MULTIPLE SERVICES AGREEMENT
This AGREEMENT is effective May 9, 1997, and is between Xxxxxx Xxxxxxx
Trust Company, a New York state chartered trust company (the "Bank"), and The
Xxxxxxx Funds, a Delaware business trust (the "Customer") on behalf of its
separate series of shares representing interests in separate portfolios which
are listed on Schedule B1, as may be amended from time to time ("Series").
WHEREAS, Customer is an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act") as an open-end
investment company; and
WHEREAS, the Customer desires to enter into one agreement providing
for the furnishing of global custody, administrative, accounting and transfer
agency services to the Series; and
WHEREAS, the Bank desires to furnish such services to the Customer or
to arrange for the furnishing of such services through the use of certain
agents;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS
I. GLOBAL CUSTODY SERVICES
The Customer hereby appoints the Bank as its global custodian to the
Series, and the Bank hereby accepts such appointment. This Section I. of this
Multiple Services Agreement (the "Agreement") relates solely to the provision of
global custody services to the Customer.
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
Separate custody accounts for each Series in the name of the Customer
on behalf of each such Series as listed in Schedule B1 for any and all stocks,
shares, bonds, debentures, notes, mortgages or other obligations for the payment
of money, bullion, coin and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe to the same or
evidencing or representing any other rights or interests therein and other
similar property whether certificated or uncertificated as may be received by
the Bank or its Subcustodian (as defined in Sub-section 3 of this Section I.)
for the account of the Customer on behalf of a Series ("Securities") and any and
all cash equivalents.
Prior to the delivery of any Assets (as defined hereinafter) by the
Customer to the Bank, the Customer shall deliver to the Bank each applicable
document or other item listed
in Schedule B2, which schedule may be amended from time to time by the Customer
and the Bank.
The Customer warrants its authority to: 1) deposit the cash and
Securities ("Assets") received in the Accounts and 2) give Instructions (as
defined in Sub-section 11 of this Section I.) concerning the Accounts. Such
Instructions shall specifically indicate to which Series such Assets belong or,
if such Assets belong to more than one Series, shall allocate such Assets to the
appropriate Series. The Bank may deliver securities of the same type and class
in place of those deposited in the Accounts.
Upon receipt of Instructions and appropriate documentation, the Bank
shall establish additional Accounts, which shall be separately accounted for as
additional Accounts under the terms of this Agreement.
The procedures the Bank and the Customer will use in performing
activities in connection with this Agreement are set forth in a client services
guide provided to the Customer by the Bank, as such guide may be amended from
time to time by the Bank (the "Client Services Guide") with the consent of the
Customer; provided, however, that any customer enhancement or amendments deemed
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necessary by the Bank in order to comply with existing or new rules, regulations
or market practices, in any jurisdiction, may be made by the Custodian without
the consent of the Customer. Any Customer specific procedures which are
included in the Client Services Guide must be agreed to or changed in writing by
both parties and such Customer specific procedures shall be deemed to be a part
of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location, securities
will be held in the country or other jurisdiction in which the principal trading
market for such Securities is located, where such Securities are to be presented
for payment or where such Securities are acquired.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
Subject to the provisions of Sub-section 2 above of this Section I.,
the Assets held for each Series may be held in custody and deposit accounts that
have been established by the Bank (i) with one or more domestic or foreign banks
or other institutions as listed on Schedule A1 (the "Subcustodians"), as such
Schedule may be amended from time to time by the Bank by ninety (90) days'
written notice to the Customer, or (ii) through the facilities of one or more
securities depositories or clearing agencies as listed on Schedule A2, as such
Schedule may be amended from time to time by the Bank by sixty (60) days' prior
written notice to the Customer. Any
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Subcustodian may hold Assets of the Customer in a securities depository and may
utilize a clearing agency. Each of the entities listed on Schedule A1 are
"Eligible Foreign Custodians" (as such term is defined in Rule 17f-5(c)(2) of
the Investment Company Act of 1940 (the "1940 Act")), except as otherwise noted
on Schedule A1. Each of the entities listed on Schedule A2 are "Eligible
Foreign Custodians" or "Securities Depositories" as such term is defined in Rule
17f-4(a) and (b) of the 1940 Act, or have been so qualified by exemptive order,
rule or other appropriate action of the SEC, except as otherwise noted on
Schedule A2; provided, however, that although the Bank is of the opinion that
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each of the securities depositories used by it does operate either a central
system for handling securities in their respective countries or a transnational
system for the central handling of securities or equivalent book-entries, the
determination that a securities depository operates a central system absent any
official proclamation by the SEC is a factual one and the Bank shall not be
liable for any future determination by the SEC that any such securities
depository does not in fact operate such a central system.
The Customer will be given reasonable notice by the Bank of any amendment
to Schedule A1 or A2. Upon request by the Customer, the Bank will identify the
name, address and principal place of business of any Subcustodian of the
Customer's Assets and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) The Bank will identify the Assets on its books as belonging to the
Customer on behalf of a particular Series.
(b) A Subcustodian will hold such Assets together with assets belonging to
other customers of the Bank in accounts identified on such Subcustodian's books
as custody accounts for the exclusive benefit of customers of the Bank. In the
event the Subcustodian holds Assets in a securities depository, such
Subcustodian shall be required by its agreement with the Bank to identify on its
books such Assets as being held for the account of the Bank as custodian for its
customers or in such other manner as is required by local law or market
practice.
(c) Any Assets in the Accounts held by a Subcustodian will be subject only
to the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject only to
the instructions of such Subcustodian or its agent.
(d) Any agreement the Bank enters into with a Subcustodian for holding the
Customer's Assets shall provide that: (i) the Account will be adequately
indemnified and its assets adequately insured in the event of a loss; (ii) the
Assets are not subject to any right, charge, security interest, lien or claim of
any kind in favor of such Subcustodian or its creditors except a claim of
payment for their safe custody or administration; (iii) beneficial
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ownership of such Assets will be freely transferable without the payment of
money or value other than for safe custody or administration; (iv) adequate
records will be maintained identifying the Assets held pursuant to such
Agreement as belonging to the Bank on behalf of Customer; (v) the independent
public accountants of or designated by, the Customer, will be given access to or
confirmation of the contents of the books and records of such Subcustodian
relating to its actions under its agreement pertaining to any Assets held by it
thereunder; and (vi) Customer will receive periodic reports with respect to the
safekeeping of the Assets, including notification of any transfer to or from the
Customer's account.
(e) The Bank shall deliver to the Customer annually documents stating: (i)
the identity of each Subcustodian then acting on behalf of the Bank and the name
and address of the governmental agency or other regulatory authority that
supervises or regulates such Subcustodian; (ii) the countries in which each
Subcustodian is located; and (iii) so long as Rule 17f-5 of the 1940 Act
requires the Customer's Board of Trustees to directly approve its foreign
custody arrangements, such other information relating to such Subcustodians as
may reasonably be requested by the Customer to ensure Customer's compliance with
Rule 17f-5 of the 1940 Act. The Bank shall furnish annually to the Customer
information concerning such Subcustodians similar in kind and scope as that
furnished to the Customer in connection with the initial approval of this
Agreement. Bank agrees to provide Customer with notice of any material adverse
changes in the facts or circumstances upon which such information is based as
soon as practicable after it becomes aware of any such material adverse changes
in the normal course of its custodian activities.
5. CASH TRANSACTIONS.
(a) All cash received by the Bank for each of the Accounts shall be held by
the Bank as a short-term credit balance in favor of the Customer on behalf of
the Series to which the Account relates and, because the Bank and the Customer
have agreed in writing in advance that such credit balances shall bear interest,
the relevant Series shall earn interest at the rates and times as agreed between
the Bank and the Customer. The Customer acknowledges that any such credit
balances shall not be accompanied by the benefit of any governmental insurance.
(b) The Bank or its Subcustodians will make cash payments from the Account
upon receipt of Instructions.
(c) In the event that any payment to be made under this Sub-section 5
exceeds the funds available in an Account, the Bank, in its discretion, may
advance the Customer on behalf of the relevant Series whose Assets are held in
such Account such excess amount which shall be deemed a short-term credit
extension which is (i) necessary in connection with payment and clearance of
securities and foreign exchange transactions or (ii) pursuant to an agreed
schedule, as and if set forth in the Client Services Guide, of credits for
dividends and interest payments on the Assets. Such credit extensions shall be
payable on demand, bearing
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interest at the rate customarily charged by the Bank on similar loans and
consistent with the fee schedule set forth on Schedule F.
(d) If the Bank credits an Account on a payable date, or at any time prior
to actual collection and reconciliation to the Account, with interest,
dividends, redemptions or any other amount due, the Customer on behalf of and
from the Assets of the Series to which the Account relates will promptly return
any such amount upon written notification: (i) that such amount has not been
received in the ordinary course of business, or (ii) that such amount was
incorrectly credited. If the Customer on behalf of and from the Assets of the
Series to which the Account relates does not promptly return any amount upon
such notification, the Bank shall be entitled, upon written notification to the
Customer, to reverse such credit by debiting the Account for the amount
previously credited. The Bank shall be entitled to charge the Customer on
behalf of the Assets of the Series in the Account interest for any such credit
extension at rates to be agreed upon from time to time or, if such credit is
arranged by the Bank with a third party on behalf of the Series, the Customer
out of the Series' assets shall reimburse the Bank for any interest charge. In
addition to any other remedies available, with respect to the extension of
credit to a particular Series, the Bank shall be entitled to a right of set-off
against the Assets of such Series to satisfy the repayment of such credit
extension and the payment of, or reimbursement for, accrued interest thereon.
(e) The Bank shall deliver to the Customer annually documents stating: (i)
the identity of each Subcustodian then acting on behalf of the Bank and the name
and address of the governmental agency or other regulatory authority that
supervises or regulates such Subcustodian; (ii) the countries in which each
Subcustodian is located; and (iii) so long as Rule 17f-5 of the 1940 Act
requires the Customer's Board of Trustees to directly approve its foreign
custody arrangements, such other information relating to such Subcustodians as
may reasonably be requested by the Customer to ensure Customer's compliance with
Rule 17f-5 of the 1940 Act. The Bank shall furnish annually to the Customer
information concerning such Subcustodians similar in kind and scope as that
furnished to the Customer in connection with the initial approval of this
Agreement. Bank agrees to provide Customer with notice of any material adverse
changes in the facts or circumstances upon which such information is based as
soon as practicable after it becomes aware of any such material adverse changes
in the normal course of its custodian activities.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank or
its Subcustodian upon receipt by the Bank of Instructions. Settlement and
payment for Securities received for, and delivery of Securities out of, the
Accounts may be made in accordance with the customary or established securities
trading or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs. Under all circumstances, Bank shall use
its reasonable efforts to make delivery of Securities to a purchaser, dealer or
their agents only against payment subject to local custom and regulations.
Delivery of Securities out of an Account may also be made in any other manner
specifically required by Instructions.
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(b) The Bank, upon receipt of Instructions, will credit or debit an
Account on a contractual settlement date, if consistent with applicable law,
with cash or Securities with respect to any sale, exchange or purchase of
Securities. Otherwise, such transactions will be credited or debited to an
Account on the date cash or Securities are actually received by the Bank and
reconciled to such Account.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in the
Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that the Bank or Subcustodian
is actually aware of such opportunities.
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
(e) Receive and collect all income and principal with respect to
Securities and to credit cash receipts to the Accounts.
(f) Take non-discretionary action on mandatory corporate actions.
(g) Pay or cause to be paid, from the Accounts, any and all taxes and
levies of any nature imposed on the Assets by any governmental authority in
connection with custody of and transactions in such Assets.
(h) In general, attend to all nondiscretionary details in connection with
the custody, sale, purchase, transfer and other dealings with the Assets held in
the Accounts.
The Bank will send the Customer an advice or notification of any
transfers of Assets to or from the Accounts. Such statements, advices or
notifications shall indicate the identity of the entity having custody of the
Assets. Unless the Customer sends the Bank a written exception or objection to
any Bank statement within ninety (90) days of receipt, the Customer shall be
deemed to have approved such statement.
All collections of funds or other property paid or distributed in
respect of Securities in the Accounts shall be made at the risk of the Customer.
The Bank shall have
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no liability for any loss occasioned by delay in the actual receipt of notice by
the Bank or by its Subcustodians of any payment, redemption or other transaction
regarding Securities in the Accounts in respect of which the Bank has agreed to
take any action under this Agreement.
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
(a) Corporate Actions. Whenever the Bank receives information concerning
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the Securities which requires discretionary action by the beneficial owner of
the Securities (other than a proxy), such as subscription rights, bonus issues,
stock repurchase plans and rights offerings, or legal notices or other material
intended to be transmitted to securities holders ("Corporate Actions"), the Bank
will give the Customer notice of such Corporate Actions to the extent that the
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank will endeavor to obtain
Instructions, as defined in Sub-section 11 of this Section I., but if
Instructions are not received in time for the Bank to take timely action, or
actual notice of such Corporate Action was received too late to seek
Instructions, the Bank is authorized to act in accordance with the default
option provided by local market practice and/or the issuer of the Securities.
Fractional interests resulting from Corporate Action activity shall be treated
in accordance with local market practices. The Bank shall be held harmless for
any such action provided such action was made in good faith.
The indemnification provision of this Sub-section 8(a) will survive
the termination of this Agreement.
(b) Proxy Voting. The Bank will provide proxy voting services only
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pursuant to the Client Services Guide. Proxy voting services may be provided by
the Bank or, in whole or in part, by one or more third parties appointed by the
Bank (which may be affiliates of the Bank).
(c) Tax Reclaims.
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(i) Subject to the provisions hereof and the receipt of Instructions
as described in the Client Services Guide, the Bank will timely apply for or
facilitate the application for a reduction of withholding tax and any refund of
any tax paid or tax credits which apply in each applicable market in respect of
income payments on Securities for the benefit of the Customer which the Bank
believes may be available to such Customer. The Bank shall notify the Customer
that it is making such application for a reduction of withholding tax and refund
of any tax paid or tax credits which apply in each applicable market in respect
of income payments on Securities for the benefit of Customer.
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(ii) The provisions of tax reclaim services by the Bank is
conditional upon the Bank receiving from the beneficial owner of Securities (A)
a declaration of its identity and place of residence and (B) certain other
documentation (pro forma copies of which are available from the Bank). The Bank
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shall use reasonable means to notify Customer of the declarations, documentation
and information which the Customer is to provide to Bank in order for the Bank
to perform the tax reclaim services described herein. The Customer acknowledges
that, if the Bank does not receive such information, additional United Kingdom
taxation will be deducted from all income received in respect of Securities
issued outside the United Kingdom and that U.S. non-resident alien tax or U.S.
backup withholding tax will be deducted from U.S. source income. The Customer
shall provide to the Bank such documentation and information as it may require
in connection with taxation, and warrants that, when given, this information
shall be true and correct in every respect, not misleading in any way, and
contain all material information. The Customer undertakes to notify the Bank
immediately if any such information requires updating or amendment.
(iii) The Bank shall not be liable to the Customer or any third party
for any tax, fines or penalties payable by the Bank or the Customer, and shall
be indemnified accordingly, whether these result from the inaccurate completion
of documents by the Customer or any third party, or as a result of the provision
to the Bank or any third party of inaccurate or misleading information or the
withholding of material information by the Customer or any other third party, or
as a result of any delay of any revenue authority or any other matter beyond the
control of the Bank. The provisions of this Sub-section 8(c)(iii) shall survive
the termination of this Agreement.
(iv) The Customer confirms that the Bank is authorized to deduct
from any cash received or credited to the Accounts any taxes or levies required
by any revenue or governmental authority for whatever reason in respect of the
Accounts.
(v) The Bank shall perform tax reclaim services only with respect
to taxation levied by the revenue authorities of the countries notified to the
Customer from time to time and, upon Instructions as described in the Client
Services Guide, the Bank may, if the Bank offers tax reclaim services in new
markets, supplement or amend the markets in which the tax reclaim services are
offered. Other than as expressly provided in this sub-clause and to the extent
that the Bank acts in accordance with the information provided on Schedule B2,
the Bank shall have no responsibility with regard to the Customer's tax position
or status in any jurisdiction.
(vi) The Customer confirms that the Bank is authorized to disclose
any information requested by any revenue authority or any governmental body in
relation to the Customer or the Securities and/or Cash held for the Customer for
the purpose of obtaining tax reclaims only. This provision does not authorize
any other disclosure to any revenue authority or any governmental body without
the prior written consent of Customer.
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(vii) Tax reclaim services may be provided by the Bank or, in whole
or in part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank); provided that the Bank shall be liable for the
performance of any such third party to the same extent as the Bank would have
been if it performed such services itself.
(viii) The Bank shall monitor tax reclaims and report on such
reclaims on a monthly basis.
9. NOMINEES.
Securities which are ordinarily held in registered form may be registered
in the name of the Bank, Subcustodian or securities depository or any of their
nominees, as the case may be. The Bank may without notice to the Customer cause
any such Securities to cease to be registered in the name of any such nominee
and to be registered in the name of the Customer. Under no circumstances, shall
any of the Securities be registered in the name of Xxxxxxx Partners, Inc. unless
the Bank has been instructed otherwise. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
Where the Bank has been instructed by the Customer to hold any Securities
in the name of any person or entity other than the Bank, its Subcustodian or any
such entity's nominee, the Bank shall not be responsible for any failure to
collect such dividends or other income or participate in any such corporate
action with respect to such Securities.
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means persons as
have been designated on Schedule B3, or entities as have been designated on
Schedule B4, as such Schedules may be amended from time to time by written
notice from the Customer or its designated agent to act on behalf of the
Customer under this Agreement. Such persons or entities shall continue to be
Authorized Persons until such time as the Bank receives Instructions that any
such person or entity is no longer an Authorized Person. Prior to the delivery
of the Assets to the Bank, the Bank shall provide to Customer a list of
designated system user ID numbers and passwords that the Customer shall be
responsible for assigning to Authorized Persons. The Bank shall assume that an
electronic transmission received and identified by a system user ID number and
password was sent by an Authorized Person. The Bank agrees to provide
additional designated system user ID numbers and passwords as needed by the
Customer. The Customer authorizes the Bank to issue new system user ID numbers
upon the request of a previously existing Authorized Person. Upon the issuance
of additional system user ID numbers by the Bank to the Customer, Schedule B4
shall be deemed automatically amended accordingly. The Customer authorizes and
instructs the Bank to assume that a facsimile transmission received which sets
forth only the typed name of an Authorized Person is an Instruction sent by an
Authorized Person. The Customer authorizes
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the Bank to receive, act and rely upon any Instructions received by the Bank
which have been issued, or purport to have been issued, by an Authorized Person.
Any Authorized Person may cancel/correct or otherwise amend any Instruction
received by the Bank, but the Customer agrees to indemnify the Bank for any
liability, loss or expense incurred by the Bank and its Subcustodians as a
result of their having relied upon or acted in good faith on any prior
Instruction. The Bank will use its reasonable efforts to process trades once
the trades have settled, upon receipt of an amendment or cancellation of an
Instruction to deliver or receive any security or funds with respect to such
trades.
11. INSTRUCTIONS.
The term "Instructions" for purposes of Section I. of this Agreement means
instructions of any Authorized Person received by the Bank, via telex, facsimile
transmission, bank wire, SWIFT or other teleprocess or electronic instruction or
trade information system acceptable to the Bank which the Bank reasonably
believes in good faith to have been given by Authorized Persons or by such other
means as may be agreed in writing by Bank and Customer or which are transmitted
with proper testing or authentication pursuant to terms and conditions which the
Bank may specify and provided that such Instructions are timely received by the
Bank. Unless otherwise expressed, Instructions shall continue in full force and
effect until canceled or superseded.
The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.
II. ADMINISTRATIVE, ACCOUNTING AND TRANSFER AGENCY SERVICES
The Customer hereby appoints the Bank as its administrative, accounting
services and transfer agent to the Series, and the Bank hereby accepts such
appointment. This Section II. of this Agreement relates solely to the provision
of administrative, accounting and transfer agency services to the Customer and
its Series. For purposes of this Section II., the term "Bank" shall include the
Bank and its agents.
A. ADMINISTRATIVE SERVICES
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1. SERVICES.
Subject to the succeeding provisions of this section and subject to
the direction and supervision of the Board of Trustees of the Customer, Bank
shall provide to Customer and each of the Series administrative services as set
forth in Schedule C attached hereto and incorporated by reference into this
Agreement. In addition to the obligations set forth in Schedule C, the Bank, in
its capacity as administrator for the Customer and each of the
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Series ("Administrator"), shall: (i) provide its own office space, facilities,
equipment and personnel for the performance of its duties under this Section
II.A. of this Agreement; and (ii) take all actions the Bank deems necessary to
properly execute administration on behalf of the Series.
2. COOPERATION OF OTHER PARTIES.
So that the Bank may perform its duties under the terms of this
Agreement, the Board of Trustees of the Customer shall direct the officers,
investment adviser, legal counsel, independent accountants and other agents of
the Customer to cooperate with the Bank in performing administrative services
hereunder and, upon request of the Bank, to provide such information, documents
and advice as is within the possession or knowledge of such persons provided
that no such person need provide any information to the Bank if to do so would
result in the loss of any privilege with respect to such information unless the
Customer elects to waive such privilege. In the event that the Customer does
not elect to waive such privilege, the Bank shall not be liable for and shall be
indemnified against any losses directly resulting from the failure to deliver
such information, documents or advice. In connection with its duties hereunder,
the Bank shall be entitled to rely, and shall be held harmless by the Customer
when acting in reliance upon the instruction, advice or any documents relating
to the Customer as provided to the Bank by any of the aforementioned persons
provided that such reliance is reasonable.
The indemnification provisions of this Sub-section 2 of this Section
II.A. shall survive the termination of the Agreement.
3. COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS.
Any activities performed by the Bank under this Section II.A. of this
Agreement shall conform to the requirements of:
(a) the provisions of the 1940 Act and of any rules or regulations in
force thereunder;
(b) any other applicable provision of state and Federal law;
(c) the provisions of the Declaration of Trust and the By-Laws of the
Customer, as amended from time to time;
(d) any policies and determinations of the Board of Trustees of the
Customer provided to the Bank in writing; and
(e) the fundamental policies of the Series as reflected in the
Customer's registration statement on Form N-1A ("Form N-1A") under the 1940 Act
and the Securities Act of 1933 (the "1933 Act") and any amendments thereto.
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4. NON-EXCLUSIVITY.
Nothing in this Agreement shall prevent the Bank or any officer or
employee thereof from acting as administrator for or with any other person,
firm, corporation or trust. While the administrative services supplied to the
Customer and the Series may be different than those supplied to other persons,
firms, corporations or trusts, the Bank shall provide the Customer and the
Series equitable treatment in supplying services. The Bank agrees to maintain
the records and all other information of the Customer and the Series as required
by the 1940 Act and shall not use such information for any purpose other than
the performance of the Bank's duties under this Agreement.
B. ACCOUNTING SERVICES
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1. SERVICES.
The Bank, in its capacity as accounting services agent for the
Customer and the Series ("Accounting Agent"), will in addition to the duties and
functions listed below, perform accounting services listed in Schedule D
attached hereto.
2. INSTRUCTIONS.
For purposes of this Section II.B. of this Agreement:
(a) Oral Instructions shall mean an authorization, instruction,
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approval, item or set of data, or information of any kind transmitted to the
Bank in person or by telephone, telegram, telecopy, or other mechanical or
documentary means lacking a signature, by an Authorized Person, as defined in
Sub-section 10 of Section I. of this Agreement or by any of the Customer's
officers, employees, shareholders or other agents reasonably believed by Bank to
be authorized to give such Oral Instructions.
(b) Written Instructions shall mean an authorization, instruction,
--------------------
approval, item or set of data or information of any kind transmitted to the Bank
in original writing containing original signatures or a copy of such document
transmitted by telecopy or facsimile transmission including transmission of such
signature reasonably identified to the Bank to be the signature of an Authorized
Person, as defined in Sub-section 10 of Section I. of this Agreement or by any
of the Customer's officers, employees, shareholders or other agents reasonably
believed by Bank to be authorized to give such Written Instructions.
3. MAINTENANCE OF ACCOUNTS AND RECORDS.
To the extent the Bank receives the necessary information from the
Customer or its agents by Written or Oral Instructions, the Bank shall maintain
and keep current the following Accounts and Records relating to the Customer's
business in such form as may be mutually agreed upon between the Customer and
the Bank:
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(a) Net Asset Value Calculation Reports;
(b) cash Receipts Journal;
(c) cash Disbursements Journal;
(d) dividends Paid and Payable Schedule;
(e) purchase and Sales Journals - Portfolio Securities;
(f) security Ledgers - Transaction Report and Tax Lot Holdings
Report;
(g) broker Ledger - Commission Report;
(h) daily Expense Accruals;
(i) daily Interest Accruals;
(j) daily Trial Balance;
(k) portfolio Interest Receivable and Income Journal;
(l) portfolio Dividend Receivable and Income Register;
(m) listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security;
(n) average daily net assets provided on monthly basis; and
(o) daily accounting reports as agreed to by the parties.
The necessary information to perform the above functions and the
calculation of each Series' net asset value as provided below, is to be
furnished by Written or Oral Instructions to the Bank daily (in accordance with
the time frame identified in Sub-section 7 of this Section II.B.).
4. CALCULATION OF NET ASSET VALUE.
The Bank shall perform the calculations necessary to calculate each
Series' net asset value daily, in accordance with: (i) the Customer's Advisory
Agreements and Declaration of Trust; (ii) the provisions of the Customer's Form
N-1A; and (iii) any other procedures approved by the Board of Trustees of the
Customer and supplied to the Bank by the Customer in writing. Portfolio items
for which market quotations are available by the Bank's use of automated
financial information services which shall be authorized by the
13
Customer in writing to the Bank ("Services") shall be based on the closing
prices of such Services except where the Customer has given or caused to be
given specific Written Instructions to utilize a different value. Restricted
securities and other securities requiring valuation not readily ascertainable
solely by such Services shall be given values as the Customer provides by
Written Instructions. The Bank shall not have any responsibility or liability
for: (i) the accuracy of prices quoted by any of the Services; (ii) the
accuracy of any information supplied by the Customer; or (iii) for any loss,
liability, damage, or cost arising out of any inaccuracy, delay or omissions
from such data provided by the Services or the Customer. The Bank shall have no
responsibility or duty to include information or valuations to be provided by
the Customer in any computation unless and until it is timely supplied to the
Bank in usable form. The Bank shall record corporate action information of
which it has become aware in its capacity as Custodian for Customer or from the
Services or the Customer. The Bank shall not have any duty to gather or record
corporate action information not supplied by these sources.
The Bank will not be responsible for any losses, damages or costs to
the Customer, the Series or its shareholders for any price errors caused by:
the Customer, the Series, its advisers, corporate action and dividend
information, or any other party other than the Bank itself.
5. AUTHORITY TO ACT UPON RECEIPT OF INSTRUCTIONS.
For all purposes under Section II.B. of this Agreement, the Bank is
authorized to act upon receipt of any Written or Oral Instruction. The Customer
agrees to provide Written Instructions to the Bank with respect to trade
confirmation and cash instruction. The Bank shall be entitled to rely on any
Oral or Written Instruction received. For any act or omission undertaken in
compliance with such Oral or Written Instruction received, the Bank shall be
free of liability and fully indemnified and held harmless by the Customer,
provided, however, that in the event an Oral or Written Instruction received by
the Bank is countermanded by a timely later Oral or Written Instruction received
by the Bank prior to acting upon such countermanded Instruction, the Bank shall
act upon such later Oral or Written Instruction. The indemnification provisions
of this Sub-section 5 shall survive termination of this Agreement.
6. PROVISION OF REPORTS.
The Bank shall promptly supply daily and periodic reports to the
Customer as requested by the Customer and agreed upon by the Bank.
7. PROVISION OF INFORMATION BY THE CUSTOMER.
The Customer shall provide to the Bank or shall cause to be provided
to the Bank as of the close of each business day or on such other schedule as
the Bank determines is necessary, Oral or Written Instructions containing any
additional data or information
14
necessary for the Bank to maintain the Customer's and the Series' Accounts and
Records. Such Oral or Written Instructions shall be delivered to the Bank no
later than 11:00 a.m., Eastern time the following business day.
8. ADOPTION OF ADDITIONAL PROCEDURES.
In connection with and in furtherance of the rendering of services
under this Section II.B., the Bank and the Customer may from time to time adopt
such procedures as agreed upon in writing, and the Bank may conclusively assume
that any procedure approved by the Customer or direction by the Customer does
not conflict with or violate any requirements of the Customer's Declaration of
Trust, By-Laws, or any rule or regulation of any regulatory body or governmental
agency.
C. TRANSFER AGENCY SERVICES
------------------------
1. SERVICES.
The Bank, in its capacity as transfer agent to the Customer and the
Series ("Transfer Agent") will, in addition to the duties and functions listed
below, perform the duties and functions of a transfer agent for an open-end
investment company as listed in Schedule E attached hereto. The terms as
defined in this Section II.C. wherever used in this Section II.C., or in any
amendment or supplement with respect to this Section II.C., shall have the
meanings herein specified unless the context otherwise requires.
Share Certificates shall mean the certificates representing shares of
------------------
beneficial interest of the Series.
Shareholders shall mean the registered owners of the Shares of the
------------
Series in accordance with the share registry records maintained by the Bank.
Shares shall mean the issued and outstanding shares of the Series.
------
Signature Guarantee shall mean the guarantee of signatures by an
-------------------
"eligible guarantor institution" as defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations. Broker-dealers guaranteeing signatures must be members of a
clearing corporation or maintain net capital of at least $100,000. Signature
guarantees will be accepted from any eligible guarantor institution which
participates in a signature guarantee program.
15
2. ISSUANCE OF SHARES.
The Bank, as Transfer Agent, shall make original issuances of Shares
in accordance with Sub-sections 7 and 8 of this Section II.C. of this Agreement
and with the Customer's Declaration of Trust upon the written request of the
Customer and upon being furnished with: (i) a certified copy of a resolution or
resolutions of the Board of Trustees of the Customer authorizing such; and (ii)
necessary funds for the payment of any original issue tax applicable to such
additional Shares.
3. TRANSFER OF SHARES.
Transfers of Shares shall be registered and new Shares issued by the
Bank upon redemption of outstanding Shares:
(a) in the form deemed by the Bank to be properly endorsed for
transfer;
(b) with all necessary endorser's signatures as required to be
guaranteed in accordance with the Customer's Form N-1A;
(c) upon receipt of such assurances as the Bank shall deem necessary
or appropriate to evidence the genuineness and effectiveness of each necessary
endorsement; and
(d) upon receipt of satisfactory evidence of compliance with all
applicable laws relating to the payment or collection of taxes.
4. RELIANCE ON APPLICABLE LAW.
In registering transfers, the Bank, as Transfer Agent, will comply
with applicable law relating to its activities as Transfer Agent for the
Customer.
5. MAINTENANCE OF RECORDS.
The Bank will maintain records in the usual form in which it will note
the issuance, transfer and redemption of Shares. The Bank is responsible for
providing reports of Share purchases, redemptions and total Shares outstanding
on the next business day after each net asset value calculation. The Bank is
authorized to keep records, which will be part of the transfer records, in which
it will note the names and registered address of Shareholders and the number of
Shares and fractions thereof held by them.
6. RELIANCE UPON LISTS, INSTRUCTIONS OR OTHER INSTRUMENTS.
The Bank, as Transfer Agent, may rely conclusively and act without
further investigation upon any list, instruction, certification, authorization
or other instrument or paper believed by it in good faith to be genuine and
unaltered, and to have been signed,
16
countersigned, or executed by a duly authorized person or persons, or upon the
instructions of any officer of the Customer, or upon the advice of counsel for
the Customer or for the Bank. The Bank may record any transfer of Shares which
is reasonably believed by it to have been duly authorized or may refuse to
record any transfer of Shares if in good faith, the Bank, in its capacity as
Transfer Agent, deems such refusal necessary in order to avoid any liability on
the part of either the Series or the Bank. The Customer agrees to indemnify and
hold the Bank harmless from and against any and all losses, costs, claims, and
liability which it may suffer or incur by reason of so relying or acting or
refusing to act, except for actions taken pursuant to advice of the Bank's
counsel and actions resulting from the Bank's negligence or lack of good faith.
The Bank shall maintain and reconcile all operating bank accounts necessary to
facilitate all transfer agency processes; including, but not limited to,
distribution disbursements, redemptions and payment clearance accounts. The
indemnification provisions of this Sub-section II.C.6. shall survive the
termination of this Agreement.
7. PROCESSING OF PURCHASE ORDERS.
Prior to the daily determination of net asset value in accordance with
the Customer's Declaration of Trust and Form N-1A, the Bank shall process all
purchase orders received since the last determination of each Series' net asset
value.
The Bank shall place a purchase order daily with the appropriate
Series for the proper number of Shares and fractional Shares to be purchased and
confirm such number to the Customer in writing.
8. ISSUANCE AND CREDITING OF SHARES.
The proper number of Shares and fractional Shares shall then be issued
daily and credited by the Bank to the Shareholder Registration Records. The
Shares and fractional Shares purchased for each Shareholder will be credited by
the Bank to that Shareholder's account. The Bank shall mail to each Shareholder
a confirmation of each purchase, with copies to the Customer as requested by the
Customer. Such confirmations will show the prior Share balance, the new Share
balance, the amount invested and the price paid for the newly purchased Shares.
9. DAILY PROCESSING OF REDEMPTION REQUESTS.
The Bank shall, prior to the daily determination of net asset value in
accordance with the Customer's Declaration of Trust and Form N-1A, process all
requests from Shareholders to redeem Shares and determine the number of Shares
required to be redeemed to make monthly payments, automatic payments or the
like. Thereupon, the Bank shall advise the Customer of total number of Shares
available for redemption and the number of Shares and fractional Shares
requested to be redeemed. The Bank shall furnish the Customer with an
appropriate confirmation of the redemption and process the redemption by
17
making the proper distribution and application of the redemption proceeds in
accordance with the Customer's Declaration of Trust and Form N-1A then in
effect. The registry books recording outstanding Shares, the Shareholder
Registration Records and the individual account of the Shareholder shall be
properly debited.
10. REDEMPTIONS AFTER RECENT PURCHASE.
With respect to redemption of Shares which have been purchased within
fifteen (15) calendar days of a redemption request, the Customer shall provide
the Bank, from time to time, with Written Instructions concerning the time
within which such requests may be honored.
III. GENERAL PROVISIONS
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1. STANDARD OF CARE; LIABILITIES - SECTION I.
(a) With respect to Section I. of this Agreement, the Bank shall be
responsible for the performance of only such duties as are set forth in Section
I. of this Agreement or expressly contained in Instructions which are consistent
with the provisions of Section I. of this Agreement as follows:
(i) The Bank will use reasonable care with respect to its
obligations under this Agreement and the safekeeping of Assets. The Bank shall
be liable to the Customer for any loss which shall occur as the result of the
negligence or willful misconduct of the Bank or a Subcustodian with respect to
the safekeeping of such Assets. In the event of any loss to the Customer or
Series by reason of the failure of the Bank or its Subcustodian to utilize
reasonable care, the Bank shall be liable to the Customer and the Series only to
the extent of the Customer's actual damages.
(ii) The Bank will not be responsible for any act, omission, default
or the solvency of any agent which it or a Subcustodian uses unless such use was
made negligently or in bad faith.
(iii) The Customer and the Series shall be indemnified by, and
without liability to, the Bank for any action taken or omitted by the Bank
within the scope of this Agreement as a result of the Bank's negligence or
willful misconduct.
(iv) The Bank and its nominees shall be indemnified by, and without
liability to, the Customer, the Series, or the Shareholders for any action taken
or omitted by the Bank whether pursuant to or in reliance upon Instructions for
any losses arising out of the Bank's performance hereunder, arising out of its
nominees acting as a nominee or holder of record of the Securities, or for any
action or omission otherwise within the scope of this Agreement if such act or
omission was in good faith, without negligence. In performing its
18
obligations under this Agreement, the Bank may rely on the genuineness of any
document which it reasonably believes in good faith to have been validly
executed.
(v) The Customer agrees to pay for and hold the Bank harmless from
any liability or loss resulting from the imposition or assessment of any taxes
or other governmental charges, and any related expenses with respect to income
from or Assets in the Accounts.
(vi) The Bank shall be entitled to rely, and may act, upon the
advice of counsel for the Customer on all matters and shall be without liability
for any action reasonably taken or omitted pursuant to such advice.
(vii) Without limiting the foregoing, the Bank shall not be liable
for any loss which results from: 1) the general risk of investing, or 2)
investing or holding Assets 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 Assets
provided, however, that where the Bank is required to provide information to the
Customer as part of its services herewith, the Bank shall be responsible for
obtaining and relaying such information in accordance with the standard of care
described in this Section III.1.
(viii) In no event shall the Bank be liable to the Customer or the
Series for any indirect, incidental, special or consequential losses or damages
of any kind whatsoever (including but not limited to lost profits), even if the
Bank has been advised of the likelihood of such loss or damage and regardless of
the form of action.
(b) Consistent with and without limiting the first paragraph of this Sub-
section 1 of this Section III. of this Agreement, it is specifically
acknowledged that the Bank shall have no duty or responsibility to:
(i) supervise or make recommendations with respect to investments
or the retention of Securities;
(ii) advise the Customer or an Authorized Person regarding any
default in the payment of principal or income of any security other than as
provided in Sub-section 5(c) of Section I. of this Agreement;
(iii) evaluate or report to the Customer 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.
Nothing contained in this clause shall limit the Bank's responsibilities
pursuant to Section I.4 of this Agreement;
19
(iv) review or reconcile trade confirmations received from brokers.
The Customer or its Authorized Persons (as defined in Sub-section 10 of Section
I. of this Agreement) issuing Instructions shall bear any responsibility to
review such confirmations against Instructions issued to and statements issued
by the Bank;
(v) The Bank hereby warrants to the Customer that in its opinion,
after due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign custodian
and each eligible foreign securities depository holding the Customer's
Securities pursuant to this Agreement afford reasonable protection for such
Securities given prevailing practices, procedures and controls available in that
market; and
(vi) The provisions of this Section III.1 shall survive the
termination of this Agreement.
2. STANDARD OF CARE; LIABILITIES - SECTION II.
(a) For purposes of Section II. of this Agreement, the Bank shall not be
liable for any error of judgment or mistake of law or for any loss or expense
suffered by the Bank or the Customer, the Series, or the Shareholders in
connection with the matters to which this Agreement relates, except for a loss
or expense to the extent caused by or resulting from willful misfeasance, bad
faith or negligence on the Bank's part in the performance of its duties or from
reckless disregard by the Bank of its obligations and duties under this
Agreement. In the performance of its services, however, the Bank shall be
obligated to exercise the due care and diligence of an open-end fund
administrative, accounting and transfer agent. In no event shall the Bank be
liable for any indirect, incidental, special or consequential losses or damages
of any kind whatsoever (including but not limited to lost profits), even if the
Bank has been advised of the likelihood of such loss or damage and regardless of
the form of action.
(b) Subject to Section 2(a) above, the Bank shall not be responsible for,
and the Customer shall indemnify and hold the Bank harmless from and against,
any and all losses, damages, costs, reasonable attorneys' fees and expenses,
payments, expenses and liabilities incurred by the Bank, any of its agents, or
the Customer's agents in the performance of its/their duties hereunder,
including but not limited to those arising out of or attributable to:
(i) any and all actions of the Bank or its officers or agents
required to be taken pursuant to this Agreement;
(ii) the reasonable reliance on or use by the Bank or its officers
or agents of information, records, or documents which are received by the Bank
or its officers or agents and furnished to it or them by or on behalf of the
Customer, and which have been prepared or maintained by the Customer or any
third party on behalf of the Customer;
20
(iii) the Customer's refusal or failure to comply with the material
terms of this Agreement or the Customer's lack of good faith, or its actions, or
lack thereof, involving negligence or willful misfeasance;
(iv) the breach of any material representation or warranty of the
Customer hereunder;
(v) the taping or other form of recording of telephone
conversations or other forms of electronic communications with investors and
shareholders, or reliance by the Bank, its officers or agents on telephone or
other electronic instructions of any person acting on behalf of a shareholder or
shareholder account for which telephone or other electronic services have been
authorized, provided the Bank, its officers or agents complies with all laws
relating to the taping or other form of recording of telephone conversations;
(vi) the reliance on or the carrying out by the Bank or its officers
or agents of any proper instructions reasonably believed to be duly authorized,
or requests of the Customer or recognition by the Bank or its officers or agents
of any share certificates which are reasonably believed to bear the proper
signatures of the officers of the Customer and the proper countersignature of
any transfer agent or registrar of the Customer;
(vii) any delays, inaccuracies or omissions from information or data
provided to the Bank or its officers or agents by data services, corporate
action services, Services or securities brokers and dealers;
(viii) the offer or sale of shares by the Customer in violation of
any requirement under the Federal securities laws or regulations or the
securities laws or regulations of any state, or in violation of any stop order
or other determination or ruling by any Federal agency or any state agency with
respect to the offer or sale of such shares in such state (1) resulting from
activities, actions or omissions by the Customer or its other service providers
and agents, or (2) existing or arising out of activities, actions or omissions
by or on behalf of the Customer prior to the effective date of this Agreement;
(ix) any failure of the Customer's registration statement to
materially comply with the 1933 Act and the 1940 Act (including the rules and
regulations thereunder) and any other applicable laws, or any untrue statement
of a material fact or omission of a material fact necessary to make any
statement therein not misleading in a Customer's prospectus; and
(x) the actions taken by the Customer, and its investment advisers,
in compliance with applicable securities, tax, commodities and other laws, rules
and regulations, or the failure to so comply.
(c) In performing the services required under Section II. hereof, the Bank
shall be entitled to rely on any Oral or Written Instructions, notices or other
communications,
21
including electronic transmissions, from the Customer and its officers and
trustees, investors, agents and other service providers which the Bank or its
agents reasonably believes to be genuine, valid and authorized, and shall be
indemnified by the Customer for any loss or expense caused by such reliance.
The Bank shall also be entitled to consult with and rely on the advice and
opinions of outside legal counsel retained by the Customer, as necessary or
appropriate.
(d) The Bank shall indemnify and hold the Customer and the Series harmless
from and against any and all losses, damages, costs, charges, reasonable
attorneys' fees and expenses, payments, expenses and liabilities arising out of
or attributable to the Bank's refusal or failure to comply with the material
terms of this Agreement; the Bank's breach of any material representation made
by it herein; or the Bank's lack of good faith or acts involving negligence,
willful misfeasance or reckless disregard of its duties under this Agreement.
(e) The provisions of this Section III.2. shall survive the termination of
this Agreement.
3. INDEMNIFICATION.
(a) In connection with any indemnification required under this Section
III., the party seeking indemnification ("Indemnified Party") shall give written
notice within a reasonable period of time to the other party ("Indemnifying
Party") of a written assertion or claim of any threatened or pending legal
proceeding which may be subject to this indemnification. The failure to so
notify the Indemnifying Party of such written assertion or claim shall not,
however, operate in any manner whatsoever to relieve the Indemnifying Party of
any liability arising from this Section III. or otherwise, except to the extent
failure to give notice prejudices the Indemnifying Party.
(b) For any legal proceeding giving rise to indemnification under this
Agreement, the Indemnifying Party shall be entitled to defend or prosecute any
claim in the name of the Indemnified Party at its own expense and through
counsel of its own choosing if it gives written notice to the Indemnified Party
within fifteen (15) business days of receiving notice of such claim.
Notwithstanding the foregoing, the Indemnified Party may participate in the
litigation at its own expense through counsel of its own choosing. If the
Indemnifying Party chooses to defend or prosecute such claim, then the parties
shall cooperate in the defense or prosecution thereof and shall furnish such
records and other information as are reasonably necessary.
(c) The provisions of this Sub-section 3 shall survive the termination of
this Agreement.
22
4. USE OF OTHER PARTIES BY THE BANK.
(a) In furnishing the services required to be provided under Section II.
of this Agreement, the Bank may, upon prior written approval of Customer, sub-
contract with other parties ("Other Parties") for the provision of all or such
part of those services as Bank deems appropriate. In the event that the Bank
utilizes the services of Other Parties in performing the functions required to
be performed by it as set forth in Section II. of this Agreement, the Bank shall
be responsible for the actions of such Other Parties to the same extent as if
the Bank performed such functions except for as provided under Sub-section III.
4(e) of this Agreement. Termination of such Other Parties may be made only upon
prior written approval of Customer.
(b) To the extent the Bank contracts with Other Parties to perform
services required by Section II., of this Agreement, Bank is authorized to make
representations in writing to such Other Parties concerning the Customer only
(i) to the same extent as the Customer makes representations and warranties to
the Bank in this Agreement; and (ii) concerning the obligations of Customer set
forth in Sub-section III, 4(c) of this Agreement.
(c) The Customer and the Bank agree that to the extent the Bank utilizes
Other Parties to perform certain functions called for by Section II. of this
Agreement, the Customer may communicate directly with such Other Parties and
agrees to pay the direct Customer expenses set forth in Schedule F.
(d) To the extent the Bank contracts with Other Parties to perform any of
the functions required under Section II. of this Agreement and is required
pursuant to contracts with such Other Parties to supply documents to such Other
Parties relating to the Customer, the Customer shall supply such documents to
the Bank upon reasonable request.
(e) The Bank shall enter into a sub-administration agreement dated as of
the date of this Agreement (the "Sub-Administration Agreement") with FDI
Distribution Services, Inc., or its delegatee (the "Sub-Administrator") for the
provision of sub-administration services as outlined in Schedule C.V. Any claim
for breach of this Agreement arising out of or attributable to the
Sub-Administrator's performance or nonperformance of its duties under the
Sub-Administration Agreement may only be brought by Customer, its rightful
assignee or third-party beneficiary, against the Sub-Administrator, and not
against the Bank. In addition, the Customer shall indemnify and hold the Bank
harmless from and against any and all losses, damages, costs, charges,
reasonable attorneys' fees and expenses, payments and liabilities arising out of
or attributable to Sub-Administrator's conduct in respect of the Customer,
including the Sub-Administrator's performance or nonperformance of its duties
under the Sub-Administration Agreement.
5. REPRESENTATIONS AND WARRANTIES OF CUSTOMER.
The Customer represents and warrants to Bank that:
(a) the Customer is a business trust duly organized and existing and in
good standing under the laws of the State of Delaware;
(b) the Customer is an open-end investment company properly registered
under the 1940 Act; and
(c) all records and regulatory filings of the Customer have been properly
maintained or made in accordance with applicable laws.
23
6. REPRESENTATIONS OF BANK
The Bank represents and warrants to the Customer that:
(a) the Bank is a New York State Chartered Trust Company duly organized
and existing and in good standing under the laws of New York;
(b) the Bank is empowered under applicable laws and by its Charter
Document and By-Laws to enter into and perform this Agreement;
(c) all requisite proceedings have been taken to authorize the Bank to
enter into and perform this Agreement;
(d) the Bank is not a party to any pending or threatened legal proceedings
which would impair its ability to perform the duties and obligations called for
by this Agreement; and
(e) the Bank will only sub-contract with an Other Party to perform
services under this Agreement if such Other Party:
(i) is duly organized, existing and in good standing under the laws
of its state of organization;
(ii) is duly qualified to carry on its business wherever it is
legally required to be so qualified;
(iii) is empowered under applicable laws and by its charter documents
and By-Laws to perform the functions required under Section II. of this
Agreement which the Bank has contracted with it to provide;
(iv) has and will continue to have access to the facilities,
personnel and equipment required to fully perform the functions which the Bank
has contracted with it to provide; and
(v) is not a party to any pending or threatened legal proceedings
which would impair such Other Party's ability to perform the duties and
obligations which the Bank has contracted with it to provide.
7. FEES AND EXPENSES.
(a) The Customer agrees to pay the Bank or its agents for all services to
be provided under this Agreement such amount as may be agreed upon in writing
and as set forth on Schedule F. For any amount of fees that has not been
contested in accordance with Sub-section (e) of this Section III.7., the Bank
shall have a lien on and is authorized to
24
charge the Account of any Series for any amount owing to the Bank by Customer on
behalf of such Series under any provision of this Agreement. The fee schedule
agreed to and as set forth on Schedule F shall be fixed for a period of three
years from the date hereof.
(b) The Bank is, and any Subcustodians are, authorized to charge the
Account of any Series for such items and the Bank shall have a lien, charge and
security interest on any and all Assets of such Series for any amount owing to
the Bank with respect to such Series from time to time under this Agreement.
(c) The Customer may from time to time request additional services,
additional processing, or special reports. The Customer shall submit such
requests in writing together with such specifications and requirements
documentation as may be reasonably required by the Bank. If the Bank elects to
provide such services or arrange for their provision, it shall be entitled to
additional fees and expenses at its customary rates and charges. The Bank's
agreement to perform such additional services shall not be unreasonably
withheld.
(d) The Bank will render, after the close of each month in which services
have been furnished, a statement reflecting all of the charges for such month.
Undisputed charges remaining unpaid after sixty (60) days shall bear interest in
finance charges equivalent to, in the aggregate, the Prime Rate (as determined
by the Bank) plus two percent per year and all costs and expenses of effecting
collection of any such sums, including reasonable attorney's fees, shall be paid
by the Customer to the Bank.
(e) In the event that the Customer is more than ninety (90) days
delinquent in its payments of monthly xxxxxxxx in connection with this Agreement
(with the exception of specific amounts which may be reasonably contested by the
Customer), this Agreement may be terminated upon sixty (60) days' written notice
to the Customer by the Bank. The Customer must notify the Bank in writing of any
contested amounts within thirty (30) days of receipt of a billing for such
amounts. Disputed amounts are not due and payable while they are being
investigated.
8. RECORDS; PROPRIETARY NATURE; DUTY TO MAINTAIN; ACCESS AND INSPECTION;
REPORT ON INTERNAL ACCOUNTING CONTROLS.
(a) Proprietary Nature. The Bank agrees that all accounts, books and
------------------
records of the Bank relating thereto, in its capacity as Custodian under this
Agreement, are the property of the Bank. The Bank agrees that all accounts,
books and records of the Customer maintained in its capacity as Administrator,
Accounting Services and Transfer Agent pursuant to Section 31 of the 1940 Act
and Rule 31a-1 and 31a-2 are the property of the Customer. All books and
records maintained in accordance with this Agreement shall be open to inspection
and audit at all reasonable times during normal business hours by any person
designated by the Customer. All such accounts, books and records shall be
maintained and preserved in the form acceptable to and the periods prescribed by
the Customer and in accordance with and for the periods prescribed by the 1940
Act and the
25
Rules and Regulations thereunder, including, without limitation, Section 31
thereof and Rules 31a-1 and 31a-2 thereunder.
(b) Access and Inspection. The Bank shall assist the Customer, the
---------------------
Customer's independent auditors, or, upon approval of the Customer, any
regulatory body, in any requested review of the Customer's or Series' accounts,
books and records maintained by the Bank in its capacity as Custodian,
Administrative, Accounting or Transfer Agent. The Bank shall be reimbursed by
the Customer for all reasonable expenses incurred in connection with any such
review, other than routine and normal periodic reviews and audits. Bank, in its
capacity as Accounting Agent, will supply the necessary data for the Customer's
or an independent auditor's completion of any necessary tax returns,
questionnaires, periodic reports to shareholders and such other reports and
information requests as the Customer and the Bank shall agree upon from time to
time. In case of any other request or demand for the inspection of any
accounts, books or records maintained by the Bank on Customer's behalf, the Bank
shall not permit such inspection except upon prior written approval of Customer,
which approval shall not be unreasonably withheld.
(c) Records of Subcustodians. Subject to restrictions under applicable
------------------------
law, the Bank shall also obtain from each Subcustodian an undertaking to permit
the Customer's independent public accountants reasonable access to the records
of each Subcustodian which has physical possession of any Assets, as may be
required in connection with the examination of the Customer's books and records.
(d) Report on Internal Accounting Controls. Upon reasonable request from
--------------------------------------
the Customer, the Bank shall furnish the Customer such reports (or portions
thereof) of the Bank's system of internal accounting controls (SAS-70)
applicable to the Bank's duties under this Agreement. The Bank shall use its
reasonable efforts to obtain and furnish the Customer with such similar reports
as it may reasonably request with respect to each Subcustodian and securities
depository holding the Customer's assets.
9. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the administration of the
-----------------------------
Customer's trading and investment activity, the Bank is authorized to enter into
spot or forward foreign exchange contracts with the Customer or an Authorized
Person for the Customer on behalf of a Series on a principal and agency basis
and may also provide foreign exchange through its subsidiaries, affiliates,
Subcustodians or third parties. Instructions, including standing instructions,
may be issued with respect to such contracts but the Bank may establish rules or
limitations concerning any foreign exchange facility made available. In all
cases where the Bank, its subsidiaries, affiliates or Subcustodians enter into a
foreign exchange contract related to Accounts, the terms and conditions of the
then current foreign exchange contract of the Bank, its subsidiary, affiliate or
Subcustodian and, to the extent not inconsistent, this Agreement shall apply to
such transaction.
26
(b) Certification of Residency, etc. The Customer certifies that it is a
--------------------------------
resident of the United States and agrees to notify the Bank of any changes in
residency. The Bank may rely upon this certification or the certification of
such other facts as may be required to administer the Bank's obligations under
this Agreement. The Customer will indemnify the Bank against all losses,
liability, claims or demands arising directly or indirectly from any such
certifications. The indemnification provisions of this Sub-section 9(b) shall
survive termination of this Agreement.
(c) Governing Law; Successors and Assign. This Agreement shall be
------------------------------------
governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.
(d) Entire Agreement; Applicable Riders. This Agreement consists
-----------------------------------
exclusively of this document together with Schedule X0, Xxxxxxxx X0, Xxxxxxxxx
X0, X0, X0, X0, Schedule C, Schedule D, Schedule E, and Schedule F. There are
no other provisions of this Agreement, and this Agreement supersedes any other
agreements, whether written or oral, between the parties. Any amendment to this
Agreement must be in writing, executed by both parties. With respect to the
services required to be provided under Section II. of this Agreement, the Bank
and the Customer may from time to time adopt such procedures to facilitate the
provision of such services, as agreed upon in writing.
(e) Severability. In the event that one or more provisions of this
------------
Agreement are held invalid, illegal or unenforceable in any respect on the basis
of any particular circumstances or in any jurisdiction, the validity, legality
and enforceability of such provision or provisions under other circumstances or
in other jurisdictions and of the remaining provisions will not in any way be
affected or impaired.
(f) Waiver. Except as otherwise provided in this Agreement, no failure or
------
delay on the part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial exercise of any
power or right preclude any other or further exercise, or the exercise of any
other power or right. No waiver by a party of any provision of this Agreement,
or waiver of any breach or default, is effective unless in writing and signed by
the party against whom the waiver is to be enforced.
(g) Notices. All notices under this Agreement shall be effective when
-------
actually received. Any notices or other communications which may be required
under this Agreement are to be sent to the parties at the following addresses or
such other addresses as may subsequently be furnished to the other party in
writing by certified or registered mail, unless otherwise specified in this
Agreement or in the Client Services Guide:
27
Bank: Xxxxxx Xxxxxxx Trust Company
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: President
or facsimile: (000) 000-0000
Customer: The Xxxxxxx Funds
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: President
or facsimile: (000) 000-0000
(h) Term and Termination.
--------------------
(i) This Agreement shall become effective on the date first written
above and shall continue in effect for an initial three year period. The
Agreement may be terminated in its entirety or as to Section I. or Section II.
only prior to the expiration of the initial term only if a party commits a
material breach of any term or condition hereof and any such breach is not cured
or rectified within ninety (90) calendar days after the party claiming the
breach shall have given written notice of such to the other party ("Curable
Breach") except that neither party shall have a right to cure a material breach
resulting from willful misconduct, reckless disregard or intentional misconduct
("Non-curable Breach"). In the event that a Curable Breach is not cured within
such ninety (90) day period, the party claiming a material breach shall have
thirty (30) days to notify the party committing the breach of its intention to
terminate this Agreement in accordance with subparagraph (ii) of Section
III.9.(h).
(ii) The Customer or the Bank may give notification of termination
to the other party following a Non-Curable Breach or following a Curable Breach
which has not been cured or after the initial three year period by giving ninety
(90) days written notice to the other, provided that such notice to the Bank
shall specify the names of the persons to whom the Bank shall deliver the Assets
in the Accounts; and further provided that, if Bank is the terminating party
(other than on account of a material breach hereof by Customer) Customer may
extend the termination period by up to an additional sixty (60) days by sending
prompt written notice ("Extension Notice") to Bank of its intent to do so
(including the number of additional days). If notice of termination is given by
the Bank, the Customer shall, within ninety (90) days (or such other amount of
days as is contemplated by the Extension Notice) following receipt of the
notice, deliver to the Bank Instructions specifying the names of the persons to
whom the Bank shall deliver the Assets. In either case the Bank will deliver the
Assets to the persons so specified, after deducting any amounts which the Bank
determines in good faith to be owed to it under Sub-section 7 of Section III. of
this Agreement.
28
If within ninety (90) days following receipt of a notice of
termination by the Bank, the Bank does not receive Instructions from the
Customer specifying the names of the persons to whom the Bank shall deliver the
Assets, the Bank, at its election, may deliver the Assets to a bank or trust
company doing business in any State within the United States to be held and
disposed of pursuant to the provisions of this Agreement, or to Authorized
Persons, or may continue to hold the Assets until Instructions are provided to
the Bank; provided, however, that the Bank shall have no obligation to settle
-------- -------
any transactions in securities for the Accounts following the expiration of the
ninety (90) day period referred to in this sentence except those transactions
which remained open prior to the expiration of such ninety (90) day period.
(iii) Termination as to One or More Series. This Agreement may be
------------------------------------
terminated as to one or more Series (but less than all of the Series) by
delivery of an amended Schedule B1 deleting such Series, in which case
termination as to such deleted Series shall take effect sixty (60) days after
the date of such delivery. The execution and delivery of an amended Schedule B1
which deletes one or more Series shall constitute a termination of this
Agreement only with respect to such deleted Series, shall be governed by the
preceding provisions of this Sub-section 9(h) of Section III. of this Agreement
as to the identification of a successor custodian and the delivery of Assets of
the Series so deleted to such successor custodian, and shall not affect the
obligations of the Bank and the Customer hereunder with respect to the other
Series set forth in Schedule B1, as amended from time to time.
(i) Several Obligations of the Series. With respect to any obligations of
---------------------------------
the Customer on behalf of the Series and their related Accounts arising out of
this Agreement, the Bank shall look for payment or satisfaction of any
obligation solely to the assets and property of the Series and such Accounts to
which such obligation relates as though the Customer had separately contracted
with the Custodian by separate written instrument with respect to each Series
and its related Accounts.
(j) Representations and Warranties. (A) The Customer represents and
------------------------------
warrants that (i) the execution, delivery and performance of this agreement
(including, without limitation, the ability to obtain the short-term extensions
of credit in accordance with Section I.5.) are within the Customer's and the
Series' power and authority and have been duly authorized by all requisite
action (corporate or otherwise) of the Customer, and (ii) this Agreement and
each extension of short-term credit extended to or arranged for the benefit of
any Series in accordance with Section I.5. shall at all times constitute a
legal, valid and binding obligation of the Customer on behalf of and solely from
the assets attributable to such Series and be enforceable against the Customer
on behalf of and solely from the assets attributable to such Series in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
29
(k) The Bank represents and warrants that (i) the execution, delivery and
performance of this Agreement are within the Bank's power and authority and have
been duly authorized by all requisite action (corporate or otherwise) of the
Bank and (ii) this Agreement constitutes the legal, valid and binding obligation
of the Bank enforceable against the Bank in accordance with its terms, except as
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general and subject to the effect of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).
(l) Force Majeure. Subject to reasonable compliance with the Bank's then-
-------------
existing disaster recovery plans, the Bank shall not be liable for any harm,
loss or damage suffered by the Customer, its investors, or other third parties
or for any failure or delay in performance of the Bank's obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond the Bank's control. In the event of a force majeure, any resulting harm,
loss, damage, failure or delay by the Bank will not give the Customer the right
to terminate this Agreement.
(m) Confidentiality.
---------------
(i) Except to the extent necessary to perform the functions
required under this Agreement, the Bank, its agents and employees shall maintain
the confidentiality of information concerning any Assets held under this
Agreement, including in dealings with affiliates of the Bank. In the event the
Bank or any Subcustodian is requested or required to disclose any confidential
information concerning any such Assets, the Bank shall, to the extent
practicable and legally permissible, promptly notify the Customer of such
request or requirement so that the Bank may seek a protective order or waive any
objection to the Bank's or such Subcustodian's compliance with this Sub-section
9(m). In the absence of such a waiver, if the Bank or such Subcustodian is
compelled, in the opinion of its counsel, to disclose any confidential
information, the Bank or such Subcustodian may disclose such information to such
persons as, in the opinion of counsel, is so required.
(ii) The Customer shall maintain the confidentiality of, and not
provide to any third parties absent the written permission of the Bank, any
computer software, hardware or communications facilities made available to the
Customer or its agents by the Bank.
(iii) Neither the Bank nor any Other Party may create written or
other promotional materials and/or distribute such promotional materials to the
public or to prospective customers or clients which state that it is providing
services to the Customer or any of its affiliates in connection with this
Agreement without the prior verbal or written consent of the Customer, which
consent will not be unreasonably withheld. For purposes of Sub-section 9(m) of
this Agreement, the term "written or other promotional materials" shall mean any
(A) material prepared in connection with the solicitation of prospective or
existing customers; and (B) material published, or designed for use in, a
newspaper, magazine or other periodical, radio, television, telephone or tape
recording, videotape display, signs or
30
billboards, motion pictures, telephone directories (other than routine
listings), electronic or other public media.
THE XXXXXXX FUNDS
By: /s/ E. Xxxxxx XxXxxxxx
------------------------------
Title: President/Treasurer
Date: May 6, 1997
XXXXXX XXXXXXX TRUST COMPANY
By: /s/ X. Xxxxxxxx
------------------------------
Title: Vice President
Date: May 7, 0000
00
XXXXX XX XXXXXXXX )
: SS.
COUNTY OF XXXX )
On this 6th day of May, 1997, before me personally came E. Xxxxxx
XxXxxxxx, to me known, who being by me duly sworn, did depose and say that
he/she resides in Chicago, Illnois at 000 Xxxxx XxXxxxx that he/she is
President/Treasurer of The Xxxxxxx Funds, the entity described in and which
executed the foregoing instrument; that he/she knows the seal of said entity,
that the seal affixed to said instrument is such seal, that it was so affixed by
order of said entity, and that he/she signed his/her name thereto by like order.
/s/ E. Xxxxxx XxXxxxxx
----------------------------
Sworn to before me this 6th
day of May, 1997.
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Notary
"Official Seal"
Xxxxxxx X. Xxxxxxxx
Notary Public, State of Illinois
My commission Expires 04/29/98
00
XXXXX XX XXX XXXX )
: SS.
COUNTY OF KINGS )
On this 7th day of May, 1997, before me personally came Xxxxxxx
Xxxxxxxx, to me known, who being by me duly sworn, did depose and say that
he/she resides in One Pierreport Plaza at Brooklyn, New York, that he/she is a
Vice President of Xxxxxx Xxxxxxx Trust Company the corporation described in and
which executed the foregoing instrument; that he/she knows the seal of said
corporation, that the seal affixed to said instrument is such corporate seal,
that it was so affixed by order of the Board of Trustees of said corporation,
and that he/she signed his/her name thereto by like order.
/s/ X. Xxxxxxxx
-------------------------
Sworn to before me this 7th
day of May, 1997.
/s/ Xxxxxxx Xxxxxx
----------------------------
Notary
Xxxxxxx Xxxxxx
Notary Public; State of New York
No.02SE5039102
Qualified in Kings County
Commission Expires March 6, 1999
33
SCHEDULE A1
-----------
LIST OF SUBCUSTODIANS
---------------------
COUNTRY SUB-CUSTODIAN
------- -------------
Argentina Citibank N.A.
Australia Westpac Banking Corporation
Austria Creditanstalt-Bankverein
Bangladesh Standard Chartered Bank
Belgium Bank Brussels Xxxxxxx X.X.
Botswana Barclays Bank of Botswana Ltd.
Brazil Banco de Boston
Canada The Toronto-Dominion Bank
Canada Royal Bank of Canada*
Chile Citibank N.A.
China Hongkong and Shanghai Banking Corporation
Colombia Cititrust X.X.
Xxxx d'Ivoire Societe Generale
Cyprus Barclays Bank PLC
Czech Republic ING Bank N.V.
Denmark Den Danske Bank
Ecuador Citibank N.A.
Egypt Citibank N.A.
Estonia Hansabank**
Finland Xxxxxx Bank
France Banque Indosuez
Germany Dresdner Bank AG
Ghana Barclays Bank of Ghana Ltd.
Greece Citibank N.A.
Hong Kong Hongkong and Shanghai Banking Corporation
Hungary Citibank Budapest Rt.
India Standard Chartered Bank
India Hongkong and Shanghai Banking Corporation
India MSTC Mumbai Branch
Indonesia Hongkong and Shanghai Banking Corporation
Ireland Allied Irish Banks plc
Israel Bank Leumi
Italy Citibank N.A.
Japan The Bank of Tokyo-Mitsubishi Limited
*Effective May 23, 1997
**Not an eligible foreign custodian under Rule 17f-5
34
LIST OF SUBCUSTODIANS
---------------------
COUNTRY SUB-CUSTODIAN
------- -------------
Japan Xxxxxx Xxxxxxx Japan Limited**
Jordan Arab Bank plc
Kenya Barclays Bank of Kenya Ltd.
Luxembourg Bank Brussels Xxxxxxx X.X.
Malaysia OCBC Bank (Malaysia) Berhad
Mauritius Hongkong and Shanghai Banking Corporation
Mexico Citibank Mexico S.A.
Morocco Banque Commerciale du Maroc
Netherlands ABN AMRO Bank N.V.
New Zealand ANZ Banking Group (New Zealand) Limited
Norway Den Norske Bank
Pakistan Standard Chartered Bank
Papua New Guinea Westpac Banking Corporation
Peru Citibank N.A.
Philippines Hongkong and Shanghai Banking Corporation
Poland Citibank Poland S.A.
Portugal Banco Comercial Portugues
Russia Credit Suisse (Moscow) Ltd.
Singapore Oversea-Chinese Banking Corporation Limited
Slovakia ING Bank N.V.
South Africa First National Bank of Southern Africa, Ltd.
South Korea Standard Chartered Bank
Spain Banco Santander
Sri Lanka Hongkong and Shanghai Banking Corporation
Swaziland Barclays Bank of Swaziland Ltd.
Sweden Svenska Handelsbanken
Switzerland Bank Leu Limited
Taiwan Hongkong and Shanghai Banking Corporation
Thailand Standard Chartered Bank
Tunisia Banque Internationale Arabe de Tunisie**
Turkey Citibank N.A.
UK Barclays Bank PLC
USA Chase Manhattan Bank
Uruguay Citibank N.A.
Venezuela Citibank N.A.
Zambia Barclays Bank of Zambia Ltd.
Zimbabwe Barclays Bank of Zimbabwe Ltd.
**Not an eligible foreign custodian under Rule 17f-5
35
SCHEDULE A2
-----------
LIST OF SECURITIES DEPOSITORIES OR CLEARING AGENCIES
----------------------------------------------------
COUNTRY CENTRAL DEPOSITORY
------- ------------------
Argentina Caja de Valores
Australia CHESS Clearing House Electronic
Subregister System
Austria OKB OsterreicheKontrollbank
Bangladesh None
Belgium CIK Caisse Interprofessionelle de
Depots et de Virements de
Titres
Botswana None
Brazil BOVESPA Bolsa de Valores de Sao Paulo
BVRJ Bolsa de Valores de Rio de
Janeiro
CETIP - fixed income Central de Custodia e
Liquidacao Financeira de
Titulos
SELIC - fixed income Sistema Especial de Liquidacao
e Custodia
Canada CDS The Canadian Depository for
Securities
Chile Depositorio Central de
Valores
China SSCCRC Shanghai Securities Central
Clearing and Registration
Corporation
SSCC Shenzhen Securities Central
Clearing Company Ltd.
Colombia DCV - central bank Deposito Central de Valores
securities
DECEVAL - fixed income
securities
Cote d'Ivoire None
Cyprus None
Czech Republic SCP Stredisko cennych papiru
(Center for Securities)
Denmark VP Vaerdipapircentralen
Ecuador None
Egypt None
36
COUNTRY CENTRAL DEPOSITORY
------- ------------------
Finland None
France SICOVAM Societe Interprofessionelle pour
la Compensation des Valeurs
Mobilieres
Germany DKV Deutscher Kassenverein AG
Ghana None
Greece Apothetirio Titlon A.E.
Hong Kong CCASS Central Clearing and Settlement
System
Hungary KELER Kozponti Elszamolohas es
Ertktar (Budapest) Rt.
India National Securities National Securities Depository
Depository Limited Limited
Indonesia KDEI Kustodian Depositari Efek
Indonesia
Ireland CGO - gilts only Central Gilts Office
Xxxxxx XXXX (for securities Stock Exchange Clearing House
listed
on the Tel Aviv Stock
Exchange)
Italy Monte Titoli S.P.A.
Banco d'Italia
Japan JASDEC Japan Securities Depository
Center
Jordan None
Kenya None
South Korea KSD Korean Securities Depository
Luxembourg None
Malaysia MCD Malaysian Central Depository
Mauritius None
Mexico S.D. INDEVAL, S.A.
Morocco None
Netherlands NECIGEF Netherlands Central Institute for
Giral Effectenclearing
New Zealand
NZCSD New Zealand Central Securities
Depository
Norway VPS Verdipapirsentralen
Pakistan CDC Central Depository Company of
Pakistan
Papua New CHESS Clearing House Electronic
Guinea Subregister System
Peru Caja de Xxxxxxx Xxxx xx Xxxxxxx xx Xxxx
00
COUNTRY CENTRAL DEPOSITORY
------- ------------------
Philippines PCD Philippines Central Depository
Poland NDS National Depository of
Securities
Portugal CENTRAL
Russia None
Singapore CDP Central Depository Pte Ltd.
Slovak Republic SCP Stredisko cennych papierov
Slovenskej Republiky (Center
for Securities)
South Africa Central Depository Ltd.
Spain SCLV Xxxxxxxx xx Xxxxxxxxxxxx x
Xxxxxxxxxxx xx Xxxxxxx
Xxx Xxxxx CDS Central Depository System Pvt
Ltd.
Swaziland None
Sweden VPS Vardipapperscentralen
Switzerland SEGA Schweizerische EffektenGiro
AG
Taiwan TSCD Taiwan Securities Depository
Co.
Thailand SDC or TSD Thailand Securities
Depository
Center
Tunisia
Turkey None
United Kingdom CGO - gilts only Central Gilts Office
CREST
United States DTC Depository Trust Company
Uruguay None
Venezuela None
Zambia Lusaka Stock Exchange
Depository
Zimbabwe None
38
SCHEDULE B1
-----------
LIST OF SERIES OF THE XXXXXXX FUNDS
-----------------------------------
Global Fund
Global Equity Fund
Global Bond Fund
U.S. Balanced Fund
U.S. Equity Fund
U.S. Bond Fund
Non-U.S. Equity Fund
39
SCHEDULE B2
-----------
LIST OF DOCUMENTS TO BE PROVIDED BY CUSTOMER TO BANK
----------------------------------------------------
REQUIRED DOCUMENTATION FOR CORE CUSTODIAL SERVICES (INCLUDING TAX RECLAIMS):
---------------------------------------------------------------------------
CUSTODY AGREEMENT
CLIENT SERVICES GUIDE (INCLUDING APPENDICES)
FEE SCHEDULE/BILLING GUIDE
GENERAL ACCOUNT INFORMATION
US TAX AUTHORITY DOCUMENTATION
LOCAL TAX OFFICE LETTER/APPLICATION LETTER
(NON-UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
FORM 6166/REQUEST FOR FOREIGN CERTIFICATION FORM
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
CERTIFICATION OF BENEFICIAL OWNERSHIP, LEGAL NAME, LEGAL RESIDENCY, TAX STATUS
AND TAX IDS
TAX RECLAIM POWER OF ATTORNEY
PREVIOUS TAX RECLAIM FILING INFORMATION
(PREVIOUS FILERS, ONLY)
UK TAX AUTHORITY DOCUMENTATION
SOPHISTICATED INVESTOR (ACCREDITED INVESTOR LETTER)
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
40
DOCUMENTATION THAT IS REQUIRED FROM AN ENTITY CLASSIFIED AS TAX-EXEMPT BY ITS
-----------------------------------------------------------------------------
LOCAL TAX AUTHORITY:
-------------------
UK FORM 4338
(EXEMPT NON-UNITED KINGDOM-RESIDENT BENEFICIAL OWNERS, ONLY)
UK FORM 309A
(EXEMPT UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
FOREIGN EXEMPTION LETTERS/APPLICATION FOR AUSTRALIAN EXEMPTION LETTER
(EXEMPT BENEFICIAL OWNERS, ONLY)
DOCUMENTATION THAT IS REQUIRED ONLY IF YOU WILL DEAL IN CERTAIN SECURITIES:
--------------------------------------------------------------------------
THAI AUTHORIZATION LETTER
JGB INDEMNIFICATION LETTER
KOREAN SECURITIES POWER OF ATTORNEY
NEW ZEALAND "APPROVED ISSUER LEVY" LETTER
SPANISH POWER OF ATTORNEY WITH APOSTILE
ITALIAN GOVERNMENT BOND LETTER
UK STAR LETTER
41
[LETTER HEAD OF THE XXXXXXX FUNDS]
SCHEDULE B3
-----------
LIST OF AUTHORIZED PERSONS
--------------------------
THE XXXXXXX FUNDS
The following is a list of individuals at The Xxxxxxx Funds who are authorized
to originate trades on behalf of The Xxxxxxx Funds. All prior authorizations are
superseded by this list.
INITIALS
/s/ Xxxxxxx X. Xxxxxxxx M.A.
----------------------------- ------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxx S.A.
----------------------------- ------
Xxxxxxx X. Xxxx
/s/ Xxxxxxx X. Xxxxxxx X.X.
----------------------------- ------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxxxxxx Xxxxxxxxx C.B.
----------------------------- ------
Xxxxxxxxxxx Xxxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx T.C.
----------------------------- ------
Xxxxxx X. Xxxxxxxx
/s/ Xxxx X. Xxxxxx P.H.
----------------------------- ------
Xxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx D.L.H
----------------------------- ------
Xxxxxx X. Xxxxx
/s/ B. Xxxxx Xxxxxx B.C.H
----------------------------- ------
B. Xxxxx Xxxxxx
/s/ Xxxxxx X. Xxxxxxx D.J.
----------------------------- ------
Xxxxxx X. Xxxxxxx
/s/ Xxxx Xxxxxxxx K.K.
----------------------------- ------
Xxxx Xxxxxxxx
/s/ Xxxxx X. Xxxx X.X.
----------------------------- ------
Xxxxx X. Xxxx
/s/ Xxxxxxxxx X. XxXxxxxxx C.M.M
----------------------------- ------
Xxxxxxxxx X. XxXxxxxxx
/s/ Xxxxx X. Xxxxxx X.X.
----------------------------- ------
Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxxx W.L.N.
----------------------------- -------
Xxxxx X. Xxxxxxxxx
/s/ Xxxxxx X. Xxxxx P.S.
----------------------------- ------
Xxxxxx X. Xxxxx
/s/ Xxxx X. Xxxxxx M.S.
----------------------------- ------
Xxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxx G.P.S.
----------------------------- -------
Xxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxx D.S.
----------------------------- ------
Xxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxxx A.M.T
----------------------------- ------
Xxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx X.X.
----------------------------- ------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxx Xxxxxx M.W.
----------------------------- ------
Xxxx Xxxxxx
/s/ Xxxxx X. Xxxxxxx X.X.
----------------------------- ------
Xxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxx J.Z.
----------------------------- ------
Xxxx X. Xxxxx
The following is a list of individuals at The Xxxxxxx Funds who are authorized
to originate memos and other instructions, EXCLUDING CASH MOVEMENTS. All prior
authorizations are superseded by this list.
INITIALS
--------
/s/ Xxxxxx X. Xxxxxxxx X.X.
----------------------------- ------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxx D.F.
----------------------------- ------
Xxxxx X. Xxxxx
/s/ Xxxx X. Xxxxx X.X.
----------------------------- ------
Xxxx X. Xxxxx
/s/ Xxxxxxxx X. Xxxxx X.X.
----------------------------- ------
Xxxxxxxx X. Xxxxx
/s/ Xxxx-Xxxx X. Le D.L.
----------------------------- ------
Xxxx-Xxxx X. Le
/s/ Xxxxxx X. Xxxxxx A.S.
----------------------------- ------
Xxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxx T.W.
----------------------------- ------
Xxxxx X. Xxxxxxxx
The following is a list of individuals at The Xxxxxxx Funds who are authorized
to originate memos and other instructions, AS WELL AS INITIATE CASH MOVEMENTS:
/s/ Xxxxxx X. Xxxxxxxx X.X.
----------------------------- ------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxx C.M.B
----------------------------- ------
Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxx R.C.C
----------------------------- ------
Xxxxxxx X. Xxxx
/s/ Xxxxxxx X. Xxxxxxxxx J.J.D
----------------------------- ------
Xxxxxxx X. Xxxxxxxxx
/s/ Xxxxxx X. Xxxxxxx T.J.D
----------------------------- ------
Xxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxx M.D.
----------------------------- ------
Xxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxx D.L.H
----------------------------- ------
Xxxxxx X. Xxxxx
/s/ E. Xxxxxx XxXxxxxx E.M.
----------------------------- ------
E. Xxxxxx XxXxxxxx
/s/ Xxxxxxxxx X. Xxxxxx C.M.
----------------------------- ------
Xxxxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxx D.L.N
----------------------------- ------
Xxxxx X. Xxxxxxx
/s/ Xxxxxxxx X. Xxxxxx N.C.R
----------------------------- ------
Xxxxxxxx X. Xxxxxx
[LETTER HEAD OF CHASE]
DATE: April 8, 1997
TO: Xxxxx Xxxxxxx
FROM: Xxxxx Xxxxxx L.K.
RE: Funds Transfer Authorization
The following is a list of Chase Global Funds Services Company
personnel authorized to instruct MSTC to transfer funds between the
transfer agent operating accounts and the Xxxxxxx Mutual Fund custody
accounts.
NAME TITLE SIGNATURE
---- ----- ---------
Xxxxxx Xxxxxx Vice President /s/ Xxxxxx Xxxxxx
----------------------
Xxxx X'Xxxxx Assistant Treasurer /s/ Xxxx X'Xxxxx
-----------------------
Xxxxx Xxxxx Assistant Treasurer /s/ Xxxxx Xxxxx
-----------------------
Xxxx Xxxxxxxx Assistant Treasurer /s/ Xxxx Xxxxxxxx
-----------------------
Xxxx Xxxxx Assistant Treasurer /s/ Xxxx Xxxxx
-----------------------
Xxxxx XxXxxxx Senior Control Accountant /s/ Xxxxx XxXxxxx
-----------------------
Xxxxxx XxXxxxxxxxxx Senior Control Accountant /s/ Xxxxxx XxXxxxxxxxxx
-----------------------
Should you have any questions, please contact me at (000) 000-0000 or Xxx Xxxxxx
at (000) 000-0000. Thank You.
[LETTER HEAD OF SBC XXXXXXX]
Cont/...
LIST OF AUTHORISED SIGNATURES - APRIL 10, 1997
----------------------------------------------
PRINTED NAME SIGNATURE
Xxxxxxxxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxxx Xxx /s/ X. Xxx
-------------------------
Xxxxxx Xxxx /s/ G. Lock
-------------------------
Xxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxxx Xxxxx /s/ X. Xxxxx
-------------------------
Xxxx Mint /s/ T. Mint
-------------------------
Xxxx-Xxxxx Xxxxxx /s/ A. Parish
-------------------------
Xxxxxxx Xxxxxxxx /s/ X. Xxxxxxxx
-------------------------
Xxxx Xxxxxx /s/ X. Xxxxxx
-------------------------
Xxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Barrie Senior /s/ B. Senior
-------------------------
Xxxxx Xxxxxxxxx /s/ X. Xxxxxxxxx
-------------------------
Xxxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxxx Xxxx /s/ X. Xxxx
-------------------------
Xxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxx Xxxxxxxx /s/ D. Blaskett
-------------------------
Xxxx Xxxxxx /s/ X. Xxxxxx
-------------------------
Xxxxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxx Xxxxxx /s/ X. Xxxxxx
-------------------------
Xxxxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxxxx Xxxxxx /s/ X. Xxxxxx
-------------------------
Xxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxxxx Xxxxxx /s/ X. Xxxxxx
-------------------------
Xxxx Xxxx /s/ X. Xxxx
-------------------------
Xxxxxxx Xxxxx /s/ X. Xxxxx
-------------------------
Nigel Head /s/ N. Head
-------------------------
Xxxxx Xxxxxx /s/ X. Xxxxxx
-------------------------
Xxxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxxxx Xxxxxxx /s/ X. Xxxxxxx
-------------------------
Xxxxxxx Xxxxxxxxx /s/ X. Xxxxxxxxx
-------------------------
SCHEDULE B4
-----------
THE XXXXXXX FUNDS
-----------------
DESIGNATED SYSTEM USER ID NUMBERS
---------------------------------
Chase Global Funds Services
User Id Email Id
------- --------
ECH1924 ECH1924
ECH1925 ECH1925
ECH1926 ECH1926
ECH1927 ECH1927
ECH1928 ECH1928
ECH1929 ECH1929
ECH1930 ECH1930
ECH1931 ECH1931
ECH1932 ECH1932
ECH1933 ECH1933
ECH1934 ECH1934
ECH1935 ECH1935
ECH1936 ECH1936
ECH1937 ECH1937
Xxxxxxx Partners, Inc.
EBP1757 BRNSYST1
EBP1784 BRNCFND1
EBP1787 BRNPRIV1
EBP1788 BRNUSEQ1
EBP1789 BRNUSFI1
EBP1790 BRNCORP
EBP1791 BRNPRIV2
EBP1792 XXXXXXX0
XXX0000 BRNMNY
EBP1941 EBP1941
43
SCHEDULE C
----------
THE XXXXXXX FUNDS
-----------------
GENERAL DESCRIPTION OF FUND ADMINISTRATIVE SERVICES
---------------------------------------------------
I. REGULATORY COMPLIANCE
---------------------
A. Compliance - Federal Investment Company Act of 1940
1. Review, report and renew
a. Investment advisory contracts
b. File and monitor compliance of fidelity bond
c. Underwriting contract
d. Distribution (12b-1) plans (class specific)
e. Multiple Services Agreement
2. Filings
a. N-SAR (semi-annual report and annual report) (series and
class specific)
b. Initial registration statement on Form N-1A, post-effective
amendments on Form N-1A, and supplements ("stickers")
c. Notice pursuant to Rule 24f-2 (registration of indefinite
number of shares)
d. Filing fidelity bond under Rule 17g-1
e. Filing shareholders reports under Rule 30b2-1
f. Proxy statement, when necessary
3. Annual up-dates of biographical information and questionnaires
for Trustees and Officers, coordinated with the Xxxxxxx
Relationship Funds' questionnaire.
B. Compliance - State "Blue Sky" (classes deemed separate funds for
filing purposes)
1. Blue Sky (state registration)
a. Registration shares (initial/renewal)
b. Monitor sales shares
c. Report shares sold
d. Filing of federal registration statements and contracts
e. Filing annual and semi-annual reports with states
44
SCHEDULE C
----------
C. Compliance - Prospectus
1. Analyze and review portfolio reports from Adviser regarding:
a. compliance with investment objectives, although primary
responsibility for such compliance will be with the
investment adviser or investment manager.
b. maximum investment by company/industry, although primary
responsibility for such compliance will be with the
investment adviser or investment manager.
D. Compliance - Exemptive Orders and No-Action Letters
1. Monitor compliance with all exemptive orders and no-action
letters, although primary responsibility for such compliance will
be with the investment adviser or investment manager.
II. CORPORATE BUSINESS AND SHAREHOLDER/PUBLIC INFORMATION
-----------------------------------------------------
A. Trustees/Management
1. Preparation of meetings
a. agendas and resolutions - all necessary items of compliance
b. compile and distribute Board materials
c. attend and record minutes of meetings
d. keep attendance records
e. maintain corporate records/minute book
2. Preparation and distribution of periodic operation reports to
management
B. Maintain Corporate Calendars and Files
1. General
2. Blue Sky
C. Release Corporate Information
1. To shareholders
2. To financial and general press
3. To industry publications
a. distributions (dividends and capital gains)
b. tax information
c. changes to prospectus
d. letters from management
45
SCHEDULE C
----------
e. performance information (class specific)
4. Respond to:
a. financial press, as authorized
b. miscellaneous shareholder inquiries
c. industry questionnaires
5. Prepare, maintain and update monthly information manual
D. Communications to Shareholders
1. Coordinate printing and distribution of annual and semi-annual
reports, proxy statements when applicable and prospectuses
E. Shareholder Meetings
1. Assist with Preparation of proxy (matters to be voted on may be
class specific)
2. Preparation of minutes and record ballot results
III. FINANCIAL AND MANAGEMENT REPORTING
----------------------------------
A. Income and Expenses (class specific when applicable)
1. Preparation of monthly expense analysis (class specific)
2. Expense figures calculated and accrual levels set (class
specific)
3. Monitoring of expenses paid and expense caps (monthly)
4. Approve and process the payment of authorized expenses
5. Checking Account Reconciliation (monthly)
6. Write checks to pay vendors
7. Calculation and payment of advisory fees
B. Distributions to Shareholders (if applicable)
1. Projections of distribution amounts
a. compliance with Sub-Chapter M income tax provisions
b. compliance with excise tax provisions - schedules prepared
2. Compilation of distributions for tax reporting for shareholders'
Form 1099
C. Financial Reporting
1. Liaison between fund management and auditors
46
SCHEDULE C
----------
2. Preparation of unaudited and audited financial statements to
shareholders (semi-annually) (class specific, when applicable)
- Statement of Assets and Liabilities - shares, TNA and NAV at
class level
- Statement of Operations - prepared at fund level
- Statement of Changes in Net Assets - distributions and
capital stock at class level
- Financial Highlights (class specific)
- per share data/analysis (class specific)
- Footnotes
- Schedule of Investments
3. 60 day delivery to SEC and shareholders
4. Preparation of semi-annual and annual N-SARs and Financial Data
Sheet (Financial Information)
5. Preparation of Post-effective financial statements (if
applicable)
6. Provide work area for auditors
D. Other Financial Analyses
1. Sales information, portfolio turnover (monthly)
2. Performance Calculations (monthly) (class specific)
3. 1099 Miscellaneous - prepared for Directors/Trustees (annually)
4. 1099 Dividend insert card prepared - coordinate printing and
mailing (annually)
5. 1099-DIV Form - validate per share amounts and tax status
(annually)
E. Review and Monitoring Functions
1. Review accruals and reclassification entries (class specific)
2. Review Financial Reporting generated entries to ensure proper
update by accounting, ensure proper money movement by reviewing
bank statements, expense analysis. Review capital stock
reconciliations.
3. Asset Diversification (Sub-Chapter M and 0000 Xxx) and Income
Qualification Tests (Sub-Chapter M)
47
SCHEDULE C
----------
F. Preparation and distribution of monthly operational reports to
management by 10th business day
1. Management Statistics (Recap) -when applicable
a. portfolio (including top ten holdings)
b. book gains/losses/per share
c. net income, book income/per share
d. share/shareholders
e. distributions
2. Performance Analysis (per class)
a. total return
b. monthly, quarterly, year to date, average annually
c. calculation of SEC yield in accordance with SEC guidelines
and interpretations and as mutually agreed upon with
Customer.
3. Short-Short Analysis
a. short-short income
x. xxxxx income (components)
4. Portfolio Turnover
a. market value
b. cost of purchases
c. net proceeds of sales
d. average market value
5. Asset Diversification Test
x. xxxxx assets
b. non-qualifying assets
c. 5% issuers
6. Activity Summary
a. shares sold, redeemed and reinvested
b. change in investment
c. change in price per share
d. net sales
7. Expense Ratios - (per class)
a. per quarter
b. semi-annual
c. annual
G. Provide rating agencies with statistical data on a monthly and
quarterly basis
48
SCHEDULE C
----------
H. For Money Market Funds -weekly Xxxx-to-Market review
- 5% test
- NAV variance
IV. SPECIAL ISSUES RELATED TO FOREIGN INVESTMENTS
---------------------------------------------
A. Financial Reporting
1. Review and monitor treatment of currency gain/loss and capital
gain/loss
a. section 988 transactions
b. section 1256 contracts
c. section 1092 deferrals
d. maintain reconciliation of portfolio forward realized
gains/losses
B. Tax Reporting (work closely with the Funds' independent audit firm)
1. Determine tax treatment of foreign investments and their impact
on taxable income and capital gains
2. Calculate distributions to shareholders (if applicable)
a. monitor character and impact of realized currency gain/loss
on distribution amount
b. adherence to 988(a)(1)(b) election (if applicable)
c. identify and compute book/tax difference
d. preparation of distribution worksheet
3. Calculate income (reclaims) and expenses (tax withheld) by
country in order to determine foreign tax credit available to
shareholders (if appropriate)
4. Work with the advisor and independent audit firm in the
identification of Passive Foreign Investment Companies (if
appropriate), although primary responsibility will be with the
investment adviser or investment manager
5. Calculate Dividend Received Deduction available to corporate
shareholders and analyze domestic equity security holding periods
6. Preparation and maintenance of straddle schedules
7. Identification and compliance with the xxxx-to-market rules
49
SCHEDULE C
----------
8. Prepare return of capital worksheet for financial statement
presentation with auditor review/discussion, if necessary
9. Provide schedules to auditors for audit/tax review to enable the
audit firm to prepare and file the necessary tax forms (1120,
8613, K-1, etc.)
V. OTHER ADMINISTRATIVE SERVICES WHICH MAY BE PERFORMED BY OTHER PARTY
-------------------------------------------------------------------
A. The provision of information to the Funds with respect to regulatory
matters, including monitoring regulatory and legislative developments
that may affect the Funds and assisting the Funds in routine
regulatory examinations or investigations.
B. Generally, assisting in all aspects of the Funds' operations and
providing general consulting services on a day to day, as needed,
basis.
C. In connection with the foregoing activities, maintenance of an office
facility; and
D. In connection with the foregoing activities, the furnishing of
clerical services and internal executive and administrative services,
stationery and office supplies; and
E. The maintenance by FDI of all books and records relating to its
services to the Funds in accordance with Rule 31a-1 under the 1940
Act.
50
SCHEDULE D
----------
THE XXXXXXX FUNDS
-----------------
DESCRIPTION OF FUND ACCOUNTING SERVICES
---------------------------------------
DAILY ACCOUNTING SERVICES
--------------------------
1) Maintain the books and records of each Series and each Class within the
-----------------------------------------------------------------------
Series.
------
2) Calculate Net Asset Value (and Offering Price) Per Share, at both a Series
--------------------------------------------------------------------------
level and on Class level:
------------------------
. Enter manual prices supplied by Customer and/or broker.
. Review variance reporting on-line and in hard copy for price changes
in individual securities using variance levels established by
Customer. Verify US dollar security prices exceeding variance levels
by notifying Customer and pricing sources, of noted variance.
. Complete daily variance review on foreign exchange rates and local
foreign prices. Notify Customer of changes exceeding established
levels for the Customer's verification.
3) Reconcile and Record All Daily Expense Accruals; on a Series level and on
-------------------------------------------------------------------------
Class level.
-----------
4) Verify and Record All Daily Income Accruals for Debt Issues, on a Series
------------------------------------------------------------------------
level and on Class level, if necessary.
--------------------------------------
5) Record Corporate Action, Cash Dividends and Capital changes on Securities,
--------------------------------------------------------------------------
on a Series level and on Class level.
------------------------------------
6) Record all Security Trades based on instruction from the Customer, on a
-----------------------------------------------------------------------
Series level and Class level.
----------------------------
7) Record All Series Share Transactions.
------------------------------------
8) Review and Reconcile With Custodian Statements:
----------------------------------------------
. Track status of past due items and failed trades handled by the
Custodian.
51
SCHEDULE D
----------
9) Submission of Daily Accounting Reports as agreed to from time to time by
------------------------------------------------------------------------
Bank and Customer:
-----------------
. Bank represents that all Customer Information, in whatever form, is
the property of the Customer.
MONTHLY ACCOUNTING SERVICES
---------------------------
1) For the Series, full Financial Statement Preparation (automated Statements
--------------------------------------------------------------------------
of Assets and Liabilities, of Operations and of Changes in Net Assets) and
--------------------------------------------------------------------------
submission to Customer by 10th Business Day.
-------------------------------------------
. Class specific capital share activity and expenses will be disclosed
also.
2) Submission of Monthly Reports Series Level:
------------------------------------------
. Security Purchase/Sales Journal.
. Interest and Maturity Report.
. Brokers Ledger (Commission Report).
. Security Ledger Transaction Report with Realized Gains/Losses.
. Security Ledger Tax Lot Holdings Report.
. Additional reports available upon request.
3) Reconcile Accounting Asset Listing to Custodian Asset Listing:
-------------------------------------------------------------
Series Level
. Report any security balance discrepancies to the Custodian/Customer.
4) Provide Monthly Analysis and Reconciliation of Additional Trial Balance
-----------------------------------------------------------------------
Accounts, such as:
-----------------
Series Level
. Security cost and realized gains/losses.
. Interest/dividend receivable and income.
. Payable/receivable for securities purchased and sold.
. Unrealized and realized currency gains/losses.
Series and Each Class
. Payable/receivable for Fund shares; issued and redeemed
. Expense payments and accruals analysis
52
SCHEDULE D
----------
ANNUAL (AND SEMI-ANNUAL) ACCOUNTING SERVICES
--------------------------------------------
1) Assist and supply auditors with schedules supporting securities and
shareholder transactions, income and expense accruals, etc. for the Series
and each Class during the year in accordance with standard audit assistance
requirements. Provide reasonable space and necessary personnel to
accommodate auditors.
2) Provide NSAR Reporting (Accounting Questions).
---------------------------------------------
3) If Appropriate, Prepare and Submit Annually During the Excise Reporting
-----------------------------------------------------------------------
Period (October-December) to the Customer at the Series level:
-------------------------------------------------------------
. Income by state reporting.
. Standard Industry Code Valuation Report.
. Alternative Minimum Tax Income segregation schedule.
53
SCHEDULE E
----------
THE XXXXXXX FUNDS
-----------------
DESCRIPTION OF TRANSFER AGENCY
------------------------------
I. SHAREHOLDERS FILE
1. Establish new accounts and enter demographic data into shareholder
base. Includes review and file maintenance for all NSCC originated
registration and data changes for FundServ, Networking and ACTS
accounts for compliance with Investar customer file requirements.
2. Create Combined Statement File to link accounts within the Fund and
across funds within the Fund Group. Facilitates account maintenance,
lead tracking, quality control, household mailings and combined
statements.
3. Systematic linkage of shareholder accounts with exact matches on
Social Security Number and address for the purpose of consolidated
account history reporting. Monthly production of laser printed
combined statements.
4. Production of mailing labels which enable the Fund to do special
mailings to each address in the Fund Group rather than each account.
5. Maintain account and customer file records based on shareholder
request and routine quality review.
6. Maintain tax ID certification and NRA records for each account,
including backup withholding.
7. Produce shareholder statements for daily activity, dividends, on-
request, third party and monthly mailings.
8. Produce shareholder lists, labels and ad hoc reports to Fund
management as requested.
9. Automated processing of dividends and capital gains with daily,
monthly, quarterly or annual distributions. Payment options include
reinvestment, directed payment to another fund, cash via mail, Fed
wire or ACH.
10. Coordination of registration of the Funds with the National Securities
Clearing Corporation ("NSCC") and filing of required Fund/SERV reports
with the NSCC.
54
SCHEDULE E
----------
II. SHAREHOLDER SERVICES
1. Answer shareholder calls: provide routine account information,
transaction details including direct and wire purchases, redemptions,
exchanges, systematic withdrawals, pre-authorized drafts, Fund SERV
and wire order trades, problem solving and process telephone
transactions.
2. Customized recording of fund prices daily after regular business hours
for shareholder access.
3. Silent monitoring of shareholder class by the phone supervisor to
ensure quality of customer service.
4. Record and maintain tape recordings of all shareholder calls for a six
month period.
5. Systematic production of daily management reports of shareholder calls
which track volumes, length of calls, average wait time and abandoned
call rates to ensure quality service.
6. Customer inquiries received by letter or telephone are researched by a
correspondence team member. These inquires include such items as,
account/customer file information, complete historical account
information, stop payments on checks, transaction details and lost
certificates.
III. INVESTMENT PROCESSING
1. Initial and subsequent investments by checks, Fed wire, or Automated
Clearing House ("ACH").
2. Pre-authorized investment (PAD) through ACH system.
3. Prepare and process daily bank deposit of shareholder investments.
4. NSCC - FundSERV and networking trades.
IV. REDEMPTION PROCESSING
1. Process letter redemption requests.
2. Process telephone redemption transactions.
55
SCHEDULE E
----------
3. Establish Systematic Withdrawal File and process automated
transactions on monthly basis.
4. Issue checkbooks and process checkbook redemptions through agent bank.
5. Redemption proceeds distributed to shareholder by check, Fed wire or
ACH processing.
6. Provide NSCC - FundSERV and networking trade processing.
V. EXCHANGE & TRADE PROCESSING
1. Process legal transfers.
2. Issue and cancel certificates.
3. Replace certificates through surety bonds (separate charge to
shareholder).
4. Process exchange transactions (letter and telephone request).
5. Process ACATS transfers.
VI. RETIREMENT PLANS
1. Fund sponsored IRAs offered using Chase as custodian. Services
include:
a. Contribution processing
b. Distribution processing
c. Apply rollover transactions
d. Process Transfer of Assets
e. Letters of Acceptance to prior custodians
f. Notify XXX holders of 70 1/2 requirements
g. Calculate Required Minimum Distributions
h. Maintain beneficiary information file
i. Solicit birth date information
2. Fund sponsored SEP-XXX plans offered using Chase as custodian.
Services include those listed under IRAs and:
a. Identification of employer contributions
3. Fund sponsored Qualified plans (401(k) and 403(b) only) offered.
56
SCHEDULE E
----------
a. Omnibus account processing only
b. Produce annual statements (omnibus account only)
c. Process contributions (omnibus account only)
d. Process distributions (omnibus account only)
e. Process rollover and Transfer of Assets transactions (omnibus
account only)
VII. SETTLEMENT & CONTROL
1. Daily review of processed shareholder transactions to assure input was
processed correctly. Accurate trade activity figures passed to Fund's
Accounting Agent by 10:00am EST.
2. Preparation of daily cash movement information to be passed to the
Fund's Accounting Agent and Custodian Bank by 10:00am EST for use in
determining Fund's daily cash availability.
3. Prepare a daily share reconcilement which balances the shares on the
Transfer Agent system to those on the books of the Fund.
4. Resolve any outstanding share or cash issues that are not cleared.
5. Process shareholder adjustments to include the proper notification of
any booking entries needed, as well as any necessary cash movement.
6. Settlement and review of Fund's declared dividends and capital gains
to include the following:
a. Review record date report for accuracy of shares.
b. Preparation of dividend settlement report after dividend is
posted. Verify the posting date shares, the rates used and the
NAV price of reinvest date to ensure dividend was posted
properly.
c. Distribute copies to the Fund's Accounting Agent.
d. Preparation of the checks prior to being mailed.
e. Sending of any dividends via wires if requested.
f. Preparation of cash movement information for each portion of the
dividend payout on payable date.
7. Placement of stop payments on dividend and liquidation checks as well
as the issuance of their replacements.
8. Maintain inventory control for stock certificates and dividend check
form.
57
SCHEDULE E
----------
9. Monthly deposits to the IRS of all taxes withheld from shareholder
disbursements, distributions and foreign account distributions.
Correspond with the IRS concerning any of the above issues.
10. Timely settlement and cash movement for all NSCC/FundSERV activity.
VIII. YEAR END PROCESSING
1. Maintain shareholder records in accordance with IRS notices for under-
reporting and invalid Tax Ids. This includes initiating 31% backup
withholding and notifying shareholders of their tax status and the
corrective action which is needed.
2. Conduct annual W-9 solicitation of all uncertified accounts. Update
account tax status to reflect backup withholding or certified status
depending upon responses.
3. Conduct periodic W-8 solicitation of all non-resident alien
shareholder accounts. Update account tax status with updated
shareholder information and treaty rates for NRA tax.
4. Review IRS Revenue Procedures for changes in transaction and
distribution reporting and specifications for the production of forms
to ensure compliance.
5. Coordinate year end activity with client. Activities include
producing year end statement, scheduling record dates for year
dividends and capital gains, production of combined statements,
printing of inserts to be mailed with tax forms.
6. Distribute Dividend Letter to funds for them to sign off on all
distributions paid year to date. Dates and rates must be authorized
so that they can be used for reporting to the IRS.
7. Coordinate the ordering of form stock and envelopes from vendor in
preparation of tax reporting. Review against IRS requirements to
ensure accuracy.
8. Prepare form flashes for the microfiche or microfilm vendor. Test and
oversee the production of fiche or film for year end statements and
tax forms.
58
SCHEDULE E
----------
9. Match and settle tax reporting totals to fund records and on-line data
from Investar.
10. Produce forms 1099R, 1099B, 1099Div, 5498, 1042S and year end
valuations. Quality assure forms before mailing to shareholders.
11. Monitor IRS deadlines and special events such as cross over dividends
and prior year XXX contributions.
12. Prepare IRS magnetic tapes and appropriate forms for the filing of all
reportable activity to the Internal Revenue Service.
IX. CLIENT SERVICES
1. An Account Manager is assigned to each relationship. The Account
Manager acts as the liaison between the Fund and the Transfer Agency
staff. Responsibilities include scheduling of events, system
enhancement implementation, special promotion/event implementation and
follow-up, and constant fund interaction on daily operational issues.
Specifically:
a. Scheduling of dividends, proxies, report mailing and special
mailings.
b. Coordinate with the Fund the shipment of materials for scheduled
mailings.
c. Liaison between the Fund and support services for preparation of
proofs and eventual printing of statement forms, certificates,
proxy cards, envelopes.
d. Handle all notification regarding proxy tabulation through the
meeting. Coordinate scheduling of materials, including voted
cards, tabulation letters, and shareholder list, to be available
for the meeting.
e. Order special reports, tapes, discs for special systems requests
received.
f. Implement new operational procedures, e.g., check writing
feature, load discounts, minimum waivers, sweeps, telephone
options, PAD promotions.
g. Coordinate with systems, services and operations on special
events, e.g., mergers, new fund start ups, small account
liquidations, combined statements, household mailings, additional
mail files.
h. Prepare standard operating procedures and review prospectus for
new funds and our current client base. Coordinate implementation
of suggested changes with the Fund.
59
SCHEDULE E
----------
i. Liaison between the Fund and the transfer agency staff regarding
all service and operational issues.
2. Proxy Processing
a. Coordinate printing of cards with vendor.
b. Coordinate mailing of cards with Account Manger and mailroom
c. Provide daily report totals to Account Manager for client
notification.
d. Preparation of affidavit of mailing documents.
e. Provide one shareholder list.
f. Prepare final tabulation letter.
3. Blue Sky Processing
a. Maintain file with additions, deletions, changes and updates at
the Fund's direction.
b. Provide daily and monthly reports to enable the Fund to do
necessary state filings.
60
SCHEDULE F
----------
FEE SCHEDULE FOR THE XXXXXXX FUNDS
----------------------------------
ACCOUNTING, ADMINISTRATION, TRANSFER AGENCY AND
CUSTODY SERVICES ANNUAL FEE SCHEDULE
1. On an annual basis, 0.25 basis points of the average weekly U.S. assets of
the Customer and 5.25 basis points of the average weekly non-U.S. assets of
the Customer, 32.50 basis points of the average weekly emerging markets
equity assets of the Customer and 1.90 basis points of the average weekly
emerging markets debt assets of the Customer.
There will be an annual fee of $25 for each shareholder account within The
Xxxxxxx Funds.
An additional fee of 7.50 basis points will be charged for administrative
duties. PLEASE NOTE: The additional fee of 7.50 basis points can ONLY be
charged up to the extent it does not make a fund exceed its expense cap.
Please see below for the expense caps of each fund within The Xxxxxxx
Funds, excluding all loads and 12(b)-1 fees:
FUND EXPENSE CAP
---- -----------
Global Fund 110 basis points
Global Equity Fund 100 basis points
Global Bond Fund 90 basis points
U.S. Balanced Fund 80 basis points
U.S. Equity Fund 80 basis points
U.S. Bond Fund 60 basis points
Non-U.S. Equity Fund 100 basis points
NO FEE (asset based or otherwise) will be charged on any investments made
by any fund into any other fund managed by Xxxxxxx Partners, Inc. Fees are
to be charged ONLY where actual non-Xxxxxxx Partners, Inc.-sponsored
investment company or series securities are held. Assets of a series which
are invested in another Xxxxxxx Partners, Inc.-sponsored investment company
or series shall not be counted in determining whether or not the charging
of the 7.50 basis points charge for administrative duties would cause a
fund to exceed its fee cap and shall not be counted in determining the
amount of assets subject to the 7.50 basis points.
For purposes of this Schedule F, the "AVERAGE WEEKLY U.S. ASSETS OF THE
CUSTOMER" means the average weekly U.S. assets custodied within the United
States of the Customer as calculated by the Accounting Agent for the month
for which the statement reflecting the charges for a given month relates.
For purposes of this Schedule F, the "AVERAGE WEEKLY NON-U.S. ASSETS OF THE
CUSTOMER" means the average weekly balance of countries included in the
Xxxxxx Xxxxxxx Capital World Ex-U.S.A. (free) Index or the Salomon Non-U.S.
Government Bond Index (including assets with a country of issue of the
European Economic Community and held in Euroclear or CEDEL) custodied
outside the United States of the Customer as calculated by the Accounting
Agent for the month for which the statement reflecting the charges for a
given month relates. For purposes of this Schedule F, the "AVERAGE WEEKLY
EMERGING MARKETS EQUITY ASSETS OF THE CUSTOMER" means the average weekly
balance of the countries included in the International Finance Corporation
Global Index (excluding countries included in the Xxxxxx Xxxxxxx Capital
World Ex-U.S.A. (free) Index or the Salomon Non-U.S. Government Bond Index,
but including assets with a country of issue in the local market contained
in such index that are held in Euroclear or CEDEL) custodied outside the
United States of the Customer's emerging markets equity funds as calculated
by the Accounting Agent for the month for which the statement reflecting
the charges for a given month relates. For purposes of this Schedule F, the
"AVERAGE WEEKLY EMERGING MARKETS DEBT ASSETS OF THE CUSTOMER" means the
average weekly balance of the countries included in the X.X. Xxxxxx
Emerging Markets Bond Index Plus custodied outside the United States of the
Customer's emerging markets debt funds (including assets with a country of
issue in the local market contained in such index that are held in
Euroclear or CEDEL) as calculated by the Accounting Agent for the month for
which the statement reflecting the charges for a given month relates.
Those fees include all out-of-pocket expenses or transaction charges
incurred by the accountant, administrator, transfer agent and custodian
with the exception of the following.
The Customer will be billed directly by Other Parties for the following
direct Customer expenses or transaction charges:
(1) taxes;
(2) salaries and other fees of officers and directors who are not
officers, directors, shareholders or employees of Other Parties, or
the Customer's investment adviser;
(3) SEC and state Blue Sky registration and qualification fees, levies,
fines and other charges;
(4) XXXXX filing fees;
(5) independent public accountants;
(6) insurance premiums including fidelity bond premiums;
(7) outside legal expenses;
(8) costs of maintenance of corporate existence;
(9) expenses of typesetting and printing of prospectuses for regulatory
purposes and for distribution to current shareholders of the Customer;
(10) expenses of printing and production costs of shareholders' reports and
proxy statements and materials;
(11) trade association dues expenses; and
(12) travel and lodging expenses of the Customer's directors and officers
who are not directors, officers and/or employees of Other parties.
Customer will not be billed directly for any direct Customer Expenses or
pay any other direct Customer expenses, unless the payment of such direct
expenses is agreed to in writing by Customer.
2. Upon termination of the provision of services under this Agreement before
the end of any month, the fee for the part of the month before such
termination or the date after which the provision of services ceases,
whichever is later, shall be prorated according to the proportion which
such part bears to the full monthly period and shall be payable upon the
date of such termination or the date after which the provision of the
services ceases, whichever is later.
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