CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of December 30, 2002 by and between SEI PRIVATE
TRUST COMPANY, a savings association supervised by the Office of Thrift
Supervision ("SEI Trust"), and MERCANTILE ABSOLUTE RETURN FUND LLC, a Delaware
limited liability company (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as a closed-end, non-diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Fund wishes to retain SEI Trust to provide custodian
services, and SEI Trust wishes to furnish custodian services, either directly or
through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 ACT" means the Securities Act of 1933, as amended.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as amended.
(c) "AUTHORIZED PERSON" means any officer of the Fund and any other person
authorized by the Fund to give Oral or Written Instructions on behalf of
the Fund. An Authorized Person's scope of authority may be limited by
setting forth such limitation in a written document signed by both
parties hereto.
(d) "BOOK-ENTRY SYSTEM" means Federal Reserve Treasury book-entry system for
United States and federal agency securities, its successor or
successors, and its nominee or nominees and any book-entry system
maintained by an exchange registered with the SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "CHANGE OF CONTROL" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial interest
of an entity or its parent(s).
(g) "ORAL INSTRUCTIONS" mean oral instructions received by SEI Trust from an
Authorized Person or from a person reasonably believed by SEI Trust to
be an
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Authorized Person. SEI Trust may, in its sole discretion in each
separate instance, consider and rely upon instructions it receives from
a person it, reasonably believes to be an Authorized Person via
electronic mail as Oral Instructions.
(h) "SEI TRUST" means SEI Private Trust Company or a subsidiary or affiliate
of SEI Private Trust Company.
(i) "SEC" means the Securities and Exchange Commission.
(j) "SECURITIES LAWS" mean the 1933 Act, the 1934 Act, the 1940 Act, the CEA
and the Investment Advisor's Act of 1940.
(k) "SHARES" mean the shares of limited liability company interests of any
series or class of the Fund.
(l) "PROPERTY" means:
(i) any and all securities and other investment items which the Fund may
from time to time deposit, or cause to be deposited, with SEI Trust
or which SEI Trust may from time to time hold for the Fund;
(ii) all income in respect of any of such securities or other investment
items;
(iii) all proceeds of the sale of any of such securities or investment
items; and
(iv) all proceeds of the sale of securities issued by the Fund, which
are received by SEI Trust from time to time, from or on behalf of
the Fund.
(m) "WRITTEN INSTRUCTIONS" mean (i) written instructions signed by two
Authorized Persons and received by SEI Trust or (ii) trade instructions
transmitted by means of an electronic transaction reporting system which
requires the use of a password or other authorized identifier in order
to gain access. The instructions may be delivered electronically or by
hand, mail or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints SEI Trust to provide custodian services
to the Fund and SEI Trust accepts such appointment and agrees to furnish such
services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide SEI Trust with the following:
(a) at SEI Trust's request, certified or authenticated copies of the
resolutions of the Fund's Managers, approving the appointment of SEI
Trust or its affiliates to provide services;
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(b) a copy of the Fund's most recent effective registration statement;
(c) a copy of the Fund's advisory and sub-advisory agreements;
(d) a copy of the distribution/underwriting agreements with respect to each
class of Shares;
(e) a copy of the Fund's administration agreement;
(f) copies of any distribution and/or member servicing plans and agreements
made in respect of the Fund or a class thereof; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. COMPLIANCE WITH LAWS.
SEI Trust undertakes to comply with material applicable requirements of
the Securities Laws and material laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be performed by
SEI Trust hereunder. Except as specifically set forth herein, SEI Trust assumes
no responsibility for compliance with such laws by the Fund or any other entity.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, SEI Trust shall act only
upon Oral Instructions or Written Instructions.
(b) SEI Trust shall be entitled to rely upon any Oral Instruction or Written
Instruction it receives from an Authorized Person (or from a person
reasonably believed by SEI Trust to be an Authorized Person) pursuant to
this Agreement. SEI Trust may assume that any Oral Instructions or
Written Instructions received hereunder are not in any way inconsistent
with the provisions of organizational documents of the Fund or of any
vote, resolution or proceeding of the Fund's Managers or of the Fund's
members, unless and until SEI Trust receives Written Instructions to the
contrary.
(c) The Fund agrees to forward to SEI Trust Written Instructions confirming
Oral Instructions (except where such Oral Instructions are given by SEI
Trust or its affiliates) so that SEI Trust receives the Written
Instructions by the close of business on the same day that such Oral
Instructions are received by SEI Trust. The fact that such confirming
Written Instructions are not received by SEI Trust or differ from the
Oral Instructions shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral Instructions
or SEI Trust's ability to rely upon such Oral Instructions.
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6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If SEI Trust is in doubt as to any action it should
or should not take, SEI Trust may request directions or advice,
including Oral Instructions or Written Instructions, from the Fund.
(b) ADVICE OF COUNSEL. If SEI Trust shall be in doubt as to any question of
law pertaining to any action it should or should not take, SEI Trust may
request advice from counsel of its own choosing (who may be counsel for
the Fund, the Fund's investment adviser or SEI Trust, at the option of
SEI Trust), and such cost shall be borne by the Fund.
(c) CONFLICTING ADVICE. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions SEI Trust receives
from the Fund, and the advice it receives from counsel, SEI Trust shall
be entitled to rely upon and follow the advice of counsel.
(d) PROTECTION OF SEI TRUST. SEI Trust shall be indemnified by the Fund and
without liability for any action SEI Trust takes or does not take in
reliance upon directions or advice or Oral Instructions or Written
Instructions SEI Trust receives from or on behalf of the Fund or from
counsel and which SEI Trust believes, in good faith, to be consistent
with those directions or advice or Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as to impose
an obligation upon SEI Trust (i) to seek such directions or advice or
Oral Instructions or Written Instructions, or (ii) to act in accordance
with such directions or advice.
7. RECORDS; VISITS. The books and records pertaining to the Fund, which are in
the possession or under the control of SEI Trust, shall be the property of the
Fund. Such books and records shall be prepared and maintained as required by the
1940 Act (including, but not limited to, Section 31 and Rules 31a-1 and 31a-2
thereunder, as these sections may be amended from time to time) and other
applicable securities laws, rules and regulations. The Fund and Authorized
Persons shall have access to such books and records at all times during SEI
Trust's normal business hours. Upon the reasonable request of the Fund, copies
of any such books and records shall be provided by SEI Trust to the Fund or to
an authorized representative of the Fund, at the Fund's expense.
8. CONFIDENTIALITY. Each party shall keep confidential any information relating
to the other party's business ("Confidential Information"). Confidential
Information shall include (a) any data or information that is competitively
sensitive material, and not generally known to the public, including, but not
limited to, information about product plans, marketing strategies, finances,
operations, customer relationships, customer profiles, customer lists, sales
estimates, business plans, and internal performance results relating to the
past, present or future business activities of the Fund or SEI Trust, their
respective subsidiaries and affiliated companies and the customers, clients and
suppliers
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of any of them; (b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and secret in
the sense that its confidentiality affords the Fund or SEI Trust a competitive
advantage over its competitors; (c) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software, source code,
object code, flow charts, databases, inventions, know-how, and trade secrets,
whether or not patentable or copyrightable; and (d) anything designated as
confidential. Notwithstanding the foregoing, information shall not be subject to
such confidentiality obligations if it: (a) is already known to the receiving
party at the first time it is obtained; (b) is or becomes publicly known or
available through no wrongful act of the receiving party; (c) is rightfully
received from a third party who, to the best of the receiving party's knowledge,
is not under a duty of confidentiality; (d) is released by the protected party
to a third party without restriction; (e) is required to be disclosed by the
receiving party pursuant to a requirement of a court order, subpoena,
governmental or regulatory agency or law (provided the receiving party will
provide the other party written notice of such requirement, to the extent such
notice is permitted and, upon request of the other party, the receiving party
shall take advantage of any provisions or opportunities specifically cited by
the other party to keep such information confidential in the hands of the
governmental or regulatory agency); (f) is relevant to the defense of any claim
or cause of action asserted against the receiving party; or (g) has been or is
independently developed or obtained by the receiving party.
9. COOPERATION WITH ACCOUNTANTS. SEI Trust shall cooperate with the Fund's
independent public accountants and shall take all reasonable action to make any
requested information available to such accountants as reasonably requested by
the Fund.
10. SEI SYSTEM. SEI Trust shall retain title to and ownership of any and all
data bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade secrets,
and other related legal rights utilized by SEI Trust in connection with the
services provided by SEI Trust to the Fund.
11. DISASTER RECOVERY. SEI Trust shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available. In the event of equipment failures, SEI Trust shall, at
no additional expense to the Fund, take reasonable steps to minimize service
interruptions. SEI Trust shall have no liability with respect to the loss of
data or service interruptions caused by equipment failure provided such loss or
interruption is not caused by SEI Trust's own willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties or obligations under this
Agreement.
12. COMPENSATION. As compensation for the services rendered by SEI Trust under
this Agreement, the Fund will pay to SEI Trust a fee or fees as may be agreed to
in writing from time to time by the Fund and SEI Trust. The Fund acknowledges
that SEI Trust may receive float benefits in connection with maintaining certain
accounts required to provide services under this Agreement.
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13. INDEMNIFICATION. The Fund agrees to indemnify and hold harmless SEI Trust
and its affiliates, including their respective officers, directors, agents and
employees, from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, attorneys' fees and disbursements
and liabilities arising under the Securities Laws and any state and foreign
securities and blue sky laws) arising directly or indirectly from any action or
omission to act which SEI Trust takes in connection with the provision of
services to the Fund. Neither SEI Trust, nor any of its affiliates, shall be
indemnified against any liability (or any expenses incident to such liability)
caused by SEI Trust's or its affiliates' own willful misfeasance, bad faith,
gross negligence or reckless disregard in the performance of SEI Trust's
activities under this Agreement. The provisions of this Section 13 shall survive
termination of this Agreement.
14. RESPONSIBILITY OF SEI TRUST.
(a) SEI Trust shall be under no duty to take any action hereunder on behalf
of the Fund except as specifically set forth herein or as may be
specifically agreed to by SEI Trust and the Fund in a written amendment
hereto. SEI Trust shall be obligated to exercise care and diligence in
the performance of its duties hereunder and to act in good faith in
performing services provided for under this Agreement. SEI Trust shall
be liable only for any damages arising out of SEI Trust's failure to
perform its duties under this Agreement to the extent such damages arise
out of SEI Trust's willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, (i) SEI
Trust shall not be liable for losses, delays, failure, errors,
interruption or loss of data occurring directly or indirectly by reason
of circumstances beyond its reasonable control, including without
limitation acts of God; action or inaction of civil or military
authority; public enemy; war; terrorism; riot; fire; flood; sabotage;
epidemics; labor disputes; civil commotion; interruption, loss or
malfunction of utilities, transportation, computer or communications
capabilities; insurrection; elements of nature; or non-performance by a
third party; and (ii) SEI Trust shall not be under any duty or
obligation to inquire into and shall not be liable for the validity or
invalidity, authority or lack thereof, or truthfulness or accuracy or
lack thereof, of any instruction, direction, notice, instrument or other
information which SEI Trust reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, (i) neither
SEI Trust nor its affiliates shall be liable for any consequential,
special or indirect losses or damages, whether or not the likelihood of
such losses or damages was known by SEI Trust or its affiliates.
(d) No party may assert a cause of action against SEI Trust or any of its
affiliates that allegedly occurred more than 12 months immediately prior
to the filing of the suit
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(or, if applicable, commencement of arbitration proceedings) alleging
such cause of action.
(e) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
The provisions of this Section 14 shall survive termination of this
Agreement.
15. DESCRIPTION OF SERVICES. SEI Trust shall perform the custodian services set
forth in Schedule A hereto. SEI Trust may sub-contract with third parties to
perform certain of the services to be performed by SEI Trust hereunder;
provided, however, that SEI Trust's obligations hereunder shall not be
diminished in the event it sub-contracts any of its responsibilities hereunder.
In meeting its duties hereunder, SEI Trust shall have the general authority to
do all acts deemed in SEI Trust's good faith belief to be necessary and proper
to perform its obligations under this Agreement.
16. DURATION AND TERMINATION. This Agreement shall continue until terminated by
the Fund or SEI Trust on sixty (60) days' prior written notice to the other
party. In the event this Agreement is terminated (pending appointment of a
successor to SEI Trust or vote of the members of the Fund to dissolve or to
function without a custodian of its cash, securities or other property), SEI
Trust shall not deliver cash, securities or other property of the Fund. It may
deliver them to a bank or trust company of SEI Trust's choice, having an
aggregate capital, surplus and undivided profits, as shown by its last published
report, of not less than twenty million dollars ($20,000,000), as a custodian
for the Fund to be held under terms similar to those of this Agreement. SEI
Trust shall not be required to make any delivery or payment of assets upon
termination until full payment shall have been made to SEI Trust of all of its
fees, compensation, costs and expenses (such expenses include, without
limitation, expenses associated with movement (or duplication) of records and
materials and conversion thereof to a successor service provider, or to a bank
or trust company pending appointment of such successor, and all trailing
expenses incurred by SEI Trust) provided, however, that any amounts owed to SEI
Trust which the Fund has specified to SEI Trust in writing as in dispute to
payment prior to such termination shall be held in escrow pending resolution of
such dispute. SEI Trust shall have a security interest in and shall have a right
of setoff against the Property as security for the payment of such fees,
compensation, costs and expenses.
17. NOTICES. Notices shall be addressed (a) if to SEI Trust at Xxx Xxxxxxx
Xxxxxx Xxxxx, Xxxx, Xxxxxxxxxxxx 00000, Attention: General Counsel; (b) if to
the Fund, at Mercantile Capital Advisers, Inc., Xxx Xxxxxxx Xxxxx, Xxxxxxxxx, XX
00000, Attention: General Counsel; or (c) if to neither of the foregoing, at
such other address as shall have been given by like notice to the sender of any
such notice or other communication by the other party. If notice is sent by
confirming electronic, hand or facsimile sending device, it shall be deemed to
have been given immediately. If notice is sent by first-class mail, it shall be
deemed to have been given five days after it has been mailed. If notice is sent
by messenger, it shall be deemed to have been given on the day it is delivered.
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18. AMENDMENTS. This Agreement, or any term hereof, may be changed or waived
only by a written amendment, signed by both parties.
20. DELEGATIONS; ASSIGNMENT. SEI Trust may assign its rights and delegate its
duties hereunder to any affiliate of SEI Investments Company provided that SEI
Trust gives the Fund 30 days' prior written notice of such assignment or
delegation.
21. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
22. FURTHER ACTIONS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
23. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements
and understandings relating to the subject matter hereof, provided that
the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties.
(b) NO REPRESENTATIONS OR WARRANTIES. Except as expressly provided in this
Agreement, SEI Trust hereby disclaims all representations and
warranties, express or implied, made to the Fund or any other person,
including, without limitation, any warranties regarding quality,
suitability, merchantability, fitness for a particular purpose or
otherwise (irrespective of any course of dealing, custom or usage of
trade), of any services or any goods provided incidental to services
provided under this Agreement. SEI Trust disclaims any warranty of title
or non-infringement except as otherwise set forth in this Agreement.
(c) NO CHANGES THAT MATERIALLY AFFECT OBLIGATIONS. Notwithstanding anything
in this Agreement to the contrary, the Fund agrees not to make any
modifications to its registration statement or adopt any policies which
would affect materially the obligations or responsibilities of SEI Trust
hereunder without the prior written approval of SEI Trust, which
approval shall not be unreasonably withheld or delayed.
(d) CAPTIONS. The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
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(e) GOVERNING LAW. This Agreement shall be deemed to be a contract made in
Pennsylvania and governed by the laws of the Commonwealth of
Pennsylvania, without regard to principles of conflicts of law.
(f) PARTIAL INVALIDITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(h) FACSIMILE SIGNATURES. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SEI PRIVATE TRUST COMPANY
By: /s/Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
MERCANTILE ABSOLUTE RETURN FUND LLC
By: /s/Xxxxxx X. Xxxxxx 12/27/02
-----------------------------
Title: Treasurer
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SCHEDULE A
DESCRIPTION OF SERVICES.
SEI Trust shall provide the following list of services to the Fund:
1. DELIVERY OF THE PROPERTY. The Fund will deliver or arrange for delivery
to SEI Trust, all the Property owned by it, including cash received as a
result of the distribution of Shares, during the term of this Agreement.
SEI Trust will not be responsible for such property until actual
receipt.
2. RECEIPTS AND DISBURSEMENT OF MONEY. SEI Trust, acting upon Written
Instructions, shall open and maintain separate accounts in the Fund's
name using all cash received from or for the account of the Fund,
subject to the terms of this Agreement.
SEI Trust shall make cash payments from or for the Accounts of the Fund only
for:
(a) purchases of securities in the name of the Fund, SEI Trust, SEI
Trust's nominee or a sub-custodian or nominee thereof as provided in
Section 9 and for which SEI Trust has received a copy of the
broker's or dealer's confirmation or payee's invoice, as
appropriate;
(b) purchase or redemption of Shares of the Fund delivered to SEI Trust;
(c) payment of, subject to Written Instructions, interest, taxes,
administration, accounting, distribution, advisory, management fees
or similar expenses which are to be borne by the Fund;
(d) payment to, subject to receipt of Written Instructions, the Fund's
investor services agent, as agent for the members, of an amount
equal to the amount of dividends and distributions stated in the
Written Instructions to be distributed in cash by the investor
services agent to members, or, in lieu of paying the Fund's investor
services agent, SEI Trust may arrange for the direct payment of cash
dividends and distributions to members in accordance with procedures
mutually agreed upon from time to time by and among the Fund, SEI
Trust and the Fund's investor services agent.
(e) payments, upon receipt of Written Instructions, in connection with
the conversion, exchange or surrender of securities owned or
subscribed to by the Fund and held by or delivered to SEI Trust;
(f) payments made to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
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(g) other payments, upon Written Instructions.
SEI Trust is hereby authorized to endorse and collect all checks, drafts
or other orders for the payment of money received as custodian for the
Accounts.
3. RECEIPT OF SECURITIES; SUB-CUSTODIANS.
(a) SEI Trust shall hold all securities received by it for the Accounts
in a separate account that physically segregates such securities
from those of any other persons, firms or corporations, except for
securities held in a Book-Entry System. All such securities shall be
held or disposed of only upon Written Instructions of the Fund
pursuant to the terms of this Agreement. SEI Trust shall have no
power or authority to assign, hypothecate, pledge or otherwise
dispose of any such securities or investment, except upon the
express terms of this Agreement or upon Written Instructions
authorizing the transaction. In no case may any member of the Fund's
Managers, or any officer, employee or agent of the Fund withdraw any
securities.
At SEI Trust's own expense and for its own convenience, SEI Trust may
enter into sub-custodian agreements with other banks or trust companies
to perform duties described in this Section 3 with respect to domestic
assets. Such bank or trust company shall have an aggregate capital,
surplus and undivided profits, according to its last published report,
of at least one million dollars ($1,000,000), if it is a subsidiary or
affiliate of SEI Trust, or at least twenty million dollars ($20,000,000)
if such bank or trust company is not a subsidiary or affiliate of SEI
Trust. In addition, such bank or trust company must be qualified to act
as custodian and agree to comply with the relevant provisions of
applicable rules and regulations. Any such arrangement will not be
entered into without prior written notice to the Fund (or as otherwise
provided in the 1940 Act).
In addition, SEI Trust may enter into arrangements with sub-custodians
with respect to services regarding foreign assets. Any such arrangement
will be entered into with prior written notice to the Fund (or as
otherwise provided in the 1940 Act).
SEI Trust shall remain responsible for the performance of all of its
duties as described in this Agreement and shall hold the Fund harmless
from its own acts or omissions, under the standards of care provided for
herein, or the acts and omissions of any sub-custodian chosen by SEI
Trust under the terms of this Section 3.
4. TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Oral Instructions
or Written Instructions and not otherwise, SEI Trust, directly or
through the use of the Book-Entry System, shall:
(a) deliver any securities held for the Fund against the receipt of
payment for the sale of such securities;
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(b) execute and deliver to such persons as may be designated in such
Oral Instructions or Written Instructions, proxies, consents,
authorizations, and any other instruments whereby the authority of
the Fund as owner of any securities may be exercised;
(c) deliver any securities to the issuer thereof, or its agent, when
such securities are called, redeemed, retired or otherwise become
payable at the option of the holder; provided that, in any such
case, the cash or other consideration is to be delivered to SEI
Trust;
(d) deliver any securities held for the Fund against receipt of other
securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, tender offer, merger,
consolidation or recapitalization of any corporation, or the
exercise of any conversion privilege;
(e) deliver any securities held for the Fund to any protective
committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and receive
and hold under the terms of this Agreement such certificates of
deposit, interim receipts or other instruments or documents as may
be issued to it to evidence such delivery;
(f) make such transfer or exchanges of the assets of the Fund and take
such other steps as shall be stated in said Oral Instructions or
Written Instructions to be for the purpose of effectuating a duly
authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
(g) release and deliver or exchange securities owned by the Fund in
connection with any conversion of such securities, pursuant to their
terms, into other securities;
(h) release and deliver securities owned by the Fund for the purpose of
redeeming in kind shares of the Fund upon delivery thereof to SEI
Trust; and
(i) release and deliver or exchange securities owned by the Fund for
other purposes.
SEI Trust must also receive a certified resolution describing the
nature of the corporate purpose and the name and address of the
person(s) to whom delivery shall be made when such action is
pursuant to Section 4(i).
5. USE OF BOOK-ENTRY SYSTEM. SEI Trust is authorized and instructed, on a
continuous basis, to deposit in the Book-Entry System all securities
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belonging to the Fund eligible for deposit therein and to utilize the
Book-Entry System to the extent possible in connection with settlements
of purchases and sales of securities by the Fund, and deliveries and
returns of securities loaned, subject to repurchase agreements or used
as collateral in connection with borrowings. SEI Trust shall continue to
perform such duties until it receives Written Instructions or Oral
Instructions authorizing contrary actions.
SEI Trust shall administer the Book-Entry System as follows:
(a) With respect to securities of the Fund which are maintained in the
Book-Entry System, the records of SEI Trust shall identify by
Book-Entry or otherwise those securities belonging to the Fund.
(b) Assets of the Fund deposited in the Book-Entry System will at all
times be segregated from any assets and cash controlled by SEI Trust
in other than a fiduciary or custodian capacity but may be
commingled with other assets held in such capacities.
SEI Trust will provide the Fund with such reports on its own system of
internal control as the Fund may reasonably request from time to time.
6. REGISTRATION OF SECURITIES. All Securities held for the Fund which are
issued or issuable only in bearer form, except such securities held in the
Book-Entry System, shall be held by SEI Trust in bearer form; all other
securities held for the Fund may be registered in the name of the Fund, SEI
Trust, the Book-Entry System, a sub-custodian, or any duly appointed nominee
of the Fund, SEI Trust, Book-Entry System or sub-custodian. The Fund
reserves the right to instruct SEI Trust as to the method of registration
and safekeeping of the securities of the Fund. The Fund agrees to furnish to
SEI Trust appropriate instruments to enable SEI Trust to hold or deliver in
proper form for transfer, or to register in the name of its nominee or in
the name of the Book-Entry System or in the name of another appropriate
entity, any securities which it may hold for the Accounts and which may from
time to time be registered in the name of the Fund.
7. VOTING AND OTHER ACTION. Neither SEI Trust nor its nominee shall vote any of
the securities held pursuant to this Agreement by or for the account of the
Fund, except in accordance with Written Instructions. SEI Trust, directly or
through the use of the Book-Entry System, shall execute in blank and
promptly deliver all notices, proxies and proxy soliciting materials
received by SEI Trust as custodian of the Property to the registered holder
of such securities. If the registered holder is not the Fund, then Written
Instructions or Oral Instructions must designate the person who owns such
securities.
8. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of contrary Written
Instructions, SEI Trust is authorized to take the following actions:
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(a) COLLECTION OF INCOME AND OTHER PAYMENTS.
(i) collect and receive for the account of the Fund, all income,
dividends, distributions, coupons, option premiums, other payments
and similar items, included or to be included in the Property, and,
in addition, promptly advise the Fund of such receipt and credit
such income, as collected, to the Fund's custodian account;
(ii) endorse and deposit for collection, in the name of the Fund,
checks, drafts, or other orders for the payment of money;
(iii) receive and hold for the account of the Fund all securities
received as a distribution on the Fund's securities as a result of a
stock dividend, share split-up or reorganization, recapitalization,
readjustment or other rearrangement or distribution of rights or
similar securities issued with respect to any securities belonging
to the Fund and held by SEI Trust hereunder;
(iv) present for payment and collect the amount payable upon all
securities which may mature or be, on a mandatory basis, called,
redeemed, or retired, or otherwise become payable on the date such
securities become payable; and
(v) take any action which may be necessary and proper in connection with
the collection and receipt of such income and other payments and the
endorsement for collection of checks, drafts, and other negotiable
instruments.
(b) MISCELLANEOUS TRANSACTIONS.
(i) SEI Trust is authorized to deliver or cause to be delivered Property
against payment or other consideration or written receipt therefor
in the following cases:
(a) for examination by a broker or dealer selling for the account of
the Fund in accordance with street delivery custom;
(b) for the exchange of interim receipts or temporary securities for
definitive securities; and
(c) for transfer of securities into the name of the Fund or SEI
Trust or a sub-custodian or a nominee of one of the foregoing,
or for exchange of securities for a different number of bonds,
certificates, or other evidence, representing the same aggregate
face amount or number of
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units bearing the same interest rate, maturity that, in any such
case, the new securities are to be delivered to SEI Trust.
(ii) unless and until SEI Trust receives Oral Instructions or Written
Instructions to the contrary, SEI Trust shall:
(a) pay all income items held by it which call for payment upon
presentation and hold the cash received by it upon such payment
for the account of the Fund;
(b) collect interest and cash dividends received, with notice to the
Fund, to the account of the Fund;
(c) hold for the account of the Fund all stock dividends, rights and
similar securities issued with respect to any securities held by
SEI Trust; and
(d) execute as agent on behalf of the Fund all necessary ownership
certificates required by the Internal Revenue Code or the Income
Tax Regulations of the United States Treasury Department or
under the laws of any state now or hereafter in effect,
inserting the Fund's name on such certificate as the owner of
the securities covered thereby, to the extent it may lawfully do
so.
9. PURCHASES OF SECURITIES. SEI Trust shall settle purchased securities upon
receipt of Oral Instructions or Written Instructions that specify:
(a) the name of the issuer and the title of the securities,
including CUSIP number if applicable;
(b) the number of shares or the principal amount purchased and
accrued interest, if any;
(c) the date of purchase and settlement;
(d) the purchase price per unit;
(e) the total amount payable upon such purchase;
(f) the name of the person from whom or the broker through whom the
purchase was made. SEI Trust shall upon receipt of securities
purchased by or for the Fund pay out of the moneys held for the
account of the Fund the total amount payable to the person from
whom or the broker through whom the purchase was made, provided
that the same conforms to the total amount payable as set forth
in such Oral Instructions or Written Instructions.
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10. SALES OF SECURITIES. SEI Trust shall settle sold securities upon receipt
of Oral Instructions or Written Instructions that specify:
(a) the name of the issuer and the title of the security, including
CUSIP number if applicable;
(b) the number of shares or principal amount sold, and accrued interest,
if any;
(c) the date of trade and settlement;
(d) the sale price per unit;
(e) the total amount payable to the Fund upon such sale;
(f) the name of the broker through whom or the person to whom the sale
was made;
(g) the location to which the security must be delivered and delivery
deadline, if any; and
SEI Trust shall deliver the securities upon receipt of the total amount
payable to the Fund upon such sale, provided that the total amount
payable is the same as was set forth in the Oral Instructions or Written
Instructions. Notwithstanding the other provisions thereof, SEI Trust
may accept payment in such form as shall be satisfactory to it, and may
deliver securities and arrange for payment in accordance with the
customs prevailing among dealers in securities.
11. REPORTS; PROXY MATERIALS.
(a) SEI Trust shall furnish to the Fund the following reports:
(1) such periodic and special reports as the Fund may reasonably
request;
(2) a monthly statement summarizing all transactions and entries for
the account of the Fund, listing each portfolio security
belonging to the Fund with the adjusted average cost of each
issue and the market value at the end of such month and stating
the cash account of the Fund including disbursements;
(3) the reports required to be furnished to the Fund pursuant to
Rule 17f-4 of the 1940 Act; and
(4) such other information as may be agreed upon from time to time
between the Fund and SEI Trust.
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(b) SEI Trust shall transmit promptly to the Fund any proxy statement,
proxy material, notice of a call or conversion or similar
communication received by it as custodian of the Property. SEI Trust
shall be under no other obligation to inform the Fund as to such
actions or events. For clarification, upon termination of this
Agreement SEI Trust shall have no responsibility to transmit such
material or to inform the Fund or any other person of such actions
or events.
12. CREDITING OF ACCOUNTS. If SEI Trust in its sole discretion credits an
Account with respect to (a) income, dividends, distributions, coupons,
option premiums, other payments or similar items on a contractual
payment date or otherwise in advance of SEI Trust's actual receipt of
the amount due, (b) the proceeds of any sale or other disposition of
assets on the contractual settlement date or otherwise in advance of SEI
Trust's actual receipt of the amount due or (c) provisional crediting of
any amounts due, and (i) SEI Trust is subsequently unable to collect
full and final payment for the amounts so credited within a reasonable
time period using reasonable efforts or (ii) pursuant to standard
industry practice, law or regulation SEI Trust is required to repay to a
third party such amounts so credited, or if any Property has been
incorrectly credited, SEI Trust shall have the absolute right in its
sole discretion without demand to reverse any such credit or payment, to
debit or deduct the amount of such credit or payment from the Account,
and to otherwise pursue recovery of any such amounts so credited from
the Fund. Nothing herein or otherwise shall require SEI Trust to make
any advances or to credit any amounts until SEI Trust's actual receipt
thereof. The Fund hereby grants a first priority contractual possessory
security interest in and a right of setoff against the assets maintained
in an Account hereunder in the amount necessary to secure the return and
payment to SEI Trust of any advance or credit made by SEI Trust
(including charges related thereto) to such Account.
13. COLLECTIONS. All collections of monies or other property in respect, or
which are to become part, of the Property (but not the safekeeping
thereof upon receipt by SEI Trust) shall be at the sole risk of the
Fund. If payment is not received by SEI Trust within a reasonable time
after proper demands have been made, SEI Trust shall notify the Fund in
writing, including copies of all demand letters, any written responses
and memoranda of all oral responses and shall await instructions from
the Fund. SEI Trust shall not be obliged to take legal action for
collection unless and until reasonably indemnified to its satisfaction.
SEI Trust shall also notify the Fund as soon as reasonably practicable
whenever income due on securities is not collected in due course and
shall provide the Fund with periodic status reports of such income
collected after a reasonable time.
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