GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective September 7, 2001, and is between THE CHASE
MANHATTAN BANK ("Bank") and X.X. XXXXXX INSTITUTIONAL FUNDS ("Customer").
1. CUSTOMER ACCOUNTS.
Bank, acting as "Securities Intermediary" (as defined in Section 15(g)
hereof) shall establish and maintain the following accounts ("Accounts"):
(a) a Custody Account (as defined in Section 15(b) hereof) in the name
of Customer for Financial Assets, which shall, except as modified by Section
15(d) hereof, mean 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 for 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 Bank or its Subcustodian (as defined in
Section 3 hereof) for the account of Customer, including as an "Entitlement
Holder" as defined in Section 15(c) hereof); and
(b) an account in the name of Customer ("Deposit Account") for any and
all cash in any currency received by Bank or its Subcustodian for the account of
Customer, which cash shall not be subject to withdrawal by draft or check.
Customer warrants its authority to: 1) deposit the cash and Financial
Assets (collectively "Assets") received in the Accounts and 2) give Instructions
(as defined in Section 11 hereof) concerning the Accounts. Bank may deliver
Financial Assets of the same class in place of those deposited in the Custody
Account.
Upon written agreement between Bank and Customer, additional Accounts
may be established and separately accounted for as additional Accounts
hereunder.
2. MAINTENANCE OF FINANCIAL ASSETS AND CASH AT BANK AND SUBCUSTODIAN
LOCATIONS.
Unless Instructions specifically require another location acceptable to
Bank:
(a) Financial Assets shall be held in the country or other jurisdiction
in which the principal trading market for such Financial Assets is located,
where such Financial Assets are to be presented for payment or where such
Financial Assets are acquired; and
(b) Cash shall be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular
currency. To the extent Instructions are issued and Bank can comply with such
Instructions, Bank is authorized to maintain cash balances on deposit for
Customer with itself or one of its
"Affiliates" at such reasonable rates of interest as may from time to time
be paid on such accounts, or in non-interest bearing accounts as Customer may
direct, if acceptable to Bank. For purposes hereof, the term "Affiliate"
shall mean an entity controlling, controlled by, or under common
control with, Bank.
If Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by Bank and Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
Bank may act hereunder through the subcustodians listed in Schedule A
hereof with which Bank has entered into subcustodial agreements
("Subcustodians"). Customer authorizes Bank to hold Assets in the Accounts in
accounts which Bank has established with one or more of its branches or
Subcustodians. Bank and Subcustodians are authorized to hold any of the
Financial Assets in their account with any securities depository in which they
participate.
Bank reserves the right to add new, replace or remove Subcustodians.
Customer shall be given reasonable notice by Bank of any amendment to Schedule
A, but in no case will such amendment be effective prior to the funds actual
receipt of such notice.. Upon request by Customer, Bank shall identify the name,
address and principal place of business of any Subcustodian of 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) Bank shall identify the Assets on its books as belonging to
Customer.
(b) A Subcustodian shall hold such Assets together with assets
belonging to other customers of Bank in accounts identified on such
Subcustodian's books as custody accounts for the exclusive benefit of customers
of Bank.
(c) Any Financial Assets in the Accounts held by a Subcustodian shall
be subject only to the instructions of Bank or its agent. Any Financial Assets
held in a securities depository for the account of a Subcustodian shall be
subject only to the instructions of such Subcustodian.
(d) Any agreement Bank enters into with a Subcustodian for holding
Bank's customers' assets shall provide (i) for indemnification or insurance
arrangements (or any combination) that will adequately protect the Customer
against the risk of loss of Assets held in accordance with the Agreement; (ii)
such assets shall not be 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 or, in the case of
cash deposits, except for liens or rights in favor of creditors of the
Subcustodian arising under bankruptcy, insolvency or similar laws; (iii) that
the beneficial ownership of such assets shall be freely transferable without the
payment of money or value other than for safe custody or administration; (iv)
that adequate records will be maintained identifying such Assets as belonging to
the customer or as being held by Bank for the benefit of its customer; (v) that
the customer's independent public accountants will be given access to those
records or confirmation of the contents of those records; and (vi) that the
Customer will receive periodic reports with respect to the safekeeping of
Customer's assets , including notification of any transfer to or from Customer's
account or a third party account containing assets held for the benefit of the
Customer. Where Securities are deposited by a Subcustodian with a securities
depository, Bank shall cause the Subcustodian to identify on its books as
belonging to Bank, as agent, the Securities shown on the Subcustodian's account
on the books of such securities depository. The foregoing shall not apply to the
extent of any special agreement or arrangement made by Customer with any
particular Subcustodian.
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5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) Bank or its Subcustodians shall make payments from the Deposit
Account upon receipt of Instructions which include all information required by
Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, Bank, in its discretion, may
advance Customer such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by Bank on similar
loans.
(c) If Bank credits the Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, Customer shall
promptly return any such amount upon oral or 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 Customer does not promptly return any
amount upon such notification, Bank shall be entitled, upon oral or written
notification to Customer, to reverse such credit by debiting the Deposit Account
for the amount previously credited. Bank or its Subcustodian shall have no duty
or obligation to institute legal proceedings, file a claim or a proof of claim
in any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for Customer upon Instructions after
consultation with Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Financial Assets shall be transferred, exchanged or delivered by
Bank or its Subcustodian upon receipt by Bank of Instructions which include all
information required by Bank. Settlement and payment for Financial Assets
received for, and delivery of Financial Assets out of, the Custody Account 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, including, without limitation, delivery of
Financial Assets to a purchaser, dealer or their agents against a receipt with
the expectation of receiving later payment and free delivery. Delivery of
Financial Assets out of the Custody Account may also be made in any manner
specifically required by Instructions acceptable to Bank.
(b) Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Financial Assets with respect to any
sale, exchange or purchase of Financial Assets. Otherwise, such transactions
shall be credited or debited to the Accounts on the date cash or Financial
Assets are actually received by Bank and reconciled to the Account.
(i) Bank may reverse credits or debits made to the Accounts in
its discretion if the related transaction fails to settle within a
reasonable period, determined by Bank in its discretion, after the
contractual settlement date for the related transaction.
(ii) If any Financial Assets delivered pursuant to this
Section 6 are returned by the recipient thereof, Bank may reverse the
credits and debits of the particular transaction at any time.
7. ACTIONS OF BANK.
Bank shall follow Instructions received regarding Assets held in the
Accounts. However, until it receives Instructions to the contrary, Bank shall:
(a) Present for payment any Financial Assets 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 Bank or
Subcustodian is aware of such opportunities. Bank is deemed to be aware for
purposes of this
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Agreement upon publication of notice of such opportunities in a publication
identified on Exhibit 1, as such Exhibit may be amended from time to time by
mutual agreement.
(b) Execute in the name of Customer such ownership and other
certificates as may be required to obtain payments in respect of Financial
Assets.
(c) Exchange interim receipts or temporary Financial Assets for
definitive Financial Assets.
(d) Appoint brokers and agents for any transaction involving the
Financial Assets, including, without limitation, Affiliates of Bank or any
Subcustodian.
(e) Issue statements to Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
Bank shall send 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
Customer sends Bank a written exception or objection to any Bank statement
within sixty (60) days of receipt, Customer shall be deemed to have approved
such statement. In such event, or where Customer has otherwise approved any such
statement, Bank shall, to the extent permitted by law, be released, relieved and
discharged with respect to all matters set forth in such statement or reasonably
implied therefrom as though it had been settled by the decree of a court of
competent jurisdiction in an action where Customer and all persons having or
claiming an interest in Customer or Customer's Accounts were parties.
All collections of funds or other property paid or distributed in
respect of Financial Assets in the Custody Account shall be made at the risk of
Customer. Bank shall have no liability for any loss occasioned by delay in the
actual receipt of notice by Bank or by its Subcustodians of any payment,
redemption or other transaction regarding Financial Assets in the Custody
Account in respect of which Bank has agreed to take any action hereunder.
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
(a) CORPORATE ACTIONS. Whenever Bank receives information concerning
the Financial Assets which requires discretionary action by the beneficial owner
of the Financial Assets (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"),
Bank shall give Customer notice of such Corporate Actions to the extent that
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, Bank shall endeavor to obtain
Instructions from Customer or its Authorized Person (as defined in Section 10
hereof), but if Instructions are not received in time for Bank to take timely
action, or actual notice of such Corporate Action was received too late to seek
Instructions, Bank is authorized to sell such rights entitlement or fractional
interest and to credit the Deposit Account with the proceeds or take any other
action it deems, in good faith, to be appropriate in which case it shall be held
harmless for any such action.
(b) PROXY VOTING. Bank shall provide proxy voting services for
securities held outside the United States, if elected by Customer, in
accordance with the terms of the proxy voting services rider hereto. Proxy
voting services may be provided by Bank or, in whole or in part, by one or
more third parties appointed by Bank (which may be Affiliates of Bank). The
Banks shall with respect to domestic securities held hereunder, cause to be
promptly executed by the registered holder of such securities, if the
securities are registered otherwise than in
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the Customer or one of its series, or a nominee of such, all proxies it
receives, without indication of the manner in which such proxies are to be
voted, and shall promptly deliver to the Customer such proxies, all proxy
soliciting materials and all notices relating to such securities.
(c) TAX RECLAIMS.
(i) Subject to the provisions hereof, Bank shall apply 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
Financial Assets for Customer's benefit which Bank believes may be
available to Customer.
(ii) The provision of tax reclaim services by Bank is conditional upon
Bank's receiving from Customer or, to the extent the Financial Assets
are beneficially owned by others, from each beneficial owner, A) a
declaration of the beneficial owner's identity and place of residence
and (B) certain other documentation (PRO FORMA copies of which are
available from Bank). Customer acknowledges that, if Bank does not
receive such declarations, documentation and information, Bank shall be
unable to provide tax reclaim services.
(iii) Bank shall not be liable to Customer or any third party for any
taxes, fines or penalties payable by Bank or Customer, and shall be
indemnified accordingly, whether these result from the inaccurate
completion of documents by Customer or any third party, or as a result
of the provision to Bank or any third party of inaccurate or misleading
information or the withholding of material information by Customer or
any other third party, or as a result of any delay of any revenue
authority or any other matter beyond Bank's control.
(iv) Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to
Customer from time to time and Bank may, by notification in writing, at
Bank's absolute discretion, supplement or amend the markets in which
tax reclaim services are offered. Other than as expressly provided in
this sub-clause, Bank shall have no responsibility with regard to
Customer's tax position or status in any jurisdiction.
(v) Customer confirms that Bank is authorized to disclose any
information requested by any revenue authority or any governmental body
in relation to Customer or the securities and/or cash held for
Customer.
(vi) Tax reclaim services may be provided by Bank or, in whole or in
part, by one or more third parties appointed by Bank (which may be
Bank's affiliates); provided that Bank shall be liable for the
performance of any such third party to the same extent as Bank would
have been if Bank had performed such services.
(d) TAX OBLIGATIONS.
(i) Customer confirms that Bank is authorized to deduct from any cash
received or credited to the Deposit Account any taxes or levies
required by any revenue or governmental authority for whatever reason
in respect of the Custody Account.
(ii) If Bank does not receive appropriate declarations, documentation
and information then additional United Kingdom taxation shall be
deducted from all income received in respect of the Financial Assets
issued outside the United Kingdom and any applicable United States
withholding tax shall be deducted from income received from the
Financial Assets.
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Customer shall provide to Bank such documentation and
information as Bank 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. Customer undertakes to notify Bank immediately if any such
information requires updating or amendment.
(iii) Customer shall be responsible for the payment of all taxes
relating to the Financial Assets in the Custody Account, and Customer
agrees to pay, indemnify and hold Bank harmless from and against any
and all liabilities, penalties, interest or additions to tax with
respect to or resulting from any delay in, or failure by, Bank (1) to
pay, withhold or report any U.S. federal, state or local taxes or
foreign taxes imposed on, or (2) to report interest, dividend or other
income paid or credited to the Deposit Account, whether such failure or
delay by Bank to pay, withhold or report tax or income is the result of
(x) Customer's failure to comply with the terms of this paragraph, or
(y) Bank's own acts or omissions; provided however, Customer shall not
be liable to Bank for any penalty or additions to tax due as a result
of Bank's failure to pay, withhold or report tax or to report interest,
dividend or other income paid or credited to the Deposit Account solely
as a result of Bank's negligent acts or omissions.
9. NOMINEES.
Financial Assets which are ordinarily held in registered form may be
registered in a nominee name of Bank, Subcustodian or securities depository, as
the case may be. Bank may without notice to Customer cause any such Financial
Assets to cease to be registered in the name of any such nominee and to be
registered in the name of Customer. In the event that any Financial Assets
registered in a nominee name are called for partial redemption by the issuer,
Bank may allot the called portion to the respective beneficial holders of such
class of security in any manner Bank deems to be fair and equitable. Customer
shall hold Bank, Subcustodians, and their respective nominees harmless from any
liability arising directly or indirectly from their status as a mere record
holder of Financial Assets in the Custody Account.
10. AUTHORIZED PERSONS.
As used herein, the term "Authorized Person" means employees or agents
including investment managers as have been designated by written notice from
Customer or its designated agent to act on behalf of Customer hereunder. Such
persons shall continue to be Authorized Persons until such time as Bank receives
Instructions from Customer or its designated agent that any such employee or
agent is no longer an Authorized Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by Bank, via telephone, telex, facsimile transmission, bank wire or
other teleprocess or electronic instruction or trade information system
acceptable to Bank which Bank believes in good faith to have been given by
Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which Bank may specify. Unless
otherwise expressly provided, all Instructions shall continue in full force and
effect until canceled or superseded. The term "Instructions" includes, without
limitation, instructions to sell, assign, transfer, deliver, purchase or receive
for the Custody Account, any and all stocks, bonds and other Financial Assets or
to transfer funds in the Deposit Account.
Any Instructions delivered to Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which
confirmation may bear the facsimile signature of such Person), but Customer
shall hold Bank harmless for the failure of an Authorized Person to send such
confirmation in writing, the failure of such
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confirmation to conform to the telephone instructions received or Bank's
failure to produce such confirmation at any subsequent time. Bank may
electronically record any Instructions given by telephone, and any other
telephone discussions with respect to the Custody Account. Customer shall be
responsible for safeguarding any testkeys, identification codes or other
security devices which Bank shall make available to Customer or its
Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) Bank shall be responsible for the performance of only such duties
as are set forth herein or expressly contained in Instructions which are
consistent with the provisions hereof as follows:
(i) Notwithstanding any other provisions of this Agreement,
Bank's responsibilities shall be limited to the exercise of reasonable
care with respect to its obligations hereunder. Bank shall only be
liable to Customer for any loss which shall occur as the result of the
failure of a Subcustodian to exercise reasonable care with respect to
the safekeeping of such Assets where such loss results directly from
the failure by the Subcustodian to use reasonable care in the provision
of custodial services by it in accordance with the standards prevailing
in its local market or from the willful default of such Subcustodian in
the provision of custodial services by it. In the event of any loss to
Customer which is compensable hereunder (I.E. a loss arising by reason
of willful misconduct or the failure of Bank or its Subcustodian to use
reasonable care), Bank shall be liable to Customer only to the extent
of Customer's direct damages, to 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 conditions
or circumstances. Bank shall have no liability whatsoever for any
consequential, special, indirect or speculative loss or damages
(including, but not limited to, lost profits) suffered by Customer in
connection with the transactions and services contemplated hereby and
the relationship established hereby even if Bank has been advised as to
the possibility of the same and regardless of the form of the action.
(ii) Bank shall not be responsible for the insolvency of any
Subcustodian which is not a branch or Affiliate of Bank. Bank shall not
be responsible for any act, omission, default or the solvency of any
broker or agent which it or a Subcustodian appoints unless such
appointment was made negligently or in bad faith.
(iii) (A) Customer shall indemnify and hold Bank and its
directors, officers, agents and employees (collectively the
"Indemnitees") harmless from and against any and all claims,
liabilities, losses, damages, fines, penalties, and expenses, including
out-of-pocket and incidental expenses and legal fees ("Losses") that
may be imposed on, incurred by, or asserted against, the Indemnitees or
any of them for following any instructions or other directions upon
which Bank is authorized to rely pursuant to the terms of this
Agreement. (B) In addition to and not in limitation of the preceding
subparagraph, Customer shall also indemnify and hold the Indemnitees
and each of them harmless from and against any and all Losses that may
be imposed on, incurred by, or asserted against, the Indemnitees or any
of them in connection with or arising out of Bank's performance under
this Agreement, provided the Indemnitees have acted with reasonable
care and have not engaged in willful misconduct. (C) In performing its
obligations hereunder, Bank may rely on the genuineness of any document
which it believes in good faith to have been validly executed. Customer
shall have no liability whatsoever for any consequential, special,
indirect or speculative loss or damages (including, but not limited to,
lost profits) suffered by Bank in connection with the transactions and
services contemplated hereby and the relationship established hereby
even if Customer has been advised as to the possibility of the same and
regardless of the form of the action.
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(iv) Customer shall pay for and hold 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.
(v) Bank shall be entitled to rely, and may act, upon the
advice of counsel reasonably acceptable to the Fund on all matters and
shall be without liability for any action reasonably taken or omitted
pursuant to such advice.
(vi) Bank need not maintain any insurance for the benefit of
Customer.
(vii) Without limiting the foregoing, 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 malfunction, interruption of or
error in the transmission of information caused by any machines or
system or interruption of communication facilities, abnormal operating
conditions, 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.
(viii) Neither party shall be liable to the other for any loss
due to forces beyond their control including, but not limited to
strikes or work stoppages, acts of war (whether declared or undeclared)
or terrorism, insurrection, revolution, nuclear fusion, fission or
radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to Customer
or an Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to
investments or the retention of Financial Assets;
(iii) advise Customer or an Authorized Person regarding any
default in the payment of principal or income of any security other
than as provided in Section 5(c) hereof;
(iv) evaluate or report to Customer or an Authorized Person
regarding the financial condition of any broker, agent or other party
to which Financial Assets are delivered or payments are made pursuant
hereto; and
(v) review or reconcile trade confirmations received from
brokers. Customer or its Authorized Persons issuing Instructions shall
bear any responsibility to review such confirmations against
Instructions issued to and statements issued by Bank.
(c) Customer authorizes Bank to act hereunder notwithstanding that Bank
or any of its divisions or Affiliates may have a material interest in a
transaction, or circumstances are such that Bank may have a potential conflict
of duty or interest including the fact that Bank or any of its Affiliates may
provide brokerage services to other customers, act as financial advisor to the
issuer of Financial Assets, act as a lender to the issuer of Financial Assets,
act in the same transaction as agent for more than one customer, have a material
interest in the issue of Financial Assets, or earn profits from any of the
activities listed herein.
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13. FEES AND EXPENSES.
Customer shall pay Bank for its services hereunder the fees set forth
in Schedule B hereto or such other amounts as may be agreed upon in writing,
together with Bank's reasonable out-of-pocket or incidental expenses, including,
but not limited to, legal fees. Bank shall have a lien on and is authorized to
charge any Accounts of Customer for any amount owing to Bank under any provision
hereof.
14. MISCELLANEOUS.
(a) CERTIFICATION OF RESIDENCY, ETC. Customer certifies that it is a
resident of the United States and shall notify Bank of any changes in residency.
Bank may rely upon this certification or the certification of such other facts
as may be required to administer Bank's obligations hereunder. Customer shall
indemnify Bank against all losses, liability, claims or demands arising directly
or indirectly from any such certifications.
(b) ACCESS TO RECORDS. Bank shall allow Customer's independent public
accountant reasonable access to the records of Bank relating to Financial Assets
as is required in connection with their examination of books and records
pertaining to Customer's affairs. Subject to restrictions under applicable law,
Bank shall also obtain an undertaking to permit Customer's independent public
accountants reasonable access to the records of any Subcustodian which has
physical possession of any Financial Assets as may be required in connection
with the examination of Customer's books and records.
(c) GOVERNING LAW; SUCCESSORS AND ASSIGNS; IMMUNITY; CAPTIONS. THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK and shall not be assignable by
either party, but shall bind the successors in interest of Customer and Bank. To
the extent that in any jurisdiction Customer may now or hereafter be entitled to
claim, for itself or its assets, immunity from suit, execution, attachment
(before or after judgment) or other legal process, Customer irrevocably shall
not claim, and it hereby waives, such immunity. The captions given to the
sections and subsections of this Agreement are for convenience of reference only
and are not to be used to interpret this Agreement.
(d) ENTIRE AGREEMENT; APPLICABLE RIDERS. Customer represents that the
Assets deposited in the Accounts are (Check one):
X Investment Company assets subject to certain U.S. Securities and
---
Exchange Commission rules and regulations;
Other (specify)
----
This Agreement consists exclusively of this document together with
Schedules A and B, Exhibits I - _______ and the following Rider(s)
[Check applicable rider(s)]:
X INVESTMENT COMPANY
---
X PROXY VOTING
---
X SPECIAL TERMS AND CONDITIONS
---
There are no other provisions hereof and this Agreement supersedes any
other agreements, whether written or oral, between the parties. Any amendment
hereto must be in writing, executed by both parties.
(e) SEVERABILITY. In the event that one or more provisions hereof are
held invalid, illegal or unenforceable in any respect on the basis of any
particular circumstances or in any jurisdiction, the validity,
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legality and enforceability of such provision or provisions under other
circumstances or in other jurisdictions and of the remaining provisions shall
not in any way be affected or impaired.
(f) WAIVER. Except as otherwise provided herein, no failure or delay on
the part of either party in exercising any power or right hereunder 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 hereof, 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) REPRESENTATIONS AND WARRANTIES. (i) Customer hereby represents and
warrants to Bank that: (A) it has full authority and power to deposit and
control the Financial Assets and cash deposited in the Accounts; (B) it has all
necessary authority to use Bank as its custodian; (C) this Agreement constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms; (D) it shall have full authority and power to borrow moneys and enter
into foreign exchange transactions; and (E) it has not relied on any oral or
written representation made by Bank or any person on its behalf, and
acknowledges that this Agreement sets out to the fullest extent the duties of
Bank. (ii) Bank hereby represents and warrants to Customer that: (A) it has the
full power and authority to perform its obligations hereunder, (B) this
Agreement constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and (C) that it has taken all necessary action to
authorize the execution and delivery hereof.
(h) NOTICES. All notices hereunder shall be effective when actually
received. Any notices or other communications which may be required hereunder
are to be sent to the parties at the following addresses or such other addresses
as may subsequently be given to the other party in writing: (a) Bank: The Chase
Manhattan Bank, 4 Chase MetroTech Center, Brooklyn, N.Y. 11245, Attention:
Global Investor Services, Investment Management Group; and (b) Customer: X.X.
XXXXXX INSTITUTIONAL FUNDS c/o X.X. Xxxxxx Xxxxxxx Asset Management 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx.
(i) TERMINATION. This Agreement may be terminated by Customer or Bank
by giving sixty (60) days' written notice to the other, provided that such
notice to Bank shall specify the names of the persons to whom Bank shall deliver
the Assets in the Accounts. If notice of termination is given by Bank, Customer
shall, within sixty (60) days following receipt of the notice, deliver to Bank
Instructions specifying the names of the persons to whom Bank shall deliver the
Assets. In either case Bank shall deliver the Assets to the persons so
specified, after deducting any amounts which Bank determines in good faith to be
owed to it under Section 13. If within sixty (60) days following receipt of a
notice of termination by Bank, Bank does not receive Instructions from Customer
specifying the names of the persons to whom Bank shall deliver the Assets, Bank,
at its election, may deliver the Assets to a bank or trust company doing
business in the State of New York to be held and disposed of pursuant to the
provisions hereof, or to Authorized Persons, or may continue to hold the Assets
until Instructions are provided to Bank.
(j) MONEY LAUNDERING. Customer warrants and undertakes to Bank for
itself and its agents that all Customer's customers are properly identified in
accordance with U.S. Money Laundering Regulations as in effect from time to
time.
(k) IMPUTATION OF CERTAIN INFORMATION. Bank shall not be held
responsible for and shall not be required to have regard to information held by
any person by imputation or information of which Bank is not aware by virtue of
a "Chinese Wall" arrangement. If Bank becomes aware of confidential information
which in good faith it feels inhibits it from effecting a transaction hereunder
Bank may refrain from effecting it.
10
15. DEFINITIONS.
As used herein, the following terms shall have the meaning hereinafter
stated:
a) "Certificated Security" shall mean a security that is represented by a
certificate.
b) "Custody Account" shall mean each Securities custody account on Bank's
records to which Financial Assets are or may be credited pursuant hereto.
c) "Entitlement Holder" shall mean the person on the records of a Securities
Intermediary as the person having a Securities Entitlement against the
Securities Intermediary.
d) "Financial Asset" shall mean, as the context requires, either the asset
itself or the means by which a person's claim to it is evidenced, including
a Certificated Security or Uncertificated Security, a security certificate,
or a Securities Entitlement. Financial Assets shall not include cash.
e) "Securities" shall mean stocks, bonds, rights, warrants and other
negotiable and non-negotiable paper whether issued as Certificated
Securities or Uncertificated Securities and commonly traded or dealt in on
securities exchanges or financial markets, and other obligations of an
issuer, or shares, participations and interests in an issuer recognized in
an area in which it is issued or dealt in as a medium for investment and
any other property as shall be acceptable to Bank for the Custody Account.
f) "Securities Entitlement" shall mean the rights and property interest of an
Entitlement Holder with respect to a Financial Asset as set forth in Part 5
of the Uniform Commercial Code.
g) "Securities Intermediary" shall mean Bank, a Subcustodian, a securities
depository, and any other financial institution which in the ordinary
course of business maintains custody accounts for others and acts in that
capacity.
h) "Uncertificated Security" shall mean a security that is not represented by
a certificate.
i) "Uniform Commercial Code" shall mean Article 8 of the Uniform Commercial
Code of the State of New York, as the same may be amended from time
to time.
11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first-above written.
X.X. XXXXXX INSTITUTIONAL FUNDS
By:____________________________________________
Title: Xxxxx Xxxxxxxx, President
Date: September 7, 2001
THE CHASE MANHATTAN BANK
By:____________________________________________
Title:
Date:
00
XXXXX XX XXX XXXX )
: ss.
COUNTY OF NEW YORK )
On this 7th day of September, 2001, before me personally came Xxxxx
Xxxxxxxx, to me known, who being by me duly sworn, did depose and say that he
resides in , that he is President of the entity described
in and which executed the foregoing instrument; that he 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.
--------------------------
Xxxxx Xxxxxxxx
Sworn to before me this 7th day
of September, 2001.
-------------------------
Notary
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this day of , 2001, before me personally came ,
to me known, who being by me duly sworn, did depose and say that he/she
resides in at ; that he/she is a Vice President of THE
CHASE MANHATTAN BANK, 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 Directors of said corporation, and that
he/she signed his/her name thereto by like order.
Sworn to before me this
day of , 2001 .
----------------
Notary
Investment Company Rider to Global Custody Agreement
Between The Chase Manhattan Bank and
X.X. XXXXXX INSTITUTIONAL FUNDS
effective September 7, 2001
The following modifications are made to the Agreement:
A. Add a new Section 16 to the Agreement as follows:
"16. COMPLIANCE WITH SEC RULE 17F-5 & RULE 17F-7
(a) Customer's board of directors (or equivalent body) (hereinafter
`Board') hereby delegates to Bank, and, Bank hereby accepts the delegation to
it, of the obligation to perform as Customer's `Foreign Custody Manager' (as
that term is defined in Securities and Exchange Commission ("SEC") rule
17f-5(a)(2) as promulgated under the Investment Company Act of 1940, as amended
("1940 Act")), for the purposes of (i) selecting Eligible Foreign Custodians (as
that term is defined in SEC rule 17f-5(a)(1), and as the same may be amended
from time to time, or that have otherwise been made exempt pursuant to an SEC
exemptive order) to hold Financial Assets and Cash; (ii) evaluating the
contractual arrangements with such Eligible Foreign Custodians (as set forth in
SEC rule 17f-5(c)(2)); and (iii) complying with the responsibilities under Rule
17f-7 of the Primary Custodian ( as defined in such Rule). Anything in this
Agreement not withstanding, the Bank in no event shall be deemed to have
selected any Eligible Securities Depository (as defined in 17f-7) the use of
which is mandatory by law or regulation.
(b) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Customer's Board of the placement
of Financial Assets and Cash with particular Eligible Foreign
Custodians and of any material change in the arrangements with such
Eligible Foreign Custodians, with such reports to be provided to
Customer's Board at such times as the Board deems reasonable and
appropriate based on the circumstances of Customer's foreign custody
arrangements (and until further notice from Customer such reports shall
be provided not less than quarterly with respect to the placement of
Financial Assets and Cash with particular Eligible Foreign Custodians
and with reasonable promptness upon the occurrence of any material
change in the arrangements with such Eligible Foreign Custodians), but
in all cases prior to the effective date of such material change;
(ii) exercise such reasonable care, prudence and diligence in
performing as Customer's Foreign Custody Manager as a person having
responsibility for the safekeeping of Financial Assets and Cash would
exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined
that Financial Assets and Cash placed and maintained in the safekeeping
of such Eligible Foreign Custodian shall be subject to reasonable care,
based on the standards applicable to custodians in the relevant market,
after having considered all factors relevant to the safekeeping of such
Financial Assets and Cash, including, without limitation, those factors
set forth in SEC rule 17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible Foreign
Custodian requires that the Eligible Foreign Custodian will provide
reasonable care for Financial Assets and Cash based on the standards
applicable to custodians in the relevant market and that such contract
comply with Rule 17f-5(c)(2)(i)(A)-(F).
(v) have established a system to monitor the continued appropriateness
of maintaining Financial Assets and Cash with particular Eligible
Foreign Custodians and of the governing contractual arrangements; it
being understood, however, that in the event that Bank shall have
determined that the existing Eligible Foreign Custodian in a given
country would no longer afford Financial Assets and Cash reasonable
care and that no other Eligible Foreign Custodian in that country would
afford reasonable care, Bank shall promptly so advise Customer and
shall then act in accordance with the Instructions of Customer with
respect to the disposition of the affected Financial Assets and Cash.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
Financial Assets and Cash on behalf of Customer with Eligible Foreign Custodians
pursuant to written contract which complies with Rule 17f-5(c)(2) and deemed
appropriate by the bank.
(c) Bank represents to Customer that it is a U.S. Bank as defined in
Rule 17f-5(a)(7). Customer represents to Bank that: (1) the Financial Assets and
Cash being placed and maintained in Bank's custody are subject to the 1940 Act,
as the same may be amended from time to time; (2) its Board: (i) has determined
that it is reasonable to rely on Bank to perform as Customer's Foreign Custody
Manager (ii) or its investment adviser shall have determined that Customer may
maintain Financial Assets and Cash in each country in which Customer's Financial
Assets and Cash shall be held hereunder and determined to accept the risks
arising therefrom (including, but not limited to, a country's financial
infrastructure), prevailing custody and settlement practices, laws applicable to
the safekeeping and recovery of Financial Assets and Cash held in custody, and
the likelihood of nationalization, currency controls and the like) (collectively
("Country Risk")). Nothing contained herein shall require Bank to make any
selection or to engage in any monitoring on behalf of Customer that would entail
consideration of Country Risk.
(d) Bank shall provide to Customer an analysis of the custody risks
associated with maintaining assets with Eligible Securities Depository. Bank
shall monitor the custody risks associated with maintaining assets with the
Eligible Securities Depository on a continuing basis, and promptly notify the
Customer of any material change in these risks. Customer hereby acknowledges
that: (i) such information is solely designed to inform Customer of market
conditions and procedures and is not intended as a recommendation to invest or
not invest in particular markets; and (ii) Bank has gathered the information
from sources it considers reliable, but that Bank shall have no responsibility
for inaccuracies or incomplete information unless the Bank knows or should have
known such information is inaccurate or incomplete.
B. Add the following after the first sentence of Section 3 of the
Agreement: "At the request of Customer, Bank may, but need not, add to Schedule
A an Eligible Foreign Custodian where Bank has not acted as Foreign Custody
Manager with respect to the selection thereof. Bank shall notify Customer in the
event that it elects to add any such entity."
C. Add the following language to the end of Section 3 of the Agreement:
"The term Subcustodian as used herein shall mean the following:
(a) a `U.S. Bank,' which shall mean a U.S. bank as defined in SEC rule
17f-5(a)(7);
(b) an `Eligible Foreign Custodian,' which shall mean (i) a banking
institution or trust company, incorporated or organized under the laws
of a country other than the United States, that is regulated as such by
that country's government or an agency thereof, (ii) a majority-owned
direct or indirect subsidiary of a U.S. bank or bank holding company
which subsidiary is incorporated or organized under the laws of a
country other than the United States; and (iii) any other entity
(other than an Eligible Securities
2
Depository) that shall have been so qualified by exemptive order,
rule or other appropriate action of the SEC.
For purposes of clarity, it is agreed that as used in Section 12(a)(i), the term
Subcustodian shall not include any Eligible Foreign Custodian as to which Bank
has not acted as Foreign Custody Manager or any Eligible Securities Depository."
3
Appendix 1-A
ELIGIBLE SECURITIES DEPOSITORIES
Appendix 1-B
INFORMATION REGARDING COUNTRY RISK
1. To aid Customer in its determinations regarding Country Risk, Bank
shall furnish annually and upon the initial placing of Financial Assets and Cash
into a country the following information (check items applicable):
A Opinions of local counsel concerning:
___ i. Whether applicable foreign law would restrict the access
afforded Customer's independent public accountants to books
and records kept by an eligible foreign custodian located in
that country.
___ ii. Whether applicable foreign law would restrict the Customer's
ability to recover its Financial Assets and Cash in the event
of the bankruptcy of an Eligible Foreign Custodian located in
that country.
___ iii. Whether applicable foreign law would restrict the Customer's
ability to recover Financial Assets that are lost while under
the control of an Eligible Foreign Custodian located in the
country.
B. Written information concerning:
___ i. The foreseeability of expropriation, nationalization, freezes,
or confiscation of Customer's Financial Assets and Cash.
___ ii. Whether difficulties in converting Customer's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.]
C. A market report with respect to the following topics:
(i) securities regulatory environment, (ii) foreign ownership
restrictions, (iii) foreign exchange, (iv) securities settlement and
registration, (v) taxation, and (vi) depositories (including depository
evaluation), if any.
2. To aid Customer in monitoring Country Risk, Bank shall furnish board
the following additional information:
Market flashes, including with respect to changes in the information in
market reports.
GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
THE CHASE MANHATTAN BANK
AND
X.X. XXXXXX INSTITUTIONAL FUNDS
Dated September 7, 2001
1. Global Proxy Services ("Proxy Services") shall be provided for the
countries listed in the procedures and guidelines ("Procedures")
furnished to Customer, as the same may be amended by Bank from time to
time on prior notice to Customer. The Procedures are incorporated by
reference herein and form a part of this Rider.
2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by
Bank to Customer of the dates of pending shareholder meetings,
resolutions to be voted upon and the return dates as may be received by
Bank or provided to Bank by its Subcustodians or third parties, and (b)
voting by Bank of proxies based on Customer Instructions. Original
proxy materials or copies thereof shall not be provided. Notifications
shall generally be in English and, where necessary, shall be summarized
and translated from such non-English materials as have been made
available to Bank or its Subcustodian. In this respect Bank's only
obligation is to provide information from sources it believes to be
reliable and/or to provide materials summarized and/or translated in
good faith. Bank reserves the right to provide Notifications, or parts
thereof, in the language received. Upon reasonable advance request by
Customer, backup information relative to Notifications, such as annual
reports, explanatory material concerning resolutions, management
recommendations or other material relevant to the exercise of proxy
voting rights shall be provided as available, but without translation.
3. While Bank shall attempt to provide accurate and complete
Notifications, whether or not translated, Bank shall not be liable for
any losses or other consequences that may result from reliance by
Customer upon Notifications where Bank prepared the same in good faith.
4. Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Proxy Services Bank shall be acting solely as
the agent of Customer, and shall not exercise any discretion with
regard to such Proxy Services.
5. Proxy voting may be precluded or restricted in a variety of
circumstances, including, without limitation, where the relevant
Financial Assets are: (i) on loan; (ii) at registrar for registration
or reregistration; (iii) the subject of a conversion or other corporate
action; (iv) not held in a name subject to the control of Bank or its
Subcustodian or are otherwise held in a manner which precludes voting;
(v) not capable of being voted on account of local market regulations
or practices or restrictions by the issuer; or (vi) held in a margin or
collateral account.
6. Customer acknowledges that in certain countries Bank may be unable to
vote individual proxies but shall only be able to vote proxies on a net
basis (E.G., a net yes or no vote given the voting instructions
received from all customers).
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered hereby, and shall
in no event sell, license, give or otherwise make the information
provided hereunder available, to any third party, and shall not
directly or indirectly compete with Bank or diminish the market for
Proxy Services by provision of such information, in whole or in part,
for compensation or otherwise, to any third party.
8. The names of Authorized Persons for Proxy Services shall be furnished
to Bank in accordance with Section 10 of the Agreement. Proxy Services
fees shall be as set forth in Section 13 of the Agreement or as
separately agreed.
2
SPECIAL TERMS AND CONDITIONS RIDER
GLOBAL CUSTODY AGREEMENT
WITH X.X. XXXXXX INSTITUTIONAL FUNDS
DATE September 7, 2001
DOMESTIC ONLY
SPECIAL TERMS AND CONDITIONS RIDER
DOMESTIC CORPORATE ACTIONS AND PROXIES
With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the provisions of
Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of Bank's
nominee or the nominee of a central depository) and communications with
respect to Financial Assets in the Custody Account as call for voting
or relate to legal proceedings within a reasonable time after
sufficient copies are received by Bank for forwarding to its customers.
In addition, Bank shall follow coupon payments, redemptions, exchanges
or similar matters with respect to Financial Assets in the Custody
Account and advise Customer or the Authorized Person for such Account
of rights issued, tender offers or any other discretionary rights with
respect to such Financial Assets, in each case, of which Bank has
received notice from the issuer of the Financial Assets, or as to which
notice is published in publications routinely utilized by Bank for this
purpose.
FEES
The fees referenced in Section 13 hereof cover only domestic and euro-dollar
holdings. There shall be no Schedule A hereto, as there are no foreign assets in
the Accounts.
DOMESTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
DOMESTIC CORPORATE ACTIONS AND PROXIES
With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the pertinent
provisions of Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of Bank's
nominee or the nominee of a central depository) and communications with
respect to Financial Assets in the Custody Account as call for voting
or relate to legal proceedings within a reasonable time after
sufficient copies are received by Bank for forwarding to its customers.
In addition, Bank shall follow coupon payments, redemptions, exchanges
or similar matters with respect to Financial Assets in the Custody
Account and advise Customer or the Authorized Person for such Account
of rights issued, tender offers or any other discretionary rights with
respect to such Financial Assets, in each case, of which Bank has
received notice from the issuer of the Financial Assets, or as to which
notice is published in publications routinely utilized by Bank for this
purpose.
The Chase Manhattan Bank
Global Investor Services
ADDENDUM TO FEE SCHEDULE FOR
X.X. XXXXXX INSTITUTIONAL FUNDS
Effective September 7, 2001
FUND ACCOUNTING FEE
In addition to the standard fund accounting charge of $45,000, and the standard
multiclass charge of $6,000 per class (after the initial class), there will be a
charge of $40,000 ($20,000 for the second and third sectors of this fund).
Signed, for and on behalf of Signed, for and on behalf of
The Chase Manhattan Bank X.X. XXXXXX INSTITUTIONAL FUNDS
------------------------ ------------------------
Date: ___________________ Date: ___________________
Fee Schedule for X.X. XXXXXX INSTITUTIONAL FUNDS
and Chase Funds, continued
page 2
DOMESTIC CUSTODY FEES DOMESTIC TRANSACTION FEES
1 basis point on the first $250MM DTC $8.00 per transaction* /$5.00 automated
.75 basis points on the next $250MM PTC/FBE $8.00 per transaction* /$6.00 automated
.50 basis points on the remainder Physical $15.00 per transaction
Income Collection $10.00 per transaction
Wire Charges (outbound only) $5.00 per wire
FUND ACCOUNTING FEES
BASE FUND ACCOUNTING: $45,000 per single class fund per year
MULTICLASS ACCOUNTING FEE: $6,000 per additional class (after A) per year
PRICE QUOTES FEE: $.50 per quote per day
This fee schedule will be in effect for a period of 2 years. New markets added,
or additional services required that are not included in this schedule will be
negotiated separately and added to this schedule as the need arises.
Agreed to on the 7th day of
September, 2001
X.X. XXXXXX INSTITUTIONAL FUNDS The Chase Manhattan Bank
------------------------- -------------------------
Xxxxx Xxxxxxxx By:
President Name:
Title:
SCHEDULE C (FUND ACCOUNTING RIDER)
Pursuant to Article 8, the Bank agrees to perform the following duties
in accordance with the requirements of the Portfolio's Registration Statement,
the 1940 Act, applicable Internal Revenue Service ("IRS") regulations, and
procedures as may be agreed upon from time to time, including without limitation
those set forth in the Service Level Agreement pertaining to the Customer to
which the Bank is a party. In all instances, the Bank agrees to perform such
services in accordance with the highest industry standards and best practices,
which may include those enumerated in the Audits of Investment Companies Audit
and Accounting Guide, as in effect from time to time. Where appropriate, the
Bank agrees to keep all records on a Portfolio class-by-class basis. The Bank
agrees to:
(a) keep and maintain the books and records of each Portfolio pursuant to
Rule 31a-1 under the 1940 Act, other than those to be maintained by the
Customer's transfer agent, including the following:
(i) journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and
disbursements of cash and all other debits and credits, as
required by subsection (b)(1) of said Rule;
(ii) general and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including
interest accrued and interest received, as required by
subsection (b)(2)(i) of said Rule;
(iii) separate ledger accounts required by subsections (b)(2)(ii)
and (iii) of said Rule; and
(iv) a monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of said
Rule.
(b) perform the following accounting services daily for each Portfolio:
(i) calculate the net asset value per share;
(ii) obtain security prices from independent pricing services, or
if such quotes are unavailable, obtain such prices from each
Portfolio's investment adviser or its designee, as approved by
the Customer's Board;
(iii) provide exception, stale and halted price reporting to Xxxxxx;
(iv) verify and reconcile with the Bank's custody records all
daily trade activity;
(v) compute, as appropriate, each Portfolio's net income and
capital gains, dividend payables, dividend factors, 7-day
yields, 7-day effective yields, 30-day yields, weighted
average portfolio maturity and such other agreed-upon rates
and yields;
(vi) review daily the net asset value calculation and dividend
factor (if any) for each Portfolio, check and confirm the net
asset values and dividend factors for reasonableness and
deviations against agreed-upon benchmarks and tolerance
levels;
(vii) distribute net asset values and yields to NASDAQ, the Transfer
Agent, the Customer's administrator and such other third
parties as are agreed upon;
(viii) report to the Customer, at least weekly, about the daily
market pricing of securities in any money market Customers,
with the comparison to the amortized cost basis;
(ix) determine unrealized appreciation and depreciation on
securities held in variable net asset value Portfolios;
(x) record all corporate actions affecting securities held by each
Portfolio, including dividends, stock splits and
recapitalizations;
(xi) amortize premiums and accrete discounts on securities
purchased at a price other than face value, if requested by
the Customer;
(xii) record and reconcile with the Transfer Agent all capital stock
activity;
(xiii) update Customer accounting system to reflect rate changes on
variable interest rate instruments;
(xiv) post Portfolio transactions to appropriate categories;
(xv) accrue expenses of each Portfolio according to instructions
received from the Customer's administrator;
(xvi) calculate book capital account balances;
(xvii) maintain tax books and records;
(xviii) prepare capital allocation reports in accordance with
Regulation 1.704-3(e)(3) (special aggregation rule for
securities partnerships) under the U.S. Internal Revenue Code,
based upon tax adjustments supplied by the Portfolio's
administrator;
(xix) determine the outstanding receivables and payables for all (1)
security trades, (2) Portfolio share transactions and (3)
income and expense accounts;
(xx) provide accounting reports in connection with the Customer's
regular annual audit and other audits and examinations by
regulatory agencies;
(xxi) advise the Customer and Xxxxxx daily of the amount of any
overdraft and the circumstances giving rise to each such
overdraft; and
(xxii) provide such periodic reports as the Customer shall reasonably
request.
In connection with the provision of these services, the Bank agrees:
(a) to maintain, in a format acceptable to the Customer, documents in
accordance with the applicable provisions of Rule 31a-2 of the 1940
Act, and with requirements of other applicable domestic regulators,
such as the IRS. The Bank agrees to make such documents available upon
reasonable request for inspection by officers, employees and auditors
of the Customer during the Bank's normal business hours.
(b) that all records maintained and preserved by the Bank pursuant to this
Agreement which the Portfolio is required to maintain and preserve
shall be and remain the property of the Portfolio and shall be
surrendered to the Portfolio promptly upon request in the form in which
such records have been maintained and preserved. Upon reasonable
request of the Portfolio, the Bank shall provide, in the form
reasonably requested by the Customer, any records included in any such
delivery, and the Customer shall reimburse the Bank for its expenses of
providing such records in such form;
(c) to make reasonable efforts to determine (i) the taxable nature of any
distribution or amount received by or deemed received by, or payable to
the Portfolio; (ii) the taxable nature or effect on the Portfolio or
its shareholders of any corporate actions, class actions, tax reclaims,
tax reCustomers, or similar
events; (iii) the taxable nature or taxable amount of any distribution
or dividend paid, payable, or deemed paid by the Portfolio to its
shareholders; or (iv) the effect under any federal, state or foreign
income tax laws of the Portfolio making or not making any distribution
or dividend payment or any election with respect thereto, in each case
subject to review by the Customer or a designee of the Customer,
subject to the following: (w) with respect to determinations
contemplated by this clause (c) that a Prudent Customer Accountant
would reasonably consider to be, and that the Bank considers to be,
non-routine in nature, the Bank may seek in writing the approval
or authorization of the Customer or a designee of the Customer and
shall not be required to act in respect of any such determination (as
to which a written request for approval or authorization shall have
been made) without such approval or authorization; (x) the Bank need
not make any such accrual, unless and until such accrual has been
approved and authorized by the Customer or its designee; (y) the
Customer shall, or shall cause its designee, to provide such approval
and authorization, or approval and authorization of different
determinations(s), promptly; and (z) provided the Bank has made the
reasonable efforts described in this clause (c) and thereafter has
acted in accordance with the approvals and authorizations of the
Customer or its designee, the Bank shall have no liability for any such
accrual if it otherwise, in performing its services hereunder, is not
in breach of this Agreement. The Bank shall accrue for these actions
appropriately; and
(d) to provide such records and assistance, including office space within
the Bank's premises, to the Customer's independent accountants in
connection with the services such accountants provide to the Customer,
as such accountants shall reasonably request.
The parties further agree as follows with respect to the provision of services
pursuant to this Schedule C:
(a) The Bank may provide services similar or identical to those covered in
this Schedule C to other corporations, associations or entities of any
kind. Any and all operational procedures, techniques and devices
developed by the Bank in connection with the performance of its duties
and obligations under this Schedule C, including those developed in
conjunction with the Customer (other than those for which the Customer
has paid the Bank in whole or in part to develop), shall be and remain
the Bank's property,
and the Bank shall be free to employ such procedures, techniques
and devices in conjunction with the performance of any other contract
with any other person, whether or not the provisions of such contract
are similar or identical to this provision of this Schedule C.
(b) The Bank may rely on the Customer's then currently effective
Prospectus, and the Customer shall promptly advise the Bank of any
amendments thereto and provide copies of such amendments to the Bank.
(c) Both the Bank and the Customer or its designee shall use reasonable
efforts to identify any changes in domestic and foreign laws and
regulations applicable to the Bank's providing of services under this
Schedule C, each shall promptly advise the other of any changes it
identifies, and upon any such identification the Customer and the Bank
shall agree on any reasonable alteration to the services to be provided
by the Bank under this Schedule C.
(d) The Customer or its designee shall (i) furnish promptly to the Bank
(and the Bank may rely upon) the amounts of, or written formulas or
methodologies to be used by the Bank to calculate the amounts of,
Customer liabilities and (ii) specify the timing for accruals of such
liabilities. The Bank shall request such additional information as it
deems reasonably necessary for it to perform its services under this
Schedule C.
(e) The Bank shall not be required to include as Customer liabilities and
expenses, nor use in its calculations hereunder, including, without
limitation, as a reduction of net asset value, any accrual for any U.S.
federal or state income taxes, unless and until the Customer or its
designee shall have specified to the Bank the precise amount of the
same to be included in liabilities and expenses or used to reduce net
asset value. The Bank agrees to include as a Customer liability proper
accruals for foreign taxes, unless, after being advised of the amount
and the basis for the accrual, the Customer by Proper Instructions
directs the Bank not to do so.
(f) The Customer or its designee shall furnish to the Bank, and the Bank
may rely upon, the following types of information (and explanations
thereof): (i) the Customer's tax basis in debt obligations acquired by
the Customer before the Bank's becoming Bank hereunder, the dates of
such acquisitions, and the amount of
premium previously amortized and the discount previously included in
income, (ii) the amounts credited to any capital accounts, (iii) the
amount of any reserves, and (iv) similar information which is required
by the Bank for performing the services and is neither possessed by the
Bank as Bank nor available from a third party.
(g) References to corporate actions in clause (b)(x) are limited to
corporate actions of which the Bank has or is deemed to have knowledge
under Section 2.2.
(h) The Bank shall not be responsible for, and shall not incur any loss or
liability with respect to: any errors or omissions in information
supplied by the Customer or its designee that the Bank has reviewed and
has concluded is free of manifest error; any improper use by the
Customer, its designees, agents, distributor or investment adviser of
any valuations or computations supplied by the Bank under this
Agreement; any valuations of securities supplied by the Customer or an
independent pricing service approved by the Customer's Board, provided
that, with respect to such valuations, the Bank has otherwise complied
with this Schedule C, has reviewed the valuations and has concluded
they are free of manifest error; any tax determination authorized and
approved by the Customer or its designee that the Bank has reviewed and
has concluded is free of manifest error; or any changes in U.S. law or
regulations applicable to the Bank's performance not identified by the
Bank's use of reasonable efforts which are not identified to the Bank
by the Customer.
