CUSTODY AGREEMENT
This Custody Agreement is dated February 17, 1993 between XXXXXX XXXXXXX
TRUST COMPANY, a New York State chartered trust company (the "Custodian"), and
XXXXXXXX, AVER & WOOD INVESTMENT TRUST (the "Client"), with respect to XXXXXXXX
INTERNATIONAL EQUITY FUND.
1. The Client hereby appoints the Custodian as a custodian of securities
and other property owned or under the control of the Client which are delivered
to the Custodian, or any Subcustodian as appointed below, from time to time to
be held in custody for the benefit of the Client. The Client instructs the
Custodian to establish on the books and records of the Custodian one or more
accounts (the "Accounts") in the name of the Client. The Custodian shall record
in the Accounts and shall have general responsibility for the safekeeping of all
securities ("Securities"), cash and other property (all such Securities, cash
and other property being collectively the "Property") of the Client so delivered
for custody. It is understood that the specific procedures the Custodian will
use in carrying out its responsibilities under this Agreement are set forth in
the procedures manual (the "Procedures Manual") prepared by the Custodian and
delivered to the Client, as such Procedures Manual may be amended from time to
time by the Custodian by written notice to the Client. The Client acknowledges
that the Procedures Manual constitutes an integral part of this Agreement.
2. The Property held in the Accounts may be held by subcustodians
appointed pursuant to the provisions of this Section 2 (a "Subcustodian"). The
Custodian may, at any time and from time to time, appoint any bank or trust
company
to act as a Subcustodian for the Client, provided that the Client shall have
approved in writing (1) any such bank or trust company and the subcustodian
agreement to be entered into between such bank or trust company and the
Custodian, and (2) the Subcustodian's offices or branches at which the
Subcustodian is authorized to hold the Property. Upon such approval by the
Client, the Custodian is authorized on behalf of the Client to notify each
Subcustodian of its appointment as such. It is intended by the parties that each
Subcustodian meet the requirements of a custodian or a foreign custodian under
the Investment Company Act of 1940 and the rules and regulations thereunder. The
Custodian may, at any time in its discretion, remove any bank or trust company
that has been appointed as a Subcustodian. The Custodian may hold property for
all of its clients with a subcustodian in a single account that is identified as
belonging to the Custodian for the benefit of its clients.
Those Subcustodians, their offices or branches which the Client has
approved to date are set forth on Exhibit A hereto. Such Exhibit shall be
amended from time to time as Subcustodians, branches or offices are changed,
added or deleted. The Client shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be held at a
location not listed on Exhibit A, in order that there shall be sufficient time
for the Client to give the approval required by the preceding paragraph and for
the Custodian to put the appropriate arrangements in place with such
Subcustodian pursuant to such subcustodian agreement.
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With respect to the Property held by a Subcustodian, the Custodian shall
be liable to the Client if and only to the extent that such Subcustodian is
liable to the Custodian. The Custodian shall nevertheless be liable to the
Client for damages sustained by the Client from the Custodian's own negligence
in transmitting any instructions received by it from the Client and for its own
negligence in connection with the delivery of any Property held by it to any
such Subcustodian.
In the event that any Subcustodian appointed pursuant to the provisions of
this Section 2 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
reasonable efforts to cause such Subcustodian to perform such obligations. In
the event that the Custodian is unable to cause such Subcustodian to perform
fully its obligations thereunder, the Custodian shall forthwith upon the
Client's request attempt to obtain the return of all Property held by such
Subcustodian and, if necessary or desirable, appoint another Subcustodian in
accordance with the provisions of this Section 2. At the election of the Client,
it shall have the right to enforce, to the extent permitted by the subcustodian
agreement and applicable law, the Custodian's rights against any such
Subcustodian for loss or damage caused the Client by such Subcustodian.
At the written request of the Client, the Custodian will attempt to obtain
the return of all Property held by any Subcustodian appointed pursuant to the
provisions of this Section 2. The Custodian will not amend any subcustodian
agreement or agree
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to change or permit any changes thereunder which would affect substantial rights
of the Client except upon the prior written approval of the Client.
In the event the Custodian intends to make any payment to a Subcustodian
under the indemnification provisions of any subcustodian agreement, the
Custodian shall give the Client written notice of such intention no less than
thirty (30) days prior to the date such payment is to be made. The Client shall
be obligated promptly to reimburse the Custodian the amount of such payment,
unless the Client shall, within thirty (30) days of receipt of the Custodian's
notice, object in writing to such payment to the Subcustodian because the Client
disputes the right of the Subcustodian to be so indemnified. In the event the
Client, at the direction of its Board of Trustees, shall give written notice of
such objection and the reasons therefor, the Custodian may nevertheless make
such payment to the Subcustodian, but without prejudice to the Client's right to
refuse to reimburse the Custodian if the Client's objection to the right of the
Subcustodian to be so indemnified shall be upheld in an appropriate judicial or
other proceeding; or in the alternative, the Custodian may refuse to pay the
indemnification demanded by the Subcustodian and the Custodian shall in such
event defend against any judicial or other proceeding brought against the
Custodian by the Subcustodian to obtain such indemnification. Such defense shall
be conducted by counsel reasonably satisfactory to both the Client and the
Custodian. The Client shall be entitled to participate in any such proceeding
with separate counsel of its own choice if it believes its position might
otherwise be compromised and, if the Client or the
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Custodian believes there may be a conflict in the respective positions of the
Client and the Custodian, then each may retain separate counsel of its own
choice. The Client shall bear the costs and expenses of defending against the
Subcustodian's claim, and the Client shall indemnify the Custodian and hold it
harmless from all claims, liabilities, judgments, costs and expenses (including
fees of its counsel) and settlements of such claim (provided that such
settlement shall have been effected with the Client's written consent) incurred
or assessed against the Custodian.
The Custodian or any Subcustodian, from time to time, may appoint such
non-U.S. securities depositaries or clearing agencies as it may determine (each
an "Authorized Depositary") for the purposes of acquiring, holding or disposing
of Property. The appointment of any such Authorized Depositary shall be approved
in writing in advance by the Client. Those Authorized Depositaries which the
Client has approved to date are set forth on Exhibit A hereto. It is intended by
the parties that each Authorized Depositary shall be qualified to act as an
"Eligible Foreign Custodian" pursuant to the Investment Company Act of 1940 and
the rules and regulations thereunder. The Custodian or the Subcustodian, as the
case may be, may at any time in its discretion terminate any such appointment
and shall, at the request of the Client, terminate any such Authorized
Depositary as promptly as practicable.
With respect to the Property held by an Authorized Depositary appointed by
the Custodian, the Custodian shall be liable to the Client if and only to the
extent that such Authorized
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Depositary is liable to the Custodian and the Custodian recovers from such
Authorized Depositary. The Custodian shall nevertheless be liable to the Client
for damages sustained by the Client from the Custodian's own negligence in
transmitting any instructions received by it from the Client and for its own
negligence in connection with the delivery of any securities or funds held by it
to any such Authorized Depositary.
The Client agrees that the Property may be physically held outside the
United States.
3. With respect to Property held by a Subcustodian pursuant to Section
2:
(a) The Custodian will identify on its books as belonging to the
Client any Property held by a Subcustodian for the Custodian's
account;
(b) The Custodian will hold Property through a Subcustodian only
if (i) such Subcustodian and any securities depository or
clearing agency in which such Subcustodian holds Property, or
any of their creditors, may not assert any right, charge,
security interest, lien, encumbrance or other claim of any
kind to such Property except a claim of payment for its safe
custody and (ii) Property may be freely transferred without
the payment of money or value other than for safe custody or
administration;
(c) The Custodian shall require that Property held by the
Subcustodian for the Custodian's account be identified on the
Subcustodian's books as separate from any property held by the
Subcustodian
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other than property of the Custodian's clients and as held
solely for the benefit of clients of the Custodian; and
(d) In the event that the Subcustodian holds Property in a
securities depository or clearing agency, such Subcustodian
will be required by its agreement with the Custodian to
identify on its books such Property as being held for the
account of the Custodian as a custodian for its clients.
4. The Custodian shall allow the Client's accountants reasonable access to
the Custodian's records relating to the Property held by the Custodian as such
accountants may reasonably require in connection with their examination of the
Client's affairs. The Custodian shall also obtain from any Subcustodian (and
will require each Subcustodian to use reasonable efforts to obtain from any
securities depository or clearing agency in which it deposits Property) an
undertaking, to the extent consistent with local practice and the laws of the
jurisdiction or jurisdictions to which such Subcustodian, securities depository
or clearing agency is subject, to permit independent public accountants such
reasonable access to the records of such Subcustodian, securities depository or
clearing agency as may be reasonably required in connection with the examination
of the Client's affairs or to take such other action as the Custodian in its
judgment may deem sufficient to ensure such reasonable access.
5. The Custodian shall provide such reports and other information to the
Client and to such persons as the Client directs as the Custodian and the Client
may
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agree from time to time, including periodic reports with respect to the
safekeeping of the Property, including, but not limited to, notification of any
transfer to or from the Accounts.
6. The Custodian shall make or cause any Subcustodian to make payments
from monies being held in the Accounts only:
(a) upon the purchase of Securities and then, to the extent
consistent with practice in the jurisdiction in which
settlement occurs, upon the delivery of such Securities;
(b) for payments to be made in connection with the conversion,
exchange or surrender of Securities;
(c) upon a request of the Client that the Custodian return monies
being held in the Accounts;
(d) upon a request of the Client that monies be exchanged for or
used to purchase monies denominated in a different currency
and then only upon receipt of such exchanged or purchased
monies;
(e) as provided in Section 8 and 12 hereof;
(f) upon termination of this Custody Agreement as hereinafter set
forth; and
(g) for any other purpose upon receipt of explicit instructions of
the Client accompanied by evidence reasonably acceptable to
the Custodian as to the authorization of such payment.
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Except as provided in the last two sentences of this Section 6 and as
provided in Section 8, all payments pursuant to this Section 6 will be made only
upon receipt by the Custodian of Authorized Instructions (as hereinafter
defined) from the Client which shall specify the purpose for which the payment
is to be made. In the event that it is not possible to make a payment in
accordance with Authorized Instructions of the Client, the Custodian shall
proceed in accordance with the procedures set forth in the Procedures Manual.
Any payment pursuant to subsection (f) of this Section 6 will be made in
accordance with Section 16.
7. The Custodian shall make or cause any Subcustodian to make transfers,
exchanges or deliveries of Securities only:
(a) upon sale of such Securities and then, to the extent
consistent with practice in the jurisdiction in which
settlement occurs, upon receipt of payment therefor;
(b) upon exercise of conversion, subscription, purchase, exchange
or other similar rights pertaining to such Securities and, if
applicable to such exercise and if consistent with practice in
the applicable jurisdiction, only on receipt of substitute or
additional securities to be received upon such exercise;
(c) as provided in Section 8 hereof;
(d) upon the termination of this Custody Agreement as hereinafter
set forth; and
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(e) for any other purpose upon receipt of explicit instructions of
the Client accompanied by evidence reasonably acceptable to
the Custodian as to the authorization of such transfer,
exchange or delivery.
Except as provided in the last two sentences of this Section 7 and as
provided in Section 8, all transfers, exchanges or deliveries of Securities
pursuant to this Section 7 will be made only upon receipt by the Custodian of
Authorized Instructions of the Client which shall specify the purpose for which
the transfer, exchange or delivery is to be made. In the event that it is not
possible to transfer Securities in accordance with Authorized Instructions of
the Client, the Custodian shall proceed in accordance with the procedures set
forth in the Procedures Manual. Any transfer or delivery pursuant to subsection
(d) of this Section 7 will be made in accordance with Section 16.
8. In the absence of Authorized Instructions from the Client to the
contrary, the Custodian may, and may authorize any Subcustodian to:
(a) make payments to itself or others for expenses of handling
Property or other similar items relating to its duties under
this Agreement, provided that all such payments shall be
accounted for to the Client;
(b) receive and collect all income and principal with respect to
Securities and to credit cash receipts to the Accounts;
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(c) exchange Securities when the exchange is purely ministerial
(including, without limitation, the exchange of interim
receipts or temporary securities for securities in definitive
form and the exchange of warrants, or other documents of
entitlement to securities, for the securities themselves);
(d) surrender Securities at maturity or when called for redemption
upon receiving payment therefor;
(e) execute in the Client's name such ownership and other
certificates as may be required to obtain the payment of
income from Securities;
(f) pay or cause to be paid, from the Accounts, any and all taxes
and levies in the nature of taxes imposed on Property by any
governmental authority in connection with custody of and
transactions in such Property;
(g) endorse for collection, in the name of the Client, checks,
drafts and other negotiable instruments; and
(h) in general, attend to all nondiscretionary details in
connection with the custody, sale, purchase, transfer and
other dealings with the Property.
9. "Authorized Instructions" of the Client shall mean instructions
received by telecopy, tested telex, electronic link or other electronic means or
by such other means
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as may be agreed in writing in advance between the Client and the Custodian.
The Custodian shall be entitled to act, and shall have no liability for acting,
in accordance with the terms of this Agreement or upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Client.
10. Securities which must be held in registered form may be registered in
the name of the Custodian's nominee or, in the case of Securities in the custody
of an entity other than the Custodian, in the name of such entity's nominee. The
Client agrees to hold the Custodian and Subcustodians and any such nominee
harmless from any liability arising out of any such person acting as a holder of
record of such Securities, except for any such liability resulting from the
Custodian, Subcustodian or any nominee's negligence or willful misconduct. The
Custodian may without notice to the Client cause any Securities to cease to be
registered in the name of any such nominee and to be registered in the name of
the Client.
11. All cash received by the Custodian for the Accounts shall be held by
the Custodian as a short-term credit balance in favor of the Client and the
Client shall earn interest at the rates and times as agreed between the
Custodian and the Client. The Client understands that any such credit balances
will not be accompanied by the benefit of any governmental insurance.
12. From time to time, the Custodian may arrange or extend short-term
credit for the Client which is (i) necessary in connection with payment and
clearance of
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securities and foreign exchange transactions or (ii) pursuant to an agreed
schedule, as and if set forth in the Procedures Manual, of credits for dividends
and interest payments on Securities. All such extensions of credit shall be
repayable by the Client on demand. The Custodian shall be entitled to charge the
Client interest for any such credit extension at rates to be agreed upon from
time to time. In addition to any other remedies available, the Custodian shall
be entitled to a right of set-off against the Property to satisfy the repayment
of such credit extensions and the payment of accrued interest thereon. The
Custodian may act as the Client's agent or act as a principal in foreign
exchange transactions at such rates as are agreed from time to time between the
Client and the Custodian.
13. The Client represents that (i) the execution, delivery and performance
of this Agreement (including, without limitation, the ability to obtain the
short-term extensions of credit in accordance with Section 12) are within the
Client's power and authority and have been duly authorized by all requisite
action (corporate or otherwise) and (ii) this Agreement and each extension of
short-term credit extended or arranged for the benefit of the Client in
accordance with Section 12 will at all times constitute a legal, valid and
binding obligation of the Client and be enforceable against the Client in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
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The Custodian represents that the execution, delivery and performance of
this Agreement is within the Custodian's power and authority and has been duly
authorized by all requisite action of the Custodian. This Agreement constitutes
the legal, valid and binding obligation of the Custodian enforceable against the
Custodian in accordance with its terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
14. The Custodian shall be responsible for the performance of only such
duties as are set forth in this Agreement or the Procedures Manual or contained
in Authorized Instructions given to the Custodian which are not contrary to the
provisions of any relevant law or regulation. The Custodian shall not be liable
to the Client or to any other person for any action taken or omitted to be taken
by it in connection with this Agreement in the absence of negligence or willful
misconduct on the part of the Custodian. Upon the request of the Custodian, the
Client agrees to deliver to the Custodian a duly executed power of attorney, in
form and substance satisfactory to the Custodian, authorizing the Custodian to
take any action or execute any instrument on behalf of the Client as necessary
or advisable to accomplish the purposes of this Agreement.
15. The Client agrees to pay to the Custodian from time to time such
compensation for its services pursuant to this Agreement as may be mutually
agreed
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upon from time to time and the Custodian's out-of-pocket or incidental expenses.
The Client hereby agrees to hold the Custodian harmless from any liability or
loss resulting from any taxes or other governmental charges, and any expenses
related thereto, which may be imposed or assessed with respect to the Accounts
or any Property held therein. The Custodian is and any Subcustodians are
authorized to charge the Accounts for such items and the Custodian shall have a
lien, charge and security interest on any and all Property for any amount owing
to the Custodian from time to time under this Agreement.
If the Client is a U.S. person as defined in Rule 902 promulgated by the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "Act"), the Client recognizes that, in connection with the Client's
election from time to time to participate in distributions of securities
(whether pursuant to rights offerings, warrant subscriptions, mergers,
reorganizations or otherwise) which have not been registered pursuant to the
Act, the Custodian may inform the issuer and its agents that the acquiror of the
securities is a U.S. person. The Custodian shall not be responsible to the
Client for the consequences of any issuer's or agent's refusal to permit the
Client to acquire such securities, and the Client shall hold the Custodian
harmless from liability to the issuer and its agents in connection with any such
election by the Client.
16. This Agreement may be terminated by the Client or the Custodian by 60
days written notice to the other, sent by registered mail. If notice of
termination is given, the Client shall, within 30 days following the giving of
such notice, deliver to the
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Custodian a statement in writing specifying the successor custodian or other
person to whom the Custodian shall transfer the Property. In either event the
Custodian, subject to the satisfaction of any lien it may have, will transfer
the Property to the person so specified. If the Custodian does not receive such
statement the Custodian, at its election, may transfer the Property to a bank or
trust company established under the laws of the United States or any state
thereof to be held and disposed of pursuant to the provisions of this Agreement
or may continue to hold the Property until such a statement is delivered to the
Custodian. In such event the Custodian shall be entitled to fair compensation
for its services during such period as the Custodian remains in possession of
any Property and the provisions of this Agreement relating to the duties and
obligations of the Custodian shall remain in full force and effect; provided,
however, that the Custodian shall no longer settle any transactions in
securities for the Accounts.
17. The Custodian, its agents and employees will maintain the
confidentiality of information concerning the Property held in the Accounts,
including in dealings with affiliates of the Custodian. In the event the
Custodian or any Subcustodian is requested or required to disclose any
confidential information concerning the Property, the Custodian shall to the
extent practicable and legally permissible, promptly notify the Client of such
request or requirement so that the Client may seek a protective order or waive
the Custodian's or such Subcustodian's compliance with this Section 17. In the
absence of such a waiver, if the Custodian or such Subcustodian is compelled, in
the
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opinion of its counsel, to disclose any confidential information, the Custodian
or such Subcustodian may disclose such information to such persons as, in the
opinion of counsel, is so required.
18. Any notice or other communication from the Client to the Custodian,
unless otherwise provided by this Agreement, shall be sent by certified or
registered mail to Xxxxxx Xxxxxxx Trust Company, Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx,
Xxx Xxxx, 00000, Attention: President, and any notice from the Custodian to the
Client is to be mailed postage prepaid, addressed to the Client at the address
appearing below, or as it may hereafter be changed on the Custodian's records in
accordance with notice from the Client.
19. The term "Xxxxxxxx, Ayer & Wood Investment Trust" means and refers to
the Trustees from time to time serving under the Agreement and Declaration of
Trust of the Client dated August 13, 1986, as the same may subsequently thereto
have been, or subsequently hereto be, amended. It is expressly agreed that the
obligations of the Client hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Client,
personally, but shall bind only the trust property of the Client as provided in
the Agreement and Declaration of Trust of the Client. The execution and delivery
of this Agreement have been authorized by the Trustees of the Client and this
Agreement has been signed by an authorized officer of the Client, acting as
such, and neither such authorization by such Trustees, nor such execution and
delivery by such officer shall be deemed to have been made by any of
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them personally, but shall bind only the trust property of the Client as
provided in the Agreement and Declaration of Trust.
20. The Custodian may assign all of its rights and obligations hereunder
to any other entity which is qualified to act as custodian under the terms of
this Agreement and majority-owned, directly or indirectly, by Xxxxxx Xxxxxxx
Group Inc., and upon the assumption of the rights and obligations hereunder by
such entity, such entity shall succeed to all of the rights and obligations of,
and be substituted for, the Custodian hereunder as if such entity had been
originally named as custodian herein. The Custodian shall give prompt written
notice to the Client upon the effectiveness of any such assignment.
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This Agreement shall bind the successors and assigns of the Client and the
Custodian and shall be governed by the laws of the State of New York applicable
to contracts executed in and to be performed in that state.
XXXXXXXX, AYER & WOOD
INVESTMENT TRUST
By /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
Address for record: Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Accepted:
XXXXXX XXXXXXX TRUST COMPANY
By /s/ Xxxxxx Xxxxxxx
-------------------------------
Authorized Signature
Xxxxxx Xxxxxxx
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