CUSTODIAN AGREEMENT
THIS AGREEMENT, dated as of ___________________, 20__, between [NAME OF FUND],
a management investment company organized under the laws of the State of
_____________________ and registered with the Commission under the Investment
Company Act of 1940 ("xxx 0000 XXX") (the FUND), and XXXXX BROTHERS XXXXXXXX &
CO., a limited partnership formed under the laws of the State of New York
(BBH&CO. or the CUSTODIAN).
W I T N E S S E T H:
WHEREAS, the Fund wishes to employ BBH&Co. to act as custodian for the 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 Fund and BBH&Co. hereby agree, as follows:
1. APPOINTMENT OF CUSTODIAN. The Fund hereby appoints BBH&Co. as the Fund's
Custodian, and BBH&Co. hereby accepts such appointment. All Investments of the
Fund 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 Fund'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 FUND. The Fund 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, executed and
delivered by the Fund. Neither this Agreement nor any Instruction issued
thereunder violates any Applicable Law or conflicts with or constitutes a
default under the Fund's prospectus, articles of organization or other
constitutive document or any agreement, judgment, order or decree to which
the Fund is a party or by which it or its Investments is bound.
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, the
Fund shall be deemed to have confirmed to the Custodian that the Fund has
(a) assessed and accepted all material Country, Sanctions or Sovereign
Risks and accepted responsibility for their occurrence, (b) made all
determinations required to be made by the Fund under the 1940 Act, and
(iii) 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 Fund 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 Fund uses any on-line or similar communications service made
available by the Custodian, the Fund 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 as directed by the Custodian. If the Custodian provides
any computer software to the Fund relating to the services described in
this Agreement, the Fund will only use the software for the purposes for
which the Custodian provided the software to the Fund, and will abide by
the license agreement accompanying the software and any other security
policies which the Custodian provides to the Fund.
2.4 By providing an Instruction in respect of an Investment (which
Instruction may relate to among other things, the execution and/or
settlement of trades), the Fund hereby (i) authorizes BBH&Co. to complete
such documentation as may be required or appropriate for the execution of
the Instruction, and agrees to be contractually bound to the terms of such
documentation "as is" without recourse against BBH&Co.; (ii) represents,
warrants and covenants that it has accepted and agreed to comply with all
Applicable Law, terms and conditions to which it and/or its Investment may
be bound, including without
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limitation, requirements imposed by the Investment prospectus or offering
circular, subscription agreement, any application or other documentation
relating to an Investment (e.g., compliance with suitability requirements and
eligibility restrictions); (iii) acknowledges and agrees that BBH&Co. will not
be responsible for the accuracy of any information provided to it by or on
behalf of the Fund, or for any underlying commitment or obligation inherent to
an Investment; (iv) except as otherwise provided for in Section 2.4.1,
represents, warrants and covenants that it will not effect any sale, transfer
or disposition of Investment(s) held in BBH&Co.'s name by any means other than
the issuance of an Instruction by the Fund to BBH&Co.; (v) acknowledges that
collective investment schemes (and/or their agent(s)) in which the Fund invests
may pay to BBH&Co. certain fees (including without limitation, shareholder
servicing and/or trailer fees) in respect of the Fund's investments in such
schemes; (vi) agrees that BBH&Co. shall have no obligation or responsibility
whatsoever to respond to, or provide capital in connection with any capital
calls, letters of intent of other requirements as set out in the prospectus or
offering circular of an Investment; (vii) represents, warrants and covenants
that it will provide BBH&Co. with such information as is necessary or
appropriate to enable BBH&Co.'s performance pursuant to an Instruction or under
this Agreement; (viii) represents that it is not a "Plan" (which term includes
(1) employee benefit plans that are subject to the United States ("US")
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
plans, individual retirement accounts and other arrangements that are subject
to Section 4975 of the US Internal Revenue Code of 1986, as amended (the
"Code"), (2) plans, individual retirement accounts and other arrangements that
are subject to the prohibited transaction provisions of Section 406 of ERISA or
Section 4975 of the Code, and (3) entities the underlying assets of which are
considered to include "plan assets" of such plans, accounts and arrangements),
or an entity purchasing shares on behalf of, or with the "plan assets" of, a
Plan; (ix) undertakes to inform BBH&Co. and to keep the same updated as to the
status under ERISA or Section 4975 of the Code, each as amended, of the
beneficial investor to the Investment, and as to any tax withholding or benefit
to which an Investment may be subject; (x) acknowledges that BBH&Co. shall have
no obligation to fund any order placed by the Fund for which the Fund does not
have sufficient cash on deposit with BBH&Co.; and (xi) agrees that BBH&Co.
shall be held harmless for the acts, omissions or any unlawful activity of any
agent of the Fund, or any transfer agent or other agent of an Investment in
which the Fund may invest.
2.4.1 To the extent that the Fund holds Investments in an account
opened in the name of BBH&Co. as custodian for and at the direction of
the Fund, and the Fund requests that BBH&Co. provide the Fund with the
capability to place orders and execute trades in fund shares directly
with such fund companies and/or their transfer agents which shall be
settled in an account established with each such fund company or its
transfer agent, the Fund hereby acknowledges that BBH&Co. is under no
obligation to agree to such arrangement but if BBH&Co. so agrees, the
Fund (i) acknowledges that all relevant terms under Section 2.4 above
apply thereto, (ii) authorizes BBH&Co. as custodian, to grant a
limited power of attorney to the Fund or its designated agent to
enable the Fund to so execute, (iii) agrees to ensure that any
instructions issued by the Fund or its designated agent shall also be
concurrently submitted to BBH&Co., and (iv) shall adhere to any
BBH&Co. procedures established with each such fund or its transfer
agent with respect thereto including, but not limited to, the terms of
the limited power of attorney. The Fund also acknowledges and agrees
that (1) BBH&Co. is acting solely in its capacity as custodian and is
not acting as a broker or introducing broker on behalf of the Fund,
(2) BBH&Co. is not receiving compensation in connection with the
Fund's execution hereunder of trades with each such fund other than
its usual and customary custody fees and transaction charges, (3) it
will provide such account opening information to each such fund and/or
transfer agent as and when requested by such fund and/or transfer
agent, and (4) BBH&Co. is not responsible for (a) providing
information published by the relevant distributor of each such fund
including, but not limited to, the prospectus for each such Investment
in a fund or for resolving execution queries or complaints relative to
any such Investment, and (b) assessing the suitability of any such
Investment executed directed by the Fund.
2.7 The Fund represents and warrants that it is not resident in or
organized under the laws of any country with which transactions or dealings
are prohibited under a Sanctions Regime. The Fund further warrants that it
is not owned or controlled by: (i) the government of any country with which
transactions or
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dealings by any person are prohibited under a Sanctions Regime; (ii) a
person or entity resident in or organized under the laws of any country
with which transactions or dealings by any person are prohibited under a
Sanctions Regime; or (iii) any person or entity on the List of Specially
Designated Nationals and Blocked Persons published by OFAC or any
comparable Sanctions Regime lists .
2.8 The Fund represents and warrants that it will not instruct or otherwise
cause Custodian to hold any assets in custody or to engage in or facilitate
any transaction that would cause Custodian to violate any Sanctions Regime,
including any transaction or dealing with or involving (i) any person or
entity subject to any Sanctions Regime, or (ii) any assets owned or
controlled by a person or entity that is subject to any Sanctions Regime,
or any fund or other investment vehicle that is invested in such assets in
violation of any Sanctions Regime (collectively, the "Sanctioned
Property"). The Fund further represents and warrants that it will not
instruct or cause Custodian to engage in any foreign exchange transaction
related to any Sanctioned Property.
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 pursuant to Instructions. As used herein, the term
INSTRUCTION shall mean a directive initiated by the Fund, acting through its
board of directors or 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 Fund 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 Fund 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
appropriate written notice from the Fund to the contrary.
4.2 FORM OF INSTRUCTION. Each Instruction shall be transmitted by such
secured or authenticated electromechanical means as the Custodian shall
make available to the Fund from time to time unless the Fund 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 Fund 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 Fund 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 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 use
reasonable care to adhere to any security or other procedures established
in writing between the Custodian and the Authorized Person with respect to
such means of
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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. 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 Funds 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.
4.3 COMPLETENESS AND CONTENTS OF INSTRUCTIONS. The Authorized Person shall
be responsible for assuring the adequacy and accuracy of Instructions.
Particularly, upon any acquisition or disposition or other dealing in the
Fund'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 appropriate detail, including, without limitation:
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 may give prompt notice of such determination to
the Fund, and the Fund shall thereupon amend or otherwise reform the
Instruction. In such event, 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.
4.4 TIMELINESS OF INSTRUCTIONS. In giving an Instruction, the Fund 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 Fund.
5. SAFEKEEPING OF FUND ASSETS. The Custodian shall hold Investments delivered to
it or Subcustodians for the Fund 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. 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 Fund 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 the
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
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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 Fund 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 Fund 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.
5.3 REGISTERED ASSETS. Investments which are registered may be registered
in the name of the Custodian, a Subcustodian, or in the name of the Fund 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
Fund 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 the Fund.
6.1 PURCHASE OF INVESTMENTS. Pursuant to Instruction, Investments purchased
for the account of the 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 the 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.
6.3 DELIVERY AND RECEIPT IN CONNECTION WITH BORROWINGS OF THE FUND OR OTHER
COLLATERAL AND MARGIN REQUIREMENTS. Pursuant to Instruction, the Custodian
may deliver or receive Investments or cash of the Fund in connection with
borrowings or loans by the 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 Fund 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
Fund of exchange-traded futures
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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 Fund shall have designated as initial,
maintenance or variation "margin" deposits or other collateral intended to
secure the Fund'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, the
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 the 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 the 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 the 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 the Fund.
6.6 EXCHANGE OF SECURITIES. Unless otherwise directed by Instruction, the
Custodian shall: (a) exchange securities held for the account of the 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 the Fund's account and
promptly notify the Fund 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 the 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 the
Fund with respect to Investments.
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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 Fund
such material information pertaining to a corporate action 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
Fund via any of the services described in the Electronic and Online
Services Schedule shall constitute the delivery of such information by the
Custodian. 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.
6.12 PROXY MATERIALS. The Custodian shall deliver, or cause to be
delivered, to the Fund 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 Fund via any of the services described in the
Electronic and Online Services Schedule shall constitute the delivery of
such information by the Custodian.
6.13 OWNERSHIP CERTIFICATES AND DISCLOSURE OF THE FUND'S INTEREST. The
Custodian is hereby authorized to execute on behalf of the 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 Fund 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 [ ] may not release the identity of the Fund 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 Fund. IF NO BOX IS CHECKED,
THE CUSTODIAN SHALL RELEASE SUCH INFORMATION UNTIL IT RECEIVES
CONTRARY INSTRUCTIONS FROM THE FUND. 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.
6.14. TAXES. The Custodian shall, where applicable, assist the Fund in the
reclamation of taxes withheld on dividends and interest payments received
by the Fund. 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 Fund's tax
status that is received from or on behalf of the Fund without duty of
separate inquiry.
6.15 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.
6.16 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 payments to itself or others for
minor expenses of administering Investments under this Agreement, provided
that the Fund shall have the right to request an accounting with respect to
such expenses.
6.17 USE OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other affiliate, bank,
trust fund or subcontractor as its agent (each an "AGENT" and collectively,
the "AGENTS"), in addition to Subcustodians, to carry out such provisions
of this Agreement as it may from time to time direct, including in
connection with use of any Securities System. The Custodian shall exercise
reasonable care in the selection and monitoring of such Agents and
Subcustodians. The appointment of an Agent or Subcustodian shall not
relieve the Custodian of its obligations under this Agreement.
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6.18 REGISTRATION DOCUMENT COMPLETION SERVICE. Each Fund may appoint the
Custodian to further provide registration document completion services for
account openings, name changes, conversions, mergers, market-specific
licensing renewals, account closings and other events, and for such
markets, as may be agreed between each Fund and the Custodian from time to
time (the "Registration Services"). Each Fund shall pay Custodian such fees
as may be agreed between the parties from time to time with respect to the
Registration Services in accordance with Section 14 hereof. Each Fund
further acknowledges and agrees that: (i) as part of the Registration
Services, the Custodian will complete registration documentation for the
agreed markets on behalf of the Fund and then forward such documentation to
the Fund or an Authorized Person for final review and signature on behalf
of the Fund; (ii) by the Fund or an Authorized Person signing and
submitting the aforementioned documentation to the Custodian on behalf of
the Fund (the "Submitted Documents"), the Fund shall be deemed to have
confirmed to the Custodian that the Fund has reviewed the Submitted
Documents and has determined that all of the information contained therein
is accurate and complete; (iii) the submission of the Submitted Documents
to the Custodian, shall be deemed an Instruction under Section 4 hereof to
open one or more accounts in the referenced market (in accordance with the
information provided in the Submitted Documents) and to provide the
Submitted Documents and/or the information contained therein to the
Subcustodian in the referenced market (and where applicable, for further
submission to the relevant Securities Depository, exchanges, regulatory and
tax authorities, tax agents and/or brokers in the referenced market).
7. CASH ACCOUNTS, DEPOSITS AND MONEY MOVEMENTS. Subject to the terms and
conditions set forth in this Section 7, the Fund 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 Fund maintains Investments or in such other currencies as the Fund
shall from time to time request by Instruction, including standing Instructions
for Principal Accounts to participate in a BBH&Co. cash management vehicle.
Notwithstanding anything in this Agreement to the contrary, the Fund shall be
liable as principal for any overdrafts occurring in any cash accounts.
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 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 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 Fund. 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. 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
Fund, 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 on behalf of the Fund or the Fund and affiliated
funds (each an "Account"). Each such Account shall be subject to the terms
and conditions of this Agreement (including, without limitation Section
7.6) and the Fund shall be liable for the satisfaction of its own
obligations in connection with each Account; provided however, the Fund
shall not be liable for the obligations of any other affiliated fund
thereunder.
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 Fund 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 Fund (each an
"Account"). Each such Account shall be subject to the terms and
conditions of this Agreement and the Fund shall be liable for the
satisfaction of its obligations in connection with each Account.
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
8
not limited to income collection with respect to the Fund'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 Fund 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 Fund shall be for the
account of the Fund.
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 Fund with such currency brokers or banking institutions,
including Subcustodians, as the Fund may direct pursuant to Instructions.
The Custodian may act as principal in any foreign exchange transaction with
the Fund 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 Fund on the same basis it
performs duties as agent for the Fund with respect to any other of the
Fund's Investments. Accordingly the Custodian shall only be
responsible for delivering or receiving currency on behalf of the Fund
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 or banking institution
with which the Fund has executed a foreign exchange contract or
option, (b) may make free outgoing payments of cash in the form of
Dollars or foreign currency 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 brokers/dealers for settlement of the Fund's foreign
exchange spot or forward transactions, foreign currency swap
transactions and similar foreign exchange transactions, process
settlements using the facilities of the 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 Fund accepts full
responsibility for its use of third-party foreign exchange dealers and
for execution of the foreign exchange
9
contracts and options and understands that the Fund shall be
responsible for any and all costs and interest charges which may be
incurred by the Fund 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
may enter into foreign exchange transactions with the Fund. If a
foreign exchange transaction with the Custodian as principal is
initiated by Instruction and the parties have no otherwise entered
into an agreement specific to such transaction(s), the transaction
will be performed and subject to the terms and conditions currently
posted on the Custodian's website at
( the "FX
Online Terms and Conditions"), which terms are available in hardcopy
upon request, and which terms may be updated from time to time. The
Custodian shall provide notice of any material change to the FX Online
Terms and Conditions to the Fund at least ten (10) business days prior
to their taking effect, unless the Custodian determines that the
circumstances require that a shorter period apply. Foreign exchange
transactions that occur or are placed on or after the effective date
of such changes, as stated in the applicable notice, shall be governed
by the modified FX Online Terms and Conditions. The Fund represents
and warrants, each and every time an Instruction to execute a foreign
exchange transaction with the Custodian as principal is initiated,
that it is an eligible contract participant, as that term is used
under the Commodity Exchange Act and the regulations thereunder, as
amended from time to time.
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 the
negligence or willful misconduct of the Custodian in carrying out an
Instruction to credit or transfer cash, the Custodian shall be liable to
the Fund: (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
the Custodian's own negligence or willful misconduct.
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 Fund (whether or not any Principal or
Agency Account shall be overdrawn either during, or at the end of, any
Business Day), the Fund hereby does:
7.6.1 acknowledge that the Fund 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 the Fund to
pay or perform any and all obligations of the 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 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.
10
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 Fund,
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 Fund 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 Fund 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
Fund authorizes the Custodian, on behalf of the Fund, 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 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.
7.8 INTEGRATED ACCOUNT. For purposes hereof, deposits maintained in all
Principal Accounts (whether or not denominated in Dollars) shall
collectively constitute a single and indivisible current account with
respect to the Fund's obligations to the Custodian or its assignee, and
balances in the Principal Accounts shall be available for satisfaction of
the 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 to the extent that the aggregate of all Principal
Accounts is overdrawn.
8. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Subject to the provisions
hereinafter set forth in this Section 8, the Fund hereby authorizes the
Custodian to utilize Securities Depositories to act on behalf of the Fund 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 Fund 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 Fund as a Subcustodian for purposes of holding Investments of the Fund
in the United States.
8.2 FOREIGN SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Unless instructed
otherwise by the Fund, the Custodian may deposit and/or maintain non-U.S.
Investments of the Fund 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 below, the Custodian shall have prepared an
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 Section 8.5. 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 Fund as a Subcustodian for
11
purposes of holding Investments of the Fund 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 Fund's Board. In such event,
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 BOARD APPROVAL OF FOREIGN SUBCUSTODIANS. Unless and except to the
extent that the Board has delegated to the Custodian and the Custodian has
accepted delegation of review of certain matters concerning the appointment
of Subcustodians pursuant to Subsection 8.3, the Custodian shall, prior to
the appointment of any Subcustodian for purposes of holding Investments of
the Fund outside the United States, obtain written confirmation of the
approval of the Board of Trustees or Directors of the Fund with respect to
(a) the identity of a Subcustodian, and (b) the Subcustodian agreement
which shall govern such appointment, such approval to be signed by an
Authorized Person. An Instruction to open an account in a given country
shall comprise authorization of the Custodian to hold assets in such
country in accordance with the terms of this Agreement. The Custodian shall
not be required to make independent inquiry as to the authorization of the
Fund to invest in such country.
8.5 MONITORING AND RISK ASSESSMENT OF SECURITIES DEPOSITORIES. Prior to the
placement of any assets of the Fund with a non-U.S. Securities Depository,
the Custodian: (a) shall provide to the Fund or its authorized
representative an assessment of the custody risks associated with
maintaining assets within such Securities Depository; and (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 Fund or its Investment Adviser of any material
changes in such risk. In performing its duties under this subsection, the
Custodian shall use reasonable care 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 reasonable care.
The risk assessment shall be provided to the Fund 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 Fund and the Custodian for
transmission of material market information.
8.6 RESPONSIBILITY FOR SUBCUSTODIANS. Except as provided in the last
sentence of this Section 8.6, the Custodian shall be liable to the Fund for
any loss or damage to the Fund 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 negligence, gross negligence or willful misconduct in
accordance with the terms of the relevant subcustodian agreement under the
laws, circumstances and practices prevailing in the place where the act or
omission occurred. The liability of the Custodian in respect of the
countries and Subcustodians designated by the Custodian, from time to time
on the Global Custody Network Listing shall be subject to the additional
condition that the Custodian actually recovers such loss or damage from the
Subcustodian.
8.7 NEW COUNTRIES. The Fund 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, 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 Fund, and
accordingly the Custodian shall be responsible to the Fund 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 Fund by such agent.
12
9. RESPONSIBILITY OF THE CUSTODIAN. In performing its duties and obligations
hereunder, the Custodian shall use reasonable care under the facts and
circumstances prevailing in the market where performance is effected. Subject to
the specific provisions of this Section, the Custodian shall be liable for any
direct damage incurred by the Fund in consequence of the Custodian's negligence,
bad faith or willful misconduct. 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 Fund's
Investments or to provide investment advice with respect to such Investments and
that the Fund 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 for or in consequence of the following causes:
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
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, (d) any interruption of the power supply or other utility
service, (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, Sanctions 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, Sanctions 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, Sanctions or Sovereign Risk, or (i) any
other cause similarly beyond the reasonable control of the Custodian.
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, (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.
9.1.4 SANCTIONS RISK. SANCTIONS 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 the
Custodian complying with one or more Sanctions Regimes, including the
risk that if Custodian reasonably believes it has come into possession
or control of any Sanctioned
13
Property as a result of its performance of this Agreement, Custodian
may be required by one or more Sanctions Regime to block (i.e. prevent
further movement of) such Sanctioned Property and report any related
activity to relevant government authorities. The Fund acknowledges
that if multiple Sanctions Regimes apply (including OFAC), the
Custodian will comply with the most restrictive of the applicable
regimes.
9.2. LIMITATIONS ON LIABILITY. 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
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, foreign custody manager or other agent of the
Fund; 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 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 Fund'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 Fund.
9.2.4 RESTRICTED SECURITIES. The limitations inherent in the rights,
transferability or similar investment characteristics of a given
Investment of the Fund.
10. INDEMNIFICATION. The Fund hereby indemnifies the Custodian and each
Subcustodian, and their respective Agents, nominees and the partners,
employees, officers and directors, and agrees to hold each of them harmless
from and against all claims and liabilities, including counsel fees and taxes,
incurred or assessed against any of them in connection with the performance of
this Agreement and any Instruction. 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 Fund.
11. REPORTS AND RECORDS. The Custodian shall:
11.1 create and maintain records relating to the performance of its
obligations under this Agreement;
11.2 make available to the Fund, 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 above,
subject, however, to all reasonable security requirements of the Custodian
then applicable to the records of its custody customers generally; and
11.3 make available to the Fund all Electronic Reports; 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.
11.4 The Fund shall examine all records, however produced or transmitted,
promptly upon receipt and notify the Custodian promptly of any discrepancy
or error. Unless the Fund delivers written notice of any such discrepancy
or error within a reasonable time after its receipt of the records, the
records shall be deemed to be true and accurate.
14
11.5 The Fund 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 Fund. The Custodian deems such sources to be
reliable but the Fund 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 Fund 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 constitutes the entire
understanding and agreement of the parties hereto and supersedes any other
oral or written agreements heretofore in effect between the Fund 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.
12.3 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of the Custodian/Administrator and the Fund and
their successors and assignees, provided that the Fund 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 Fund 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 FUND 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:
If to the Fund:
Attn: [ ]
Telephone: [ ]
Facsimile [ ]
15
If to the Custodian: Xxxxx Brothers Xxxxxxxx & Co.
00 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn:
Telephone: (000) 000-0000
Facsimile: (617) 772-XXXX,
or such other address as the Fund or the Custodian may have designated in
writing to the other. Notices given by the Custodian pursuant to Section
12.13 may also be given by electronic mail to the email address of any
Authorized Person. The Fund agrees that such notices given by electronic
mail shall be conclusively presumed to have been delivered and received by
the Fund as of the date such electronic mail was sent by the Custodian, as
recorded by the Custodian's systems.
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 Fund 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 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 (including, without limitation,
disclosure to Subcustodians or Agents appointed by the Custodian), 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 regulator of the Custodian or any
Agent or Subcustodian, any Regulatory Authority, any auditor or attorney of
the parties hereto, or by judicial or administrative process or otherwise
by Applicable Law.
12.10 TAPE-RECORDING. The Fund 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 Fund,
including from any Authorized Person. This authorization will remain in
effect until and unless revoked by the Fund in writing. The Fund 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 Fund or (iii) such counsel or certified
public accountant as the Fund 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.
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 Fund's Investments to, or
from the Custodian or its associates; (ii) acting as a custodian, a
subcustodian, a trustee, an agent, securities
16
dealer, an investment manager or in any other capacity for any other client
whose interests may be adverse to the interest of the Fund; 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 Fund notwithstanding that the same or
similar assets may be held or dealt in by, or for the account of the Fund
by the Custodian. The Fund hereby voluntarily consents to, and waives any
potential conflict of interest between the Custodian and/or its associates
and the Fund, 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 Fund 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 Fund;
(c) the Custodian and/or its associates shall not be liable to account
to the Fund for any profits or benefits made or derived by or in
connection with any such transaction; and
(d) the Fund shall use all reasonable efforts to disclose this
provision, among other provisions in this Agreement, to its
shareholders.
12.13 ONLINE TERMS AND CONDITIONS. Foreign exchange services provided under
or otherwise referenced in this Agreement will be performed and subject to
the terms and conditions posted on the Custodian's website at <
xxxx://xxx.xxx.xxx/xx/xxxxx.xxx/xx0/Xxxxx_xxx_Xxxxxxxxxx/> (the "FX Online
Terms and Conditions"), which terms are available in hardcopy upon request,
and which terms may be updated from time to time. The Custodian shall
provide notice of any change to the FX Online Terms and Conditions to the
Fund at least ten business days prior to their taking effect, unless the
Custodian determines that the circumstances require that a shorter period
apply. Foreign exchange transactions that occur or are placed on or after
the effective date of such changes, as stated in the applicable notice,
shall be governed by the modified FX Online Terms and Conditions.
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 Fund as described in Section
7.4.2 hereof, or paid to third parties for account of the Fund or in
discharge of any expense, tax or other item payable by the Fund.
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.
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 Fund 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.
17
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 Fund 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 Fund 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 Fund.
13.11 ELECTRONIC REPORTS shall mean any reports prepared by the Custodian
and remitted to the Fund or its authorized representative via the internet
or electronic mail.
13.12 EU shall mean the European Union and its member states
13.13 FOREIGN CUSTODY MANAGER shall mean the Fund's foreign custody manager
appointed pursuant to Rule 17f-5 of the 1940 Act.
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 Fund or its authorized
representative with respect to certain matters concerning the processing of
payment orders from Principal Accounts of the Fund.
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 Fund's Investments.
13.19 INVESTMENT(S) shall mean any investment asset of the Fund, 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 OFAC shall mean the US Treasury Department's Office of Foreign Assets
Control
13.22 PRINCIPAL ACCOUNT(S) shall mean deposit accounts of the Fund 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 Fund (or clients of the Custodian or Subcustodian) from the assets
of the Custodian or any Subcustodian.
13.24 SANCTIONS OR SANCTIONS REGIME(S) shall mean any governmental
sanctions against countries, persons and entities that are imposed at any
time by the US, the EU, the United Nations or any other jurisdiction, which
Custodian must comply with.
18
13.25 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.
13.26 SUBCUSTODIAN(S) shall mean each foreign bank appointed by the
Custodian pursuant to Section 8 hereof, but shall not include Securities
Depositories.
13.27 TRI-PARTY AGREEMENT shall have the meaning set forth in Section 6.4
hereof.
13.28 1940 ACT shall mean the Investment Company Act of 1940.
14. COMPENSATION. The Fund agrees to pay to the Custodian (a) a fee in an
amount set forth in the fee letter between the Fund 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 Fund, and payable from time to time. Amounts payable
by the Fund 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.
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 sooner than
seventy-five (75) 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 at any time (a) for cause, which is a material
breach of the Agreement not cured within 60 days, in which case termination
shall be effective upon written receipt of notice by the non-terminating
party, or (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.
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 Fund 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 to a successor within the time
specified in the notice of termination as aforesaid, BBH and the Fund 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 Fund 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 Fund 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 Fund's Investments in
accordance with Instructions.
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 Fund either (a) deliver the Investments of the Fund held hereunder
to the Fund 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 Fund. In
19
the event that Investments or moneys of the Fund remain in the custody of
the Custodian or its Subcustodians after the date of termination owing to
the failure of the Fund 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. COMPLIANCE POLICIES AND PROCEDURES. To assist the Fund in complying with
Rule 38a-1 of the 1940 Act, BBH&Co. represents that it has adopted written
policies and procedures reasonably designed to prevent violation of the federal
securities laws in fulfilling its obligations under the Agreement and that it
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 our compliance program as mutually agreed.
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. [THE FUND]
By: _________________________ By: _____________________
Name: Name:
Title: Title:
Date: Date:
Xxxxx Brothers Xxxxxxxx & Co. ("BBH&Co.") is a limited partnership organized
under the laws of the United States of America ("US") and is subject to the US
Treasury Regulations set forth under 00 XXX 000, et seq. BBH&Co. may not
establish any relationship with any Prohibited Person or Entity as such term is
defined under the regulations. No customer of BBH&Co. may be owned or
controlled by an entity or person: (i) that is listed in the Annex to, or is
otherwise subject to the provisions of Executive Order 13224, issued on
September 24, 2001 ("EO13224")
; (ii)
whose name appears on the United States Treasury Department's Office of Foreign
Assets Control ("OFAC") most current list of "Specifically Designated National
and Blocked Persons" (which list may be published from time to time in various
mediums including, but not limited to, the OFAC website; (iii) who commits,
threatens to commit or supports "terrorism", as such term is defined in
EO13224; or (iv) who is otherwise affiliated with any entity or person listed
above (any and all parties or persons described in clauses (i) through (iv)
above are herein referred to as a "Prohibited Person").
20
FUNDS TRANSFER SERVICES SCHEDULE
("FTSS")
In accordance with Section 4.2 of the Custodian Agreement, the Fund
acknowledges the following terms and conditions in respect of all funds
transfers effected by the Custodian. References to UCC 4A shall mean Article 4A
of the Uniform Commercial Code as currently in effect in the State of New York.
Terms not otherwise defined herein shall have the meanings accorded to them in
the Custodian Agreement.
1. Transmission of Payment Orders. Each FT Instruction shall be transmitted by
such secured or authenticated means and subject to such security procedures as
the Custodian shall make available to the Fund from time to time (such
transmission method and security procedures, a CUSTODIAN DESIGNATED SECURITY
PROCEDURE), unless the Fund shall elect to transmit such FT Instruction in
accordance with a Fund Designated Security Procedure (as defined in Section 4
below). The Fund acknowledges and agrees that the Custodian will use the
security procedures referenced in Sections 3 and 4 below solely to authenticate
a FT Instruction, as set forth herein, and not to detect any errors or omissions
therein.
2. Custodian Designated Security Procedure. The Custodian will make the
following Custodian Designated Security Procedures available to the Fund for use
in communicating FT Instructions to the Custodian:
o BBH Worldview[R] Payment Products. The Custodian offers to the Fund
use of its BBH Worldview Payment Products ("BBH Worldview"), which are
Custodian proprietary on-line payment order authorization facilities
with built-in authentication procedures. The Custodian and the Fund
shall each be responsible for maintaining the confidentiality of
passwords or other codes used by them in connection with BBH
Worldview. The Custodian will act on FT Instructions received through
BBH Worldview without duty of further confirmation unless the Fund
notifies the Custodian that its password is not secure. The Fund
agrees that access to, and use of, BBH Worldview shall be governed by
an Electronic and Online Services Schedule, which the Fund will
execute prior to access to BBH Worldview.
o SWIFT Transmission. The Custodian and the Fund shall comply with
SWIFT's authentication procedures. The Custodian will act on FT
Instructions received via SWIFT provided the instruction is
authenticated by the SWIFT system.
o Written Instructions. Instructions may be transmitted in an original
writing that bears the manual signature of an Authorized Person(s).
3. Fund Designated Security Procedure. FT Instructions may be transmitted
through such other means, and subject to such additional security procedures,
as may be elected by the Fund (or by an Authorized Person entitled to give
Instructions) and acknowledged and accepted by the Custodian (the transmission
methods and security procedures referenced below, as may be supplemented by
such additional security procedures, each a FUND DESIGNATED SECURITY
PROCEDURE); it being understood that the Custodian's acknowledgment shall
authorize it 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 Fund.
o Computer Transmission. The Custodian is able to accept transmissions
sent from the Fund's computer facilities to the Custodian's computer
facilities. If the Fund determines to use its proprietary transmission
or other electronic transmission method, it must provide Custodian
sufficient notice and information to allow testing or other
confirmation that FT Instructions received via the Fund Designated
Security Procedure can be processed in good time and order. The
Custodian may require the Fund to execute additional documentation
prior to the use of such transmission method.
o Facsimile Transmission.
A FT Instruction transmitted to the Custodian by facsimile transmission must be
transmitted by the Fund to a telephone number specified from time to time by
the Custodian for such purposes. The Custodian will then follow one of the
procedures below:
21
1. If the facsimile requests a non-repetitive order, the Custodian
will call the Fund and request to speak to a person authorized to
validate orders on behalf of the Fund, and confirm the authorization
and details of the payment order (a CALLBACK);
2. If the facsimile FT Instruction pertains to a repetitive payment
order (see Section 7 below), the Custodian may (at its sole
discretion) perform a Callback. The Fund acknowledges that prior to
its issuance of any repetitive payment order, it must (a) request that
the appropriate repetitive payment order process be approved and set
up at the Custodian, and (b) complete such documentation as may be
required by the Custodian, including a PPO (as defined in Section 7).
The Custodian shall rely on the purported identity of the originator but due to
the lack of reliability of a facsimile signature, it will not perform signature
verification on facsimiles.
o Telephonic. The Fund may call a telephonic payment order 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 FT Instruction
details from the caller. The Custodian shall then follow one of the
procedures below:
i. If the telephonic FT Instruction pertains to a non-repetitive
payment order, the Custodian will perform a Callback; or
ii. If the telephonic FT Instruction pertains to a repetitive
payment order (see Section 7 below), the Custodian may (at its
sole discretion) perform a Callback. The Fund acknowledges that
prior to its issuance of any repetitive payment order, it must
(a) request that the appropriate repetitive payment order process
be approved and set up at the Custodian, and (b) complete such
documentation as may be required by the Custodian, including a
PPO.
In electing to transmit a FT Instruction via a Fund Designated Security
Procedure, the Fund (i) agrees to be bound by the transaction(s) or payment
order(s) specified on said FT Instruction, whether or not authorized, and
accepted by the Custodian in compliance with such Fund Designated Security
Procedure, and (ii) accepts the risk associated with such Fund Designated
Security Procedure and confirms it is commercially reasonable for the
transmission and authentication of the FT Instruction.
The parties agree that the Fund's transmission of a FT Instruction by means of
any of the above Fund Designated Security Procedures and the Custodian's
acceptance and execution of such FT Instruction shall constitute a FT
Instruction sent via a Fund Designated Security Procedure and governed by the
terms of this FTSA.
4. Rejection of Payment Orders; Rescission of Designated Security Procedure.
The Custodian shall give the Fund timely notice of the Custodian's rejection of
a FT Instruction. Such notice may be given in writing, via a Custodian
Designated Security Procedure or any Fund Designated Security Procedure used by
the Fund, or orally by telephone, each of which is hereby deemed commercially
reasonable. In the event the Custodian fails to execute a properly executable
FT Instruction and fails to give the Fund notice of the Custodian's
non-execution, the Custodian shall be liable only for the Fund's actual damages
and only to the extent that such damages are recoverable under UCC 4A. The
Custodian, after providing prior written notice, may decide to no longer accept
a particular Fund or Custodian Designated Security Procedure, or to do so only
on revised terms, in the event that it determines that such agreed or
established method of transmission represents a security risk or is attendant
to any general change in the Custodian's policy regarding FT Instructions.
Notwithstanding anything in this FTSA and the Agreement to the contrary, the
Custodian shall in no event be liable for any consequential, indirect, special
or punitive damages under this FTSA, whether or not such damages relate to
services covered by UCC 4A, even if the Custodian was advised of the
possibility of such damages.
5. Cancellation of Payment Orders. The Fund may cancel a FT Instruction but the
Custodian shall have no liability for the Custodian's failure to act on a
cancellation FT Instruction unless the Custodian has received such cancellation
FT Instruction at a time and in a manner affording the Custodian reasonable
opportunity to act prior to
22
the Custodian's execution of the original FT Instruction. Any cancellation FT
Instruction shall be sent and confirmed by such means as is set forth in Section
3 or 4 above.
6. Preauthorized Repetitive Payment Orders. The Fund may establish with the
Custodian a process to preauthorize certain repetitive payments or transfers.
The Fund will execute all documentation required by the Custodian, including a
separate Preauthorized Repetitive Payment Order (PPO) form. The PPO shall be
delivered to the Custodian in writing or by another Custodian Designated
Security Procedure or Fund Designated Security Procedure, and will become
effective after the Custodian shall have had a reasonable opportunity to act
thereon (or if later, two (2) banking days after receipt by the Custodian). The
PPO may take the form of either:
(i) A STANDING INSTRUCTION in which the Fund provides in the PPO all
required information for a FT Instruction (except for the transfer
date and amount) on a "standing instructions" basis. The Fund may from
time-to-time instruct the Custodian to make a payment under the PPO,
in writing or another Custodian Designated Security Procedure or Fund
Designated Security Procedure, which instruction shall reference the
repetitive line number (a number assigned to it by the Custodian after
execution of the PPO), details of the payment, the transfer date and
the amount of the transfer; or
(ii) A RECURRING INSTRUCTION in which the Fund supplies all required
information for a FT Instruction with an instruction to process such
payments with a specific frequency.
7. Responsibility for the Detection of Errors in Payment Orders; Liability of
the Parties. The purpose of any Fund Designated Security Procedure or Custodian
Designated Security Procedure is to confirm the authenticity of any FT
Instruction and is not designed to detect errors or omissions in such FT
Instructions. Therefore, the Custodian is not responsible for detecting any
Fund error or omission contained in any FT Instruction received by the
Custodian. In the event that the FT Instruction either (i) identifies the
beneficiary by both a name and an identifying or Fund account number and the
name and number identify different persons or entities, or (ii) identifies any
Fund by both a name and an identifying number and the number identifies a
person or entity different from the Fund identified by name, execution of the
relevant payment order, payment to the beneficiary, cancellation of the payment
order or actions taken by the Custodian or any Fund 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 FT
Instruction that was not authorized or was erroneously executed unless the Fund
so notifies the Custodian within thirty (30) days following the Fund's receipt
of notice that such FT Instruction was processed. Any compensation payable in
the form of interest shall be payable in accordance with UCC 4A. If a FT
Instruction in the name of the Fund and accepted by the Custodian was not
authorized by the Fund, the liability of the parties will be governed by the
applicable provisions of UCC 4A.
23
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 ________________,
_____, 20__ (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. BBH WorldView[R], 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. ActionView[SM], a system for receiving certain corporate action
information; and,
1.6. Such other services as we shall from time to time offer.
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.
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,
24
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. 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). You
agree to take all necessary actions and precautions to prevent the
introduction and proliferation of any Malicious Code into those systems
that interact with the Services.
6. INDEMNIFICATION.
For avoidance of doubt, you hereby agree that the provisions in the Related
Agreement(s) related to your indemnification of us and any limitations on
our liability and responsibilities to you 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.
7. PAYMENT.
You may be charged for services hereunder as set forth in a fee schedule
from time to time agreed by us.
8. TERM/TERMINATION.
8.1. 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.
8.2. 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 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. 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.
9. MISCELLANEOUS.
9.1. 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).
9.2. 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.
25
9.3. 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.
9.4. 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.
The undersigned acknowledges that (I/we) have received a copy of this
document.
[FUND] ("YOU")
By: __________________________________
Title: _______________________________
Date: ________________________________
26
17F-5 DELEGATION SCHEDULE
By its execution of this Delegation Schedule dated as of _____________, 20__,
between __________________________, 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 FUND),
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 Fund, 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 Fund and the Delegate (the CUSTODIAN AGREEMENT) to place and
maintain the Fund's Assets in countries outside the United States in accordance
with Instructions received from the Fund's Investment Advisor. Such instruction
shall constitute an Instruction under the terms of the Custodian Agreement. The
Fund 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 Fund'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
Fund as are reasonably required to discharge its duties under this Delegation
Schedule, including, without limitation, to cause the Fund's Assets to be
placed with a particular Eligible Foreign Custodian in accordance herewith. The
Fund confirms to the Delegate that the Fund 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 Fund'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 Fund's Assets held in custody pursuant
to the terms of the Custodian Agreement.
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 Fund's foreign custodial arrangements:
(a) Selection of Eligible Foreign Custodian. The Delegate shall place and
maintain the Fund's Assets with an Eligible Foreign Custodian, provided
that the Delegate shall have determined that the Fund'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 Fund's Assets;
(iii) The Eligible Foreign Custodian's general reputation and
standing; and
(iv) Whether the Fund 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
27
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 Fund will be adequately protected
against the risk of loss of assets held in accordance with such
contract;
(ii) That the Fund'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 Fund'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 Fund's
Assets as belonging to the Fund or as being held by a third party for
the benefit of the Fund;
(v) That the Fund'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 Fund's Assets,
including, but not limited to, notification of any transfer to or from
the Fund's account or a third party account containing the Fund'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 Fund'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 Fund'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 Fund'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 Fund'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 mutually agreed between
the parties, the Delegate shall provide to the Board written reports specifying
placement of the Fund'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.
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.
6. Withdrawal of Fund'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 Fund's Assets from the non-complying
arrangement as soon as reasonably practicable; provided, however, that if in
the reasonable judgment of the Delegate, such
28
withdrawal would require liquidation of any of the Fund's Assets or would
materially impair the liquidity, value or other investment characteristics of
the Fund'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 Fund or its Investment Advisor with respect to such
liquidation or other withdrawal.
7. Direction as to Eligible Foreign Custodian. Notwithstanding this Delegation
Schedule, the Fund, acting through its Board, its Investment Advisor or its
other Authorized Representative, may direct the Delegate to place and maintain
the Fund'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 Fund'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 Fund 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 Fund and is a
legal, valid and binding agreement of the Fund.
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 Fund'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 Fund'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.
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.
29
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. [FUND]
By: _________________________ By: _____________________
Name: Name:
Title: Title:
30
