CUSTODIAN AGREEMENT
THIS
AGREEMENT,
dated
as of July 20, 2007, between XXXXXXXX
INTERNATIONAL FUNDS, doing
business as (“dba”) XXXXXXXX
ASIAN FUNDS,
a
management investment company organized under the laws of the State of
Delaware
and
registered with the U.S.
Securities Exchange Commission
(the
Commission)
under
the Investment Company Act of 1940 (“the 1940
Act”)
(the
Trust),
and
XXXXX
BROTHERS XXXXXXXX & CO.,
a
limited partnership formed under the laws of the State of New York (BBH&Co.
or the
Custodian),
WITNESSETH:
WHEREAS,
the
Trust
wishes
to employ BBH&Co. to act as custodian for each
of
its existing or additional series of shares listed on Appendix A hereto (each
such listed series, a Fund)
and to
provide related services, all as provided herein, and BBH&Co. is willing to
accept such employment, subject to the terms and conditions herein set forth;
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements herein contained, the
Trust
and
BBH&Co. hereby agree, as follows:
1. Appointment
of Custodian.
The
Trust
hereby
appoints BBH&Co. as Custodian
for each
Fund,
and
BBH&Co. hereby accepts such appointment. All Investments of the Trust
delivered to the Custodian or its agents or Subcustodians shall be dealt
with as
provided in this Agreement. The
duties of the Custodian with respect to the Trust's
Investments shall be only as set forth expressly in this Agreement which
duties
are generally comprised of safekeeping and various administrative duties
that
will be performed in accordance with Instructions and as reasonably required
to
effect Instructions.
2. Representations,
Warranties and Covenants of the Trust.
The
Trust
hereby
represents, warrants and covenants each of the following:
2.1
This
Agreement has been, and at the time of delivery of each Instruction such
Instruction will have been duly authorized and if in writing, duly executed
and
delivered by the Trust.
Neither
this Agreement nor any Instruction issued hereunder
violates
any Applicable Law or conflicts with or constitutes a default under the
Trust's
prospectus, articles of organization or other constitutive document or any
agreement, judgment, order or decree to which the Trust
is a
party or by which it or its Investments is bound.
1
2.2
By
providing an Instruction with respect to the first acquisition of an Investment
in a jurisdiction other than the United States of America, Trust
acknowledges that
the
Custodian has
no
obligation to assess
Country
or Sovereign Risks,
and the
Trust has (a)
made
all determinations required to be made by the Trust
under
the 1940 Act, and (b)
appropriately and adequately disclosed to its shareholders, other investors
and
all persons who have rights in or to such Investments, all material investment
risks, including those relating to the custody and settlement infrastructure
or
the servicing of securities in such jurisdiction.
2.3
The
Trust
shall
safeguard and shall solely be responsible for the safekeeping of any testkeys,
identification codes, passwords, other security devices or statements of
account
with which the Custodian provides it. If the Trust
uses any
on-line or similar communications service made available by the Custodian,
the
Trust
shall be
solely responsible for ensuring the security of its access to the service
and
for the use of the service, and shall only attempt to access the service
and the
Custodian’s computer systems in the manner directed by the Custodian. If the
Custodian provides any computer software to the Trust
relating
to the services described in this Agreement, the Trust
will
only use the software for the purposes for which the Custodian provided the
software to the Trust,
and
will abide by the license agreement accompanying the software and any other
security policies which the Custodian provides to the Trust.
3. Representation
and Warranty of BBH&Co.
BBH&Co. hereby represents and warrants that this Agreement has been duly
authorized, executed and delivered by BBH&Co. and does not and will not
violate any Applicable Law or conflict with or constitute a default under
BBH&Co.'s limited partnership agreement or any agreement, instrument,
judgment, order or decree to which BBH&Co. is a party or by which it is
bound.
4. Instructions.
Unless
otherwise explicitly indicated herein, the Custodian shall perform its duties
upon
receipt of
Instructions. As used herein, the term Instruction
shall
mean a directive initiated by the Trust,
acting
through its Board of Trustees or other Authorized Person, which directive
shall
conform to the requirements of this Section 4.
4.1
Authorized
Persons.
For
purposes hereof, an Authorized
Person
shall be
a person or entity authorized to give Instructions to the Custodian by written
notices or otherwise for or on behalf of the Trust
in
accordance with procedures delivered to and acknowledged by the Custodian.
The
Custodian may treat any Authorized Person as having the full authority of
the
Trust
to issue
Instructions hereunder unless the notice of authorization contains explicit
limitations as to said authority. The Custodian shall be entitled to rely
upon
the authority of Authorized Persons until it receives an
Instruction
from the
Trust
to the
contrary.
2
4.2
Form
of Instruction.
Each
Instruction shall be transmitted by such secured or authenticated
electro-mechanical means as the Custodian shall make available to the
Trust
from
time to time unless the Trust
shall
elect to transmit such Instruction in accordance with Subsections 4.2.1 through
4.2.3 of this Section.
4.2.1
Fund
Designated Secured-Transmission Method. Instructions
may be transmitted through a secured or tested electro-mechanical means
identified by the Trust
or by an
Authorized Person entitled to give Instruction and acknowledged and accepted
by
the Custodian, it being understood that such acknowledgment shall authorize
the
Custodian to accept such means of delivery but shall not represent a judgment
by
the Custodian as to the reasonableness or security of the means utilized
by the
Authorized Person.
4.2.2
Written
Instructions.
Instructions may be transmitted in a writing that bears the manual signature
of
Authorized Persons.
4.2.3
Other
Forms of Instruction.
Instructions may also be transmitted by another means determined by the
Trust
or
Authorized Persons and acknowledged and accepted by the Custodian (subject
to
the same limits as to acknowledgements as are contained in Subsection 4.2.1,
above) including Instructions given orally or by SWIFT, telex or telefax
(whether tested or untested).
When
an
Instruction is given by means established under Subsections 4.2.1 through
4.2.3,
it shall be the responsibility of the Custodian to adhere
to
the Standard of Care and
to
adhere to any security or other procedures established in writing between
the
Custodian and the Authorized Person with respect to such means of Instruction,
but the Authorized Person shall be solely responsible for determining that
the
particular means chosen is reasonable under the circumstances. Oral Instructions
shall be binding upon the Custodian only if and when the Custodian takes
action
with respect thereto. Written
Instructions shall be binding upon the Custodian upon receipt, provided that
a
written Instruction shall be deemed received by the Custodian (a) if transmitted
via SWIFT, upon transmission by the Trust; and (b) if sent by registered
receipt
mail, the date indicated on the receipt. With
respect to telefax instructions, the parties agree and acknowledge that receipt
of legible instructions cannot be assured, that the Custodian cannot verify
that
authorized signatures on telefax instructions are original or properly affixed,
and that the Custodian shall not be liable for losses or expenses incurred
through actions taken in reliance on inaccurately stated, illegible or
unauthorized telefax instructions. The provisions of Section 4A of the Uniform
Commercial Code shall apply to Funds Transfers performed in accordance with
Instructions. The Trusts
Transfer
Services Schedule and the Electronic and Online Services Schedule to this
Agreement shall each comprise a designation of a means of delivering
Instructions for purposes of this Section 4.2.
3
4.3
Completeness
and Contents of Instructions.
The
Trust shall be responsible for assuring the adequacy and accuracy of
Instructions. Particularly, upon any acquisition or disposition or other
dealing
in the Trust's
Investments and upon any delivery and transfer of any Investment or moneys,
the
person initiating the Instruction shall give the Custodian an Instruction
with
the following information (as appropriate):
4.3.1
The
transaction date and the date and location of settlement;
4.3.2
The
specification of the type of transaction;
4.3.3
A
description of the Investments or moneys in question, including, as appropriate,
quantity, price per unit, amount of money to be received or delivered and
currency information. Where an Instruction is communicated by electronic
means,
or otherwise where an Instruction contains an identifying number such as
a
CUSIP, SEDOL or ISIN number, the Custodian shall be entitled to rely on such
number as controlling notwithstanding any inconsistency contained in the
Instruction, particularly with respect to Investment description;
and
4.3.4
The
name of the broker or similar entity concerned with execution of the
transaction.
If
the
Custodian determines that an Instruction is either unclear or incomplete,
the
Custodian shall give prompt notice of such determination to the Trust,
and the
Trust
shall
thereupon amend or otherwise reform the Instruction. In such event, to
the
extent of such lack of clarity or completeness, the
Custodian shall have no obligation to take any action in response to the
Instruction initially delivered until the redelivery of an amended or reformed
Instruction;
provided, that if any of the information specified in Sections 4.3.1 - 4.3.4
is
missing from an Instruction, the Custodian shall take no action on such
Instruction, and shall notify the Trust promptly of such informational
deficiency.
4.4
Timeliness
of Instructions.
In
giving an Instruction, the Trust
shall
take into consideration delays which may occur due to the involvement of
a
Subcustodian or agent, differences in time zones, and other factors particular
to a given market, exchange or issuer. When the Custodian has established
specific timing requirements or deadlines with respect to particular classes
of
Instruction, or when an Instruction is received by the Custodian at such
a time
that it could not reasonably be expected to have acted on such instruction
due
to time zone differences or other factors beyond its reasonable control,
the
execution of any Instruction received by the Custodian after such deadline
or at
such time (including any modification or revocation of a previous Instruction)
shall be at the risk of the Trust.
4
5. Safekeeping
of Fund Assets. The
Custodian shall hold Investments delivered to it or Subcustodians for the
Trust
in
accordance with the provisions of this Section. The Custodian shall not be
responsible for (a) the safekeeping of Investments not delivered or that
are not
caused to be issued to it or its Subcustodians; or, (b) pre-existing faults
or
defects in Investments that are delivered to the Custodian or its
Subcustodians
provided
that in the case of clause (b) the Custodian shall promptly notify the Trust
of
any such pre-existing fault or defect of which it has actual knowledge. The
Custodian is hereby authorized to hold with itself or a Subcustodian, and
to
record in one or more accounts, all Investments delivered to and accepted
by the
Custodian, any Subcustodian or their respective agents pursuant to an
Instruction or in consequence of any corporate action or income
event.
The
Custodian shall hold Investments for the account of the Funds
and
shall segregate Investments from assets belonging to the Custodian and shall
cause its Subcustodians to segregate Investments from assets belonging to
the
Subcustodian in an account held for each
relevant
Fund or
in an account maintained by the Subcustodian generally for non-proprietary
assets of the Custodian.
5.1
Use
of Securities Depositories. The
Custodian may deposit and maintain Investments in any Securities Depository,
either directly or through one or more Subcustodians appointed by the Custodian.
Investments held in a Securities Depository shall be held (a) subject to
the
agreement, rules, statement of terms and conditions or other document or
conditions effective between the Securities Depository and the Custodian
or the
Subcustodian, as the case may be, and (b) in an account for the Trust
or in
bulk segregation in an account maintained for the non-proprietary assets
of the
entity holding such Investments in the Depository. If market practice or
the
rules and regulations of the Securities Depository prevent the Custodian,
the
Subcustodian or (any agent of either) from holding its client assets in such
a
separate account, the Custodian, the Subcustodian or other agent shall as
appropriate segregate such Investments for benefit of the Trust
or for
benefit of clients of the Custodian generally on its own books.
5.2
Certificated
Assets.
Investments which are certificated may be held in registered or bearer form:
(a)
in the Custodian's vault; (b) in the vault of a Subcustodian or agent of
the
Custodian or a Subcustodian; or (c) in an account maintained by the Custodian,
Subcustodian or agent at a Securities Depository; all in accordance with
customary market practice in the jurisdiction in which any Investments are
held.
5
5.3
Registered
Assets.
Investments which are registered may be registered in the name of the Custodian,
a Subcustodian, or in the name of the Trust
or a
nominee for any of the foregoing, and may be held in any manner set forth
in
Section 5.2 above with or without any identification of fiduciary capacity
in
such registration.
5.4
Book
Entry Assets.
Investments which are represented by book-entry may be so held in an account
maintained by the Book-entry Agent on behalf of the Custodian, a Subcustodian
or
another Agent of the Custodian, or a Securities Depository.
5.5
Replacement
of Lost Investments.
In the
event of a loss of Investments for which loss the Custodian is responsible
under
the terms of this Agreement, the Custodian shall replace such Investment,
or in
the event that such replacement cannot be effected, the Custodian shall pay
to
the Trust
the fair
market value of such Investment based on the last available price as of the
close of business in the relevant market on the date that a
claim
was first made to the Custodian with respect to such loss,
or such
other lesser amount as shall be agreed by the
parties.
6.
Administrative
Duties of the Custodian. The
Custodian shall perform the following administrative duties with respect
to
Investments of each
Fund.
6.1
Purchase
of Investments. Pursuant
to Instruction, Investments purchased for the account of any
Fund
shall be paid for (a) against delivery thereof to the Custodian or a
Subcustodian, as the case may be, either directly or through a Clearing
Corporation or a Securities Depository (in accordance with the rules of such
Securities Depository or such Clearing Corporation), or (b) otherwise in
accordance with an Instruction, Applicable Law, generally accepted trade
practices, or the terms of the instrument representing such
Investment.
6.2
Sale
of Investments.
Pursuant
to Instruction, Investments sold for the account of any
Fund
shall be delivered (a) against payment therefor in cash, by check or by bank
wire transfer, (b) by credit to the account of the Custodian or the applicable
Subcustodian, as the case may be, with a Clearing Corporation or a Securities
Depository (in accordance with the rules of such Securities Depository or
such
Clearing Corporation), or (c) otherwise in accordance with an Instruction,
Applicable Law, generally accepted trade practices, or the terms of the
instrument representing such Investment.
6
6.3
Delivery
and Receipt in Connection with Borrowings of the Trust
or other Collateral and Margin Requirements.
Pursuant
to Instruction, the Custodian may deliver or receive Investments or cash
of
any
Fund in
connection with borrowings or loans by any
Fund and
other collateral and margin requirements.
6.4
Futures and Options.
If,
pursuant to an Instruction, the Custodian shall become a party to an agreement
with the Trust
and a
futures commission merchant regarding margin (Tri-Party
Agreement),
the
Custodian shall (a) receive and retain, to the extent the same are provided
to
the Custodian, confirmations or other documents evidencing the purchase or
sale
by the Trust
of
exchange-traded futures contracts and commodity options, (b) when required
by
such Tri-Party Agreement, deposit and maintain in an account opened pursuant
to
such Agreement (Margin
Account),
segregated either physically or by book-entry in a Securities Depository
for the
benefit of any futures commission merchant, such Investments as the Trust
shall
have designated as initial, maintenance or variation "margin" deposits or
other
collateral intended to secure the Trust's
performance of its obligations under the terms of any exchange-traded futures
contracts and commodity options; and (c) thereafter pay, release or transfer
Investments into or out of the margin account in accordance with the provisions
of such Agreement. Alternatively, the Custodian may deliver Investments,
in
accordance with an Instruction, to a futures commission merchant for purposes
of
margin requirements in accordance with Rule 17f-6 under the 1940 Act. The
Custodian shall in no event be responsible for the acts and omissions of
any
futures commission merchant to whom Investments are delivered pursuant to
this
Section; for the sufficiency of Investments held in any Margin Account; or,
for
the performance of any terms of any exchange-traded futures contracts and
commodity options.
6.5 Contractual
Obligations and Similar Investments.
From
time to time, a
Fund’s
Investments may include Investments that are not ownership interests as may
be
represented by certificate (whether registered or bearer), by entry in a
Securities Depository or by Book-Entry Agent, registrar or similar agent
for
recording ownership interests in the relevant Investment. If any
Fund
shall at any time acquire such Investments, including without limitation
deposit
obligations, loan participations, repurchase agreements and derivative
arrangements, the Custodian shall (a) receive and retain, to the extent the
same
are provided to the Custodian, confirmations or other documents evidencing
the
arrangement; and (b) perform on such
Fund's
account in accordance with the terms of the applicable arrangement, but only
to
the extent directed to do so by Instruction. The Custodian shall have no
responsibility for agreements running to such
Fund as
to which it is not a party other than to retain, to the extent the same are
provided to the Custodian, documents or copies of documents evidencing the
arrangement and, in accordance with Instruction, to include such arrangements
in
reports made to such
Fund.
7
6.6
Exchange
of Securities.
Unless
otherwise directed by Instruction, the Custodian shall: (a) exchange securities
held for the account of such
Fund for
other securities in connection with any reorganization, recapitalization,
conversion, stock split, change of par value of shares or similar event,
and (b)
deposit any such securities in accordance with the terms of any reorganization
or protective plan.
6.7
Surrender
of Securities.
Unless
otherwise directed by Instruction, the Custodian may surrender securities:
(a)
in temporary form for definitive securities; (b) for transfer into the name
of
an entity allowable under Section 5.3; and (c) for a different number of
certificates or instruments representing the same number of shares or the
same
principal amount of indebtedness.
6.8
Rights,
Warrants, Etc.
Pursuant
to Instruction, the Custodian shall (a) deliver warrants, puts, calls, rights
or
similar securities to the issuer or trustee thereof, or to any agent of the
issuer or trustee, for purposes of exercising such rights or selling such
securities, and (b) deliver securities in response to any tender
offer.
6.9
Mandatory
Corporate Actions. Unless
otherwise directed by Instruction, the Custodian shall: (a) comply with the
terms of all mandatory or compulsory exchanges, calls, tenders, redemptions
or
similar rights of securities ownership affecting securities held on any
Fund’s
account and promptly notify the Trust
of such
action; and (b) collect all stock dividends, rights and other items of like
nature with respect to such securities.
6.10
Income
Collection.
Unless
otherwise directed by Instruction, the Custodian shall collect any amount
due
and payable to any
Fund
with respect to Investments and promptly credit the amount collected to a
Principal or Agency Account; provided, however, that the Custodian shall
not be
responsible for: (a) the collection of amounts due and payable with respect
to
Investments that are in default or (b) the collection of cash or share
entitlements with respect to Investments that are not registered in the name
of
the Custodian or its Subcustodians. The Custodian is hereby authorized to
endorse and deliver any instrument required to be so endorsed and delivered
to
effect collection of any amount due and payable to any
Fund
with respect to Investments.
6.11
Corporate
Action Information. In
fulfilling the duties set forth in Sections 6.6 through 6.10 above, the
Custodian shall provide to the Trust
on
a timely basis
such
material information pertaining to a corporate action (including without
limitation, tenders, exchanges and calls) which the Custodian actually receives;
provided that the Custodian shall not be responsible for the completeness
or
accuracy of such information. Information
relative to any pending corporate action made available to the Trust
via any
of the services described in the Electronic and Online Services Schedule
or as
otherwise agreed among the parties from time to time shall constitute the
delivery of such information by the Custodian.
In the
event that Custodian is aware that any such service is not functioning as
intended, or as reasonably requested by the Trust, Custodian shall deliver
information relating to any pending corporate action in a manner mutually
agreed
by the parties. Any advance credit of cash or shares expected to be received
as
a result of any corporate action shall be subject to actual collection and
may
be reversed by the Custodian.
8
6.12
Proxy
Materials. The
Custodian shall deliver, or cause to be delivered, on
a
timely basis to
the
Trust
or
its Agent
proxy
forms, notices of meeting, and any other notices or announcements materially
affecting or relating to Investments received by the Custodian. [Information
relative to any pending corporate action made available to the Trust
via any
of the services described in the Electronic and Online Services Schedule
or as
otherwise agreed among the parties from time to time shall constitute the
delivery of such information by the Custodian.
6.13 Class
Actions. The
Custodian shall promptly notify the Trust of any shareholder class action
lawsuit (each a “Class Action”) in connection with an Investment of the Trust in
the custody of the Custodian to the extent that the Custodian becomes aware
of
such Class Action. Upon receipt of an Instruction from the Trust the Custodian
shall, as the Trust’s designated attorney in fact pursuant to Schedule I hereto,
assist the Trust by completing, executing and filing such documentation as
may
be reasonably necessary to register the Trust’s claim in a recovery under a
Class Action (“Claim Documentation”). The Trust shall, upon request by the
Custodian, promptly provide any and all information and supporting documentation
reasonably necessary and/or required for the submission of such Claim
Documentation to the extent that such information and documentation is not
in
the Custodian’s possession. The Custodian shall not be responsible for (i)
completing, executing and filing documentation required for the Trust’s
participation in a Class Action as a lead plaintiff or representative party,
(ii) retroactively seeking recovery on behalf of the Trust for claims arising
prior to the date BBH was appointed Custodian, (iii) advising the Trust as
to
its rights or interests in any Class Action, (iv) representing the Trust
in
connection with any Class Action by personal appearance or otherwise, and
(v)
expenses incurred by the Trust in connection with any Class Action.
The
Trust acknowledges that identifying its interest may involve manually
researching historic records and that the Custodian does not warrant that
the
review will be error free. The Trust acknowledges that the Custodian is acting
in a clerical capacity in completing and filing such claim forms and that
the
Custodian will not be using legal expertise in providing this
service.
9
6.14
Ownership Certificates and Disclosure of the Trust's
Interest.
The
Custodian is hereby authorized to execute on behalf of any
Fund
ownership certificates, affidavits or other disclosure required under Applicable
Law or established market practice in connection with the receipt of income,
capital gains or other payments by the Funds
with
respect to Investments, or in connection with the sale, purchase or ownership
of
Investments.
With
respect to securities issued in the United States of America, the Custodian
[ ]
may [XXX] may not release the identity of the Trust
to an
issuer which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of direct communications
between such issuer and the Trust.
IF NO
BOX IS CHECKED, THE CUSTODIAN SHALL RELEASE SUCH INFORMATION UNTIL IT RECEIVES
CONTRARY INSTRUCTIONS FROM THE TRUST.
With
respect to securities issued outside of the United States of America,
information shall be released in accordance with law or custom of the particular
country in which such security is located.
6.15. Taxes.
The
Custodian shall, where applicable, assist the Trust
in the
reclamation of taxes withheld on dividends and interest payments received
by the
Trust.
In the
performance of its duties with respect to tax withholding and reclamation,
the
Custodian shall be entitled to rely on the advice of counsel and upon
information and advice regarding the Trust’s
tax
status that is received from or on behalf of the Trust
without
duty of separate inquiry. Custodian shall use reasonable commercial care
to
cause Subcustodians to cooperate with the Trust’s foreign tax advisers and
promptly to provide cost allocation and other accounting information as such
advisers shall reasonably request.
6.16 Other
Dealings.
The
Custodian shall otherwise act as directed by Instruction, including without
limitation effecting the free payments of moneys or the free delivery of
securities, provided that such Instruction shall indicate the purpose of
such
payment or delivery and that the Custodian shall record the party to whom
the
payment or delivery is made.
10
6.17 Nondiscretionary
Details and Minor Expenses. The
Custodian shall attend to all nondiscretionary details in connection with
the
sale or purchase or other administration of Investments, except as otherwise
directed by Instruction, and may make reasonable payments to itself or others
for minor expenses of administering Investments under this Agreement, provided
that the Trust
shall
have the right to request an accounting with respect to such
expenses.
6.20 Use
of Agents. The
Custodian may at any time in its discretion appoint (and may at any time
remove)
agents (other than Subcustodians) to carry out some or all of the administrative
provisions of this Agreement (Agents),
provided, however, that the appointment of an Agent shall not relieve the
Custodian of its administrative obligations under this Agreement.
7. Cash
Accounts, Deposits and Money Movements. Subject
to the terms and conditions set forth in this Section 7, the Trust
hereby
authorizes the Custodian to open and maintain, with itself or with
Subcustodians, cash accounts in United States Dollars, in such other currencies
as are the currencies of the countries in which the Trust
maintains Investments or in such other currencies as the Trust
shall
from time to time request by Instruction.
7.1
Types
of Cash Accounts.
Cash
accounts opened on the books of the Custodian (Principal
Accounts)
shall
be opened in the name of the
relevant
Fund.
Such accounts collectively shall be a deposit obligation of the Custodian
and
shall be subject to the terms of this Section 7 and the general liability
provisions contained in Section 9. Cash accounts opened on the books of a
Subcustodian may be opened in the name of the relevant
Fund
or
the Custodian or in the name of the Custodian for its customers generally
(Agency
Accounts).
Such
deposits shall be obligations of the Subcustodian and shall be treated as
an
Investment of the Trust.
Accordingly, the Custodian shall be responsible for exercising reasonable
care
in the administration of such accounts, but shall not be liable for their
repayment in the event the Subcustodian, by reason of its bankruptcy, insolvency
or otherwise, fails to make repayment.
7.1.1.
Administrative
Accounts.
In
connection with the services provided hereunder, the Custodian is hereby
directed to open cash accounts on its books and records from time to time
for
the purposes of receiving subscriptions and/or processing redemptions on
behalf
of the Funds
and/or
for the purposes of aggregating, netting and/or clearing transactions
(including, without limitation foreign exchange, repurchase agreements, capital
stock activity, expense payment) or other administrative purposes, each on
behalf of the applicable
Fund
(each an “Account”). Each such Account shall be subject to the terms and
conditions of this Agreement and each
Fund
shall be liable for the satisfaction of its own obligations in connection
with
each Account.
11
7.2
Payments
and Credits with Respect to the Cash Accounts.
The
Custodian shall make payments from or deposits to any of the cash accounts
in
the course of carrying out its administrative duties, including but not limited
to income collection with respect to the Trust's
Investments, and otherwise in accordance with Instructions. The Custodian
and
its Subcustodians shall be required to credit amounts to the cash accounts
only
when moneys are actually received in cleared funds in accordance with banking
practice in the country and currency of deposit. Any credit made to any
Principal or Agency Account before actual receipt of cleared funds shall
be
provisional and may be reversed by the Custodian in the event such payment
is
not actually collected. Unless otherwise specifically agreed in writing by
the
Custodian or any Subcustodian, all deposits shall be payable only at the
branch
of the Custodian or Subcustodian where the deposit is made or
carried.
7.3
Currency
and Related Risks.
The
Trust
bears
the risks of holding or transacting in any currency, including any xxxx to
market exposure associated with a foreign exchange transaction undertaken
with
the Custodian. The Custodian shall not be liable for any loss or damage arising
from the applicability of any law or regulation now or hereafter in effect,
or
from the occurrence of any event, which may delay or affect the transferability,
convertibility or availability of any currency in the country (a) in which
such
Principal or Agency Accounts are maintained or (b) in which such currency
is
issued, and in no event shall the Custodian be obligated to make payment
of a
deposit denominated in a currency during the period during which its
transferability, convertibility or availability has been affected by any
such
law, regulation or event. Without limiting the generality of the foregoing,
neither the Custodian nor any Subcustodian shall be required to repay any
deposit made at a foreign branch of either the Custodian or Subcustodian
if such
branch cannot repay the deposit due to a cause for which the Custodian would
not
be responsible in accordance with the terms of Section 9 of this Agreement
unless the Custodian or such Subcustodian expressly agrees in writing to
repay
the deposit under such circumstances. All currency transactions in any account
opened pursuant to this Agreement are subject to exchange control regulations
of
the United States and of the country where such currency is the lawful currency
or where the account is maintained. Any taxes, costs, charges or fees imposed
on
the convertibility of a currency held by the any
Fund
shall
be
for the account of such Fund.
12
7.4
Foreign Exchange Transactions.
The
Custodian shall, subject to the terms of this Section, settle foreign exchange
transactions (including contracts, futures, options and options on futures)
on
behalf and for the account of the Trust
with
such currency brokers or banking institutions, including Subcustodians, as
the
Trust
may
direct pursuant to Instructions. The Custodian may act as principal in any
foreign exchange transaction with the Trust
in
accordance with Section 7.4.2 of this Agreement. The obligations of the
Custodian in respect of all foreign exchange transactions (whether or not
the
Custodian shall act as principal in such transaction) shall be contingent
on the
free, unencumbered transferability of the currency transacted on the actual
settlement date of the transaction.
7.4.1
Third
Party Foreign Exchange Transactions.
The
Custodian shall process foreign exchange transactions (including without
limitation contracts, futures, options, and options on futures), where any
third
party acts as principal counterparty to the Trust
on the
same basis it performs duties as agent for the Trust
with
respect to any other of the Trust's
Investments. Accordingly the Custodian shall only be responsible for delivering
or receiving currency on behalf of the Trust
in
respect of such contracts pursuant to Instructions. The Custodian shall not
be
responsible for the failure of any counterparty (including any Subcustodian)
in
such agency transaction to perform its obligations thereunder. The Custodian
(a)
shall transmit cash and Instructions to and from the currency broker/dealer
or
banking institution with which the Trust
has
executed a foreign exchange contract or option, (b) may make free outgoing
payments of cash in the form of U.S. Dollars or foreign currency consistent
with
applicable Instruction without receiving confirmation of
a
foreign exchange contract or option or confirmation that the countervalue
currency completing the foreign exchange contract has been delivered or received
or that the option has been delivered or received, (c) may, in connection
with
cash payments made to third party currency broker/dealers for settlement
of the
Trust’s
foreign exchange spot or forward transactions, foreign exchange swap
transactions and similar foreign exchange transactions, process settlements
using the facilities of CLS Bank according to CLS Bank’s standard terms and
conditions, and (d) shall hold in safekeeping all confirmations, certificates
and other documents and agreements received by the Custodian and evidencing
or
relating to such foreign exchange transactions. The Trust
accepts
full responsibility for its use of third-party foreign exchange broker/dealers
and for execution of the foreign exchange contracts and options and understands
that the Trust
shall be
responsible for any and all costs and interest charges which may be incurred
by
the Trust
or the
Custodian as a result of the failure or delay of third parties to deliver
foreign exchange.
7.4.2
Foreign
Exchange with the Custodian as Principal.
The
Custodian, as principal, may undertake such foreign exchange transactions
with
the Trust
as the
Custodian and the Trust
may
agree from time to time. In this event, the foreign exchange transaction
will be
performed in accordance with the particular agreement of the parties, or
in
the
event a principal foreign exchange transaction is initiated by Instruction,
the
transaction will be performed in accordance with the standard terms and
conditions attached to this Agreement.
In the
event that either the Trust
or
BBH&Co
defaults
on the settlement of any such foreign exchange transaction,, the defaulting
party
shall be
liable to the non-defaulting party for contracted currency of the transaction
together with any xxxx to market exposure associated with the replacement
purchase of the contracted currency undertaken with the Custodian.
,
with
interest to be calculated at the rate customarily paid on such deposit and
currency by the Custodian on overnight deposits from the day when the settlement
should have been effected until the day it is in fact effected, or such other
lesser amount as shall be agreed by the parties.
13
7.5
Delays. If
no
event of Force Majeure shall have occurred and be continuing and in the event
that
a
delay shall have been caused by any
breach of the Standard of Care by
the
Custodian in carrying out an Instruction to credit or transfer cash, the
Custodian shall be liable to the Trust:
(a)
with respect to Principal Accounts, for
interest to be calculated at the rate customarily paid on such deposit and
currency by the Custodian on overnight deposits at the time the delay occurs
for
the period from the day when the transfer should have been effected until
the
day it is in fact effected; and, (b) with respect to Agency Accounts, for
interest to be calculated at the rate customarily paid on such deposit and
currency by the Subcustodian on overnight deposits at the time the delay
occurs
for the period from the day when the transfer should have been effected until
the day it is in fact effected. The Custodian shall not be liable for delays
in
carrying out Instructions to transfer cash which are not due to a
breach
of the Standard of Care by the
Custodian.
7.6
Advances.
If, for
any reason in connection with this Agreement the Custodian or any Subcustodian
makes an Advance to facilitate settlement or otherwise for the benefit of
the
Trust
(whether
or not any Principal or Agency Account shall be overdrawn either during,
or at
the end of, any Business Day), the Trust
hereby
does:
7.6.1
acknowledge that the Trust
shall
have no right, title or interest in or to any Investments purchased with
such
Advance or proceeds of such Investments, and that any credit to an account
of
Fund shall be provisional, until: (a) the debit of the Principal or Agency
Account by Custodian for an amount equal to Advance Costs; and/or (b) if
such
debit produces an overdraft in such account, reimbursement to the Custodian
or
Subcustodian for the amount of such overdraft;
7.6.2
acknowledge that the Custodian has an automatically perfected statutory security
interest in Investments purchased with any such Advance pursuant to Section
9-206 of the Uniform Commercial Code as in effect in the State of New York
from
time to time;
7.6.3
in
addition, in order to secure the obligations of any
Fund to
pay or perform any and all obligations of such
Fund
pursuant to this Agreement, including without limitation to repay any Advance
made pursuant to this Agreement, grant to the Custodian a security interest
in
all Investments of
such
Fund and
proceeds thereof (as defined in the Uniform Commercial Code as currently
in
effect in the State of New York); and agree to take, and agree that the
Custodian may take, in respect of the security interest referenced above,
any
further actions that the Custodian may reasonably require.
7.7
Custodian’s
Rights Neither
the Custodian nor any Subcustodian shall be obligated to make any Advance
or to
allow an Advance to occur to the Trust,
and in
the event that the Custodian or any Subcustodian does make or allow an Advance,
any such Advance and any transaction giving rise to such Advance shall be
for
the account and risk of the Trust
and
shall not be deemed to be a transaction undertaken by the Custodian for its
own
account and risk. If such Advance shall have been made or allowed by a
Subcustodian or any other person, the Custodian may assign all or part of
its
security interest referenced above and any other rights granted to the Custodian
hereunder to such Subcustodian or other person. If the Trust
shall
fail to repay the Advance Costs when due, the Custodian or its assignee,
as the
case may be, shall be entitled to a portion of the available cash balance
in any
Agency or Principal Account equal to such Advance Costs, and the Trust
authorizes the Custodian, on behalf of the Trust,
to pay
an amount equal to such Advance Costs irrevocably to such Subcustodian or
other
person, and to dispose of any property in such Account to the extent necessary
to make such payment. Any Investments and funds credited to accounts subject
to
this Agreement created pursuant hereto shall be treated as financial assets
credited to securities accounts under Articles 8 and 9 of the Uniform Commercial
Code as in effect in the State of New York from time to time. Accordingly,
the
Custodian and any Subcustodian shall have the rights and benefits of a secured
creditor that is a securities intermediary under such Articles 8 and
9.
14
7.8
Integrated
Account.
For
purposes hereof, deposits maintained in all Principal Accounts (whether or
not
denominated in U.S. Dollars) shall collectively constitute a single and
indivisible current account with respect to the applicable
Fund's
obligations to the Custodian or its assignee, and balances in the Principal
Accounts shall be available for satisfaction of such
Fund's
obligations under this Section 7. The Custodian shall further have a right
of
offset against the balances in any Agency Account maintained hereunder
for
the
account of any Fund to
the
extent that the aggregate of all Principal Accounts of
such
Fund is
overdrawn.
8. Subcustodians
and Securities Depositories.
Subject
to the provisions hereinafter set forth in this Section 8, the Trust
hereby
authorizes the Custodian to utilize Securities Depositories to act on behalf
of
the Trust
and to
appoint from time to time and to utilize Subcustodians. With respect to
securities and funds held by a Subcustodian, either directly or indirectly
(including by a Securities Depository or Clearing Corporation), notwithstanding
any provisions of this Agreement to the contrary, payment for securities
purchased and delivery of securities sold may be made prior to receipt of
securities or payment, respectively, and securities or payment may be received
in a form in accordance with (a) governmental regulations, (b) rules of
Securities Depositories and Clearing Agencies, (c) generally accepted trade
practice in the applicable local market, (d) the terms and characteristics
of
the particular Investment, or (e) the terms of Instructions.
8.1
Domestic
Subcustodians and Securities Depositories.
The
Custodian may deposit and/or maintain, either directly or through one or
more
Agents appointed by the Custodian, Investments of the Trust
in any
Securities Depository in the United States, including The Depository Trust
Company, provided such Depository meets applicable requirements of the Federal
Reserve Bank or of the Securities and Exchange Commission. The Custodian
may,,
from
time to time, appoint any bank as defined in Section 2(a)(5) of the 1940
Act
meeting the requirements of a custodian under Section 17(f) of the 1940 Act
and
the rules and regulations thereunder to act on behalf of the Trust
as a
Subcustodian for purposes of holding Investments of the Trust
in the
United States.
15
8.2
Foreign
Subcustodians and Securities Depositories.
Unless
instructed otherwise by the Trust,
the
Custodian may deposit and/or maintain non-U.S. Investments of the Trust
in any
non-U.S. Securities Depository provided such Securities Depository meets
the
requirements of an "eligible securities depository" under Rule 17f-7 promulgated
under the 1940 Act, or any successor rule or regulation ("Rule 17f-7") or
which
by order of the Securities and Exchange Commission is exempted therefrom.
Prior
to the time that securities are placed with such depository, but subject
to the
provisions of Section 8.5
[Note:
Confirm cross -reference.]
below,
the Custodian shall have prepared a
written
assessment of the custody risks associated with maintaining assets with the
Securities Depository and shall have established a system to monitor such
risks
on a continuing basis in accordance with subsection 8.2.38.3
[Note:
Confirm cross-reference.]
of this
Section. Additionally, the Custodian may, from time to time, appoint (a)
any
bank, trust company or other entity meeting the requirements of an “eligible
foreign custodian”
under
Rule 17f-5 or which by order of the Securities and Exchange Commission is
exempted therefrom, or (b) any bank as defined in Section 2(a)(5) of the
1940
Act meeting the requirements of a custodian under Section 17(f) of the 1940
Act
and the rules and regulations thereunder, to act on behalf of the Trust
as a
Subcustodian for purposes of holding Investments of the Trust
outside
the United States.
8.3
Delegation of Board Review of Subcustodians.
From
time to time, the Custodian may
agree
to perform
certain reviews of Subcustodians and of Subcustodian Contracts as the delegate
of the Trust's
Board.
The
Custodian's duties and obligations with respect to this delegated review
will be
performed in accordance with the terms of the attached 17f-5 Delegation Schedule
to this Agreement.
8.4
[Reserved.]
8.5 Monitoring
and Risk Assessment of Securities Depositories.
Prior to
the placement of any assets of the Trust
with a
non-U.S. Securities Depository, the Custodian: (a) shall provide to the
Trust
or its
authorized representative a
written
assessment of the custody risks associated with maintaining assets within
such
Securities Depository; (b)
shall
have established a system to monitor the custody risks associated with
maintaining assets with such Securities Depository on a continuing basis
and to
promptly notify the Trust
or its
Investment Adviser of any material changes in such risk;
and (c)
shall, from time to time, provide such additional information relating to
such
risks as the Trust may reasonably request, including but not limited to
information relating to a country’s financial infrastructure, prevailing custody
and settlement practices, applicable laws and market conditions.
In
performing its duties under this subsection, the Custodian shall adhere
to
the Standard of Care
set
forth in the 17f-5 Delegation Schedule to this Agreement, and may rely on
such
reasonable sources of information as may be available including but not limited
to: (i) published ratings; (ii) information supplied by a Subcustodian that
is a
participant in such Securities Depository; (iii) industry surveys or
publications; (iv) information supplied by the depository itself, by its
auditors (internal or external) or by the relevant Foreign Financial Regulatory
Authority. It is acknowledged that information procured through some or all
of
these sources may not be independently verifiable by the Custodian and that
direct access to Securities Depositories is limited under most circumstances.
Accordingly, the Custodian shall not be responsible for errors or omissions
in
its duties hereunder provided that it has performed its monitoring and
assessment duties with the care required by this Section. The risk assessment
shall be provided to the Trust
or its
Investment Advisor by such means as the Custodian shall reasonably establish.
Advices of material change in such assessment may be provided by the Custodian
in the manner established as customary between the Trust
and the
Custodian for transmission of material market information.
16
8.6
Responsibility
for Subcustodians.
The
Custodian shall be liable to the Trust
for any
loss or damage to the Trust
caused
by or resulting from the acts or omissions of any Subcustodian to
the
extent that such acts or omissions would be deemed to be a
breach
of the Standard of Care set
forth
in the 17f-5 Delegation Schedule to this Agreement
had such
acts or omissions been performed or failed to have been performed by the
Custodian.
8.7
Responsibilities
in connection with Eligible Securities Depositories. The
Custodian agrees to perform in accordance with the Standard of Care the
requirements of paragraphs (a) and (b) of this Section.
(a) the
Custodian shall provide to the Trust an analysis of the custody risks associated
with maintaining assets with an Eligible Securities Depository; and
17
(b) the
Custodian shall monitor the custody risks associated with maintaining assets
with an Eligible Securities Depository on a continuing basis, and shall promptly
notify the Trust of any material change in these risks.
8.8
New
Countries.
The
Trust
shall be
responsible for informing the Custodian sufficiently in advance of a proposed
investment which is to be held in a country in which no Subcustodian is
authorized to act in order that the Custodian shall, if it deems appropriate
to
do so, have sufficient time to establish a subcustodial arrangement in
accordance herewith. In the event
that
the
Custodian is unable to establish such arrangements prior to the time the
investment is to be acquired, the Custodian is authorized to designate at
its
discretion a local safekeeping agent, and the use of the local safekeeping
agent
shall be at the sole risk of the Trust,
and
accordingly the Custodian shall be responsible to the Trust
for the
actions of such agent if and only to the extent the Custodian shall have
recovered from such agent for any damages caused the Trust
by such
agent.
9. Responsibility
of the Custodian.
In
performing its duties and obligations hereunder, the Custodian shall
adhere
to
the Standard of Care.
Subject
to the specific provisions of this Section, the Custodian shall be liable
for
any direct damage incurred by the Trust
in
consequence of the Custodian's breach
of
the Standard of Care.
In no
event shall the Custodian be liable hereunder for any special, indirect,
punitive or consequential damages arising out of, pursuant to or in connection
with this Agreement even if the Custodian has been advised of the possibility
of
such damages. It is agreed that the Custodian shall have no duty to assess
the
risks inherent in the Trust's
Investments or to provide investment advice with respect to such Investments
and
that the Trust
as
principal shall bear any risks attendant to particular Investments such as
failure of counterparty or issuer.
9.1 Limitations
of Performance.
The
Custodian shall not be responsible under this Agreement for any failure to
perform its duties, and shall not be liable hereunder for any loss or damage
in
association with such failure to perform as
a
result
of the
following:
9.1.1
Force
Majeure. Force
Majeure
shall
mean any circumstance or event which is beyond the reasonable control of
the
Custodian, a Subcustodian or any agent of the Custodian or a Subcustodian
and
which materially
adversely
affects the performance by the Custodian of its obligations hereunder, by
the
Subcustodian of its obligations under its Subcustody Agreement or by any
other
Agent of the Custodian or the Subcustodian, including any event caused by,
arising out of or involving (a) an act of God, (b) accident, fire, water
or wind
damage or explosion, (c) any computer, system or other equipment failure
or
malfunction caused by any computer virus or the malfunction or failure of
any
communications medium, in
each
case that was not reasonably preventable or avoidable, (d)
any
interruption of the power supply or other utility service
that is
necessary to operations, in each case that was not reasonably
foreseeable,
(e) any
strike or other work stoppage, whether partial or total, (f) any delay or
disruption resulting from or reflecting the occurrence of any Country or
Sovereign Risk, (g) any disruption of, or suspension of trading in, the
securities, commodities or foreign exchange markets, whether or not resulting
from or reflecting the occurrence of any Country or Sovereign Risk, (h) any
encumbrance on the transferability of a currency or a currency position on
the
actual settlement date of a foreign exchange transaction, whether or not
resulting from or reflecting the occurrence of any Country or Sovereign Risk,
or
(i) any other cause similarly beyond the reasonable control of the
Custodian.
18
9.1.2
Country
Risk. Country
Risk
shall
mean, with respect to the acquisition, ownership, settlement or custody of
Investments in a jurisdiction, all risks relating to, or arising in consequence
of, systemic and markets factors affecting the acquisition, payment for or
ownership of Investments including (a) the prevalence of crime and corruption,
(b) the inaccuracy or unreliability of business and financial information,
other
than that with respect to Subcustodians, (c)
the
instability or volatility of banking and financial systems, or the absence
or
inadequacy of an infrastructure to support such systems, (d) custody and
settlement infrastructure of the market in which such Investments are transacted
and held, (e) the acts, omissions and operation of any Securities Depository,
(f) the risk of the bankruptcy or insolvency of banking agents, counterparties
to cash and securities transactions, registrars or transfer agents, and (g)
the
existence of market conditions which prevent the orderly execution or settlement
of transactions or which affect the value of assets.
9.1.3
Sovereign
Risk. Sovereign
Risk
shall
mean, in respect of any jurisdiction, including the United States of America,
where Investments are acquired or held hereunder or under a Subcustody
Agreement, (a) any act of war, terrorism, riot, insurrection or civil commotion,
(b) the imposition of any investment, repatriation or exchange control
restrictions by any Governmental Authority, (c) the confiscation, expropriation
or nationalization of any Investments by any Governmental Authority, whether
de
facto or de jure, (d) any devaluation or revaluation of the currency, (e)
the
imposition of taxes, levies or other charges affecting Investments, (f) any
change in the Applicable Law, or (g) any other economic or political risk
incurred or experienced.
9.2. Limitations
on Liability
of Custodian.
The
Custodian shall not be liable for any loss, claim, damage or other liability
arising from the following causes:
9.2.1
Failure of Third Parties.
The
failure of any third party
other
than a Subcustodian,
including: (a) any issuer of Investments or Book-Entry Agent or other agent
of
an issuer; (b) any counterparty with respect to any Investment, including
any
issuer of exchange-traded or other futures, option, derivative or commodities
contract; (c) failure of an Investment Advisor
or other
agent of the Trust
other than the Custodian or any Subcustodian;
or (d)
failure of other third parties similarly beyond the control or choice of
the
Custodian.
9.2.2
Information Sources.
The
Custodian may rely upon information received from issuers of Investments
or
agents of such issuers, information received from Subcustodians and from
other
commercially reasonable sources such as commercial data bases and the like,
but
shall not be responsible for specific inaccuracies in such information, provided
that the Custodian has
reasonably
relied
upon such information in good faith, or for the failure of any commercially
reasonable information provider.
9.2.3
Reliance
on Instruction.
Action
by
the Custodian or the Subcustodian in accordance with an Instruction, even
when
such action conflicts with, or is contrary to any provision of, the Trust's
declaration of trust, certificate of incorporation or by-laws or other
constitutive document, Applicable Law, or actions by the trustees, directors
or
shareholders of the Trust.
19
9.2.4
Restricted Securities.
The
limitations inherent in the rights, transferability or similar investment
characteristics of a given Investment of the Trust.
9.3
Limitation
on Liability of Fund.
The
Trust shall not be liable to the Custodian if the Trust is prevented, forbidden
or delayed from performing, or omits to perform, any act or thing which this
Agreement provides shall be performed, by reason of a Force Majeure.
10. Indemnification.
10.1 The
Trust
hereby
indemnifies the Custodian and each Subcustodian, and their respective Agents,
nominees and partners,
employees, officers and directors, and agrees to hold each of them harmless
from
and against all losses, claims and liabilities, including reasonable counsel
fees and resulting
tax liabilities,
incurred or assessed against any of them in connection with the performance
of
this Agreement and any Instruction (other
than any income or similar tax incurred by or assessed against the
Custodian).
If a
Subcustodian or any other person indemnified under the preceding sentence,
gives
written notice of claim to the Custodian, the Custodian shall promptly give
written notice to the Trust.
Not
more than thirty days following the date of such notice, unless the Custodian
shall be liable under Section 9 hereof in respect of such claim, the
Trust
will pay
the amount of such claim or reimburse the Custodian for any payment made
by the
Custodian in respect thereof.
10.2 The
Custodian hereby indemnifies the Trust, and its Agents, nominees and partners,
employees, officers and directors, and agrees to hold each of them harmless
from
and against all losses,
claims and liabilities, including reasonable counsel fees and resulting
tax liabilities,
incurred or assessed against the Trust or its Agents that
are
the direct and proximate result of the Custodian’s breach of the Standard of
Care. If
an
Agent or any other person indemnified under the preceding sentence gives
written
notice of claim to the Trust, the Trust shall promptly give written notice
to
the Custodian.
Not
more than thirty days following the date of such notice, unless the Custodian
shall not be liable under Section 8 hereof in respect of such claim, the
Custodian
will pay
the amount of such claim or reimburse the Trust for any payment made by the
Trust in respect thereof.
11. Reports
and Records.
20
11.1
The
Custodian shall:
11.1.1
create
and maintain complete
and accurate records
relating to assets
held for the account of the Trust and the
performance of its obligations under this Agreement
as
required by the 1940 Act and the rules and regulations of the
Commission;
11.1.2
make
available to the Trust,
its
auditors, agents and employees, upon reasonable request and during normal
business hours of the Custodian, all records maintained by the Custodian
pursuant to Section 11.1.1
above,
subject, however, to all reasonable security requirements of the Custodian
then
applicable to the records of its custody customers generally; and
11.1.3
make
available to the Trust
all
Electronic Reports, in such form as the Trust shall reasonably request; it
being
understood that the Custodian shall not be liable hereunder for the inaccuracy
or incompleteness thereof or for errors in any information included
therein.
11.2
The
Trust
shall
examine all records, however produced or transmitted, promptly upon receipt
and
notify the Custodian promptly of any discrepancy or error. Unless the
Trust
delivers
written notice of any such discrepancy or error within a reasonable time
after
its receipt of the records, the records shall be presumed
to be
true and accurate.
11.3
The
Trust
acknowledges that the Custodian obtains information on the value of assets
from
outside sources which may be utilized in certain reports made available to
the
Trust.
The
Custodian deems such sources to be reliable but the Trust
acknowledges and agrees that the Custodian does not verify such information
nor
make any representations or warrantees as to its accuracy or completeness
and
accordingly shall be without liability in selecting and using such sources
and
furnishing such information.
12. Miscellaneous.
12.1 Powers
of Attorney, etc.
The
Trust
will
promptly execute and deliver, upon request, such proxies, powers of attorney
or
other instruments as may be necessary or desirable for the Custodian to provide,
or to cause any Subcustodian to provide, custody services.
12.2 Entire
Agreement; Amendment. This
Agreement, including the schedules hereto, constitutes the entire understanding
and agreement of the parties hereto and supersedes any other oral or written
agreements heretofore in effect between the Trust
and the
Custodian
with
respect to the subject matter hereof. No provision of this Agreement may
be
amended or terminated except by a statement in writing signed by the party
against which enforcement of the amendment or termination is sought, provided,
however, that an Instruction shall, whether or not such Instruction shall
constitute a waiver, amendment or modification for purposes hereof, be deemed
to
have been accepted by the Custodian when it commences actions pursuant thereto
or in accordance therewith. In
the
event of a conflict between the terms of this Agreement and the terms of
a
service level agreement or other operating agreement in place between the
parties from time to time, the terms of this Agreement shall
control.
21
12.3
Binding
Effect; Assignment. This
Agreement shall be binding upon and shall inure to the benefit of the
Custodian/Administrator and the Trust
and
their successors and assignees, provided that the Trust
may not
assign this Agreement without the prior written consent of the Custodian.
Each
party agrees that only the parties to this Agreement and/or their successors
in
interest shall have a right to enforce the terms of this Agreement. Accordingly,
no client of the Trust
or other
third party shall have any rights under this Agreement and such rights are
explicitly disclaimed by the parties.
12.4
GOVERNING
LAW, JURISDICTION AND VENUE.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES
OF
SUCH STATE. THE PARTIES HERETO IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS LOCATED IN
NEW
YORK CITY. THE TRUST
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF
VENUE OF ANY ACTION OR PROCEEDING IN ANY OF THE AFORESAID COURTS AND ANY
CLAIM
THAT ANY SUCH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
FURTHERMORE,
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO
TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.5 Notices.
Notices
and other writings contemplated by this Agreement, other than Instructions,
shall be delivered (a) by hand, (b) by first class registered or certified
mail,
postage prepaid, return receipt requested, (c) by a nationally recognized
overnight courier, or (d) by facsimile transmission, provided that any notice
or
other writing sent by facsimile transmission shall also be mailed, postage
prepaid, to the party to whom such notice is addressed. All such notices
shall
be addressed, as follows:
22
If
to the
Trust:
Xxxxxxxx
International Funds
Xxxx
Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, XX 00000
Attn:
General
Counsel
Telephone: (000)
000-0000
Facsimile (000)
000-0000
If
to the
Custodian:
Xxxxx
Brothers Xxxxxxxx & Co.
00
Xxxxx
Xxxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attn:
Senior Legal Officer, Investor Services
Telephone: (000)
000-0000
Facsimile:
(000)
000-0000
or
such
other address as the Trust
or the
Custodian may have designated in writing to the other.
12.6
Headings.
Paragraph headings included herein are for convenience of reference only
and
shall not modify, define, expand or limit any of the terms or provisions
hereof.
12.
7
Severability. In
the
event any provision of this Agreement is determined to be void or unenforceable,
such determination shall not affect the remainder of this Agreement, which
shall
continue to be in force.
12.8
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original. This Agreement shall become effective when one or more
counterparts have been signed and delivered by the Trust
and the
Custodian. A photocopy or telefax of the Agreement shall be acceptable evidence
of the existence of the Agreement and the Custodian shall be protected in
relying on the photocopy or telefax until the Custodian has received the
original of the Agreement.
12.9
Confidentiality.
The
parties hereto agree that each shall treat confidentially the terms and
conditions of this Agreement and all information provided by each party to
the
other regarding its business and operations. All confidential information
(including without limitation: (i) any information concerning the investment
research, or portfolio transactions or holdings of any Fund; and (ii) any
information in any way relating to any shareholder of any Fund including
any
such person’s name, address tax payer identification number, social security
number, brokerage account number, bank account number, custody account number
or
other personally identifying information) provided by a party hereto shall
be
used by any other party hereto solely for the purpose of rendering or obtaining
services pursuant to this Agreement and, except as may be required in carrying
out this Agreement, shall not be disclosed to any third party without the
prior
consent of such providing party. The foregoing shall not be applicable to
any
information that is publicly available when provided or thereafter becomes
publicly available other than through a breach of this Agreement, or that
is
required to be disclosed by or to any bank examiner of the Custodian or any
Subcustodian, any Regulatory Authority, any auditor of the parties hereto,
or by
judicial or administrative process or otherwise by Applicable Law. Custodian
represents and warrantes that it has adopted and implemented policies and
procedures reasonably designed to prevent the mis-use of confidential
information, including any material non-public information, by itself, or
its
directors, officers, employees and agents. Custodian acknowledges that any
mis-use of confidential information would cause irreparable and continuing
harm
to the Trust, that it will be impossible to measure in money the damage to
the
Trust by such breach, and that in the event of any such mis-use the Trust
will
not have an adequate remedy at law or in damages. Therefore, Custodian hereby
consents to the issuance of an injunction, a decree for specific performance,
and/or the enforcement of other equitable remedies against it by the Trust
(including monetary damages if appropriate), without bond or other security,
to
compel the performance of all of the material terms of this Agreement, and
hereby waives the defense of the availability of adequate relief in
damages.
23
12.10
Tape-recording. The
Trust
on
behalf of itself and its Customers authorizes the Custodian to tape record
any
and all telephonic or other oral instructions given to the Custodian by or
on
behalf of the Trust,
including from any Authorized Person. This authorization will remain in effect
until and unless revoked by the Trust
in
writing. The Trust
further
agrees to solicit valid written or other consent from any of its employees
with
respect to telephone communications to the extent such consent is required
by
applicable law.
12.11
Counsel/
Certified Public Accountant . In
fulfilling its duties hereunder, the Custodian shall be entitled to receive
and
act upon the advice of (i) counsel and/or a certified public accountant
regularly retained by the Custodian in respect of such matters, (ii) counsel
and/or a certified public accountant for the Trust
or (iii)
such counsel or certified public accountant as the Trust
and the
Custodian may agree upon, with respect to all matters, and the Custodian
shall
be without liability for any action reasonably taken or omitted pursuant
to such
advice,
provided that the Custodian shall have timely notified the Trust of such
reliance.
24
12.12
Conflict.
Nothing
contained in this Agreement shall prevent the Custodian and its associates
from
(i) dealing as a principal or an intermediary in the sale, purchase or loan
of
the Trust’s
Investments to, or from the Custodian or its associates; (ii) acting as a
custodian, a subcustodian, a trustee, an agent, securities dealer, an investment
manager or in any other capacity for any other client whose interests may
be
adverse to the interest of the Trust;
or
(iii) buying, holding, lending, and dealing in any way in any assets for
the
benefit of its own account, or for the account of any other client whose
interests may be adverse to the Trust
notwithstanding that the same or similar assets may be held or dealt in by,
or
for the account of the Trust
by the
Custodian. The Trust
hereby
voluntarily consents to, and waives any potential conflict of interest between
the Custodian and/or its associates and the Trust,
and
agrees that:
(a)
the
Custodian’s and/or its associates’ engagement in any such transaction shall not
disqualify the Custodian from continuing to perform as the custodian of the
Trust
under
this Agreement;
(b)
the
Custodian and/or its associates shall not be under any duty to disclose any
information in connection with any such transaction to the Trust;
(c)
the
Custodian and/or its associates shall not be liable to account to the
Trust
for any
profits or benefits made or derived by or in connection with any such
transaction; and
(d)
Trust
shall use reasonable efforts to disclose this provision, among other provisions
in this Agreement, to its shareholders.
12.13 Standard
of Care. Except
where otherwise noted herein, the Custodian shall use reasonable care in
the
performance of all of its duties hereunder, without negligence,
bad faith or willful misconduct
(the
Standard
of Care).
13. Definitions.
The
following defined terms will have the respective meanings set forth
below.
13.1 Advance(s)
shall
mean any extension of credit by or through the Custodian or by or through
any
Subcustodian and shall include, without limitation, amounts due to the Custodian
as the principal counterparty to any foreign exchange transaction with the
Trust
as
described in Section 7.4.2 hereof, or paid to third parties for account of
the
Trust
or in
discharge of any expense, tax or other item payable by the Trust.
13.2 Advance
Costs shall
mean any Advance, interest on the Advance and any related expenses, including
without limitation any xxxx to market loss of the Custodian or Subcustodian
on
any Investment to which Section 7.6.1 applies.
25
13.3 Agency
Account(s)
shall
mean any deposit account opened on the books of a Subcustodian or other banking
institution in accordance with Section 7.1 hereof.
13.4 Agent(s)
shall
have the meaning set forth in the last sentence of Section 6
hereof.
13.5 Applicable
Law
shall
mean with respect to each jurisdiction, all (a) laws, statutes, treaties,
regulations, guidelines (or their equivalents); (b) orders, interpretations,
licenses and permits; and (c) judgments, decrees, injunctions, writs, orders
and
similar actions by a court of competent jurisdiction; compliance with which
is
required or customarily observed in such jurisdiction.
13.6 Authorized
Person(s)
shall
mean any person or entity authorized to give Instructions on behalf of the
Trust
in
accordance with Section 4.1 hereof.
13.7
Book-entry
Agent(s)
shall
mean an entity acting as agent for the issuer of Investments for purposes
of
recording ownership or similar entitlement to Investments, including without
limitation a transfer agent or registrar.
13.8
Clearing
Corporation
shall
mean any entity or system established for purposes of providing securities
settlement and movement and associated functions for a given
market(s).
13.9 Delegation
Schedule
shall
mean any separate schedule entered into between the Custodian and the
Trust
or its
authorized representative with respect to certain matters concerning the
appointment and administration of Subcustodians delegated to the Custodian
pursuant to Rule 17f-5 under the 1940 Act.
13.10 Electronic
and Online Services Schedule
shall
mean any separate agreement entered into between the Custodian and the
Trust
or its
authorized representative with respect to certain matters concerning certain
electronic and online services as described therein and as may be made available
from time to time by the Custodian to the Trust.
13.11 Electronic
Reports
shall
mean any reports prepared by the Custodian and remitted to the Trust
or its
authorized representative via the internet or electronic mail.
13.12 Foreign
Custody Manager
shall
mean the Trust’s
foreign custody manager appointed pursuant to Rule 17f-5 of the 1940
Act
and the
17f-5 Delegation Schedule attached hereto.
26
13.13 Federal
Securities Laws
shall
mean shall mean the Securities Act of 1933, the Securities Exchange Act of
1934,
the Xxxxxxxx-Xxxxx Act of 2002, the 1940 Act, the Investment Advisers Act
of
1940, and the Title V of the Xxxxx-Xxxxx-Xxxxxx Act, each as amended from
time
to time, any rules adopted by the United States Securities and Exchange
Commission (the SEC)
under
any of these statutes, the Bank Secrecy Act as it applies to funds and
investment advisers, and any rules adopted thereunder by the SEC or the United
States Department of the Treasury.
13.14 Foreign
Financial Regulatory Authority
shall
have the meaning given by Section 2(a)(50) of the 0000 Xxx.
13.15 Funds
Transfer Services Schedule
shall
mean any separate schedule entered into between the Custodian and the
Trust
or its
authorized representative with respect to certain matters concerning the
processing of payment orders from Principal Accounts of the Trust.
13.16 Global
Custody Network Listing
shall
mean the Countries and Subcustodians approved for Investments in non-U.S.
Markets.
13.17 Instruction(s)
shall
have the meaning assigned in Section 4 hereof.
13.18
Investment
Advisor
shall
mean any person or entity who is an Authorized Person to give Instructions
with
respect to the investment and reinvestment of the Trust's
Investments.
13.19 Investment(s)
shall
mean any investment asset of the Trust,
including without limitation securities, bonds, notes, and debentures as
well as
receivables, derivatives, contractual rights or entitlements and other
intangible assets, but shall not include any Principal Account.
13.20 Margin
Account shall
have the meaning set forth in Section 6.4 hereof.
13.21 Material
Compliance Matter shall
mean: (a) any material matter, including without limitation any material
violation of or material weakness in the design of or implementation concerning
or related to compliance policy or procedures concerning Federal Securities
Laws
or the policies and procedures referred to in Section 12.9 and 16 hereof,
whether directly affecting or relating to the Trust or involving or related
to
any service provided by or process utilized by Custodian for the Trust (whether
or not such matter directly affected the Trust); or, (b) any material violation
of Federal Securities Law or targeted regulatory investigation about each
of
which the Trust would reasonably need to know to oversee the performance
of this
Agreement by Custodian and the disclosure of which would not violate legal,
regulatory or judicial/administrative non-disclosure requirements.
27
13.22 Principal
Account(s)
shall
mean deposit accounts of the Trust
carried
on the books of BBH&Co. as principal in accordance with Section 7 hereof.
13.23 Safekeeping
Account shall
mean an account established on the books of the Custodian or any Subcustodian
for purposes of segregating the interests of the Trust
(or
clients of the Custodian or Subcustodian) from the assets of the Custodian
or
any Subcustodian.
13.24 Securities
Depository
shall
mean a central or book entry system or agency established under Applicable
Law
for purposes of recording the ownership and/or entitlement to investment
securities for a given market that, if a foreign Securities Depository, meets
the definitional requirements of Rule 17f-7 under the 1940 Act.
13.25 Standard
of Care shall
have the meaning set forth in Section 12.13. hereof.
Subcustodian(s)
shall
mean each foreign bank appointed by the Custodian pursuant to Section 8 hereof,
but shall not include Securities Depositories.
13.26 Tri-Party
Agreement
shall
have the meaning set forth in Section 6.4 hereof.
13.27 1940
Act shall
mean the Investment Company Act of 1940.
14. Compensation.
The
Trust
agrees
to pay to the Custodian (a) a fee in an amount set forth in the fee letter
between the Trust
and the
Custodian in effect on the date hereof or as amended from time to time, and
(b)
all out-of-pocket expenses incurred by the Custodian, including the fees
and
expenses of all Subcustodians and other amounts paid by the Custodian to
a third
party for account or benefit of the Trust,
and
payable from time to time. Amounts payable by the Trust
under
and pursuant to this Section 14 shall be payable by wire transfer to the
Custodian at BBH&Co. in New York, New York.
15. Termination. This
Agreement may be terminated by either party in accordance with the provisions
of
this Section. The provisions of this Agreement and any other rights or
obligations incurred or accrued by any party hereto prior to termination
of this
Agreement shall survive any termination of this Agreement.
28
15.1 Term,
Notice and Effect.
This
Agreement shall have an initial term of three
(3)
years
from the date hereof. Thereafter, this Agreement shall automatically renew
for
successive one (1) year periods unless either party terminates this Agreement
by
written notice effective no less than ninety (90) days following
the date that notice to such effect shall be delivered to the other party
at its
address set forth in Section 12.5 hereof. Notwithstanding the foregoing
provisions, either party may terminate this Agreement with
respect to one or more Funds at
any
time (a) for a material breach of the Agreement not cured within 60 days,
in
which case termination shall be effective thirty (30) days following receipt
of
written notice by the non-terminating party, or such later date as may be
stated
in such notice; (b) upon thirty (30) days’ written notice to the other party in
the event that either party is adjudged bankrupt or insolvent, or there shall
be
commenced against such party a case under any applicable bankruptcy, insolvency,
or other similar law now or hereafter in effect; or (c) with respect to
termination by the Trust, upon ninety (90) days’ written notice following any
change of control of the Custodian. For purposes of this section a change
of
control shall include any merger, adoption, acquisition, re-structuring or
re-organization (excluding any transaction between or among wholly owned
direct
or indirect subsidiaries of a common parent) and any change in ownership
or
control (not including transactions between wholly owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial ownership
of
the shares of common stock or shares of Custodian.
15.2
Notice
and Succession. In
the
event a termination notice is given by a party hereto, all reasonable costs
and
expenses associated with any required systems, facilities, procedures,
personnel, and other resourced modifications as well as the movement of records
and materials and the conversion thereof shall be paid by the company for
which
Services shall cease to be performed hereunder. Furthermore, to the extent
that
it appears impracticable given the circumstances to effect an orderly delivery
of the necessary and appropriate records of BBH&Co.
to a
successor within the time specified in the notice of termination as aforesaid,
BBH&Co.
and the
Trust
agree
that this Agreement shall remain in full force and effect for such reasonable
period as may be required to complete necessary arrangements with a
successor.
15.3 Successor
Custodian.
In
the
event of the appointment of a successor custodian, it is agreed that the
Investments of the Trust
held by
the Custodian or any Subcustodian shall be delivered to the successor custodian
in accordance with reasonable Instructions. The Custodian agrees to cooperate
with the Trust
in the
execution of documents and performance of other actions necessary or desirable
in order to facilitate the succession of the new custodian. If no successor
custodian shall be appointed, the Custodian shall in like manner transfer
the
Trust's
Investments in accordance with Instructions.
29
15.4
Delayed
Succession.
If no
Instruction has been given as of the effective date of termination, Custodian
may at any time on or after such termination date and upon ten (10) consecutive
calendar days written notice to the Trust
either
(a) deliver the Investments of the Trust
held
hereunder to the Trust
at the
address designated for receipt of notices hereunder; or (b) deliver any
investments held hereunder to a bank or trust company having a capitalization
of
$2,000,000 USD equivalent and operating under the Applicable Law of the
jurisdiction where such Investments are located, such delivery to be at the
risk
of the Trust.
In the
event that Investments or moneys of the Trust
remain
in the custody of the Custodian or its Subcustodians after the date of
termination owing to the failure of the Trust
to issue
Instructions with respect to their disposition or owing to the fact that
such
disposition could not be accomplished in accordance with such Instructions
despite diligent efforts of the Custodian, the Custodian shall be entitled
to
compensation for its services with respect to such Investments and moneys
during
such period as the Custodian or its Subcustodians retain possession of such
items and the provisions of this Agreement shall remain in full force and
effect
until disposition in accordance with this Section is accomplished.
16. IT
Security.
Custodian represents and warrants that it has adopted and implemented policies
and procedures reasonably designed to maintain (through both physical and
technological means) the confidentiality of Confidential Information and
the use
of Confidential Information in securities transactions by Custodian, or its
officers, directors, employees or agents.
17. Compliance
Matters, Policies and Procedures. To
assist
the Trust
in
complying with Rule 38a-1 of the 1940 Act, BBH&Co. represents that it has
adopted and implemented written policies and procedures reasonably designed
to
prevent violation of
the
Federal
Securities Laws in connection with the fulfillment of BBH&Co.’s
obligations under the Agreement and that BBH&Co.
has in
place a compliance program to monitor its compliance with those policies
and
procedures.
BBH&Co. will upon request provide the Fund with information about its
compliance program as mutually agreed and the
Custodian’s reports prepared in compliance with the requirements of Statement of
Auditing Standards No. 70 issued by the American Institute of Certified Public
Accountants, as it may be amended from time to time (commonly referred to
as a
“SAS 70 report”)
The
Custodian shall maintain complete and accurate records with respect to assets
held for the account of the Trust as required by the rules and regulations
of
the SEC applicable to investment companies registered under the 0000 Xxx.
All
such books and records maintained by the Custodian shall be made available
to
the Trust upon request and shall, where required to be maintained by Rule
31a-1
under the 1940 Act, be preserved for the periods prescribed in Rule 31a-2
under
the 1940 Act. The Custodian shall allow the Trust’s independent public
accountant reasonable access to the records of the Custodian relating to
the
assets held for the account of the Trust as is required in connection with
their
examination of books and records pertaining to the Trust’s affairs. Custodian
shall promptly notify Trust of the occurence of any Material Compliance Matter.
The Custodian shall use reasonable efforts to provide the Trust and its agents
with such reports as the Trust may reasonably request or otherwise reasonably
require to fulfill its duties under rule 38a-1 under the 1940 Act and, in
any
case, provide the Trust with at least the same level of such reporting as
the
Custodian furnishes to its other mutual fund clients.
30
18. Regulatory
Examinations. Custodian
shall cooperate with the Trust and promptly provide the Trust with any records
requested in connection with any audit, inspection or other action by the
SEC or
any other governmental or self-regulatory organization to which the Trust
is
subject, or any other audit, examination or similar event to which the Trust
is
subject.
31
IN
WITNESS WHEREOF,
each of
the parties hereto has caused this Agreement to be duly executed as of the
date
first above written.
The
undersigned acknowledges that (I/we) have received a copy of this
document
| XXXXX BROTHERS XXXXXXXX & CO. | XXXXXXXX INTERNATIONAL FUNDS, | |
| dba XXXXXXXX ASIAN FUNDS | ||
| By: /s/ Xxxxx X. Xxxx | By: /s/ Xxxx X. XxXxxxx | |
| Name: Xxxxx X. Xxxx | Name: Xxxx X. XxXxxxx | |
| Title: Managing Director | Title: Vice President | |
| Date: July 20, 2007 | Date: July 20, 2007 |
32
Appendix
A
Funds
Xxxxxxxx
Asia Pacific Fund
Xxxxxxxx
Asia Pacific Equity Income Fund
Xxxxxxxx
Pacific Tiger Fund
Xxxxxxxx
Asian Growth and Income Fund
Xxxxxxxx
Asian Technology Fund
Xxxxxxxx
China Fund
Xxxxxxxx
India Fund
Xxxxxxxx
Japan Fund
Xxxxxxxx
Korea Fund
33
FUNDS
TRANSFER SERVICES SCHEDULE TO CUSTODIAN AGREEMENT
1. Execution
of Payment Orders. Xxxxx Brothers Xxxxxxxx & Co. (the Custodian)
is
hereby instructed by the
Trust
to execute each payment order, whether denominated in United States dollars
or
other applicable currencies, received by the Custodian in the Trust’s
name
as sender and authorized and confirmed by an Authorized Person as defined
in a
Custodian Agreement dated as of ______________, 2007 by and between the
Custodian and the Trust,
as
amended or restated from time thereafter (the Agreement),
provided that the Trust
has
sufficient available funds on deposit in a Principal Account as defined in
the
Agreement and provided that the order (i) is received by the Custodian in
the
manner specified in this Funds Transfer Services Schedule or any amendment
hereafter; (ii) complies with any written instructions and restrictions of
the
Trust
as set
forth in this Funds Transfer Services Schedule or any amendment hereafter;
(iii)
is authorized by the Trust
or is
verified by the Custodian in compliance with a security procedure set forth
in
Paragraph 2 below for verifying the authenticity of a funds transfer
communication sent to the Custodian in the name of the Trust
or for
the detection of errors set forth in any such communication; and (iv) contains
sufficient data to enable the Custodian to process such transfer.
2. Security
Procedure. The Trust
hereby
elects to use the procedure selected below as its security procedure (the
Security
Procedure).
The
Security Procedure will be used by the Custodian to verify the authenticity
of a
payment order or a communication amending or canceling a payment order. The
Custodian will act on Instructions received provided the instruction is
authenticated by the Security Procedure. The Trust
agrees
and acknowledges in connection with (i) the size, type and frequency of payment
orders normally issued or expected to be issued by the Trust
to the
Custodian, (ii) all of the security procedures offered to the Trust
by the
Custodian, and (iii) the usual security procedures used by customers and
receiving banks similarly situated, that authentication through the Security
Procedure shall be deemed commercially reasonable for the authentication
of all
payment orders submitted to the Custodian. The Trust
hereby
elects (please
choose one)
the
following Security Procedure as described below:
[
] BIDS and BIDS Worldview Payment Products.
BIDS and BIDS Worldview Payment Products, are on-line payment order
authorization facilities with built-in authentication procedures. The Custodian
and the Trust
shall
each be responsible for maintaining the confidentiality of passwords or other
codes to be used by them in connection with BIDS. The Custodian will act
on
instructions received through BIDS without duty of further confirmation unless
the Trust
notifies
the Custodian that its password is not secure.
[
] SWIFT. The Custodian and the Trust
shall
comply with SWIFT’s authentication procedures. The Custodian will act on
instructions received via SWIFT provided the instruction is authenticated
by the
SWIFT system.
[
] Tested Telex. The Custodian will accept
payment orders sent by tested telex, provided the test key matches the
algorithmic key the Custodian and Fund have agreed to use.
[
] Computer
Transmission. The Custodian is able to accept transmissions sent from the
Trust’s
computer facilities to the Custodian’s computer facilities provided such
transmissions are encrypted and digitally certified or are otherwise
authenticated in a reasonable manner based on available technology. Such
procedures shall be established in an operating protocol between the Custodian
and the Trust.
[X] Telefax
Instructions. A payment order transmitted to the Custodian by telefax
transmission shall transmitted by the Trust
to a
telephone number specified from time to time by the Custodian for such purposes.
If it detects no discrepancies, the Custodian will follow one of the procedures
below.
34
|
1.
|
If
the telefax requests a repetitive payment order, the Custodian
may call
the Trust
at
its last known telephone number, request to speak to the Trust
or
Authorized Person, and confirm the authorization and the details
of the
payment order (a Callback);
or
|
|
2.
|
If
the telefax requests a non-repetitive order, the Custodian will
perform a
Callback.
|
All
faxes
must be accompanied by a fax cover sheet which indicates the sender’s name,
company name, telephone number, fax number, number of pages, and number of
transactions or instructions attached.
|
[
]
|
Telephonic.
A telephonic payment order shall be called into the Custodian at
the
telephone number designated from time to time by the Custodian
for that
purpose. The caller shall identify herself/himself as an Authorized
Person. The Custodian shall obtain the payment order data from
the caller.
The Custodian shall then:
|
|
1.
|
If
a telephonic repetitive payment order, the Custodian may perform
a
Callback; or
|
| 2. |
If
a telephonic non-repetitive payment order, the Custodian will perform
a
Callback.
|
In
the
event the Trust
chooses
a procedure which is not a Security Procedure as described above, the
Trust
agrees
to be bound by any payment order (whether or not authorized) issued in its
name
and accepted by the Custodian in compliance with the procedure selected by
the
Trust.
3. Rejection
of Payment Orders. The Custodian shall give the Trust
timely
notice of the Custodian’s rejection of a payment order. Such notice may be given
in writing or orally by telephone, each of which is hereby deemed commercially
reasonable. In the event the Custodian fails to execute a properly executable
payment order and fails to give the Trust
notice
of the Custodian’s non-execution, the Custodian shall be liable only for the
Trust’s
actual
damages and only to the extent that such damages are recoverable under UCC
4A
(as defined in Paragraph 7 below). Notwithstanding anything in this Funds
Transfer Services Schedule and the Agreement to the contrary, the Custodian
shall in no event be liable for any consequential or special damages under
this
Funds Transfer Services Schedule, whether or not such damages relate to services
covered by UCC 4A, even if the Custodian has been advised of the possibility
of
such damages. Whenever compensation in the form of interest is payable by
the
Custodian to the Trust
pursuant
to this Funds Transfer Services Schedule, such compensation will be payable
as
specified in UCC 4A.
4. Cancellation
of Payment Orders. The Trust
may
cancel a payment order but the Custodian shall have no liability for the
Custodian’s failure to act on a cancellation instruction unless the Custodian
has received such cancellation instruction at a time and in a manner affording
the Custodian reasonable opportunity to act prior to the Custodian’s execution
of the order. Any cancellation shall be sent and confirmed in the manner
set
forth in Paragraph 2 above.
5. Responsibility
for the Detection of Errors and Unauthorized Payment Orders. Except as may
be
provided, the Custodian is not responsible for detecting any Fund error
contained in any payment order sent by the Trust
to the
Custodian. In the event that the Trust’s
payment order to the Custodian either (i) identifies the beneficiary by both
a
name and an identifying or bank account number and the name and number identify
different persons or entities, or (ii) identifies any bank by both a name
and an
identifying number and the number identifies a person or entity different
from
the bank identified by name, execution of the payment order, payment to the
beneficiary, cancellation of the payment order or actions taken by any bank
in
respect of such payment order may be made solely on the basis of the number.
The
Custodian shall not be liable for interest on the amount of any payment order
that was not authorized or was erroneously executed unless the Trust
so
notifies the Custodian within thirty (30) business days following the
Trust’s
receipt of notice that such payment order had been processed. If a payment
order
in the name of the Trust
and
accepted by the Custodian was not authorized by the Trust,
the
liability of the parties will be governed by the applicable provisions of
UCC
4A.
For the
avoidance of doubt, the Custodian shall be responsible to the Trust for any
failure by the Custodian to adhere to the specifications of any
Instruction.
35
6. Laws
and
Regulations. The rights and obligations of the Custodian and the Trust
with
respect to any payment order executed pursuant to this Funds Transfer Services
Schedule will be governed by any applicable laws, regulations, circulars
and
funds transfer system rules, the laws and regulations of the United States
of
America and of other relevant countries including exchange control regulations
and limitations on dealings or other sanctions, and including without limitation
those sanctions imposed under the law of the United States of America by
the
Office of Foreign Assets Control. Any taxes, fines, costs, charges or fees
imposed by relevant authorities on such transactions shall be for the account
of
the Trust.
7.
Miscellaneous.
All accounts opened by the Trust
or its
authorized agents at the Custodian subsequent to the date hereof shall be
governed by this Funds Transfer Schedule. All terms used in this Funds Transfer
Services Schedule shall have the meaning set forth in Article 4A of the Uniform
Commercial Code as currently in effect in the State of New York (UCC 4A)
unless
otherwise set forth herein. The terms and conditions of this Funds Transfer
Services Schedule are in addition to, and do not modify or otherwise affect,
the
terms and conditions of the Agreement and any other agreement or arrangement
between the parties hereto.
8. [Indemnification.
The Custodian does not recommend the sending of instructions by telefax or
telephonic means as provided in Paragraph 2. BY
ELECTING TO SEND INSTRUCTIONS BY TELEFAX OR TELEPHONIC MEANS, EACH
FUNDAGREES
TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL
LOSSES ARISING OR IN CONNECTION WITH ANY SUCH INSTRUCTIN SENT BY THAT
FUND.]
The
undersigned acknowledges that (I/we) have received a copy of this
document
Accepted
and agreed:
| XXXXX BROTHERS XXXXXXXX & CO. | XXXXXXXX INTERNATIONAL FUNDS, | |
| dba XXXXXXXX ASIAN FUNDS | ||
| By: /s/ Xxxxx X. Xxxx | By: /s/ Xxxx X. XxXxxxx | |
| Name: Xxxxx X. Xxxx | Name: Xxxx X. XxXxxxx | |
| Title: Managing Director | Title: Vice President | |
| Date: July 20, 2007 | Date: July 20, 2007 |
36
ELECTRONIC
AND ON-LINE SERVICES
SCHEDULE
This
Electronic and On-Line Services Schedule (this Schedule)
to a
Custodian Agreement dated as of _____________________(as amended from time
to
time hereafter, the Agreement)
by and
between Xxxxx Brothers Xxxxxxxx & Co. (we,
us, our)
and
______________________ (you,
your),
provides general provisions governing your use of and access to the Services
(as
hereinafter defined) provided to you by us via the Internet (at xxx.xxxxx.xxx
or
such other URL as we may instruct you to use to access our products) and
via a
direct dial-up connection between your computer and our computers, as of
________________, _____, 2007 (the Effective
Date). Use
of
the Services constitutes acceptance of the terms and conditions of this
Schedule, any Appendices hereto, the Terms and Conditions posted on our web
site, and any terms and conditions specifically governing a particular Service
or our other products, which may be set forth in the Agreement or in a separate
related agreement (collectively, the Related
Agreements).
1. General
Terms.
You
will
be granted access to our suite of online products, which may include, but
shall
not be limited to the following services via the Internet or dial-up connection
(each separate service is a Service;
collectively referred to as the Services):
|
1.1.
|
BIDS®
and BIDS WorldView, a system for effectuating securities and fund
trade
instruction and execution, processing and handling instructions,
and for
the input and retrieval of other information;
|
|
1.2.
|
F/X
WorldView, a system for executing foreign exchange
trades;
|
|
1.3.
|
Fund
WorldView, a system for receiving fund and prospectus
information;
|
|
1.4.
|
BBHCOnnect,
a system for placing securities trade instructions and following
the
status and detail of trades;
|
|
1.5.
|
ActionViewSM,
a
system for receiving certain corporate action information;
|
|
1.6.
|
Risk
View, an interactive portfolio risk analysis tool; and
|
|
1.7.
|
Such
other services as we shall from time to time offer.
[Note:
Need to specify.]
|
|
2.
|
Security
/ Passwords.
|
|
2.1.
|
A
digital certificate and/or an encryption key may be required to
access
certain Services. You may apply for a digital certificate and/or
an
encryption key by following the procedures set forth at xxxx://xxx.xxx.xxx/xxxxx/. You
also will need an identification code (ID)
and password(s) (Password)
to access the Services.
|
|
2.2.
|
You
agree to safeguard your digital certificate and/or encryption key,
ID, and
Password and not to give or make available, intentionally or otherwise,
your digital certificate, ID, and/or Password to any unauthorized
person.
You must immediately notify us in writing if you believe that your
digital
certificate and/or encryption key, Password, or ID has been compromised
or
if you suspect unauthorized access to your account by means of
the
Services or otherwise, or when a person to whom a digital certificate
and/or an encryption key, Password, or ID has been assigned leaves
or is
no longer permitted to access the Services.
|
|
2.3.
|
We
will not be responsible for any breach of security, or for any
unauthorized trading or theft by any third party, caused by your
failure
(be it intentional, unintentional, or negligent) to maintain the
confidentiality of your ID and/or Password and/or the security
of your
digital certificate and/or encryption key.
|
37
|
3.
|
Instructions.
|
|
3.1.
|
Proper
instructions under this Schedule shall be provided as designated
in the
Related Agreements (Instructions).
|
|
3.2.
|
The
following additional provisions apply to Instructions provided
via the
Services:
|
|
a.
|
Instructions
sent by electronic mail will not be accepted or acted
upon.
|
|
b.
|
You
authorize us to act upon Instructions received through the Services
utilizing your digital certificate, ID, and/or Password as though
they
were duly authorized written instructions, without any duty of
verification or inquiry on our part, and agree to hold us harmless
for any
losses you experience as a result.
|
|
c.
|
From
time to time, the temporary unavailability of third party
telecommunications or computer systems required by the Services
may result
in a delay in processing Instructions. In such an event, we shall
not be
liable to you or any third party for any liabilities, losses, claims,
costs, damages, penalties, fines, obligations, or expenses of any
kind
(including without limitation, reasonable attorneys', accountants',
consultants', or experts' fees and disbursements) that you experience
due
to such a delay.
|
|
4.
|
Electronic
Documents.
|
We
may
make periodic statements, disclosures, notices, and other documents available
to
you electronically, and, subject to any delivery and receipt verification
procedures required by law, you agree to receive such documents electronically
and to check the statements for accuracy. If you believe any such statement
contains incorrect information, you must follow the procedures set forth
in the
Related Agreement(s).
|
5.
|
Use
of Products; Indemnification.
|
The
Custodian hereby represents and warrants that: (i) the Custodian has the
right
to use all of the products listed in Section 1 hereof (the Products),
and
has the power and authority to allow the Trust to use the Products in accordance
with any applicable licensing agreements or other arrangements governing
their
use; and (ii) no third party consents, assignments or licenses are necessary
to
perform under this Electronic and On-Line Services Schedule. The Custodian
(a)
agrees to immediately notify the Trust in writing if any facts or circumstances
arise that would make any of the representations in this Electronic and On-Line
Services Schedule inaccurate in any way;
|
6.
|
Malicious
Code.
|
You
understand and agree that you will be responsible for the introduction (by
you,
your employees, agents, or representatives) into the Services, whether
intentional or unintentional, of (i) any virus or other code, program, or
sub-program that damages or interferes with the operation of the computer
system
containing the code, program or sub-program, or halts, disables, or interferes
with the operation of the Services themselves; or (ii) any device, method,
or
token whose knowing or intended purpose is to permit any person to circumvent
the normal security of the Services or the system containing the software
code
for the Services (Malicious
Code),
provided that you shall only be responsible for such introduction of Malicious
Code that occurred despite the taking by you of reasonable
actions
and precautions to prevent the introduction and proliferation of any Malicious
Code into those systems that interact with the Services.
|
7.
|
Indemnification.
|
For
avoidance of doubt, the parties hereby agree that the provisions in the Related
Agreement(s) related to the indemnification of the parties and any limitations
on liability and responsibilities between the parties shall be applicable
to
this Agreement, and are hereby expressly incorporated herein. You agree that
the
Services are comprised of telecommunications and computer systems, and that
it
is possible that Instructions, information, transactions, or account reports
might be added to, changed, or omitted by electronic or programming malfunction,
unauthorized access, or other failure of the systems which comprise the
Services, despite the security features that have been designed into the
Services. You agree that we will not be liable for any action taken or not
taken
in complying with the terms of this Schedule, except for our willful misconduct
or gross negligence. The provisions of this paragraph shall survive the
termination of this Schedule and the Related Agreements.
38
|
8.
|
Payment.
|
You
may
be charged for services hereunder as set forth in a fee schedule from time
to
time agreed by us.
|
9.
|
Term/Termination.
|
|
9.1.
|
This
Schedule is effective as of the date you sign it or first use the
Services, whichever is first, and continues in effect until such
time as
either you or we terminate the Schedule in accordance with this
Section 8
and/or until your off-line use of the Services is
terminated.
|
|
9.2.
|
We
may terminate your access to the Services at any time, for any
reason,
with five (5) business days prior notice; provided that we may
terminate
your access to the Services with no prior notice (i) if your account
with
us is closed, (ii) if you fail to comply with any of the terms
of this
Agreement, (iii) if we reasonably believe that your continued access
to
the Services poses a security risk, or (iv) if we believe that
you are
violating or have violated applicable laws, and we will not be
liable for
any loss you may experience as a result of such termination,
provided that in the case of any of (i) - (iv), we shall notify
you
promptly of such termination of access.
You may terminate your access to the Services at any time by giving
us ten
(10) business days notice. Upon termination, we will cancel all
your
Passwords and IDs and any in-process or pending Instructions will
be
carried out or cancelled, at our sole discretion ,
provided that we shall notify you promptly of such termination
of any such
cancellation.
|
|
10.
|
Miscellaneous.
|
|
10.1.
|
Notices.
All notices, requests, and demands (other than routine operational
communications, such as Instructions) shall be in such form and
effect as
provided in the Related Agreement(s).
|
|
10.2.
|
Inconsistent
Provisions.
Each Service may be governed by separate terms and conditions in
addition
to this Schedule and the Related Agreement(s). Except where specifically
provided to the contrary in this Schedule, in the event that such
separate
terms and conditions conflict with this Schedule and the Related
Agreement(s), the provisions of this Schedule shall prevail to
the extent
this Schedule applies to the transaction in
question.
|
|
10.3.
|
Binding
Effect; Assignment; Severability.
This Schedule shall be binding on you, your employees, officers
and
agents. We may assign or delegate our rights and duties under this
Schedule at any time without notice to you. Your rights under this
Schedule may not be assigned without our prior written consent.
In the
event that any provision of this Schedule conflicts with the law
under
which this Schedule is to be construed or if any such provision
is held
invalid or unenforceable by a court with jurisdiction over you
and us,
such provision shall be deemed to be restated to effectuate as
nearly as
possible the purposes of the Schedule in accordance with applicable
law.
The remaining provisions of this Schedule and the application of
the
challenged provision to persons or circumstances other than those
as to
which it is invalid or unenforceable shall not be affected thereby,
and
each such provision shall be valid and enforceable to the full
extent
permitted by law.
|
|
10.4.
|
Choice
of Law; Jury Trial.
This Schedule shall be governed by and construed, and the legal
relations
between the parties shall be determined, in accordance with the
laws of
the State of New York, without giving effect to the principles
of
conflicts of laws. Each party agrees to waive its right to trial
by jury
in any action or proceeding based upon or related to this Agreement.
The
parties agree that all actions and proceedings based upon or relating
to
this Schedule shall be litigated exclusively in the federal and
state
courts located within New York City, New York.
|
39
The
undersigned acknowledges that (I/we) have received a copy of this
document
XXXXXXXX
INTERNATIONAL FUNDS, dba XXXXXXXX ASIAN FUNDS
By:
/s/
Xxxx X. XxXxxxx
Name:
Xxxx X. XxXxxxx
Title:
Vice President
40
17f-5
DELEGATION SCHEDULE
By
its
execution of this Delegation Schedule dated as of _____________, 2007, the
Trust, a management investment company registered with the Securities and
Exchange Commission (the Commission)
under
the Investment Company Act of 1940, as amended (the 1940
Act),
acting
through its Board of Directors/Trustees or its duly appointed representative
(the Trust),
hereby
appoints XXXXX
BROTHERS XXXXXXXX & CO.,
a New
York limited partnership with an office in Boston, Massachusetts (the
Delegate)
as its
delegate to perform certain functions with respect to the custody of Fund's
Assets outside the United States.
1. Maintenance
of Fund's Assets Abroad. The Trust,
acting
through its Board or its duly authorized representative, hereby instructs
the
Delegate pursuant to the terms of the Custodian Agreement dated as of the
date
hereof executed by and between the Trust
and the
Delegate (the Custodian
Agreement)
to
place and maintain the Trust's
Assets
in countries outside the United States in accordance with Instructions received
from the Trust’s
Investment Advisor. Such instruction shall constitute an Instruction under
the
terms of the Custodian Agreement. The Trust
acknowledges that (a) the Delegate shall perform services hereunder only
with
respect to the countries where it accepts delegation as Foreign Custody Manager
as indicated on the Delegate’s Global Custody Network Listing; (b) depending on
conditions in the particular country, advance notice may be required before
the
Delegate shall be able to perform its duties hereunder in or with respect
to
such country (such advance notice to be reasonable in light of the specific
facts and circumstances attendant to performance of duties in such country);
and
(c) nothing in this Delegation Schedule shall require the Delegate to provide
delegated or custodial services in any country, and there may from time to
time
be countries as to which the Delegate determines it will not provide delegation
services.
2. Delegation. Pursuant
to the provisions of Rule 17f-5 under the 1940 Act as amended, the Board
hereby
delegates to the Delegate, and the Delegate hereby accepts such delegation
and
agrees to perform only those duties set forth in this Delegation Schedule
concerning the safekeeping of the Trust's
Assets
in each of the countries as to which it acts as the Board’s delegate. The
Delegate is hereby authorized to take such actions on behalf of or in the
name
of the Trust
as are
reasonably required to discharge its duties under this Delegation Schedule,
including, without limitation, to cause the Trust's
Assets
to be placed with a particular Eligible Foreign Custodian in accordance
herewith. The Trust
confirms
to the Delegate that the Trust
or its
Investment Adviser has considered the Sovereign Risk and prevailing Country
Risk
as part of its continuing investment decision process, including such factors
as
may be reasonably related to the systemic risk of maintaining the Trust's
Assets
in a particular country, including, but not limited to, financial
infrastructure, prevailing custody and settlement systems and practices
(including the use of any Securities Depository in the context of information
provided by the Custodian in the performance of its duties as required under
Rule 17f-7 and the terms of the Custodian Agreement governing such duties),
and
the laws relating to the safekeeping and recovery of the Trust's
Assets
held in custody pursuant to the terms of the Custodian Agreement.
41
3. Selection
of Eligible Foreign Custodian and Contract Administration. The
Delegate shall perform the following duties with respect to the selection
of
Eligible Foreign Custodians and administration of certain contracts governing
the Trust's
foreign custodial arrangements:
(a)
Selection
of Eligible Foreign Custodian. The Delegate shall place and maintain the
Trust's
Assets
with an Eligible Foreign Custodian, provided that the Delegate shall have
determined that the Trust's
Assets
will be subject to reasonable care based on the standards applicable to
custodians in the relevant market after considering factors relevant to the
safekeeping of such assets including without limitation:
(i) The
Eligible Foreign Custodian's practices, procedures, and internal controls,
including, but not limited to, the physical protections available for
certificated securities (if applicable), the controls and procedures for
dealing
with any Securities Depository, the method of keeping custodial records,
and the
security and data protection practices;
(ii) Whether
the Eligible Foreign Custodian has the requisite financial strength to provide
reasonable care for the Trust's
Assets;
(iii) The
Eligible Foreign Custodian's general reputation and standing; and
(iv) Whether
the Trust
will
have jurisdiction over and be able to enforce judgments against the Eligible
Foreign Custodian, such as by virtue of the existence of any offices of such
Eligible Foreign Custodian in the United States or such Eligible Foreign
Custodian's appointment of an agent for service of process in the United
States
or consent to jurisdiction in the United States.
The
Delegate shall be required to make the foregoing determination to the best
of
its knowledge and belief based only on information reasonably available to
it.
(b) Contract
Administration. The Delegate shall cause that the foreign custody arrangements
with an Eligible Foreign Custodian shall be governed by a written contract
that
the Delegate has determined will provide reasonable care for Fund assets
based
on the standards applicable to custodians in the relevant market. Each such
contract shall, except as set forth in the last paragraph of this subsection
(b), include provisions that provide:
(i) For
indemnification or insurance arrangements (or any combination of the foregoing)
such that the Trust
will be
adequately protected against the risk of loss of assets held in accordance
with
such contract;
42
(ii)
That
the
Trust's
Assets
will not be subject to any right, charge, security interest, lien or claim
of
any kind in favor of the Eligible Foreign Custodian or its creditors except
a
claim of payment for their safe custody or administration or, in the case
of
cash deposits, liens or rights in favor of creditors of such Custodian arising
under bankruptcy, insolvency or similar laws;
(iii) That
beneficial ownership of the Trust's
Assets
will 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 the Trust's
Assets
as belonging to the Trust
or as
being held by a third party for the benefit of the Trust;
(v) That
the
Trust's
independent public accountants will be given access to those records described
in (iv) above or confirmation of the contents of such records; and
(vi) That
the
Delegate will receive sufficient and timely periodic reports with respect
to the
safekeeping of the Trust's
Assets, including, but not limited to, notification of any transfer to or
from
the Trust's
account or a third party account containing the Trust's
Assets.
Such
contract may contain, in lieu of any or all of the provisions specified in
this
Section 3(b), such other provisions that the Delegate determines will provide,
in their entirety, the same or a greater level of care and protection for
the
Trust's
Assets
as the specified provisions, in their entirety.
(c) Limitation
to Delegated Selection. Notwithstanding anything in this Delegation Schedule
to
the contrary, the duties under this Section 3 shall apply only to Eligible
Foreign Custodians selected by the Delegate and shall not apply to Securities
Depositories or to any Eligible Foreign Custodian that the Delegate is directed
to use pursuant to Section 7 of this Delegation Schedule.
4. Monitoring. The
Delegate shall establish a system to monitor at reasonable intervals (but
at
least annually) the appropriateness of maintaining the Trust's
Assets
with each Eligible Foreign Custodian that has been selected by the Delegate
pursuant to Section 3 of this Delegation Schedule. The Delegate shall monitor
the continuing appropriateness of placement of the Trust's
Assets
in accordance with the criteria established under Section 3(a) of this
Delegation Schedule. The Delegate shall monitor the continuing appropriateness
of the contract governing the Trust's
arrangements in accordance with the criteria established under Section 3(b)
of
this Delegation Schedule.
5. Reporting. At
least
annually and more frequently as reasonably requested by the Trust, the Delegate
shall provide to the Board written reports specifying placement of the
Trust's
Assets
with each Eligible Foreign Custodian selected by the Delegate pursuant to
Section 3 of this Delegation Schedule and shall promptly report on any material
changes to such foreign custody arrangements,
including any legal, regulatory, or other changes or events affecting the
transferability, convertibility or availability of any currency in which
deposits for the account of the Trust are denominated.
Delegate will prepare such a report with respect to any Eligible Foreign
Custodian that the Delegate has been instructed to use pursuant to Section
7 of
this Delegation Schedule only to the extent specifically agreed with respect
to
the particular situation.
43
6. Withdrawal
of Trust's
Assets.
If the
Delegate determines that an arrangement with a specific Eligible Foreign
Custodian selected by the Delegate under Section 3 of this Delegation Schedule
no longer meets the requirements of said Section, Delegate shall withdraw
the
Trust's
Assets
from the non-complying arrangement as soon as reasonably practicable; provided,
however, that if in the reasonable judgment of the Delegate, such withdrawal
would require liquidation of any of the Trust's
Assets
or would materially impair the liquidity, value or other investment
characteristics of the Trust's
Assets, it shall be the duty of the Delegate to provide information regarding
the particular circumstances and to act only in accordance with Instructions
of
the Trust
or its
Investment Advisor with respect to such liquidation or other
withdrawal.
7.
Direction
as to Eligible Foreign Custodian. Notwithstanding
this Delegation Schedule, the Trust,
acting
through its Board, its Investment Advisor or its other Authorized
Representative, may direct the Delegate to place and maintain the Trust's
Assets
with a particular Eligible Foreign Custodian, including without limitation
with
respect to investment in countries as to which the Custodian will not provide
delegation services. In such event, the Delegate shall be entitled to rely
on
any such instruction as an Instruction under the terms of the Custodian
Agreement and shall have no duties under this Delegation Schedule with respect
to such arrangement save those that it may undertake specifically in writing
with respect to each particular instance.
8. Standard
of Care. In
carrying out its duties under this Delegation Schedule, the Delegate agrees
to
exercise reasonable care, prudence and diligence such as a person having
responsibility for safekeeping the Trust's
Assets
would exercise.
9.
Representations. The
Delegate hereby represents and warrants that it is a U.S. Bank and that this
Delegation Schedule has been duly authorized, executed and delivered by the
Delegate and is a legal, valid and binding agreement of the
Delegate.
The
Trust
hereby
represents and warrants that its Board of Directors has determined that it
is
reasonable to rely on the Delegate to perform the delegated responsibilities
provided for herein and that this Delegation Schedule has been duly authorized,
executed and delivered by the Trust
and is a
legal, valid and binding agreement of the Trust.
44
The
Delegate hereby represents and warrants that it has provided to the Trust,
and
covenants to provide to the Trust on an ongoing basis, all information relevant
to the determination by the Trust’s Board of Directors that it is reasonable to
rely on the Delegate to perform the delegated responsibilities provided for
herein.
10. Effectiveness;
termination. This
Delegation Schedule shall be effective as of the date on which this Delegation
Schedule shall have been accepted by the Delegate, as indicated by the date
set
forth below the Delegate's signature. This Delegation Schedule may be terminated
at any time, without penalty, by written notice from the terminating party
to
the non-terminating party. Such termination shall be effective on the 30th
calendar day following the date on which the non-terminating party shall
receive
the foregoing notice. The foregoing to the contrary notwithstanding, this
Delegation Schedule shall be deemed to have been terminated concurrently
with
the termination of the Custodian Agreement.
11.
Notices. Notices
and other communications under this Delegation Schedule are to be made in
accordance with the arrangements designated for such purpose under the Custodian
Agreement unless otherwise indicated in a writing referencing this Delegation
Schedule and executed by both parties.
12.
Definitions. Capitalized
terms not otherwise defined in this Delegation Schedule have the following
meanings:
a.
Country
Risk - shall have the meaning set forth in Section [ ] of the Custodian
Agreement.
b. Eligible
Foreign Custodian - shall have the meaning set forth in Rule 17f-5(a)(1)
of the
1940 Act and shall also include a U.S. Bank.
c. Fund's
Assets - shall mean any of the Trust's
investments (including foreign currencies) for which the primary market is
outside the United States, and such cash and cash equivalents as are reasonably
necessary to effect the Trust's
transactions in such investments.
d.
Instructions
- shall have the meaning set forth in the Custodian Agreement.
e.
Securities
Depository - shall have the meaning set forth in Rule 17f-7 of the 1940
Act.
45
f. Sovereign
Risk - shall have the meaning set forth in Section [6.3] of the Custodian
Agreement.
g
. U.S.
Bank
- shall mean a bank which qualifies to serve as a custodian of assets of
investment companies under Section 17(f) of the 1940 Act.
13. Governing
Law and Jurisdiction. This
Delegation Schedule shall be construed in accordance with the laws of the
State
of New York. The parties hereby submit to the exclusive jurisdiction of the
Federal courts sitting in the State of New York or the Commonwealth of
Massachusetts or of the state courts of either such State or such
Commonwealth.
14. Fees. Delegate
shall perform its functions under this Delegation Schedule for the compensation
determined under the Custodian Agreement.
15. Integration. This
Delegation Schedule sets forth all of the Delegate's duties with respect
to the
selection and monitoring of Eligible Foreign Custodians, the administration
of
contracts with Eligible Foreign Custodians, the withdrawal of assets from
Eligible Foreign Custodians and the issuance of reports in connection with
such
duties. The terms of the Custodian Agreement shall apply generally as to
matters
not expressly covered in this Delegation Schedule, including dealings with
the
Eligible Foreign Custodians in the course of discharge of the Delegate's
obligations under the Custodian Agreement.
IN
WITNESS WHEREOF,
each of
the parties hereto has caused this Agreement to be duly executed as of the
date
first above written.
The
undersigned acknowledges that (I/we) have received a copy of this
document
| XXXXX BROTHERS XXXXXXXX & CO. | XXXXXXXX INTERNATIONAL FUNDS, | |
| dba XXXXXXXX ASIAN FUNDS | ||
| By: /s/ Xxxxx X. Xxxx | By: /s/ Xxxx X. XxXxxxx | |
| Name: Xxxxx X. Xxxx | Name: Xxxx X. XxXxxxx | |
| Title: Managing Director | Title: Vice President | |
| Date: July 20, 2007 | Date: July 20, 2007 |
46
STANDARD
TERMS AND CONDITIONS FOR SPOT AND FORWARD FOREIGN EXCHANGE
TRADES
These
terms and conditions shall apply to any spot or forward foreign exchange
trades
(each a “Transaction”) entered into between Xxxxx Brothers Xxxxxxxx & Co.
(“BBH”) and Xxxxxxxx
International Funds, doing business as (“dba”) Xxxxxxxx Asian Funds
for
itself and on behalf of each of its series, (Individually a “Fund” and
collectively the “Funds”), the Counterparty noted on the attached hereof, except
to the extent (if any) that BBH and the Funds shall have agreed in writing
that
other or additional terms apply.
BBH
is
hereby granted a continuing security interest in any and all of each Fund’s
property held by BBH or on its behalf to satisfy that Fund’s obligations to BBH
hereunder now existing or hereafter arising in connection with a spot or
forward
foreign exchange trade; provided, however, that the security interest granted
hereby in the assets of any Fund shall not secure the performance of the
obligations of any other Fund. .
When
two
or more open Transactions exist between BBH and a Fund in the same currency for
the same settlement date, BBH may, at its sole discretion, elect to net the
amounts payable under the Transactions. All
transactions executed between BBH and any Fund will be subject to mandatory
net
settlement whereby all amounts bought/sold for the same currency on the same
value date will settle for the net amount of that currency bought or sold.
Unless requested by reasonable prior written notice from a Fund to BBH and
to
which BBH has agreed, BBH will not settle outstanding Transactions on a gross
basis. BBH shall not be liable for any damages, costs, expenses, liabilities
or
claims of any kind incurred by a Fund as a result of, or in connection with,
the
settlement of any such Transaction on a net basis. The mechanics of net
settlement will operate as follows: to the extent that a Fund is a net buyer
of
a currency, BBH will credit its custody account with BBH with the net amount
of
currency bought by such Fund. To the extent that a Fund is a net seller of
a
currency, BBH will debit its custody account with BBH for the net amount
of
currency sold by it. Such net amounts shall constitute a liquidated claim
and
shall be the sole and exclusive remedy at law and equity of each of BBH and
such
Fund.
Delivery
of currency shall be made to the bank specified by the purchaser (either
BBH ora
Fund, as the case may be) in a major city in the country in which the currency
is legal tender. Unless otherwise agreed to by BBH and you in writing or
by
telex or S.W.I.F.T. transmission, the currency shall be delivered by wire
transfer of immediately available funds or by crediting or debiting such
Fund’s
account with BBH.
Each
of the following events shall constitute a default with respect to any
Transaction not settled as of the time of the default: (i) either party files
a
petition or commence a proceeding under any bankruptcy, insolvency, dissolution
or liquidation law or have any such petition filed or proceeding commenced
against such party, or (ii) either party otherwise become bankrupt or insolvent
(however evidenced), (iii) either party defaults on any financial obligation
to
the other party and such default is not remedied or cured on or before the
thirtieth day after notice of such failure is given to such defaulting party,
(iv) either party misrepresents any
material information in connection with a Transaction, or (v) either party
consolidates or amalgamates with, or merges with or into, or transfers all
or
substantially all of its assets to, another entity or entities and, at the
time
of such consolidation, amalgamation, merger or transfer the
resulting, surviving or transferee entity fails to assume all of such party’s
obligations.
As of
the time of any such default, BBH shall have shall have all the rights and
remedies of a secured party afforded by the Uniform Commercial Code as then
in
effect in the State of New York (“UCC”) or afforded by other applicable xxx.Xx
addition, as of the time of any such default, (a) the non-defaulting party
may
elect to liquidate any transaction not settled as of the time of any such
default; and (b) all settlement payments due and owing to the defaulting
party
whether as a result of such a liquidation or otherwise shall be set off against
any settlement payments due and owing to the non-defaulting party, and any
net
amount due to the non-defaulting party thereafter shall be payable immediately.
For the purposes of liquidation, each Transaction may (at the election of
the
non-defaulting party) be considered a separate contract. The foregoing rights
are in addition to, and not in lieu or limitation of, any other rights and
remedies available to the parties, whether by agreement, operation of law
or
otherwise.
If
circumstances beyond the control of a party to perform an obligation hereunder
(an event of Force Majeure), including without limitation (A) the imposition
of
governmental regulation or foreign exchange restrictions or similar sovereign
act whether de facto or de jure that: (1) would operate to prevent deliver
of
currency, (2) that would materially impair the convertibility or repatriation
of
a delivered currency, should prevent delivery by other party hereunder of
any or
all of each currency (unless otherwise specifically agreed in writing with
respect to the particular foreign exchange trade) free of restriction on
transfer, convertibility or repatriation on the date specified for the delivery
thereof, , or (B) the occurrence of a natural or man-made disaster, armed
conflict, act of terrorism, riot, labor disruption, act of state or force
majeure which makes it impossible (other than as a result of its own misconduct)
for BBH or any Fund to perform any absolute or contingent obligation, to
make a
payment or delivery or to receive a payment or delivery in respect of such
Transaction or to comply with any other material provision of this Agreement
relating to such Transaction, then the party to receive delivery or performance
(1) may, but shall not be obligated to, extend the time of delivery or
performance of the Transaction; (2) cancel the transaction; or (3) liquidate
the
transaction at the composite buying or selling rate then (or last) being
quoted
by Bloomberg or, if Bloomberg is not quoting a composite rate, such other
publicly quoted rate as chosen reasonably and in good faith by the party
to
receive delivery or performance. The amount owing as a result shall be payable
immediately by the appropriate party.
On
or as soon as reasonably practicable following the occurrence of a default
or an
event of Force Majeure, the party to whom performance or delivery is owed
will
make the calculations and will provide the other party with a statement (1)
showing, in reasonable detail, such calculations (including all relevant
quotations and specifying any amount payable hereunder and (2) giving details
of
the relevant account to which any amount payable to it is to be paid. An
amount
calculated as being due in respect of any default or event of Force Majeure
will
be payable on the day that notice of the amount payable is effective. Such
amount will be paid together with (to the extent permitted under applicable
law)
interest thereon (before as well as after judgment) in US Dollars, from (and
including) the relevant date of default or event of Force Majeure (but
excluding) the date such amount is paid, at the commercially reasonable rate
of
interest. Such interest will be calculated on the basis of daily compounding
and
the actual number of days elapsed. The amount will be subject to any Set-off.
In
the
event of a default, the defaulting party agrees to reimburse the non-defaulting
party for and indemnify it against, any and all costs, claims, damages, losses
or liabilities which may be incurred by it in connection with the Transactions
including reasonable attorney’s fees, and any interest due and payable thereon.
Such indemnity shall extend to each party’s trustees, directors, officers,
partners, employees, and agents and shall survive the settlement of all
Transactions.
Time
is
of the essence with respect to the performance of each Transaction by each
party. Each Transaction shall constitute a “qualifying financial contract” as
that term is defined in the New York General Obligations Law and Uniform
Commercial Code and these Standard Terms and Conditions for Spot and Forward
Foreign Exchange Trades shall be a final expression of the agreement of BBH
and
the Funds with respect to the matters addressed.
BBH
and
the Funds irrevocably (a) submit to the non-exclusive jurisdiction of the
court
of the State of New York and the United States District Court located in
the
Borough of Manhattan in New York City, (b) waive any objection to the laying
of
venue in such courts, (c) waive any claim that any suit, action or proceeding
in
any such court has been brought in an inconvenient forum, (d) waive the right
to
object that any such court does not have jurisdiction over BBH or the Funds,
as
the case may be, (e) waive the right to trial by jury in any suit, action
or
proceeding, and (f) designate the Secretary of State of the State of new
York as
its agent for the service of process (provided that BBH and the Funds may
by
written notice to the other change its designation of agent to a specified
person located in the Borough of Manhattan).
