Material
Changes to the Fund's foreign custodian arrangements, with the
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reports to be provided to the Board at each calendar quarter or at
such times as the Board deems reasonable and appropriate based on
the circumstances of the Fund's arrangements. "Material Changes"
include, but are not limited to: a decision to remove all Foreign
Assets from a particular sub-custodian; any event that may
adversely and materially affect an Eligible Foreign Custodian's
financial or operational strength; Custodian's inability to
perform its duties in accordance with the standard of care under
this Section 3(A); a change in control of an Eligible Foreign
Custodian; the failure of an Eligible Foreign Custodian to comply
with the terms of Rule 17f-5, or its contract governing the Fund's
foreign custody arrangements; the failure of the Custodian or a
foreign custody arrangement to meet the standards in Rule 17f-5;
any event that may adversely affect the Custodian's ability to
comply with Rule 17f-5; and a material change in any information
provided to the Board regarding: Custodian's expertise in foreign
custody issues and risks.
(v) withdraw the Fund's assets from any Foreign Custodian as soon
as reasonably practicable, if the foreign custody arrangement no
longer meets the requirement of Rule 17f-5; and
(vi) exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of the Fund's
Foreign Assets would exercise.
4. USE OF SUB-CUSTODIANS AND SECURITIES DEPOSITORIES.
With respect to property of a Portfolio which is maintained by the
Custodian in the custody of a Sub-Custodian pursuant to Section 3:
(a) The Custodian will identify on its books as belonging to the
particular Portfolio any property held by such Sub-Custodian.
(b) In the event that a Sub-Custodian permits any of the Securities
placed in its care to be held with an Eligible Securities Depository,
such Sub-Custodian will be required by its agreement with the Custodian
to identify on its books such Securities as being held for the account
of the Custodian as a custodian for its customers.
(c) Any Securities held by a Sub-Custodian will be subject only to the
instructions of the Custodian or its agents; and any Securities held
with an Eligible Securities Depository for the account of a
Sub-Custodian will be subject only to the instructions of such
Sub-Custodian.
(d) The Custodian will only deposit property of a Portfolio in an
account with a Sub-Custodian which includes exclusively the assets held
by the Custodian for its customers, and will cause such account to be
designated by such Sub-Custodian as a special custody account for the
exclusive benefit of customers of the Custodian.
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(e) Before any Foreign Assets are placed with an Eligible Securities
Depository, the Custodian shall provide the Fund's Board of Directors
with an analysis of the custody risks associated with maintaining such
assets with the depository.
(f) The Custodian or its agent shall continue to monitor the custody
risks associated with maintaining the Foreign Assets with the Eligible
Securities Depository on a continuing basis and shall promptly notify
the Fund's Board of Directors of any material changes in said risks.
(g) The Custodian shall determine the eligibility under Rule 17f-7 of
each Depository and shall promptly advise the Fund (and its investment
adviser(s)) if any Eligible Securities Depository ceases to be eligible
and, upon Instruction from the Fund, will withdraw the Fund's foreign
assets from the depository as soon as reasonably practical..
(h) The Custodian shall exercise reasonable care, prudence and
diligence in performing the requirements set forth in this Section.
5. COMPENSATION.
(a) The Fund will compensate the Custodian for its services rendered
under this Agreement in accordance with the fees set forth in the Fee
Schedule annexed hereto as Schedule C and incorporated herein. Such Fee
Schedule does not include out-of-pocket disbursements of the Custodian
for which the Custodian shall be entitled to xxxx separately; provided
that out-of-pocket disbursements may include only the items specified
in Schedule C.
(b) In the event that the Fund establishes one or more portfolios in
addition to the Portfolios listed on Schedule B, for which the Fund
desires the Custodian to render services under the terms hereof, the
Fund shall notify the Custodian in writing, and if the Custodian agrees
in writing to provide these services, the portfolios shall become a
Portfolio hereunder.
(c) If the Fund's requests for additional portfolios under this
Agreement has been accepted by the Custodian, the compensation for such
services will be reflected in Schedule C of this Agreement.
(d) Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule C, or replacing Schedule C with, a
revised Fee Schedule, dated and signed by an officer of each party
hereto.
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(e) The Custodian will xxxx the Fund for its services to each Portfolio
hereunder as soon as practicable after the end of each calendar
quarter, and said xxxxxxxx will be detailed in accordance with the Fee
Schedule for the Fund. The Fund will promptly pay to the Custodian the
amount of such billing. The Custodian shall have a claim of payment
against the property in each Portfolio for any compensation or expense
amount owing to the Custodian in connection with such Portfolio from
time to time under this Agreement.
(f) The Custodian (not the Fund) will be responsible for the payment of
the compensation of each Sub-Custodian.
6. CUSTODY OF CASH AND SECURITIES
(a) RECEIPT AND HOLDING OF ASSETS. The Fund will deliver or cause to be
delivered to the Custodian and any Sub-Custodians all Securities and
monies of any Portfolio at any time during the period of this Agreement
and shall specify the Portfolio to which the Securities and monies are
to be specifically allocated. The Custodian will not be responsible for
such Securities and monies until actually received by it or by a
Sub-Custodian. The Fund may, from time to time in its sole discretion,
provide the Custodian with Instructions as to the manner in which and
in what amounts Securities, and monies of a Portfolio are to be held on
behalf of such Portfolio in the Book-Entry System or a Depository.
Securities and monies of a Portfolio held in the Book-Entry System or a
Depository will be held in accounts which include only assets of
Custodian that are held for its customers.
(b) ACCOUNTS AND DISBURSEMENTS. The Custodian shall establish and
maintain a separate account for each Portfolio and shall credit to the
separate account all monies received by it or a Sub-Custodian for the
account of such Portfolio and shall disburse, or cause a Sub-Custodian
to disburse, the same only:
1. In payment for Securities purchased for the Portfolio, as
provided in Section 7 hereof;
2. In payment of dividends or distributions with respect to the
Shares of such Portfolio, as provided in Section 11 hereof;
3. In payment of original issue or other taxes with respect to the
Shares of such Portfolio, as provided in Section 12(c) hereof;
4. In payment for Shares which have been redeemed by such
Portfolio, as provided in Section 12 hereof;
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5. In payment of fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to the Fund, as provided
in Sections 5 and 16(h) hereof;
6. Pursuant to Instructions setting forth the name of the
Portfolio and the name and address of the person to whom the
payment is to be made, the amount to be paid and the purpose for
which payment is to be made.
(c) FAIL FLOAT. In the event that any payment made for a Portfolio
under this Section 6 exceeds the funds available in that Portfolio's
account, the Custodian or relevant Sub-Custodian, as the case may be,
may, in its discretion, advance the Fund on behalf of that Portfolio an
amount equal to such excess and such advance shall be deemed an
overdraft from the Custodian or such Sub-Custodian to that Portfolio
payable on demand, bearing interest at the rate of interest customarily
charged by the Custodian or such Sub-Custodian on similar overdrafts.
(d) CONFIRMATION AND STATEMENTS. At least monthly, the Custodian shall
furnish the Fund with a detailed statement of the Securities and monies
held by it and all Sub-Custodians for each Portfolio. Where securities
purchased for a Portfolio are in a fungible bulk of securities
registered in the name of the Custodian (or its nominee) or shown on
the Custodian's account on the books of a Depository, the Book-Entry
System or a Sub-Custodian, the Custodian shall maintain such records as
are necessary to enable it to identify the quantity of those securities
held for such Portfolio. In the absence of the filing in writing with
the Custodian by the Fund of exceptions or objections to any such
statement within 60 days after the date that a material defect is
reasonably discoverable, the Fund shall be deemed to have approved such
statement; and in such case or upon written approval of the Fund of any
such statement the Custodian shall, to the extent permitted by law and
provided the Custodian has met the standard of care in Section 16
hereof, be released, relieved and discharged with respect to all
matters and things set forth in such statement as though such statement
had been settled by the decree of a court of competent jurisdiction in
an action in which the Fund and all persons having any equity interest
in the Fund were parties.
(e) REGISTRATION OF SECURITIES AND PHYSICAL SEPARATION. All Securities
held for a Portfolio which are issued or issuable only in bearer form,
except such Securities as are held in the Book-Entry System, shall be
held by the Custodian or a Sub-Custodian in that form; all other
Securities held for a Portfolio may be registered in the name of that
Portfolio, in the name of any duly appointed registered nominee of the
Custodian or a Sub-Custodian as the Custodian or such Sub-Custodian may
from time to time determine, or in the name of the Book-Entry System or
a Depository or their successor or successors, or their nominee or
nominees. The Fund reserves the right to instruct the Custodian as to
the method of registration and safekeeping of the Securities. The Fund
agrees to furnish to the Custodian appropriate instruments to enable
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the Custodian or any Sub-Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered nominee or
in the name of the Book-Entry System or a Depository, any Securities
which the Custodian of a Sub-Custodian may hold for the account of a
Portfolio and which may from time to time be registered in the name of
a Portfolio. The Custodian shall hold all such Securities specifically
allocated to a Portfolio which are not held in the Book-Entry System or
a Depository in a separate account for such Portfolio in the name of
such Portfolio physically segregated at all times from those of any
other person or persons.
(f) SEGREGATED ACCOUNTS. Upon receipt of an Instruction, the Custodian
will establish segregated accounts on behalf of a Portfolio to hold
liquid or other assets as it shall be directed by such Instruction and
shall increase or decrease the assets in such segregated accounts only
as it shall be directed by subsequent Instruction.
(g) COLLECTION OF INCOME AND OTHER MATTERS AFFECTING SECURITIES. Except
as otherwise provided in an Instruction, the Custodian, by itself or
through the use of the Book-Entry System or a Depository with respect
to Securities therein maintained, shall, or shall instruct the relevant
Sub-Custodian to:
1. Collect all income due or payable with respect to Securities in
accordance with this Agreement;
2. Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed or retired, or
otherwise become payable;
3. Surrender Securities in temporary form for derivative
Securities;
4. Execute any necessary declarations or certificates of ownership
under the federal income tax laws or the laws or regulations of
any other taxing authority now or hereafter in effect; and
5. Hold directly, or through the Book-Entry System or a Depository
with respect to Securities therein deposited, for the account of
each Portfolio all rights and similar Securities issued with
respect to any Securities held by the Custodian or relevant
Sub-Custodian for each Portfolio.
(h) DELIVERY OF SECURITIES AND EVIDENCE OF AUTHORITY. Upon receipt of
an Instruction, the Custodian, directly or through the use of the
Book-Entry System or a Depository, shall, or shall instruct the
relevant Sub-Custodian to:
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1. Execute and deliver or cause to be executed and delivered to
such persons as may be designated in such Instructions, proxies,
consents, authorizations, and any other instruments whereby the
authority of the Fund as owner of any Securities may be exercised;
2. Deliver or cause to be delivered any Securities held for a
Portfolio in exchange for other Securities or cash issued or paid
in connection with the liquidation, reorganization, refinancing,
merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege;
3. Deliver or cause to be delivered any Securities held for a
Portfolio to any protective committee, reorganization committee or
other person in connection with the reorganization, refinancing,
merger, consolidation or recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this
Agreement in the separate account for each such Portfolio
certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery;
4. Make or cause to be made such transfers or exchanges of the
assets specifically allocated to the separate account of a
Portfolio and take such other steps as shall be stated in
Instructions to be for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
5. Deliver Securities upon sale of such Securities for the account
of a Portfolio pursuant to Section 7;
6. Deliver Securities upon the receipt of payment in connection
with any repurchase agreement related to such Securities entered
into on behalf of a Portfolio;
7. Deliver Securities of a Portfolio to the issuer thereof or its
agent when such Securities are called, redeemed, retired or
otherwise become payable; provided, however, that in any such case
the cash or other consideration is to be delivered to the
Custodian or Sub-Custodian, as the case may be;
8. Deliver Securities for delivery in connection with any loans of
securities made by a Portfolio but only against receipt of
adequate collateral as agreed upon from time to time by the
Custodian and the Fund which may be in the form of cash or
obligations issued by the United States Government, its agencies
or instrumentalities;
9. Deliver Securities for delivery as security in connection with
any borrowings by a Portfolio requiring a pledge of Portfolio
assets, but only against receipt of the amounts borrowed;
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10. Deliver Securities to the Transfer Agent or its designee or to
the holders of Shares in connection with distributions in kind, in
satisfaction of requests by holders of Shares for repurchase or
redemption;
11. Deliver Securities for any other proper business purpose,
naming the person or persons to whom delivery of such Securities
shall be made.
(i) ENDORSEMENT AND COLLECTION OF CHECKS, ETC. The Custodian is hereby
authorized to endorse and collect all checks, drafts or other orders
for the payment of money received by the Custodian for the account of a
Portfolio.
(j) EXECUTION OF REQUIRED DOCUMENTS. The Custodian is hereby authorized
to execute any and all applications or other documents required by a
regulatory agency or similar entity as a condition of making
investments in the foreign market under such entity's jurisdiction.
7. PURCHASE AND SALE OF SECURITIES.
(a) Promptly after the purchase of Securities, the Fund or its designee
shall deliver to the Custodian an Instruction specifying with respect
to each such purchase: (1) the name of the Portfolio to which such
Securities are to be specifically allocated; (2) the name of the issuer
and the title of the Securities; (3) the number of shares or the
principal amount purchased and accrued interest, if any; (4) the date
of purchase and settlement; (5) the purchase price per unit; (6) the
total amount payable upon such purchase; and (7) the name of the person
from whom or the broker through whom the purchase was made, if any. The
Custodian or specified Sub-Custodian shall receive the Securities
purchased by or for a Portfolio and upon receipt thereof (or upon
receipt of advice from a Depository or the Book-Entry System that the
Securities have been transferred to the Custodian's account) shall pay
to the broker or other person specified by the Fund or its designee out
of the monies held for the account of such Portfolio the total amount
payable upon such purchase, provided that the same conforms to the
total amount payable as set forth in such Instruction.
(b) Promptly after the sale of Securities, the Fund or its designee
shall deliver to the Custodian an Instruction specifying with respect
to each such sale: (1) the name of the Portfolio to which the
Securities sold were specifically allocated; (2) the name of the issuer
and the title of the Securities; (3) the number of shares or principal
amount sold, and accrued interest, if any; (4) the date of sale; (5)
the sale price per unit; (6) the total amount payable to the Portfolio
upon such sale; and (7) the name of the broker through whom or the
person to whom the sale was made. The Custodian or relevant
Sub-Custodian shall deliver or cause to be delivered the Securities to
the broker or other person designated by the Fund upon receipt of the
total amount payable to such Portfolio upon such sale, provided that
the same conforms to the total amount payable to such Portfolio as set
forth in such Instruction. Subject to the foregoing, the Custodian or
relevant Sub-Custodian may accept payment in such form as shall be
satisfactory to it, and may deliver Securities and arrange for payment
in accordance with the customs prevailing among dealers in Securities.
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(c) Notwithstanding (a) and (b) above, cash in any of the Portfolios
may be invested by the Custodian for short term purposes pursuant to
standing Instructions from the Fund.
8. LENDING OF SECURITIES.
If the Fund and the Custodian enter into a separate written agreement
authorizing the Custodian to lend Securities, the Custodian may lend
Securities pursuant to such agreement. Such agreement must be approved
by the Fund in the manner required by any applicable law, regulation or
administrative pronouncement, and may provide for the payment of
additional reasonable compensation to the Custodian. For the avoidance
of doubt, the Fund can also lend securities through a third party
lending agent other than the Custodian.
9. INVESTMENT IN FUTURES, OPTIONS ON FUTURES AND OPTIONS
The Custodian shall pursuant to Instructions (which may be standing
instructions) (i) with respect to futures or options on futures,
transfer initial margin to a futures commission merchant or safekeeping
bank or, with respect to options, transfer collateral to a broker; (ii)
pay or demand variation margin to or from a designated futures
commission merchant or other broker based on daily marking to market
calculations and in accordance with accepted industry practices; and
(iii) subject to the Custodian's consent, enter into separate
procedural, safekeeping or other agreements with respect to the custody
of initial margin deposits or collateral in transactions involving
futures contracts or options, as the case may be. The Custodian shall
have no custodial or investment responsibility for any assets
transferred to a safekeeping bank, futures commission merchant or
broker pursuant to this paragraph. In addition, in connection with
options transactions in a Portfolio, the Custodian is authorized to
pledge assets of the Portfolio as collateral for such transactions in
accordance with industry practice.
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10. PROVISIONAL CREDITS AND DEBITS.
(a) The Custodian is authorized, but shall not be obligated, to credit
the account of a Portfolio provisionally on payable date with interest,
dividends, distributions, redemptions or other amounts due. Otherwise,
such amounts will be credited to the Portfolio on the date such amounts
are actually received and reconciled to the Portfolio. In cases where
the Custodian has credited a Portfolio with such amounts prior to
actual collection and reconciliation, the Fund acknowledges that the
Custodian shall be entitled to recover any such credit on demand from
the Fund and further agrees that the Custodian may reverse such credit
if and to the extent that Custodian does not receive such amounts in
the ordinary course of business.
(b) If the Portfolio is maintained as a global custody account it shall
participate in the Custodian's contractual settlement date processing
service ("CSDP") unless the Custodian directs the Fund, or the Fund
informs the Custodian, otherwise. Pursuant to CSDP the Custodian shall
be authorized, but not obligated, to automatically credit or debit the
Portfolio provisionally on contractual settlement date with cash or
securities in connection with any sale, exchange or purchase of
securities. Otherwise, such cash or securities shall be credited to the
Portfolio on the day such cash or securities are actually received by
the Custodian and reconciled to the Portfolio. In cases where the
Custodian credits or debits the Portfolio with cash or securities prior
to actual receipt and reconciliation, the Custodian may reverse such
credit or debit as of contractual settlement date if and to the extent
that any securities delivered by the Custodian are returned by the
recipient, or if the related transaction fails to settle (or fails, due
to market change or other reasons, to settle on terms which provide the
Custodian full reimbursement of any provisional credit the Custodian
has granted) within a period of time judged reasonable by the Custodian
under the circumstances. The Fund agrees that it will not make any
claim or pursue any legal action against the Custodian for loss or
other detriment allegedly arising or resulting from the Custodian's
good faith determination to effect, not effect or reverse any
provisional credit or debit to the Portfolio.
The Fund acknowledges and agrees that funds debited from the
Portfolio on contractual settlement date including, without limitation,
funds provided for the purchase of any securities under circumstances
where settlement is delayed or otherwise does not take place in a
timely manner for any reason, shall be held pending actual settlement
of the related purchase transaction in a non-interest bearing deposit
at the Custodian's London Branch; that such funds shall be available
for use in the Custodian's general operations; and that the Custodian's
maintenance and use of such funds in such circumstances are, without
limitation, in consideration of the Custodian's providing CSDP.
13
(c) The Fund recognizes that any decision to effect a provisional
credit or an advancement of the Custodian's own funds under this
agreement will be an accommodation granted entirely at the Custodian's
option and in light of the particular circumstances, which
circumstances may involve conditions in different countries, markets
and classes of assets at different times. The Fund shall make the
Custodian whole for any loss which it may incur from granting such
accommodations and acknowledges that the Custodian shall be entitled to
recover any relevant amounts from the Fund on demand. All amounts thus
due to the Custodian shall be paid by the Fund from the account of the
relevant Portfolio unless otherwise paid on a timely basis and in that
connection the Fund acknowledges that the Custodian has a continuing
lien on all assets of such Portfolio to the extent permissible under
the 1940 Act to secure such payments and agrees that the Custodian may
apply or set off against such amounts any amounts credited by or due
from the Custodian to the Fund. If funds in the Portfolio are
insufficient to make any such payment the Fund shall promptly deliver
to the Custodian the amount of such deficiency in immediately available
funds when and as specified by the Custodian's written or oral
notification to the Fund.
(d) In connection with the Custodian's global custody service the Fund
will maintain deposits at the Custodian's London Branch. The Fund
acknowledges and agrees that such deposits are payable only in the
currency in which an applicable deposit is denominated; that such
deposits are payable only on the Fund's demand at the Custodian's
London Branch; that such deposits are not payable at any of the
Custodian's offices in the United States; and that the Custodian will
not in any manner directly or indirectly promise or guarantee any such
payment in the United States.
The Fund further acknowledges and agrees that such deposits are
subject to cross-border risk, and therefore the Custodian will have no
obligation to make payment of deposits if and to the extent that the
Custodian is prevented from doing so by reason of applicable law or
regulation or any Sovereign Risk event affecting the London Branch or
the currency in which the applicable deposit is denominated. "Sovereign
Risk" for this purpose means nationalization, expropriation,
devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto
or de jure; or enactment, promulgation, imposition or enforcement by
any such governmental authority of currency restrictions, exchange
controls, taxes, levies or other charges affecting the property rights
of persons who are not residents of the affected jurisdiction; or acts
of war, terrorism, insurrection or revolution; or any other act or
event beyond the Custodian's control.
14
THE FUND ACKNOWLEDGES AND AGREES THAT DEPOSIT ACCOUNTS MAINTAINED
AT FOREIGN BRANCHES OF UNITED STATES BANKS (INCLUDING, IF APPLICABLE,
ACCOUNTS IN WHICH CUSTOMER FUNDS FOR THE PURCHASE OF SECURITIES ARE
HELD ON AND AFTER CONTRACTUAL SETTLEMENT DATE), ARE NOT INSURED BY THE
U.S. FEDERAL DEPOSIT INSURANCE CORPORATION; MAY NOT BE GUARANTEED BY
ANY LOCAL OR FOREIGN GOVERNMENTAL AUTHORITY; ARE UNSECURED; AND IN A
LIQUIDATION MAY BE SUBORDINATED IN PRIORITY OF PAYMENT TO DOMESTIC
(U.S.- DOMICILED) DEPOSITS. THEREFORE, BENEFICIAL OWNERS OF SUCH
FOREIGN BRANCH DEPOSITS MAY BE UNSECURED CREDITORS OF THE NORTHERN
TRUST COMPANY.
Deposit account balances that are owned by United States residents
are expected to be maintained in an aggregate amount of at least
$100,000 or the equivalent in other currencies.
11. PAYMENT OF DIVIDENDS OR DISTRIBUTIONS.
(a) In the event that the Board of Directors of the Fund (or a
committee thereof) authorizes the declaration of dividends or
distributions with respect to a Portfolio, an Authorized Person shall
provide the Custodian with Instructions specifying the record date, the
date of payment of such distribution and the total amount payable to
the Transfer Agent or its designee on such payment date.
(b) Upon the payment date specified in such Instructions, the Custodian
shall pay the total amount payable to the Transfer Agent or its
designee out of the monies specifically allocated to and held for the
account of the appropriate Portfolio.
12. SALE AND REDEMPTION OF SHARES.
(a) Whenever the Fund shall sell any Shares, the Fund shall deliver or
cause to be delivered to the Custodian an Instruction specifying the
name of the Portfolio whose Shares were sold and the amount to be
received by the Custodian for the sale of such Shares.
(b) Upon receipt of such amount from the Transfer Agent or its
designee, the Custodian shall credit such money to the separate account
of the Portfolio specified in the Instruction described in paragraph
(a) above.
(c) Upon issuance of any Shares in accordance with the foregoing
provisions of this Section 12, the Custodian shall pay all original
issue or other taxes required to be paid in connection with such
issuance upon the receipt of an Instruction specifying the amount to be
paid.
15
(d) Except as provided hereafter, whenever any Shares are redeemed, the
Fund shall deliver or cause to be delivered to the Custodian an
Instruction specifying the name of the Portfolio whose Shares were
redeemed and the total amount to be paid for the Shares redeemed.
(e) Upon receipt of an Instruction described in paragraph (d) above,
the Custodian shall pay to the Transfer Agent (or such other person as
the Transfer Agent directs) the total amount specified in such
Instruction. Such payment shall be made from the separate account of
the Portfolio specified in such Instruction.
13. INDEBTEDNESS.
(a) The Fund or its designee will cause to be delivered to the
Custodian by any bank (excluding the Custodian) from which the Fund
borrows money, using Securities as collateral, a notice or undertaking
in the form currently employed by any such bank setting forth the
amount which such bank will loan to the Fund against delivery of a
stated amount of collateral. The Fund shall promptly deliver to the
Custodian an Instruction stating with respect to each such borrowing:
(1) the name of the Portfolio for which the borrowing is to be made;
(2) the name of the bank; (3) the amount and terms of the borrowing,
which may be set forth by incorporating by reference an attached
promissory note, duly endorsed by the Fund, or other loan agreement;
(4) the time and date, if known, on which the loan is to be entered
into (the "borrowing date"); (5) the date on which the loan becomes due
and payable; (6) the total amount payable to the Fund for the separate
account of the Portfolio on the borrowing date; (7) the market value of
Securities to be delivered as collateral for such loan, including the
name of the issuer, the title and the number of shares or the principal
amount of any particular Securities; (8) whether the Custodian is to
deliver such collateral through the Book-Entry System or a Depository;
and (9) a statement that such loan is in conformance with the 1940 Act
and the Prospectus.
(b) Upon receipt of the Instruction referred to in paragraph (a) above,
the Custodian shall deliver on the borrowing date the specified
collateral and the executed promissory note, if any, against delivery
by the lending bank of the total amount of the loan payable, provided
that the same conforms to the total amount payable as set forth in the
Instruction. The Custodian may, at the option of the lending bank, keep
such collateral in its possession, but such collateral shall be subject
to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall deliver as
additional collateral in the manner directed by the Fund from time to
time such Securities specifically allocated to such Portfolio as may be
specified in the Instruction to collateralize further any transaction
described in this Section 13. The Fund shall cause all Securities
released from collateral status to be returned directly to the
Custodian, and the Custodian shall receive from time to time such
return of collateral as may be tendered to it. In the event that the
Fund fails to specify in such Instruction all of the information
required by this Section 13, the Custodian shall not be under any
obligation to deliver any Securities. Collateral returned to the
Custodian shall be held hereunder as it was prior to being used as
collateral.
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14. CORPORATE ACTION.
Whenever the Custodian or any Sub-Custodian receives information
concerning Securities held for a Portfolio which requires discretionary
action by the beneficial owner of the Securities (other than a proxy),
such as subscription rights, bond issues, stock repurchase plans and
rights offerings, or legal notices or other material intended to be
transmitted to Securities holders ("Corporate Actions"), the Custodian
shall promptly deliver to the Fund or its designee notice of such
Corporate Actions.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action
which bears an expiration date is received, the Custodian will endeavor
to obtain an Instruction relating to such Corporate Action from an
Authorized Person, but if such Instruction is not received in time for
the Custodian to take timely action, or actual notice of such Corporate
Action was received too late to seek such an Instruction, the Custodian
is authorized to sell, or cause a Sub-Custodian to sell, such rights
entitlement or fractional interest and to credit the applicable account
with the proceeds and to take any other action it deems, in good faith,
to be appropriate, in which case, provided it has met the standard of
care in Section 16 hereof, it shall be held harmless by the particular
Portfolio involved for any such action.
The Fund or its designated agent shall have the right to exercise
voting and other rights and powers for any Securities, however
registered. Custodian's only duty shall be to promptly deliver to the
Fund any documents received, including proxy statements and offering
circulars, with any proxies executed by the nominee for Securities
registered in a nominee name. Custodian reserves the right to provide
any documents received, or parts thereof, in the language received. The
Fund acknowledges that in certain countries Custodian may be unable to
vote individual proxies but be able only to vote proxies on a net
basis. Custodian will use reasonable care in facilitating the exercise
of voting and other shareholder rights by the Fund, subject always to
the laws, regulations and practical constraints that may exist in the
country where such securities are issued. The Fund acknowledges that
local conditions, including lack of regulation, onerous procedural
obligations, lack of notice and other factors may have the effect of
severely limiting the ability of the Fund to exercise shareholder
rights. Custodian shall vote or cause proxies to be voted only as
expressly directed in writing pursuant to Instructions of the Fund's
Authorized Person. In the absence of Instructions, neither Custodian
nor any Sub-Custodian shall vote or cause proxies to be voted, and they
shall expire without liability to Custodian.
17
15. PERSONS HAVING ACCESS TO THE PORTFOLIOS.
(a) Neither the Fund nor any officer, director, employee or agent of
the Fund, the Fund's investment adviser, or any sub-investment adviser,
shall have physical access to the assets of any Portfolio held by the
Custodian or any Sub-Custodian or be authorized or permitted to
withdraw any investments of a Portfolio, nor shall the Custodian or any
Sub-Custodian deliver any assets of a Portfolio to any such person. No
officer, director, employee or agent of the Custodian who holds any
similar position with the Fund's investment adviser, with any
sub-investment adviser of the Fund or with the Fund shall have access
to the assets of any Portfolio.
(b) Nothing in this Section 15 shall prohibit any Authorized Person
from giving Instructions to the Custodian so long as such Instructions
do not result in delivery of or access to assets of a Portfolio
prohibited by paragraph (a) of this Section 15.
(c) The Custodian represents that it maintains a system that is
reasonably designed to prevent unauthorized persons from having access
to the assets that it holds (by any means) for its customers.
16. CONCERNING THE CUSTODIAN.
(a) SCOPE OF SERVICES. The Custodian shall be obligated to perform only
such services as are set forth in this Agreement or expressly contained
in an Instruction given to the Custodian which is not contrary to the
provisions of this Agreement.
(b) STANDARD OF CARE.
1. The Custodian will use reasonable care, prudence and diligence
with respect to its obligations under this Agreement. The Custodian
shall be liable to, and shall indemnify and hold harmless the Fund
from and against any liability which arise out of the failure of
the Custodian or a Sub-Custodian to perform its duties under this
Agreement to the extent such liability arise out of Custodian's
willful misfeasance, bad faith, negligence or reckless disregard of
its duties under this Agreement. In the event of any loss to the
Fund by reason of the failure of the Custodian or a Sub-Custodian
to perform its duties consistent with the standard of care as
provided in this Section 16, paragraph (b), the Custodian shall be
liable to the Fund only to the extent of the Fund's direct damages
and expenses including any attendant transaction expenses, which
damages, for purposes of property only, shall be determined based
on the market value of the property which is the subject of the
loss at the date of discovery of such loss and without reference to
any special condition or circumstances.
18
2. The Custodian will not be responsible for any act, omission, or
default of, or for the insolvency of any central clearing agency,
central securities depository, Depository or Eligible Securities
Depository.
3. The Custodian will not be responsible for any act, omission, or
default of, or for the insolvency of, any broker or agent, which it
appoints and uses unless such appointment and use is made or done
negligently or in bad faith. In the event such an appointment and
use is made or done negligently or in bad faith, the Custodian
shall be liable to the Fund only for direct damages and expenses
(determined in the manner described in paragraph (b)(1) above)
resulting from such appointment and use and, in the case of any
loss due to an act, omission or default of such agent or broker,
only to the extent that such loss occurs as a result of the failure
of the agent or broker to exercise reasonable care ("reasonable
care" for this purpose to be determined in light of the prevailing
standards applicable to such agents or brokers, as appropriate, in
the jurisdiction where the services are performed).
4. The Custodian shall be entitled to rely, and may act, upon the
advice of counsel (who may be counsel for the Fund) on all matters
and shall be without liability for any action reasonably taken or
omitted in good faith and without negligence pursuant to such
advice.
5. The Custodian shall be entitled to rely upon any Instruction it
receives pursuant to the applicable Sections of this Agreement that
it reasonably believes to be genuine and to be from an Authorized
Person. In the event that the Custodian receives oral Instructions,
the Fund or its designee shall cause to be delivered to the
Custodian, by the close of business on the same day that such oral
Instructions were given to the Custodian, written Instructions
confirming such oral Instructions, whether by hand delivery, telex
or otherwise. The Fund agrees that the fact that no such confirming
written Instructions are received by the Custodian shall in no way
affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Fund. The Fund agrees that
the Custodian shall incur no liability to the Fund in connection
with (i) acting upon oral Instructions given to the Custodian
hereunder, provided such instructions reasonably appear to have
been received from an Authorized Person or (ii) deciding not to act
solely upon oral Instructions, provided that the Custodian first
contacts the giver of such oral Instructions and requests written
confirmation immediately following any such decision not to act.
6. The Custodian shall supply the Fund or its designee with such
daily information regarding the cash and Securities positions and
activity of each Portfolio as the Custodian and the Fund or its
19
designee shall from time to time agree. It is understood that such
information will not be audited by the Custodian and the Custodian
represents that such information will be the best information then
available to the Custodian. The Custodian shall have no
responsibility whatsoever for the pricing of Securities, accruing
for income, valuing the effect of Corporate Actions, or for the
failure of the Fund or its designee to reconcile differences
between the information supplied by the Custodian and information
obtained by the Fund or its designee from other sources, including
but not limited to pricing vendors and the Fund's investment
adviser. Subject to the foregoing, to the extent that any
miscalculation by the Fund or its designee of a Portfolio's net
asset value is attributable to the willful misfeasance, bad faith
or negligence of the Custodian (including any Sub-Custodian ) in
supplying or omitting to supply the Fund or its designee with
information as aforesaid, the Custodian shall be liable to the Fund
for any resulting loss (subject to such de minimis rule of change
in value as the Board of Directors may from time to time adopt).
(c) LIMIT OF DUTIES. Without limiting the generality of the foregoing,
the Custodian shall be under no duty or obligation to inquire into, and
shall not be liable for:
1. The validity of the issue of any Securities purchased by any
Portfolio, the legality of the purchase thereof, or the propriety
of the amount specified by the Fund or its designee for payment
therefor;
2. The legality of the sale of any Securities by any Portfolio or
the propriety of the amount of consideration for which the same are
sold;
3. The legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Shares, or the propriety
of the amount to be paid therefor;
5. The legality of the declaration or payment of any dividend or
distribution by the Fund; or
6. The legality of any borrowing.
(d) The Custodian need not maintain any insurance for the exclusive
benefit of the Fund, but hereby warrants that as of the date of this
Agreement it is maintaining a bankers Blanket Bond and hereby agrees to
notify the Fund upon request, the status of coverage and will notify
the Fund in the event that such bond coverage is materially changed,
canceled or otherwise lapses.
20
(e) Consistent with and without limiting the language contained in
Section 16(a), it is specifically acknowledged that the Custodian shall
have no duty or responsibility to:
1. Question any Instruction or make any suggestions to the Fund or
an Authorized Person regarding any Instruction;
2. Supervise or make recommendations with respect to investments or
the retention of Securities;
3. Subject to Section 16(b)(3) hereof, evaluate or report to the
Fund or an Authorized Person regarding the financial condition of
any broker, agent or other party to which Securities are delivered
or payments are made pursuant to this Agreement; or
4. Review or reconcile trade confirmations received from brokers.
(f) AMOUNTS DUE FROM OR TO TRANSFER AGENT. The Custodian shall not be
under any duty or obligation to take action to effect collection of any
amount due to any Portfolio from the Transfer Agent or its designee nor
to take any action to effect payment or distribution by the Transfer
Agent or its designee of any amount paid by the Custodian to the
Transfer Agent in accordance with this Agreement.
(g) NO DUTY TO ASCERTAIN AUTHORITY. The Custodian shall not be under
any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Fund and specifically allocated to a
Portfolio are such as may properly be held by the Fund under the
provisions of the Articles of Incorporation and the Prospectus.
(h) INDEMNIFICATION. The Fund agrees to indemnify and hold the
Custodian harmless from all loss, cost, taxes, charges, assessments,
claims, and liabilities (including, without limitation, liabilities
arising under the Securities Act of 1933, the Securities Exchange Act
of 1934 and the 1940 Act and state or foreign securities laws) and
expenses (including reasonable attorneys fees and disbursements)
arising directly or indirectly from any action taken or omitted by the
Custodian (i) upon an Instruction and otherwise in accordance with this
Agreement; provided, that the foregoing indemnity shall not apply to
any loss, cost, tax, charge, assessment, claim, liability or expense to
the extent the same is attributable to the Custodian's or any
Sub-Custodian's willful misfeasance, bad faith, negligence or reckless
disregard of duties and obligations under this Agreement or any other
agreement relating to the custody of Fund property.
(i) The Fund agrees to hold the Custodian harmless from any liability
or loss resulting from the imposition or assessment of any taxes or
other governmental charges on a Portfolio.
21
(j) Without limiting the foregoing, the Custodian shall not be liable
for any loss which results from:
1. the general risk of investing;
2. subject to Section 16(b) hereof, investing or holding property
in a particular country including, but not limited to, losses
resulting from nationalization, expropriation or other governmental
actions; regulation of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market conditions
which prevent the orderly execution of securities transactions or
affect the value of property held pursuant to this Agreement; or
3. consequential, special or punitive damages for any act or
failure to act under any provision of this Agreement, even if
advised of the possibility thereof.
(k) FORCE MAJEURE. The Custodian shall not be liable to the Fund for
any delay in performance, or non- performance, of any obligation
hereunder to the extent that the same is due to forces beyond its
reasonable control, including but not limited to delays, errors or
interruptions caused by the Custodian or third parties, any industrial,
juridical, governmental, civil or military action, acts of terrorism,
insurrection or revolution, nuclear fusion, fission or radiation,
failure or fluctuation in electrical power, heat, light, air
conditioning or telecommunications equipment, or acts of God. Custodian
acknowledges that it has entered into arrangements that provide for
back-up and disaster recovery facilities and will take reasonable steps
to minimize service interruptions due to the aforementioned events.
Further, the Custodian shall maintain and update from time to time
commercially reasonable business continuity procedures and disaster
recovery facilities with respect to its custody business, both domestic
and foreign, as would be maintained by a professional custodian.
(1) INSPECTION OF BOOKS AND RECORDS. The Custodian shall create and
maintain all records relating to its activities and obligations under
this Agreement in such manner as will meet the obligations of the Fund
under the 1940 Act, with particular attention to Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder, and under applicable federal and
state laws. All such records shall be the property of the Fund and
shall at all times during regular business hours of the Custodian be
open for inspection by duly authorized officers, employees and agents
of the Fund and by the appropriate employees of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request, supply
the Fund with a tabulation of Securities and shall, when requested to
do so by the Fund and for such compensation as shall be agreed upon
between the Fund and the Custodian, include certificate numbers in such
tabulations.
22
(m) ACCOUNTING CONTROL REPORT. The Custodian shall provide, promptly,
upon request of the Fund, such reports as are available concerning the
internal accounting controls and financial strength of the Custodian.
17. TERM AND TERMINATION.
(a) This Agreement shall become effective on the date first set forth
above (the "Effective Date") and shall continue in effect thereafter
until terminated in accordance with Section 17(b).
(b) Either of the parties hereto may terminate this Agreement with
respect to any Portfolio by giving to the other party a notice in
writing specifying the date of such termination, which, in case the
Fund is the terminating party, shall be not less than 30 days after the
date of Custodian receives such notice in a case where the Portfolio is
liquidating and 60 days after the date Custodian receives such notice
where the Portfolio is converting to a new custodian or, in case the
Custodian is the terminating party, shall be not less than 90 days
after the date the Fund receives such notice. In the event such notice
is given by the Fund, it shall be accompanied by a certified resolution
of the Board of Directors, electing to terminate this Agreement with
respect to any Portfolio and designating a successor custodian or
custodians.
In the event such notice is given by the Custodian, the Fund shall, on
or before the termination date, deliver to the Custodian a certified
resolution of the Board of Directors, designating a successor custodian
or custodians. In the absence of such designation by the Fund, the
Custodian may designate a successor custodian, which shall be a person
qualified to so act under the 0000 Xxx. If the Fund fails to designate
a successor custodian with respect to any Portfolio, the Fund shall
upon the date specified in the notice of termination of this Agreement
and upon the delivery by the Custodian of all Securities (other than
Securities held in the Book-Entry System which cannot be delivered to
the Fund) and monies of such Portfolio, be deemed to be its own
custodian and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry System which cannot be
delivered to the Fund.
(c) Upon the date set forth in such notice under paragraph (b) of this
Section 17, this Agreement shall terminate to the extent specified in
such notice, and the Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly to
the successor custodian all Securities and monies then held by the
Custodian and specifically allocated to the Portfolio or Portfolios
specified, after deducting all fees, expenses and other amounts for the
payment or reimbursement of which it shall then be entitled with
respect to such Portfolio or Portfolios.
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18. MISCELLANEOUS.
(a) Annexed hereto as Schedule A is a certification signed by two of
the present officers of the Fund setting forth the names of the present
Authorized Persons. The Fund agrees to furnish to the Custodian a new
certification in similar form in the event that any such present
Authorized Person ceases to be such an Authorized Person or in the
event that other or additional Authorized Persons are elected or
appointed. Until such new certification is received by the Custodian,
the Custodian shall be fully protected in acting under the provisions
of this Agreement upon Instructions which Custodian reasonably believes
were given by an Authorized Person, as identified in the last delivered
certification. Unless such certification specifically limits the
authority of an Authorized Person to specific matters or requires that
the approval of another Authorized Person is required, Custodian shall
be under no duty to inquire into the right of such person, acting
alone, to give any instructions whatsoever under this Agreement.
(b) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, shall be sufficiently
given if addressed to the Custodian and mailed or delivered to it at
its offices at its address stated on the first page hereof or at such
other place as the Custodian may from time to time designate in
writing.
(c) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Fund, shall be sufficiently given
if addressed to the Fund and mailed or delivered to it at its offices
at its address shown on the first page hereof or at such other place as
the Fund may from time to time designate in writing.
(d) Except as expressly provided herein, this Agreement may not be
amended or modified in any manner except by a written agreement
executed by both parties with the same formality as this Agreement.
(e) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund
without the written consent of the Custodian, or by the Custodian
without the written consent of the Fund, and any attempted assignment
without such written consent shall be null and void.
(f) This Agreement shall be construed in accordance with the laws of
the State of Illinois.
(g) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
24
(h) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
(i) The Fund and the Custodian agree that the obligations of the Fund
under this Agreement shall not be binding upon or any member of the
Board of Directors or any shareholder, nominee, officer, employee or
agent, whether past, present or future, of the Fund individually, but
are binding only upon the assets and property of the Fund or of the
appropriate Portfolio(s) thereof. The execution and delivery of this
Agreement have been duly authorized by Fund and signed by an authorized
officer of the Fund, acting as such, but neither such authorization by
the Fund nor such execution and delivery by such officer shall be
deemed to have been made by any member of the Board of Directors or by
any officer or shareholder of the Fund individually or to impose any
liability on any of them personally, but shall bind only the assets and
property of the Fund or of the appropriate Portfolio(s) thereof.
(j) The Fund and the Custodian shall be entitled to rely, and may act,
although not required to act, upon the advice of counsel (who may be
counsel for the Custodian or the Fund, as the case may be) on all
matters and shall be without liability for any action reasonably taken
or omitted in good faith and without negligence pursuant to such
advice.
(k) If any party seeks indemnification under this Agreement, they must
advise the other party of the pertinent facts and give reasonable
notice of such indemnification.
19. CONFIDENTIALITY.
The parties hereto agree that each shall treat confidentially all
information provided by each party to the other regarding its business
and operations. Further, the Custodian also agrees not to trade on
information received regarding the funds trading practices or portfolio
holdings. All confidential information provided by a party hereto shall
be used by any other party hereto solely for the purpose of rendering
or obtaining services pursuant to this Agreement and, except as may be
required in carrying out this Agreement, shall not be disclosed to any
third party without the prior consent of such providing party. The
foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other
than through a breach of this Agreement, or that is required to be
disclosed by the receiving party pursuant to a requirement of a court
order, subpoena, governmental, or regulatory agency or law (provided
the receiving party will provide the other party written notice of such
requirement, to the extent such notice is permitted).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective representatives duly authorized as of the day and
year first above written.
THE ADVISORS' INNER CIRCLE FUND II
By:
-------------------------------------
Name:
Title:
The undersigned, _____________________, does hereby certify that he/she is the
duly elected, qualified and acting Secretary of The Advisors' Inner Circle Fund
II (the "Fund") and further certifies that the person whose signature appears
above is a duly elected, qualified and acting officer of the Fund with full
power and authority to execute this Custody Agreement on behalf of the Fund and
to take such other actions and execute such other documents as may be necessary
to effectuate this Agreement.
_________________________
Secretary
THE ADVISORS' INNER CIRCLE FUND II
THE NORTHERN TRUST COMPANY
By:
------------------------------------
Name:
Title:
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SCHEDULE A
CERTIFICATION OF AUTHORIZED PERSONS
Pursuant to paragraphs 1(b) and 18(a) of the Agreement, the undersigned
officers of [Fund Name] hereby certify that the person(s) whose name(s) and
signature(s) appear below have been duly authorized by the Board of Directors to
give Instructions on behalf of the Fund.
NAME SIGNATURE
-------------------------- ---------------------------
-------------------------- ---------------------------
-------------------------- ---------------------------
-------------------------- ---------------------------
-------------------------- ---------------------------
-------------------------- ---------------------------
Certified as of the ____ day of _____________, 200__:
OFFICER: OFFICER:
------------------------------- --------------------------------
(Signature) (Signature)
------------------------------- --------------------------------
(Name) (Name)
------------------------------- --------------------------------
(Title) (Title)
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SCHEDULE B
PORTFOLIOS OF THE FUND
Aberdeen Emerging Markets Fund (Institutional Class)
Aberdeen Emerging Markets Fund (Investor Class)
Aberdeen Total Fixed Income Fund (Institutional Class)
Aberdeen Total Fixed Income Fund (Investor Class)
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SCHEDULE C
FEES
Northern Trust has three components to its custody fee structure:
1. A charge per fund account;
2. A variable charge on the market value of assets based upon the country of
investment, and;
3. A variable charge per transaction.
1. ACCOUNT-BASED FEES
Per fund account $2,500 per annum
Per holding/transition account $2,500 per annum
Per one line asset account $1,500 per annum
2. ASSET-BASED FEES
Tier 1 United States 0.25 basis point
Tier 0 Xxxxxx, Xxxxxxx, Xxxxxx Xxxxxxx 1.0 basis point
Tier 3 Austria, Belgium, Denmark, Euroclear, Finland, France, Germany, 2.0 basis points
Greece, Italy, Japan, Luxembourg, Netherlands, Norway, Portugal,
Spain, Sweden and Switzerland
Tier 0 Xxxxxxxxx, Xxxx Xxxx, Xxx Xxxxxxx and Singapore 4.0 basis points
Tier 0 Xxxxxxxx, Xxxxxxxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxx and 7.0 basis points
Thailand
Tier 0 Xxxxxxxxx, Xxxxxx, Xxxxx, Xxxxxx, Xxxxx Xxxxxxxx, Xxxxxxx, 12.0 basis points
Xxxxxxx, Xxxxxxxxx, Xxxxxx, Xxxxxx, Xxx Xxxxx and Xxxxxx
Xxxx 0 Xxxxxxx, Xxxxxxxxxx, Xxxxxxx, Xxxxxxx, Xxxxxxxx, Xxxxxxxx, Chile, 25.0 basis points
Colombia, Croatia, Ecuador, Egypt, Estonia, Ghana, India, Israel,
Ivory Coast, Jamaica, Jordan, Kazahkstan, Kenya, Latvia, Lebanon,
Lithuania, Malta, Mauritius, Morocco, Namibia, Nigeria, Oman,
Pakistan, Palestine, Peru, Qatar, Romania, Russia, Slovakia,
Slovenia, Swaziland, Trinidad and Tobago, Tunisia, Uganda,
Ukraine, United Arab Emirates, Uruguay, Venezuela, Vietnam,
Zambia and Zimbabwe
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3. TRANSACTION-BASED FEES
Tier 1
DTC $ 7 per
Fed Book Entry $ 7 per
P&I Book Entry $ 5 per
P&I Physical $ 10 per
Tier 2 $ 10 per
Tier 3 $ 20 per
Tier 4 $ 40 per
Tier 5 $ 60 per
Tier 6 $ 80 per
Tier 7 $125 per
Futures/options $ 25 per
Third-party payments, Foreign Exchange and fixed deposits
outside Northern Trust $ 50 per
Wire Transfers and Xxxx to Markets $ 5 per
OTHER COSTS
A charge may be applied for:
o Market associated execution costs, not limited to but including
stamp duty, securities re-registration charges, third-party
foreign exchange, third-party fixed deposits, and proxy voting
physical representation/ad hoc expenses will be passed through at
cost if and as applicable.
o Services required in respect of any directly held property,
derivatives or venture capital/private equity portfolios will be
evaluated and priced on a case by case business, according to the
level of work involved.
o The transactions involved in portfolio restructuring
o Supporting/facilitating on-site visits by your auditors
ANNUAL CUSTODY MINIMUM
An annual minimum custody fee of $50,000 per fund account is waived in lieu of
the quoted fee schedule.
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