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EXHIBIT 99.g-3
FOREIGN CUSTODY MANAGER DELEGATION AGREEMENT
AGREEMENT made as of this day of between UMB
Bank, n.a. ("UMB"), for and on behalf of each Fund or series thereof within Lend
Lease Funds, a management investment company registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940,
as amended, (the "Act"), acting through its Board of Directors or its duly
appointed representative (each a "Fund"), and XXXXX BROTHERS XXXXXXXX & CO., a
New York limited partnership with an office in Boston, Massachusetts (the
"Delegate").
WITNESSETH
WHEREAS UMB at the direction of each Fund has appointed the
Delegate as custodian or subcustodian as the case may be (the "Custodian") of
the Fund's Assets in a Custodian Agreement between UMB and each Fund dated (the
"Custodian Agreement");
WHEREAS UMB and the Delegate have entered into a Subcustodian
Agreement dated January 9, 1992 (the "Subcustodian Agreement");
WHEREAS a Fund may, from time to time determine to invest and
maintain some or all of the Fund's Assets outside the United States;
WHEREAS UMB at the direction of the Board of Directors of each
Fund (a "Board") wishes to delegate to the Delegate certain functions with
respect to the custody of Fund's Assets outside the United States;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the Fund and the Delegate agree as follows.
Capitalized terms shall have the meaning indicated in Section 12 unless
otherwise indicated.
1. Maintenance of Fund's Assets Abroad. Pursuant to instructions
from each Fund, UMB, hereby instructs Delegate pursuant to the terms of the
Subcustodian Agreement to place and maintain each Fund's Assets within the
countries listed in Schedule 1 attached hereto (as
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such Schedule may be amended from time to time in accordance herewith which will
at all times include all the countries in the Delegate's global custody network
generally offered to its customers). Such instruction shall be deemed to include
an instruction to use any Compulsory Securities Depository in any such country
and shall represent a Proper Instruction under the terms of the Subcustodian
Agreement. Countries may be added to Schedule 1 by written instruction of UMB,
at the direction of the Fund or its duly appointed representative(s) that is
accepted in writing by the Delegate as an amendment to Schedule 1. With respect
to amendments adding countries to Schedule 1, UMB acknowledges that - (a) the
Delegate shall perform services hereunder only with respect to the countries
where it provides custodial services under the Subcustodian Agreement; and (b)
that nothing in this Agreement shall require the Delegate to provide delegated
or custodial services in any country not listed in Schedule 1 until such amended
Schedule 1 has been accepted by the Delegate in accordance herewith.
2. Delegation. Pursuant to the provisions of Rule 17f-5 under the
Act as amended, UMB, at the direction of each Fund pursuant to the Custodian
Agreement hereby delegates to the Delegate, and the Delegate hereby accepts such
delegation and agrees to perform, only those duties set forth in this Agreement
concerning the safekeeping of each Fund's Assets in each of the countries set
forth in Schedule 1. The Delegate is hereby authorized to take such actions on
behalf of or in the name of UMB, on behalf of the Funds, as are reasonably
required to discharge its duties under this Agreement, including, without
limitation, to cause a Fund's Assets to be placed with a particular Eligible
Foreign Custodian in accordance herewith.
3. Eligible Foreign Custodian and Contract Administration. The
Delegate shall perform the following duties with respect to the Eligible Foreign
Custodians listed on Schedule 1 and administration of certain contracts
governing each Fund's foreign custodial arrangements:
(a) Eligible Foreign Custodian. The Delegate shall place and
maintain the Assets delivered by UMB on behalf of a Fund with an Eligible
Foreign Custodian; provided that the Delegate shall have determined that the
Fund's Assets will be subject to reasonable care based on the standards
applicable to custodians in the relevant market after considering all factors
relevant to the safekeeping of such assets including without limitation:
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(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
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, in the case of a Securities Depository, the depository's
operating history and number of participants; 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
consent to service of process in the United States.
(b) Contract Administration. In the case of an Eligible Foreign
Custodian that is not a Securities Depository or a U.S. Bank, the Delegate shall
cause that the foreign custody arrangements shall be governed by a written
contract that the Delegate has determined will provide reasonable care for Fund
Assets based on the standards specified in subsection (a) of this Section 3.
Each such contract shall, except as set forth in the last paragraph of this
subsection (b), include provisions that provide:
(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 Fund 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 Fund Assets will be freely
transferable without the payment of money or value other than for safe
custody or administration;
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(iv) That adequate records will be maintained identifying Fund
Assets as belonging to the applicable Fund or as being held by a third
party for the benefit of such Fund;
(v) That each Fund's independent public accountants will be given
access to those records or confirmation of the contents of such
records; and
(vi) That each Fund 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 Fund Assets as the specified
provisions, in their entirety.
(c) Limitation to Delegated Selection. Notwithstanding anything in this
Agreement to the contrary, the duties under this Section 3 shall not apply to
Eligible Foreign Custodians that the Delegate is directed to use pursuant to
Section 7.
4. Monitoring. The Delegate shall establish a system to monitor at
reasonable intervals (but at least annually) the appropriateness of maintaining
each Fund's Assets with each Eligible Foreign Custodian in which Fund Assets are
maintained pursuant to Section 3 of this Agreement. The Delegate shall monitor
the continuing appropriateness of placement of each Fund's Assets in accordance
with the criteria established under Section 3(a) of this Agreement. The Delegate
shall monitor the continuing appropriateness of the contract governing each
Fund's arrangements in accordance with the criteria established under Section
3(b) of this Agreement.
5. Reporting. Annually, or at such greater frequency as a Fund may
reasonably request, the Delegate shall provide to the Board written reports
specifying placement of the Fund's Assets with each Eligible Foreign Custodian
selected by the Delegate pursuant to Section 3, and each Compulsory Securities
Depository in which Fund Assets are maintained. The Delegate shall promptly
report to the Board any material adverse changes in a Fund's
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foreign custody arrangements. Delegate will prepare such a report with respect
to any Eligible Foreign Custodian that the Delegate has been instructed to use
pursuant to Section 7 only to the extent specifically agreed with respect to the
particular situation. The Delegate shall provide such information as UMB at the
direction of a Fund, acting through its Board, Investment Adviser or other
authorized representative, may reasonably request relating to (a) prevailing
country risk, including but not limited to information regarding market entrance
requirements, the imposition of currency controls, applicable bankruptcy laws,
customary custody and settlement practices for Eligible Foreign Custodians
maintaining custody of the assets of any Fund, availability of investor
guarantee or protection funds, fail penalties and fail avoidance mechanisms,
foreign ownership limitations, substantial shareholder reporting requirements,
applicable tax laws, and the like; and (b) safety of assets maintained in any
Eligible Foreign Custodian or Compulsory Depository, including financial
condition of the entity and its operational and internal control procedures.
6. Withdrawal of Fund's Assets. If the Delegate determines that an
arrangement with a specific Eligible Foreign Custodian selected by the Delegate
under Section 3 of this Agreement no longer meets the requirements of said
Section, Delegate shall withdraw all Fund Assets from the non-complying
arrangement as soon as reasonably practicable; provided, however, that if in the
reasonable judgment of the Delegate, such withdrawal would require liquidation
of any Fund Assets or would materially impair the liquidity, value or other
investment characteristics of a Fund's Assets, it shall be the duty of the
Delegate to provide UMB with information regarding the particular circumstances
and to act only in accordance with Proper Instructions of the Fund or its
Investment Advisor with respect to such liquidation or other withdrawal, which
UMB shall forward to the Delegate.
7. Direction as to Eligible Foreign Custodian. Notwithstanding
this Delegation Agreement, a Fund, acting through its Board, its Investment
Adviser or its other authorized representative, may direct the Delegate to place
and maintain the Fund's Assets with a particular Eligible Foreign Custodian not
generally offered to Delegate's customers. In such event, the Delegate shall be
entitled to rely on any such instruction as a Proper Instruction under the terms
of the Subcustodian Agreement and shall have no duties under this Delegation
Agreement with respect to such arrangement save those that it may undertake
specifically in writing with respect
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to each particular instance.
8. Standard of Care. In carrying out its duties under this
Agreement, the Delegate agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for safekeeping Fund Assets
would exercise.
9. Representations. The Delegate hereby represents and warrants
that it is a U.S. Bank and that this Agreement has been duly authorized,
executed and delivered by the Delegate and is a legal, valid and binding
agreement of the Delegate.
UMB represents and warrants that each Fund's Board of Directors
has determined that it is reasonable to rely on the Delegate to perform the
delegated responsibilities provided for herein and that this Agreement has been
duly authorized, executed and delivered by the Fund and is a legal, valid and
binding agreement of the Fund.
10. Effectiveness; termination. This Agreement shall be effective
as of the date on which this Agreement shall have been accepted by the Delegate,
as indicated by the date set forth below the Delegate's signature. This
Agreement may be terminated at any time, without penalty, by written notice from
the terminating party to the non-terminating party. Such termination shall be
effective on the 30th day following the date on which the non-terminating party
shall receive the foregoing notice. The foregoing to the contrary
notwithstanding, this Agreement shall be deemed to have been terminated
concurrently with the termination of the Custodian Agreement or Subcustodian
Agreement.
11. Notices. Notices and other communications under this Agreement
are to be made in accordance with the arrangements designated for such purpose
under the Subcustodian Agreement unless otherwise indicated in a writing
referencing this Agreement and executed by both parties.
12. Definitions. Capitalized terms in this agreement have the
following meanings:
a. Compulsory Securities Depository - shall mean a Securities
Depository the use of which is mandatory (i) under applicable law
or regulation; (ii) because
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securities cannot be withdrawn from the depository; or, (iii)
because maintaining securities outside the Securities Depository
is not consistent with prevailing custodial practices.
b. Eligible Foreign Custodian - shall have the meaning set forth
in Rule 17f-5(a)(1) and shall also include a U.S. Bank.
c. Fund's Assets or Fund Assets - shall mean any of a 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 a Fund's
transactions in such investments.
d. Proper Instructions - shall have the meaning set forth in the
Subcustodian Agreement.
e. Securities Depository - shall have the meaning set forth in
Rule 17f-5(a)(6).
f. U.S. Bank - shall mean a bank which qualifies to serve as a
custodian of assets of investment companies under Section 17(f) of
the Act.
13. Governing Law and Jurisdiction. This Agreement shall be
construed in accordance with the laws of the State of New York. The parties
hereby submit to the exclusive jurisdiction of the Federal courts sitting in the
State of New York or the Commonwealth of Massachusetts or of the state courts of
either such State or such Commonwealth.
14. Fees. Delegate shall perform its functions under this
agreement for the compensation determined under the Subcustodian Agreement.
15. Integration. This Agreement sets forth all of the Delegate's
duties with respect to the maintenance of Fund Assets with and monitoring of
Eligible Foreign Custodians, the administration of contracts with Eligible
Foreign Custodians, the withdrawal of assets from Eligible Foreign Custodians
and the issuance of reports in connection with such duties. The terms of the
Subcustodian Agreement shall apply generally as to matters not expressly covered
in this Agreement.
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NOW THEREFORE, the parties have caused this Agreement to be executed by its duly
authorized representatives, effective as of the date first above written.
XXXXX BROTHERS XXXXXXXX & CO. UMB Bank, n.a.
By: By:
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Name: Name: Xxxxx X. Xxxxxxx
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Title: Title: Senior Vice President
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Date: Date:
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