Exhibit J-1
CUSTODY AGREEMENT
AGREEMENT dated as of April 21, 2004, between NT Alpha Strategies
Fund, a Delaware statutory trust (the "Fund"), and The Northern Trust Company
(the "Custodian"), an Illinois state bank.
W I T N E S S E T H
That for and in consideration of the mutual promises hereinafter set
forth, the Fund and the Custodian agree as follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
(a) "Authorized Person" shall be deemed to include the Chairman of the
Board of Trustees, the President, and any Vice President, the
Secretary, the Treasurer or any other person, whether or not any such
person is an officer or employee of the Fund, duly authorized by the
Board of Trustees to give Instructions on behalf of the Fund and
listed in the certification annexed hereto as Schedule A or such other
certification as may be received by the Custodian from time to time
pursuant to Section 17(a).
(b) "Board of Trustees" shall mean the Board of Trustees of the Fund.
(c) "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor
or successors and its nominee or nominees.
(d) "Confidential Offering Memorandum" shall include each current
confidential offering memorandum of the Fund.
(e) "Declaration of Trust" shall mean the Declaration of Trust of the
Fund, including all amendments thereto.
(f) "Delegate of the Fund" shall mean and include any entity to whom the
Board of Trustees of the Fund has delegated responsibility under Rule
17f-5 of the 1940 Act.
(g) "Depository" shall mean The Depository Trust Company, a clearing
agency registered with the Securities and Exchange Commission under
Section 17(a) of the Securities Exchange Act of 1934, as amended, its
successor or successors and its nominee or nominees, the use of which
is hereby specifically authorized. The term "Depository" shall further
mean and include any other person named in an Instruction and approved
by the Fund to act as a depository in the manner required by Rule
17f-4 of the 1940 Act, its successor or successors and its nominee or
nominees.
(h) "Instruction" shall mean written (including telecopied, telexed, or
electronically transmitted in a form that can be converted to print)
or oral instructions actually received by the Custodian which the
Custodian reasonably believes were given by an Authorized Person. An
Instruction shall also include any instrument in writing actually
received by the Custodian which the Custodian reasonably believes to
be genuine and to be signed by any two officers of the Fund, whether
or not such officers are Authorized Persons. Except as otherwise
provided in this Agreement, "Instructions" may include instructions
given on a standing basis.
(i) "1940 Act" shall mean the Investment Company Act of 1940, and the
Rules and Regulations thereunder, all as amended from time to time.
(j) "Rule 17f-5" shall mean Rule 17f-5 under the 1940 Act.
(k) "Rule 17f-7" shall mean Rule 17f-7 under the 1940 Act.
(l) "Units" refers to Units of the Fund.
(m) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and
other securities, commodity interests and investments from time to
time owned by the Fund and held in a Fund.
(n) "Sub-Custodian" shall mean and include (i) any branch of the
Custodian, and (ii) any "eligible foreign custodian," as that term is
defined in Rule 17f-5 under the 1940 Act, approved by the Fund or a
Delegate of the Fund in the manner required by Rule 17f-5. For the
avoidance of doubt, the term "Sub-Custodian" shall not include any
central securities depository or clearing agency.
(o) "Eligible Securities Depository" shall have the same meaning as set
forth in Rule 17f-7(b)(1).
(p) "Transfer Agent" shall mean the person which performs as the transfer
agent for the Fund.
2. Appointment of Custodian.
(a) The Fund hereby constitutes and appoints the Custodian as custodian of
all the Securities and moneys owned by or in the possession of the
Fund during the period of this Agreement.
(b) The Custodian hereby accepts appointment as such custodian and agrees
to perform the duties thereof as hereinafter set forth.
3. Appointment and Removal of Sub-Custodians.
(a) The Custodian may appoint one or more Sub-Custodians to act as
sub-custodian or sub-custodians of Securities and moneys at any time
held, upon the terms and conditions specified in this Agreement,. The
Custodian shall oversee the maintenance by any Sub-Custodian of any
Securities or moneys of the Fund.
(b) The Agreement between the Custodian and each Sub-Custodian described
in clause (ii) of Section 1(o) and acting hereunder shall contain any
provisions necessary to comply with Rule 17f-5 under the 1940 Act.
(c) Prior to the Custodian's use of any Sub-Custodian described in clause
(ii) of Paragraph 1(o), the Fund or a Delegate of the Fund must
approve such Sub-Custodian in the manner required by Rule 17f-5 and
provide the Custodian with satisfactory evidence of such approval.
(d) The Custodian shall promptly take such steps as may be required to
remove any Sub-Custodian that has ceased to be an "eligible foreign
custodian" or has otherwise ceased to meet the requirements under Rule
17f-5. If the Custodian intends to remove any Sub-Custodian previously
approved by the Fund or a Delegate of the Fund pursuant to paragraph
3(c), and the Custodian proposes to replace such Sub-Custodian with a
Sub-Custodian that has not yet been approved by the Fund or a Delegate
of the Fund, it will so notify the Fund or a Delegate of the Fund and
provide it with information reasonably necessary to determine such
proposed Sub-Custodian's eligibility under Rule 17f-5, including a
copy of the proposed agreement with such Sub-Custodian. The Fund shall
at the meeting of the Board of Trustees next following receipt of such
notice and information, or a Delegate of the Fund shall promptly after
receipt of such notice and information, determine whether to approve
the proposed Sub-Custodian and will promptly thereafter give written
notice of the approval or disapproval of the proposed action.
(e) The Custodian hereby represents to the Fund that in its opinion, after
due inquiry, the established procedures to be followed by each
Sub-Custodian in connection with the safekeeping of property of the
Fund pursuant to this Agreement afford reasonable care for the
safekeeping of such property based on the standards applicable in the
relevant market.
3A Delegation of Foreign Custody Management.
(a) The Fund hereby delegates to Custodian the responsibilities set
forth in subparagraph (b) below of this Section 3A, in accordance with
Rule 17f-5 with respect to foreign custody arrangements for the Fund,
except that the Custodian shall not have such responsibility with
respect to central depositories and clearing agencies or with respect
to custody arrangements in the countries listed on Schedule I,
attached hereto, as that Schedule may be amended from time to time by
notice to the Fund.
(b) With respect to each arrangement with any Sub-Custodian regarding the
assets of the Fund for which Custodian has responsibility under this
Section 3A (a "Foreign Custodian"), Custodian shall:
(i) determine that the Fund's assets will be subject to
reasonable care, based on standards applicable to custodians
in the relevant market, if maintained with the Foreign
Custodian, after considering all factors relevant to the
safekeeping of such assets;
(ii) determine that the written contract with such Foreign
Custodian governing the foreign custody arrangements complies
with the requirements of Rule 17f-5 and will provide
reasonable care for the Fund's assets;
(iii) establish a system to monitor the appropriateness of
maintaining the Fund's assets with such Foreign Custodian and
the contract governing the Fund's foreign custody
arrangements;
(iv) provide to the Fund's Board of Trustees, at least annually,
written reports notifying the Board of the placement of the
Fund's assets with a particular Foreign Custodian and
periodic reports of any material changes to the Fund's
foreign custodian arrangements; and
(v) withdraw the Fund's assets from any Foreign Custodian as soon
as reasonably practicable, if the foreign custody arrangement
no longer meets the requirement of Rule 17f-5.
4. Use of Sub-Custodians and Securities Depositories.
With respect to property of the Fund which is maintained by the
Custodian in the custody of a Sub-Custodian pursuant to Section 3:
(a) The Custodian will identify on its books as belonging to the Fund any
property held by such Sub-Custodian.
(b) In the event that a Sub-Custodian permits any of the Securities placed
in its care to be held in a foreign securities depository, such
Sub-Custodian will be required by its agreement with the Custodian to
identify on its books such Securities as being held for the account of
the Custodian as a custodian for its customers.
(c) Any Securities held by a Sub-Custodian will be subject only to the
instructions of the Custodian or its agents; and any Securities held
in a foreign securities depository for the account of a Sub-Custodian
will be subject only to the instructions of such Sub-Custodian.
(d) The Custodian will only deposit property of the Fund in an account
with a Sub-Custodian which includes exclusively the assets held by the
Custodian for its customers, and will cause such account to be
designated by such Sub-Custodian as a special custody account for the
exclusive benefit of customers of the Custodian.
(e) Before any Securities are placed in a foreign securities depository,
the Custodian shall provide the fund's Board of Trustees with an
analysis of the custody risks associated with maintaining assets with
the foreign securities depository.
(f) The Custodian or its agent shall continue to monitor the custody risks
associated with maintaining the Securities with a foreign securities
depository and shall promptly notify the Fund's Board of Trustees of
any material changes in said risks.
5. Compensation.
(a) The Fund will compensate the Custodian for its services rendered under
this Agreement in accordance with the fees set forth in the Fee
Schedule annexed hereto as Schedule C and incorporated herein. Such
Fee Schedule does not include out-of-pocket disbursements of the
Custodian for which the Custodian shall be entitled to xxxx
separately; provided that out-of-pocket disbursements may include only
the items specified in Schedule C.
(b) Any compensation agreed to hereunder may be adjusted from time to time
by attaching to Schedule C, or replacing Schedule C with, a revised
Fee Schedule, dated and signed by an officer of each party hereto.
(c) The Custodian will xxxx the Fund for its services hereunder as soon as
practicable after the end of each calendar quarter, and said xxxxxxxx
will be detailed in accordance with the Fee Schedule for the Fund. The
Fund will promptly pay to the Custodian the amount of such billing.
The Custodian shall have a claim of payment against the property of
the Fund for any compensation or expense amount owing to the Custodian
in connection with such Fund from time to time under this Agreement.
(d) The Custodian (not the Fund) will be responsible for the payment of
compensation of each Sub-Custodian.
6. Custody of Cash and Securities.
(a) Receipt and Holding of Assets. The Fund will deliver or cause to be
delivered to the Custodian and any Sub-Custodians all Securities and
moneys at any time during the period of this Agreement. The Custodian
will not be responsible for such Securities and moneys until actually
received by it or by a Sub-Custodian. The Fund may, from time to time
in its sole discretion, provide the Custodian with Instructions as to
the manner in which and in what amounts Securities, and money are to
be held in the Book-Entry System or a Depository. Securities and
moneys held in the Book-Entry System or a Depository will be held in
accounts which include only assets of Custodian that are held for its
customers.
(b) Accounts and Disbursements. The Custodian shall establish and maintain
a separate account for the Fund and shall credit to the account all
moneys received by it or a Sub-Custodian for the account of such Fund
and shall disburse, or cause a Sub-Custodian to disburse, the same
only:
1. In payment for Securities purchased for the Fund, as provided
in Section 7 hereof;
2. In payment of dividends or distributions with respect to the
Units of such Fund, as provided in Section 10 hereof;
3. In payment of original issue or other taxes with respect to
the Units of such Fund, as provided in Section 11(c) hereof;
4. In payment for Units which have been redeemed by such Fund,
as provided in Section 11 hereof;
5. In payment of fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to the Fund, as
provided in Sections 5 and 15(h) hereof;
6. Pursuant to Instructions setting forth the name of the Fund
and the name and address of the person to whom the payment is
to be made, the amount to be paid and the purpose for which
payment is to be made.
(c) Fail Float. In the event that any payment made for the Fund under this
Section 6 exceeds the funds available in the Fund's account, the
Custodian or relevant Sub-Custodian, as the case may be, may, in its
discretion, advance the Fund an amount equal to such excess and such
advance shall be deemed an overdraft from the Custodian or such
Sub-Custodian to that Fund payable on demand, bearing interest at the
rate of interest customarily charged by the Custodian or such
Sub-Custodian on similar overdrafts.
(d) Confirmation and Statements. At least monthly, the Custodian shall
furnish the Fund with a detailed statement of the Securities and
moneys held by it and all Sub-Custodians for the Fund. Where
securities purchased for a Fund are in a fungible bulk of securities
registered in the name of the Custodian (or its nominee) or shown on
the Custodian's account on the books of a Depository, the Book-Entry
System or a Sub-Custodian, the Custodian shall maintain such records
as are necessary to enable it to identify the quantity of those
securities held for such Fund. In the absence of the filing in writing
with the Custodian by the Fund of exceptions or objections to any such
statement within 60 days after the date that a material defect is
reasonably discoverable, the Fund shall be deemed to have approved
such statement; and in such case or upon written approval of the Fund
of any such statement the Custodian shall, to the extent permitted by
law and provided the Custodian has met the standard of care in Section
16 hereof, be released, relieved and discharged with respect to all
matters and things set forth in such statement as though such
statement had been settled by the decree of a court of competent
jurisdiction in an action in which the Fund and all persons having any
equity interest in the Fund were parties.
(e) Registration of Securities and Physical Separation. All Securities
held for the Fund which are issued or issuable only in bearer form,
except such Securities as are held in the Book-Entry System, shall be
held by the Custodian or a Sub-Custodian in that form; all other
Securities held for the Fund may be registered in the name of the
Fund, in the name of any duly appointed registered nominee of the
Custodian or a Sub-Custodian as the Custodian or such Sub-Custodian
may from time to time determine, or in the name of the Book-Entry
System or a Depository or their successor or successors, or their
nominee or nominees. The Fund reserves the right to instruct the
Custodian as to the method of registration and safekeeping of the
Securities. The Fund agrees to furnish to the Custodian appropriate
instruments to enable the Custodian or any Sub-Custodian to hold or
deliver in proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or a
Depository, any Securities which the Custodian or a Sub-Custodian may
hold for the Fund and which may from time to time be registered in the
name of the Fund. The Custodian shall hold all such Securities
specifically allocated to the Fund which are not held in the
Book-Entry System or a Depository in a separate account for the Fund
in the name of the Fund physically segregated at all times from those
or any other person or persons.
(f) Segregated Accounts. Upon receipt of an Instruction, the Custodian
will establish segregated accounts on behalf of the Fund to hold
liquid or other assets as it shall be directed by such Instruction and
shall increase or decrease the assets as it shall be directed by such
Instruction and shall increase or decrease the assets in such
segregated accounts only as it shall be directed by subsequent
Instruction.
(g) Collection of Income and Other Matters Affecting Securities. Except as
otherwise provided in an Instruction, the Custodian, by itself or
through the use of the Book-Entry System or a Depository with respect
to Securities therein maintained, shall, or shall instruct the
relevant Sub-Custodian to:
1. Collect all income due or payable with respect to Securities
in accordance with this Agreement;
2. Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed or
retired, or otherwise become payable;
3. Surrender Securities in temporary form for derivative
Securities;
4. Execute any necessary declarations or certificates of
ownership under the federal income tax laws or the laws or
regulations of any other taxing authority now or hereafter in
effect; and
5. Hold directly, or through the Book-Entry System or a
Depository with respect to Securities therein deposited, for
the account of the Fund all rights and similar Securities
issued with respect to any Securities held by the Custodian
or relevant Sub-Custodian for the Fund.
(h) Delivery of Securities and Evidence of Authority. Upon receipt of an
Instruction, the Custodian, directly or through the use of the
Book-Entry System or a Depository, shall, or shall instruct the
relevant Sub-Custodian to:
1. Execute and deliver or cause to be executed and delivered to
such persons as may be designated in such Instructions,
proxies, consents, authorizations, and any other instruments
whereby the authority of the Fund as owner of any Securities
may be exercised;
2. Deliver or cause to be delivered any Securities held for the
Fund in exchange for other Securities or cash issued or paid
in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
3. Deliver or cause to be delivered any Securities held for the
Fund to any protective committee, reorganization committee or
other person in connection with the reorganization,
refinancing, merger, consolidation or recapitalization or
sale of assets of any corporation, and receive and hold under
the terms of this Agreement in the separate account for each
such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence
such delivery;
4. Make or cause to be made such transfers or exchanges of the
assets specifically allocated to the separate account of the
Fund and take such other steps as shall be stated in Written
Instructions to be for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
5. Deliver Securities upon sale of such Securities for the
account of the Fund pursuant to Section 7;
6. Deliver Securities upon the receipt of payment in connection
with any repurchase agreement related to such Securities
entered into on behalf of the Fund;
7. Deliver Securities of the Fund to the issuer thereof or its
agent when such Securities are called, redeemed, retired or
otherwise become payable; provided, however, that in any such
case the cash or other consideration is to be delivered to
the Custodian or Sub-Custodian, as the case may be;
8. Deliver Securities for delivery in connection with any loans
of securities made by the Fund but only against receipt of
adequate collateral as agreed upon from time to time by the
Custodian and the Fund which may be in the form of cash or
obligations issued by the United States Government, its
agencies or instrumentalities;
9. Deliver Securities for delivery as security in connection
with any borrowings by the Fund requiring a pledge of Fund
assets, but only against receipt of the amounts borrowed;
10. Deliver Units to the Transfer Agent or its designee or to the
holders of Units in connection with distributions in kind, in
satisfaction of requests by holders of Units for repurchase
or redemption;
11. Deliver Securities for any other proper business purpose, but
only upon receipt of, in addition to written Instructions, a
copy of a resolution or other authorization of the Fund
certified by the Secretary of the Fund, specifying the
Securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose to
be a proper business purpose, and naming the person or
persons to whom delivery of such Securities shall be made.
(i) Endorsement and Collection of Checks, Etc. The Custodian is hereby
authorized to endorse and collect all checks, drafts or other orders
for the payment of money received by the Custodian for the account of
the Fund.
(j) Execution of Required Documents. The Custodian is hereby authorized to
execute any and all applications or other documents required by a
regulatory agency or similar entity as a condition of making
investments in the foreign market under such entity's jurisdiction.
(k) Additional Duties of Custodian
1. Valuations; Net Income Computation. Unless otherwise directed
by proper insructions from Trustees or Officers of the Trust,
the Custodian shall compute and determine on the days and at
the times specified in the Fund's Confidential Offering
Memorandum, the net asset value of a Unit of the Fund, such
computation and determination to be made in accordance with
the Fund's Confidential Offering Memorandum, and shall
promptly notify the Administrator of the result of such
computation and determination.
Unless advised otherwise by proper instructions from the
Trustees or Officers of the Trust, Custodian shall also
calculate at the times specified in the Fund's Confidential
Offering Memorandum the net income of the Fund and shall
promptly advise the Administrator of the results of such
calculation. Such calculation shall be made in accordance
with the Fund's Confidential Offering Memorandum.
7. Purchase and Sale of Securities.
(a) Promptly after the purchase of Securities, the Fund or its designee
shall deliver to the Custodian an Instruction specifying with respect
to each such purchase: (1) the name of the Fund; (2) the name of the
issuer and the title of the Securities; (3) the number of shares or
the principal amount purchased and accrued interest, if any; (4) the
date of purchase and settlement; (5) the purchase price per unit; (6)
the total amount payable upon such purchase; and (7) the name of the
person from whom or the broker through whom the purchase was made, if
any. The Custodian or specified Sub-Custodian shall receive the
Securities purchased by or for the Fund and upon receipt thereof (or
upon receipt of advice from a Depository or the Book-Entry System that
the Securities have been transferred to the Custodian's account) shall
pay to the broker or other person specified by the Fund or its
designee out of the moneys held for the account of the Fund the total
amount payable upon such purchase, provided that the same conforms to
the total amount payable as set forth in such Instruction.
(b) Promptly after the sale of Securities, the Fund or its designee shall
deliver to the Custodian an instruction specifying with respect to
each such sale: (1) the name of the issuer and the title of the
Securities; (2) the number of shares or principal amount sold, and
accrued interest, if any; (3) the date of sale; (4) the sale price per
unit; (5) the total amount payable upon such sale; and (6) the name of
the broker through whom or the person to whom the sale was made. The
Custodian or relevant Sub-Custodian shall deliver or cause to be
delivered the Securities to the broker or other person designated by
the Fund upon receipt of the total amount payable upon such sale,
provided that the same conforms to the total amount payable as set
forth in such Instruction. Subject to the foregoing, the Custodian or
relevant Sub-Custodian may accept payment in such form as shall be
satisfactory to it, and may deliver Securities and arrange for payment
in accordance with the customs prevailing among dealers in Securities.
(c) Notwithstanding (a) and (b) above, cash may be invested by the
Custodian for short term purposes pursuant to standing Instructions
from the Fund.
8. Investment in Futures and Options.
The Custodian shall pursuant to Instructions (which may be standing
instructions) (i) transfer initial margin to a safekeeping bank or,
with respect to options, broker; (ii) pay or demand variation margin
to or from a designated futures commission merchant or other broker
based on daily marking to market calculations and in accordance with
accepted industry practices; and (iii) subject to the Custodian's
consent, enter into separate procedural, safekeeping or other
agreements with safekeeping banks, futures commission merchants and
other brokers pursuant to which such banks and, in the case of
options, brokers, will act as custodian for initial margin deposits in
transactions involving futures contracts and options. The Custodian
shall have no custodial or investment responsibility for any assets
transferred to a safekeeping bank, futures commission merchant or
broker pursuant to this paragraph.
9. Provisional Credits and Debits.
(a) The Custodian is authorized, but shall not be obligated, to credit the
Fund provisionally on payable date with interest, dividends,
distributions, redemptions or other amounts due. Otherwise, such
amounts will be credited on the date such amounts are actually
received and reconciled to the Fund. In cases where the Custodian has
credited the Fund with such amounts prior to actual collection and
reconciliation, the Fund acknowledges that the Custodian shall be
entitled to recover any such credit on demand from the Fund and
further agrees that the Custodian may reverse such credit if and to
the extent that Custodian does not receive such amounts in the
ordinary course of business.
(b) If the Fund is maintained as a global custody account it shall
participate in the Custodian's contractual settlement date processing
service ("CSDP") unless the Custodian directs the Fund, or the Fund
informs the Custodian, otherwise. Pursuant to CSDP the Custodian shall
be authorized, but not obligated, to automatically credit or debit the
Fund provisionally on contractual settlement date with cash or
securities in connection with any sale, exchange or purchase of
securities. Otherwise, such cash or securities shall be credited to
the Fund on the day such cash or securities are actually received by
the Custodian and reconciled to the Fund. In cases where the Custodian
credits or debits the Fund with cash or securities prior to actual
receipt and reconciliation, the Custodian may reverse such credit or
debit as of contractual settlement date if and to the extent that any
securities delivered by the Custodian are returned by the recipient,
or if the related transaction fails to settle (or fails, due to market
change or other reasons, to settle on terms which provide the
Custodian full reimbursement of any provisional credit the Custodian
has granted) within a period of time judged reasonable by the
Custodian under the circumstances. The Fund agrees that it will not
make any claim or pursue any legal action against the Custodian for
loss or other detriment allegedly arising or resulting from the
Custodian's good faith determination to effect, not effect or reverse
any provisional credit or debit to the Fund.
The Fund acknowledges and agrees that funds debited from the Fund on
contractual settlement date including, without limitation, funds
provided for the purchase of any securities under circumstances where
settlement is delayed or otherwise does not take place in a timely
manner for any reason, shall be held pending actual settlement of the
related purchase transaction in a non-interest bearing deposit at the
Custodian's London Branch; that such funds shall be available for use
in the Custodian's general operations; and that the Custodian's
maintenance and use of such funds in such circumstances are, without
limitation, in consideration of the Custodian's providing CSDP.
(c) The Fund recognizes that any decision to effect a provisional credit
or an advancement of the Custodian's own funds under this agreement
will be an accommodation granted entirely at the Custodian's option
and in light of the particular circumstances, which circumstances may
involve conditions in different countries, markets and classes of
assets at different times. The Fund shall make the Custodian whole for
any loss which it may incur from granting such accommodations and
acknowledges that the Custodian shall be entitled to recover any
relevant amounts from the Fund on demand. All amounts thus due to the
Custodian shall be paid by the Fund from the account of the Fund
unless otherwise paid on a timely basis and in that connection the
Fund acknowledges that the Custodian has a continuing lien on assets
of the Fund to secure such payments and agrees that the Custodian may
apply or set off against such amounts any amounts credited by or due
from the Custodian to the Fund. If funds in the Fund are insufficient
to make any such payment the Fund shall promptly deliver to the
Custodian the amount of such deficiency in immediately available funds
when and as specified by the Custodian's written or oral notification
to the Fund.
(d) In connection with the Custodian's global custody service the Fund
will maintain deposits at the Custodian's London Branch. The Fund
acknowledges and agrees that such deposits are payable only in
currency in which an applicable deposit is denominated; that such
deposits are payable only on the Fund's demand at the Custodian's
London Branch; that such deposits are not payable at any of the
Custodian's offices in the United States; and that the Custodian will
not in any manner directly or indirectly promise or guarantee any such
payment in the United States.
The Fund further acknowledges and agrees that such deposits are
subject to cross-border risk, and therefore the Custodian will have no
obligation to make payment or deposits if and to the extent that the
Custodian is prevented from doing so by reason of applicable law or
regulation or any Sovereign Risk event affecting the London Branch or
the currency in which the applicable deposit is denominated.
"Sovereign Risk" for this purpose means nationalization,
expropriation, devaluation, revaluation, confiscation, seizure,
cancellation, destruction or similar action by any governmental
authority, de facto or de jure; or enactment, promulgation, imposition
or enforcement by any such governmental authority of currency
restrictions, exchange controls, taxes, levies or other charges
affecting the property rights of persons who are not residents of the
affected jurisdiction; or acts of war, terrorism, insurrection or
revolution; or any other act or event beyond the Custodian's control.
THE FUND ACKNOWLEDGES AND AGREES THAT DEPOSIT ACCOUNTS MAINTAINED AT
FOREIGN BRANCHES OF UNITED STATES BANKS (INCLUDING, IF APPLICABLE,
ACCOUNTS IN WHICH CUSTOMER FUNDS FOR THE PURCHASE OF SECURITIES ARE
HELD ON AND AFTER CONTRACTUAL SETTLEMENT DATE), ARE NOT INSURED BY THE
U.S. FEDERAL DEPOSIT INSURANCE CORPORATION; MAY NOT BE GUARANTEED BY
ANY LOCAL OR FOREIGN GOVERNMENTAL AUTHORITY; ARE UNSECURED; AND IN A
LIQUIDATION MAY BE SUBORDINATED IN PRIORITY OF PAYMENT TO DOMESTIC
(U.S.-DOMICILED) DEPOSITS. THEREFORE, BENEFICIAL OWNERS OF SUCH
FOREIGN BRANCH DEPOSITS MAY BE UNSECURED CREDITORS OF THE NORTHERN
TRUST COMPANY.
Deposit account balances that are owned by United States residents are
expected to be maintained in an aggregate amount of at least $100,000
or the equivalent in other currencies.
10. Payment of Dividends or Distributions.
(a) In the event that the Board of Trustees of the Fund (or a committee
thereof) authorizes the declaration of dividends or distributions with
respect to the Fund, an Authorized Person shall provide the Custodian
with Instructions specifying the record date, the date of payment of
such distribution and the total amount payable to the Transfer Agent
or its designee on such payment date.
(b) Upon the payment date specified in such Instructions, the Custodian
shall pay the total amount payable to the Transfer Agent or its
designee out of the moneys specifically allocated to and held for the
account of the Fund.
11. Sale and Redemption of Units.
(a) Whenever the Fund shall sell any Units, the Fund shall deliver or
cause to be delivered to the Custodian an Instruction specifying the
amount to be received by the Custodian for the sale of such Units.
(b) Upon the receipt of such amount from the Transfer Agent or its
designee, the Custodian shall credit such money to the separate
account of the Fund specified in the Instruction described in
paragraph (a) above.
(c) Upon issuance of any Units in accordance with the foregoing provisions
of this Section 11, the Custodian shall pay all original issue or
other taxes required to be paid in connection with such issuance upon
the receipt of an Instruction specifying the amount to be paid.
(d) Except as provided hereafter, whenever any Units are redeemed, the
Fund shall deliver or cause to be delivered to the Custodian an
Instruction specifying the name of the Fund whose Units were redeemed
and the total amount to be paid for the Units redeemed.
(e) Upon receipt of an Instruction described in paragraph (d) above, the
Custodian shall pay to the Transfer Agent (or such other person as the
Transfer Agent directs) the total amount specified in such
Instruction. Such payment shall be made from the separate account of
the Fund specified in such Instruction.
12. Indebtedness.
(a) The Fund or its designee will cause to be delivered to the Custodian
by any bank (excluding the Custodian) from which the Fund borrows
money, using Securities as collateral, a notice or undertaking in the
form currently employed by any such bank setting forth the amount
which such bank will loan to the Fund against delivery of a stated
amount of collateral. The Fund shall promptly deliver to the Custodian
an Instruction stating with respect to each such borrowing: (1) the
name of the bank; (2) the amount and terms of the borrowing, which may
be set forth by incorporating by reference an attached promissory
note, duly endorsed by the Fund, or other loan agreement; (3) the time
and date, if known, on which the loan is to be entered into (the
"borrowing date"); (4) the date on which the loan becomes due and
payable; (5) the total amount payable to the Fund on the borrowing
date; (6) the market value of Securities to be delivered as collateral
for such loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular Securities;
(7) whether the Custodian is to deliver such collateral through the
Book-Entry System or a Depository; and (8) a statement that such loan
is in conformance with the 1940 Act and the Confidential Offering
Memorandum.
(b) Upon receipt of the Instruction referred to in paragraph (a) above,
the Custodian shall deliver on the borrowing date the specified
collateral and the executed promissory note, if any, against delivery
by the lending bank of the total amount of the loan payable, provided
that the same conforms to the total amount payable as set forth in the
Instruction. The Custodian may, at the option of the lending bank,
keep such collateral in its possession, but such collateral shall be
subject to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall deliver as
additional collateral in the manner directed by the Fund from time to
time such Securities specifically allocated to the Fund as may be
specified in the Instruction to collateralize further any transaction
described in this Section 12. The Fund shall cause all Securities
released from collateral status to be returned directly to the
Custodian, and the Custodian shall receive from time to time such
return of collateral as may be tendered to it. In the event that the
Fund fails to specify in such Instruction all of the information
required by this Section 12, the Custodian shall not be under any
obligation to deliver any Securities. Collateral returned to the
Custodian shall be held hereunder as it was prior to being used as
collateral.
13. Corporate Action.
Whenever the Custodian or any Sub-Custodian receives information
concerning Securities held for the Fund which requires discretionary
action by the beneficial owner of the Securities (other than a proxy),
such as subscription rights, bond issues, stock repurchase plans and
rights offerings, or legal notices or other material intended to be
transmitted to Securities holders ("Corporate Actions"), the Custodian
will give the Fund or its designee notice of such Corporate Actions to
the extent that the Custodian's central corporate actions department
has actual knowledge of a Corporate Action in time to notify the Fund.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action
which bears an expiration date is received, the Custodian will
endeavor to obtain an Instruction relating to such Corporate Action
from an Authorized Person, but if such Instruction is not received in
time for the Custodian to take timely action, or actual notice of such
Corporate Action was received too late to seek such an Instruction,
the Custodian is authorized to sell, or cause a Sub-Custodian to sell,
such rights entitlement or fractional interest and to credit the
applicable account with the proceeds and to take any other action it
deems, in good faith, to be appropriate, in which case, provided it
has met the standard of care in Section 15 hereof, it shall be held
harmless for any such action.
The Custodian will deliver proxies to the Fund or its designated agent
pursuant to special arrangements which may have been agreed to in
writing between the parties hereto. Such proxies shall be executed in
the appropriate nominee name relating to Securities registered in the
name of such nominee but without indicating the manner in which such
proxies are to be voted; and where bearer Securities are involved,
proxies will be delivered in accordance with an applicable
Instruction, if any.
14. Persons Having Access to the Funds.
(a) Neither the Fund nor any officer, director, employee or agent of the
Fund, the Fund's investment adviser, or any sub-investment adviser,
shall have physical access to the assets of the Fund held by the
Custodian or any Sub-Custodian or be authorized or permitted to
withdraw any investments of the Fund, nor shall the Custodian or any
Sub-Custodian deliver any assets of the Fund to any such person. No
officer, director, employee or agent of the Custodian who holds any
similar position with the Fund's investment adviser, with any
sub-investment adviser of the Fund or with the Fund shall have access
to the assets of the Fund.
(b) Nothing in this Section 14 shall prohibit any Authorized Person from
giving instructions to the Custodian so long as such Instructions do
not result in delivery of or access to assets of the Fund prohibited
by paragraph (a) of this Section 14.
(c) The Custodian represents that it maintains a system that is reasonably
designed to prevent unauthorized persons from having access to the
assets that it holds (by any means) for its customers.
15. Concerning the Custodian.
(a) Scope of Services. The Custodian shall be obligated to perform only
such services as are set forth in this Agreement or expressly
contained in an Instruction given to the Custodian which is not
contrary to the provisions of this Agreement.
(b) Standard of Care.
1. The Custodian will use reasonable care, prudence and
diligence with respect to its obligations under this
Agreement and the safekeeping of property of the Fund. The
Custodian shall be liable to, and shall indemnify and hold
harmless the Fund from and against any loss which shall occur
as the result of the Failure of the Custodian or a
Sub-Custodian to exercise reasonable care, prudence and
diligence with respect to their respective obligations under
this Agreement and the safekeeping of such property. The
determination of whether the Custodian or a Sub-Custodian has
exercised reasonable care, prudence and diligence in
connection with their obligations under this Agreement shall
be made in light of prevailing standards applicable to
professional custodians in the jurisdiction in which such
custodial services are performed. In the event of any loss to
the Fund by reason of the failure of the Custodian or a
Sub-Custodian to exercise reasonable care, prudence and
diligence, the Custodian shall be liable to the Fund only to
the extent of the Fund's direct damages and expenses, which
damages, for purposes of property only, shall be determined
based on the market value of the property which is the
subject of the loss at the date of discovery of such loss and
without reference to any special condition or circumstances.
2. The Custodian will not be responsible for any act, omission,
or default of, or for the insolvency of, any central
securities depository or clearing agency.
3. The Custodian will not be responsible for any act, omission,
or default of, or for the solvency of, any broker or agent
(not referred to in paragraph (b)(2) above) which it or a
Sub-Custodian appoints and uses unless such appointment and
use is made or done negligently or in bad faith. In the event
such an appointment and use is made or done negligently or in
bad faith, the Custodian shall be liable to the Fund only for
direct damages and expenses (determined in the manner
described in paragraph (b)(1) above) resulting from such
appointment and use and, in the case of any loss due to an
act, omission or default of such agent or broker, only to the
extent that such loss occurs as a result of the failure of
the agent or broker to exercise reasonable care ("reasonable
care" for this purpose to be determined in light of the
prevailing standards applicable to agents or brokers, as
appropriate, in the jurisdiction where the services are
performed).
4. The Custodian shall be entitled to rely, and may act, upon
the advice of counsel (who may be counsel for the Fund) on
all matters and shall be without liability for any action
reasonably taken or omitted in good faith and without
negligence pursuant to such advice.
5. The Custodian shall be entitled to rely upon any Instruction
it receives pursuant to the applicable Sections of this
Agreement that it reasonably believes to be genuine and to be
from an Authorized Person. In the event that the Custodian
receives oral Instructions, the Fund or its designee shall
cause to be delivered to the Custodian, by the close of
business on the same day that such oral Instructions were
given to the Custodian, written Instructions confirming such
oral Instructions, whether by hand delivery, telex or
otherwise. The Fund agrees that the fact that no such
confirming written Instructions are received by the Custodian
shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the
Fund. The Fund agrees that the Custodian shall incur no
liability to the Fund in connection with (i) acting upon oral
Instructions given to the Custodian hereunder, provided such
instructions reasonably appear to have been received from an
Authorized Person or (ii) deciding not to act solely upon
oral Instructions and requests written confirmation
immediately following any such decision not to act.
6. The Custodian shall supply the Fund or its designee with such
daily information regarding the cash and Securities positions
and activity as the Custodian and the Fund or its designee
shall from time to time agree. It is understood that such
information will not be audited by the Custodian and the
custodian represents that such information will be the best
information then available to the Custodian. The Custodian
shall have no responsibility whatsoever for the pricing of
Securities, accruing for income, valuing the effect of
Corporate Actions, or for the failure of the Fund or its
designee to reconcile differences between the information
supplied by the Custodian and information obtained by the
Fund or its designee from other sources, including but not
limited to pricing vendors and the Fund's investment adviser.
Subject to the foregoing, to the extent that any
miscalculation by the Fund or its designee of net asset value
is attributable to the willful misfeasance, bad faith or
negligence of the Custodian (including any Sub-Custodian) in
supplying or omitting to supply the Fund or its designee with
information as aforesaid, the Custodian shall be liable to
the Fund for any resulting loss (subject to such de minimis
rule of change in value as the Board of Trustees may from
time to time adopt).
(c) Limit of Duties. Without limiting the generality of the foregoing, the
Custodian shall be under no duty or obligation to inquire into, and
shall not be liable for:
1. The validity of the issue of any Securities purchased by the
Fund, the legality of the purchase thereof, or the propriety
of the amount specified by the Fund or its designee for
payment therefor;
2. The legality of the sale of any Securities by the Fund or the
propriety of the amount of consideration for which the same
are sold;
3. The legality of the issue or sale of any Units, or the
sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Units, or the propriety
of the amount to be paid therefore;
5. The legality of the declaration or payment of any dividend or
distribution by the Fund; or
6. The legality of any borrowing.
(d) The Custodian need not maintain any insurance for the exclusive
benefit of the Fund, but hereby warrants that as of the date of this
Agreement it is maintaining a bankers Blanket Bond and hereby agrees
to notify the Fund in the event that such bond is canceled or
otherwise lapses.
(e) Consistent with and without limiting the language contained in Section
15(a), it is specifically acknowledged that the Custodian shall have
no duty or responsibility to:
1. Question any Instruction or make any suggestions to the Fund
or an Authorized Person regarding any Instruction;
2. Supervise or make recommendations with respect to investments
or the retention of Securities;
3. Subject to Section 15(b)(3) hereof, evaluate or report to the
Fund or an Authorized Person regarding the financial
condition of any broker, agent or other party to which
Securities are delivered or payments are made pursuant to
this Agreement; or
4. Review or reconcile trade confirmations received from
brokers.
(f) Amounts Due from or to Transfer Agent. The Custodian shall not be
under any duty or obligation to take action to effect collection of
any amount due to the Fund from the Transfer Agent or its designee nor
to take any action to effect payment or distribution by the Transfer
Agent or its designee of any amount paid by the Custodian to the
Transfer Agent in accordance with this Agreement.
(g) No Duty to Ascertain Authority. The Custodian shall not be under any
duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Fund and specifically allocated to
the Fund are such as may properly be held by the Fund under the
provisions of the Declaration of Trust and the confidential offering
memorandum.
(h) Indemnification. The Fund agrees to indemnify and hold the Custodian
harmless from all loss, cost, taxes, charges, assessments, claims, and
liabilities (including, without limitation, the 1940 Act and state or
foreign securities laws) and expenses (including reasonable attorneys'
fees and disbursements) arising directly or indirectly from any action
taken or omitted by the Custodian (i) at the request or on the
direction of or in reliance on the advice of the Fund or in reasonable
reliance upon the confidential offering memorandum or (ii) upon an
Instruction; provided, that the foregoing indemnity shall not apply to
any loss, cost, tax, charge, assessment, claim, liability or expense
to the extent the same is attributable to the Custodian's or any
Sub-Custodian's negligence, willful misconduct, bad faith or reckless
disregard of duties and obligations under this Agreement or any other
agreement relating to the custody of Fund property.
(i) The Fund agrees to hold the Custodian harmless from any liability or
loss resulting from the imposition or assessment of any taxes or other
governmental charges on the Fund.
(j) Without limiting the foregoing, the Custodian shall not be liable for
any loss which results from:
1. the general risk of investing;
2. subject to Section 15(b) hereof, investing or holding
property in a particular country including, but not limited
to, losses resulting from nationalization, expropriation or
other governmental actions; regulation of the banking or
securities industry; currency restrictions, devaluations or
fluctuations; and market conditions which prevent the orderly
execution of securities transactions or affect the value of
property held pursuant to this Agreement; or
3. consequential, special or punitive damages for any act or
failure to act under any provision of this Agreement, even if
advised of the possibility thereof.
(k) Force Majeure. No party shall be liable to the other for any delay in
performance, or non-performance, of any obligation hereunder to the
extent that the same is due to forces beyond its reasonable control,
including but not limited to delays, errors or interruptions caused by
the other party or third parties, any industrial, juridical,
governmental, civil or military action, acts of terrorism,
insurrection or revolution, nuclear fusion, fission or radiation,
failure or fluctuation in electrical power, heat, light, air
conditioning or telecommunications equipment, or acts of God.
(l) Inspection of Books and Records. The Custodian shall create and
maintain all records relating to its activities and obligations under
this Agreement in such manner as will meet the obligations of the Fund
under the 1940 Act, with particular attention to Section 31 thereof
and Rules 31a-1 and 31a-2 thereunder, and under applicable federal and
state laws. All such records shall be the property of the Fund and
shall at all times during regular business hours of the Custodian be
open for inspection by duly authorized officers, employees and agents
of the Fund and by the appropriate employees of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request,
supply the Fund with a tabulation of Securities and shall, when
requested to do so by the Fund and for such compensation as shall be
agreed upon between the Fund and the Custodian, include certificate
numbers in such tabulations.
(m) Accounting Control Report. The Custodian shall provide, promptly upon
request of the Fund, such reports as are available concerning the
internal accounting controls and financial strength of the Custodian.
16. Term and Termination.
(a) This Agreement shall become effective on the date first set forth
above (the "Effective Date") and shall continue in effect thereafter
until terminated in accordance with Section 16(b).
(b) Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such
termination, which, in case the Fund is the terminating party, shall
be not less than 60 days after the date of Custodian receives such
notice or, in case the Custodian is the terminating party, shall be
not less than 90 days after the date the Fund receives such notice. In
the event such notice is given by the Fund, it shall be accompanies by
a certified resolution of the Board of Trustees, electing to terminate
this Agreement with respect to the Fund and designating a successor
custodian or custodians.
In the event such notice is given by the Custodian, the Fund shall, on
or before the termination date, deliver to the Custodian a certified
resolution of the Board of Trustees, designating a successor custodian
or custodians. In the absence of such designation by the Fund, the
Custodian may designate a successor custodian, which shall be a person
qualified to so act under the 0000 Xxx. If the Fund fails to designate
a successor custodian, the Fund shall upon the date specified in the
notice of termination of this Agreement and upon the delivery by the
Custodian of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and moneys of
the Fund, be deemed to be its own custodian and the Custodian shall
thereby be relieved of all duties and responsibilities pursuant to
this Agreement, other than the duty with respect to Securities held in
the Book-Entry System which cannot be delivered to the Fund.
(c) Upon the date set forth in such notice under paragraph (b) of this
Section 16, this Agreement shall terminate to the extent specified in
such notice, and the Custodian shall upon receipt of a notice of
acceptance by the successor custodian on that date deliver directly to
the successor custodian all Securities and moneys then held by the
Custodian and specifically allocated to the Fund specified, after
deducting all fees, expenses and other amounts for the payment or
reimbursement of which it shall then be entitled with respect to the
Fund.
17. Miscellaneous.
(a) Annexed hereto as Schedule A is a certification signed by two of the
present officers of the Fund setting forth the names of the present
Authorized Persons. The Fund agrees to furnish to the Custodian a new
certification in similar form in the event that any such present
Authorized Person ceases to be such an Authorized Person or in the
event that other or additional Authorized Persons are elected or
appointed. Until such new certification is received by the Custodian,
the Custodian shall be fully protected in acting under the provisions
of this Agreement upon Instructions which Custodian reasonably
believes were given by an Authorized Person, as identified in the last
delivered certification. Unless such certification specifically limits
the authority of an Authorized Person to specific matters or requires
that the approval of another Authorized Person is required, Custodian
shall be under no duty to inquire into the right of such person,
acting alone, to give any instructions whatsoever under this
Agreement.
(b) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Custodian, shall be sufficiently
given if addressed to the Custodian and mailed or delivered to it at
its offices at its address stated on the first page hereof or at such
other place as the Custodian may from time to time designate in
writing.
(c) Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund, shall be sufficiently given if
addressed to the Fund and mailed or delivered to it at its offices at
its address shown on the first page hereof or at such other pace as
the Fund may from time to time designate in writing.
(d) Except as expressly provided herein, Agreement may not be amended or
modified in any manner except by a written agreement executed by both
parties with the same formality as this Agreement.
(e) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund
without the written consent of the Custodian, or by the Custodian
without the written consent of the Fund, and any attempted assignment
without such written consent shall be null and void.
(f) This Agreement shall be construed in accordance with the laws of the
State of Illinois.
(g) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(h) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective representatives duly authorized as of the day
and year first above written.
NT ALPHA STRATEGIES FUND
By: _____________________________
Name:
Title:
THE NORTHERN TRUST COMPANY
By: _____________________________
Name:
Title:
SCHEDULE A
CERTIFICATION OF AUTHORIZED PERSONS
Pursuant to paragraphs 1(b) and 17(a) of the Agreement, the
undersigned officers of the NT Alpha Strategies Fund hereby certify that the
person(s) whose name(s) and signature(s) appear below have been duly authorized
by the Board of Trustees to give Instructions on behalf of the Fund.
NAME SIGNATURE
____________________________________ _________________________________
____________________________________ _________________________________
____________________________________ _________________________________
____________________________________ _________________________________
____________________________________ _________________________________
____________________________________ _________________________________
Certified as of the ___ day of ____________, 2004:
OFFICER: OFFICER:
____________________________________ _________________________________
(Signature) (Signature)
____________________________________ _________________________________
(Name) (Name)
____________________________________ _________________________________
(Title) (Title)
SCHEDULE B
A. Basic Custodial Fee
Fund Fee
Sub-Fund/Security $500 (flat fee)
B. Wire Fees
Type of Wire Fee
Wire Out $10
C. Out-of-Pocket Expenses Reimbursable by the Trust
The Trust will reimburse Custodian monthly for the following
out-of-pocket expenses incurred by Custodian during such month in the
performance of its duties under the Custodian Agreement: (1) telephone; (ii)
postage; (iii) courier fees of independent courier services; (iv) office
supplies used in maintaining the Trust's records; and (v) duplicating.
D. Fund Accounting Fee
Fund Fee
First $50 million of Net Assets $25,000 (flat fee)
Net Assets in excess of $50 million 1 basis point
SCHEDULE I
(Countries for which Custodian shall not have responsibility
under Section 3A for managing foreign custody
arrangements)
None
