Exhibit 99.(g)(1)
[CHASE LOGO]
FORM OF
CUSTODY AGREEMENT
This AGREEMENT is effective Jaunuary 31, 2003, and is between JPMORGAN
CHASE BANK ("Bank") and the entities listed on Annex A hereto (each a "Customer"
or "Fund").
1. CUSTOMER ACCOUNTS.
Bank, acting as "Securities Intermediary" (as defined in Section 15(g)
hereof) shall establish and maintain the following accounts ("Accounts"):
(a) a Custody Account (as defined in Section 15(b) hereof) in the name
of Customer for Financial Assets, which shall, except as modified by Section
15(d) hereof, mean stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same or evidencing or representing any other rights or
interests therein and other similar property whether certificated or
uncertificated as may be received by Bank or its Subcustodian (as defined in
Section 3 hereof) for the account of Customer, including as an "Entitlement
Holder" as defined in Section 15(c) hereof); and
(b) an account in the name of Customer ("Deposit Account") for any and
all cash in any currency received by Bank or its Subcustodian for the account of
Customer, which cash shall not be subject to withdrawal by draft or check.
Customer warrants its authority to: 1) deposit the cash and Financial
Assets (collectively "Assets") received in the Accounts and 2) give Instructions
(as defined in Section 11 hereof) concerning the Accounts. Bank may deliver
Financial Assets of the same class in place of those deposited in the Custody
Account.
Upon written agreement between Bank and Customer, additional Accounts may
be established and separately accounted for as additional Accounts hereunder.
2. MAINTENANCE OF FINANCIAL ASSETS AND CASH AT BANK AND SUBCUSTODIAN
LOCATIONS.
Unless Instructions specifically require another location acceptable to
Bank:
(a) Financial Assets shall be held in the country or other jurisdiction
in which the principal trading market for such Financial Assets is located,
where such Financial Assets are to be presented for payment or where such
Financial Assets are acquired; and
(b) Cash shall be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
To the extent Instructions are issued and Bank can comply with such
Instructions, Bank is authorized to maintain cash balances on deposit for
Customer with itself or one of its "Affiliates" at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as Customer may direct, if acceptable to Bank. For purposes
hereof, the term "Affiliate" shall mean an entity controlling, controlled by, or
under common control with, Bank.
If Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by Bank and Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
Bank may act hereunder through the subcustodians listed in Schedule A
hereof with which Bank has entered into subcustodial agreements
("Subcustodians"). Customer authorizes Bank to hold Assets in the Accounts in
accounts which Bank has established with one or more of its branches or
Subcustodians. Bank and Subcustodians are authorized to hold any of the
Financial Assets in their account with any securities depository in which they
participate.
Bank reserves the right to add new, replace or remove Subcustodians.
Customer shall be given reasonable notice by Bank of any amendment to Schedule
A, but in no case will such amendment be effective prior to Customer's actual
receipt of such notice. Upon request by Customer, Bank shall identify the name,
address and principal place of business of any Subcustodian of Customer's Assets
and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) Bank shall identify the Assets on its books as belonging to
Customer.
(b) A Subcustodian shall hold such Assets together with assets belonging
to other customers of Bank in accounts identified on such Subcustodian's books
as custody accounts for the exclusive benefit of customers of Bank.
(c) Any Financial Assets in the Accounts held by a Subcustodian shall be
subject only to the instructions of Bank or its agent. Any Financial Assets held
in a securities depository for the account of a Subcustodian shall be subject
only to the instructions of such Subcustodian.
(d) Any agreement Bank enters into with a Subcustodian for holding
Bank's customers' assets shall provide (i) for indemnification or insurance
arrangements (or any combination) that will adequately protect the Customer
against the risk of loss of Assets held in accordance with the Agreement; (ii)
that such assets shall not be subject to any right, charge, security interest,
lien or claim of any kind in favor of such Subcustodian or its creditors except
a claim of payment for their safe custody or administration or, in the case of
cash deposits, except for liens or rights in favor of creditors of the
Subcustodian arising under bankruptcy, insolvency or similar laws; (iii) that
the beneficial ownership of such assets shall be freely transferable without the
payment of money or value other than for safe custody or administration; (iv)
that adequate records will be maintained identifying such Assets as belonging to
the Customer or as being held by Bank for the benefit of its customers; (v) that
the Customer's independent public accountants
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will be given access to those records or confirmation of the contents of those
records; and (vi) that the Customer will receive periodic reports with respect
to the safekeeping of Customer's Assets, including notification of any transfer
to or from Customer's account or a third party account containing assets held
for the benefit of the Customer. Where Securities are deposited by a
Subcustodian with a securities depository, Bank shall cause the Subcustodian to
identify on its books as belonging to Bank, as agent, the Securities shown on
the Subcustodian's account on the books of such securities depository. The
foregoing shall not apply to the extent of any special agreement or arrangement
made by Customer with any particular Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) Bank or its Subcustodians shall make payments from the Deposit
Account upon receipt of Instructions which include all information required by
Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, Bank, in its discretion, may
advance Customer such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by Bank on similar
loans.
(c) If Bank credits the Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, Customer shall
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If Customer does not promptly return any
amount upon such notification, Bank shall be entitled, upon oral or written
notification to Customer, to reverse such credit by debiting the Deposit Account
for the amount previously credited. Bank or its Subcustodian shall have no duty
or obligation to institute legal proceedings, file a claim or a proof of claim
in any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for Customer upon Instructions after
consultation with Customer.
6. CUSTODY ACCOUNT TRANSACTIONS; ACCOUNTING SERVICES.
(a) Financial Assets shall be transferred, exchanged or delivered by
Bank or its Subcustodian upon receipt by Bank of Instructions which include all
information required by Bank. Settlement and payment for Financial Assets
received for, and delivery of Financial Assets out of, the Custody Account may
be made in accordance with the customary or established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivery of
Financial Assets to a purchaser, dealer or their agents against a receipt with
the expectation of receiving later payment and free delivery. Delivery of
Financial Assets out of the Custody Account may also be made in any manner
specifically required by Instructions acceptable to Bank.
(b) In accordance with applicable law, Bank will effect book entries on
a "contractual settlement date accounting" basis as described below with respect
to the settlement of trades in those markets where Bank generally offers
contractual settlement date accounting and will notify Customer of those markets
from time to time. Otherwise, such transactions shall be credited or debited to
the Accounts on the date cash or Financial Assets are actually received by the
Bank and reconciled to the Account.
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(i) On the settlement date for a sale, Bank will credit the
Deposit Account with the proceeds of the sale and transfer the relevant
Financial Assets to an account at Bank pending settlement of the trade
where not already delivered.
(ii) On the settlement date for the purchase (or earlier, if
market practice requires delivery of the purchase price before settlement
date), Bank will debit the Deposit Account for the settlement amount and
credit a separate account at Bank. Bank will then post the Custody Account
as awaiting receipt of expected Financial Assets. Customer will not be
entitled to the Financial Assets that are awaiting receipt until Bank or a
Subcustodian actually receives them.
(iii) Bank reserves the right to restrict in good faith the
availability of contractual settlement date accounting for credit or
operational reasons.
(iv) Bank may (in its absolute discretion) upon oral or written
notification to Customer reverse any debit or credit made pursuant to this
Section 6 prior to a transaction's actual settlement, and Customer will be
responsible for any costs or liabilities resulting from such reversal.
Customer acknowledges that the procedures described in these sub-sections
are of an administrative nature, and Bank does not undertake to make loans
and/or Financial Assets available to Customer other than as provided for in
Section 5 or otherwise in this Agreement.
(c) Bank shall perform fund accounting services as specified on attached
Schedule D.
7. ACTIONS OF BANK.
Bank shall follow Instructions received regarding Assets held in the
Accounts. However, until it receives Instructions to the contrary, Bank shall:
(a) Present for payment any Financial Assets which are called, redeemed
or retired or otherwise become payable and all coupons and other income items
which call for payment upon presentation, to the extent that Bank or
Subcustodian is aware of such opportunities. Bank is deemed to be aware for
purposes of this Agreement upon publication of notice of such opportunities in a
publication identified on Exhibit 1, as such Exhibit may be amended from time to
time by mutual agreement.
(b) Execute in the name of Customer such ownership and other
certificates as may be required to obtain payments in respect of Financial
Assets.
(c) Exchange interim receipts or temporary Financial Assets for
definitive Financial Assets.
(d) Appoint brokers and agents for any transaction involving the
Financial Assets, including, without limitation, Affiliates of Bank or any
Subcustodian.
(e) Advise Customer and its investment adviser daily of the amount of
any funds advanced to Customer by Bank under Section 5(b) hereof
("overdrafts") and the circumstances giving rise to each such
overdraft.
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(f) Issue statements to Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
Bank shall send Customer an advice or notification of any transfers of
Assets to or from the Accounts. Such statements, advices or notifications shall
indicate the identity of the entity having custody of the Assets. Unless
Customer sends Bank a written exception or objection to any Bank statement
within sixty (60) days of receipt, Customer shall be deemed to have approved
such statement. In such event, or where Customer has otherwise approved any such
statement, Bank shall, to the extent permitted by law, be released, relieved and
discharged with respect to all matters set forth in such statement or reasonably
implied therefrom as though it had been settled by the decree of a court of
competent jurisdiction in an action where Customer and all persons having or
claiming an interest in Customer or Customer's Accounts were parties.
All collections of funds or other property paid or distributed in respect
of Financial Assets in the Custody Account shall be made at the risk of
Customer. Bank shall have no liability for any loss occasioned by delay in the
actual receipt of notice by Bank or by its Subcustodians of any payment,
redemption or other transaction regarding Financial Assets in the Custody
Account in respect of which Bank has agreed to take any action hereunder.
Except as specifically stated otherwise in this Agreement, in any and every
case where payment for purchases of domestic securities for the account of
Customer is made by Bank in advance of receipt of the securities purchased in
the absence of specific written instructions from Customer to pay in advance,
Bank shall be absolutely liable to Customer for any and all Losses (as defined
hereinafter) resulting therefrom. Notwithstanding the foregoing, settlement and
payment for securities received for the account of Customer and delivery of
securities maintained for the account of Customer may be effected in accordance
with the best customary established securities trading or securities processing
practices and procedures in the market in which the transaction occurs,
including delivering securities to the purchaser thereof or to a dealer therefor
(or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such purchaser
or dealer.
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
(a) CORPORATE ACTIONS. Whenever Bank receives information concerning
the Financial Assets which requires discretionary action by the beneficial owner
of the Financial Assets (other than a proxy), such as subscription rights, bonus
issues, stock repurchase plans and rights offerings, or legal notices or other
material intended to be transmitted to securities holders ("Corporate Actions"),
Bank shall give Customer notice of such Corporate Actions to the extent that
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, Bank shall endeavor to obtain Instructions from
Customer or its Authorized Person (as defined in Section 10 hereof), but if
Instructions are not received in time for Bank to take timely action, or actual
notice of such Corporate Action was received too late to seek Instructions, Bank
is authorized to sell such rights entitlement or fractional interest and to
credit the Deposit Account with the proceeds or take any other action it deems,
in good faith, to be appropriate in which case it shall be held harmless for any
such action.
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(b) PROXY VOTING. Bank shall provide proxy voting services for
securities held outside the United States, if elected by Customer, in accordance
with the terms of the proxy voting services rider hereto. Proxy voting services
may be provided by Bank or, in whole or in part, by one or more third parties
appointed by Bank (which may be Affiliates of Bank). The Bank shall, with
respect to domestic securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities are registered
otherwise than in the name of Customer or one of its series, or a nominee of
such, all proxies it receives, without indication of the manner in which such
proxies are to be voted, and shall promptly deliver to the Customer such
proxies, all proxy soliciting materials and all notices relating to such
securities as it has received.
(c) TAX RECLAIMS.
(i) Subject to the provisions hereof, Bank shall apply for a reduction
of withholding tax and any refund of any tax paid or tax credits which
apply in each applicable market in respect of income payments on Financial
Assets for Customer's benefit which Bank believes may be available to
Customer.
(ii) The provision of tax reclaim services by Bank is conditional upon
Bank's receiving from Customer or, to the extent the Financial Assets are
beneficially owned by others, from each beneficial owner, A) a declaration
of the beneficial owner's identity and place of residence and (B) certain
other documentation (PRO FORMA copies of which are available from Bank).
Customer acknowledges that, if Bank does not receive such declarations,
documentation and information, Bank shall be unable to provide tax reclaim
services.
(iii) Bank shall not be liable to Customer or any third party for any
taxes, fines or penalties payable by Bank or Customer, and shall be
indemnified accordingly, whether these result from the inaccurate
completion of documents by Customer or any third party, or as a result of
the provision to Bank or any third party of inaccurate or misleading
information or the withholding of material information by Customer or any
other third party, or as a result of any delay of any revenue authority or
any other matter beyond Bank's control.
(iv) Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to
Customer from time to time and Bank may, by notification in writing, at
Bank's absolute discretion, supplement or amend the markets in which tax
reclaim services are offered. Other than as expressly provided in this
sub-clause, Bank shall have no responsibility with regard to Customer's tax
position or status in any jurisdiction.
(v) Customer confirms that Bank is authorized to disclose any
information requested by any revenue authority or any governmental body in
relation to Customer or the securities and/or cash held for Customer.
(vi) Tax reclaim services may be provided by Bank or, in whole or in
part, by one or more third parties appointed by Bank (which may be Bank's
affiliates); provided that Bank shall be liable for the performance of any
such third party to the same extent as Bank would have been if Bank had
performed such services.
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(d) TAX OBLIGATIONS.
(i) Customer confirms that Bank is authorized to deduct from any cash
received or credited to the Deposit Account any taxes or levies required by
any revenue or governmental authority for whatever reason in respect of the
Custody Account.
(ii) If Bank does not receive appropriate declarations, documentation and
information then additional United Kingdom taxation shall be deducted from
all income received in respect of the Financial Assets issued outside the
United Kingdom and any applicable United States withholding tax shall be
deducted from income received from the Financial Assets. Customer shall
provide to Bank such documentation and information as Bank may require in
connection with taxation, and warrants that, when given, this information
shall be true and correct in every respect, not misleading in any way, and
contain all material information. Customer undertakes to notify Bank
immediately if any such information requires updating or amendment.
(iii) Customer shall be responsible for the payment of all taxes relating
to the Financial Assets in the Custody Account, and Customer agrees to pay,
indemnify and hold Bank harmless from and against any and all liabilities,
penalties, interest or additions to tax with respect to or resulting from
any delay in, or failure by, Bank (1) to pay, withhold or report any U.S.
federal, state or local taxes or foreign taxes imposed on, or (2) to report
interest, dividend or other income paid or credited to the Deposit Account,
whether such failure or delay by Bank to pay, withhold or report tax or
income is the result of (x) Customer's failure to comply with the terms of
this paragraph, or (y) Bank's own acts or omissions; provided however,
Customer shall not be liable to Bank for any penalty or additions to tax
due as a result of Bank's failure to pay, withhold or report tax or to
report interest, dividend or other income paid or credited to the Deposit
Account solely as a result of Bank's negligent acts or omissions.
9. NOMINEES.
Financial Assets which are ordinarily held in registered form may be
registered in a nominee name of Bank, Subcustodian or securities depository, as
the case may be. Bank may without notice to Customer cause any such Financial
Assets to cease to be registered in the name of any such nominee and to be
registered in the name of Customer. In the event that any Financial Assets
registered in a nominee name are called for partial redemption by the issuer,
Bank may allot the called portion to the respective beneficial holders of such
class of security in any manner Bank deems to be fair and equitable. Customer
shall hold Bank, Subcustodians, and their respective nominees harmless from any
liability arising directly or indirectly from their status as a mere record
holder of Financial Assets in the Custody Account.
10. AUTHORIZED PERSONS.
As used herein, the term "Authorized Person" means employees or agents
including investment managers as have been designated by written notice from
Customer or its designated agent to act on behalf of Customer hereunder. Such
persons shall continue to be Authorized
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Persons until such time as Bank receives Instructions from Customer or its
designated agent that any such employee or agent is no longer an Authorized
Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by Bank, via telephone, telex, facsimile transmission, bank wire or
other teleprocess or electronic instruction or trade information system
acceptable to Bank which Bank believes in good faith to have been given by
Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which Bank may specify. Unless
otherwise expressly provided, all Instructions shall continue in full force and
effect until canceled or superseded. The term "Instructions" includes, without
limitation, instructions to sell, assign, transfer, deliver, purchase or receive
for the Custody Account, any and all stocks, bonds and other Financial Assets or
to transfer funds in the Deposit Account.
Any Instructions delivered to Bank by telephone shall promptly thereafter
be confirmed in writing by an Authorized Person (which confirmation may bear the
facsimile signature of such Person), but Customer shall hold Bank harmless for
the failure of an Authorized Person to send such confirmation in writing, the
failure of such confirmation to conform to the telephone instructions received
or Bank's failure to produce such confirmation at any subsequent time. Bank may
electronically record any Instructions given by telephone, and any other
telephone discussions with respect to the Custody Account. Customer shall be
responsible for safeguarding any testkeys, identification codes or other
security devices which Bank shall make available to Customer or its Authorized
Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) Bank shall be responsible for the performance of only such duties
as are set forth herein or expressly contained in Instructions which are
consistent with the provisions hereof as follows:
(i) Bank shall exercise reasonable care, prudence and diligence
in carrying out all its duties and obligations under this Agreement, and
shall be liable to each Fund for any and all claims, liabilities losses,
damages fines, penalties and expenses ("Losses") suffered or incurred by
such Fund resulting from the failure of Bank to exercise such reasonable
care, prudence and diligence or resulting from Bank's negligence or willful
misconduct. In addition, Bank shall be liable to each applicable Fund for
all Losses representing reasonable costs and expenses incurred by such Fund
in connection with any claim by such Fund against Bank arising from the
obligations of Bank hereunder, including, without limitation, all
reasonable attorneys' fees and expenses incurred by such Fund in connection
with any investigations, lawsuits or proceedings relating to such claim;
provided that such Fund has recovered from Bank for such claim. Bank shall
be liable for the actions or omissions of any domestic Subcustodian or any
Foreign Subcustodian to the same extent as if such act or omission was
performed by the Bank itself. In the event of any Losses suffered or
incurred by a Fund caused by or resulting from the actions or omissions of
any Domestic Subcustodian or Foreign Subcustodian for which the Bank would
otherwise be liable, the Bank shall promptly reimburse such Fund in the
amount of any such Losses. Bank shall have no liability whatsoever for any
consequential, special, indirect or speculative loss or damages (including,
but not limited to, lost profits) suffered by Customer in connection with
the transactions and
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services contemplated hereby and the relationship established hereby even
if Bank has been advised as to the possibility of the same and regardless
of the form of the action.
(ii) Bank shall not be responsible for the insolvency of any
Subcustodian which is not a branch or Affiliate of Bank. Bank shall not be
responsible for any act, omission, default or the solvency of any broker or
agent which it or a Subcustodian appoints unless such appointment was made
negligently or in bad faith.
(iii) Each Fund severally and not jointly shall indemnify Bank
against, and hold harmless Bank from, any Losses suffered, incurred or
sustained by Bank or to which Bank becomes subject, resulting from, arising
out of or relating to: (A) Instructions or other directions upon which Bank
is authorized to rely pursuant to the terms of this Agreement; and (B)
Bank's performance under this Agreement, provided Bank has acted with
reasonable care and prudence, and has not been negligent or engaged in
willful misconduct. (C) In performing its obligations hereunder, Bank may
rely on the genuineness of any document which it believes in good faith to
have been validly executed. Customer shall have no liability whatsoever for
any consequential, special, indirect or speculative loss or damages
(including, but not limited to, lost profits) suffered by Bank in
connection with the transactions and services contemplated hereby and the
relationship established hereby even if Customer has been advised as to the
possibility of the same and regardless of the form of action.
(iv) Customer shall pay for and hold Bank harmless from any
liability or loss resulting from the imposition or assessment of any taxes
or other governmental charges, and any related expenses, with respect to
income from or Assets in the Accounts.
(v) Bank shall be entitled to rely, and may act, upon the advice
of counsel reasonably acceptable to the Customer on all matters and shall
be without liability for any action reasonably taken or omitted pursuant to
such advice.
(vi) Bank need not maintain any insurance for the benefit of
Customer.
(vii) Without limiting the foregoing, Bank shall not be liable for
any loss which results from: 1) the general risk of investing, or 2)
investing or holding Assets in a particular country including, but not
limited to, losses resulting from malfunction, interruption of or error in
the transmission of information caused by any machines or system or
interruption of communication facilities, abnormal operating conditions,
nationalization, expropriation or other governmental actions; regulation of
the banking or securities industry; currency restrictions, devaluations or
fluctuations; and market conditions which prevent the orderly execution of
securities transactions or affect the value of Assets.
(viii) Neither party shall be liable to the other for any loss due
to forces beyond their control including, but not limited to strikes or
work stoppages, acts of war (whether declared or undeclared) or terrorism,
insurrection, revolution, nuclear fusion, fission or radiation, or acts of
God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that Bank shall have no duty or
responsibility to:
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(i) question Instructions or make any suggestions to Customer
or an Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to
investments or the retention of Financial Assets;
(iii) advise Customer or an Authorized Person regarding any default
in the payment of principal or income of any security other than as
provided in Section 5(c) hereof;
(iv) evaluate or report to Customer or an Authorized Person
regarding the financial condition of any broker, agent or other party to
which Financial Assets are delivered or payments are made pursuant hereto;
and
(v) review or reconcile trade confirmations received from
brokers. Customer or its Authorized Persons issuing Instructions shall bear
any responsibility to review such confirmations against Instructions issued
to and statements issued by Bank.
(c) Customer authorizes Bank to act hereunder notwithstanding that Bank
or any of its divisions or Affiliates may have a material interest in a
transaction, or circumstances are such that Bank may have a potential conflict
of duty or interest including the fact that Bank or any of its Affiliates may
provide brokerage services to other customers, act as financial advisor to the
issuer of Financial Assets, act as a lender to the issuer of Financial Assets,
act in the same transaction as agent for more than one customer, have a material
interest in the issue of Financial Assets, or earn profits from any of the
activities listed herein.
The provisions of this Section 12 shall survive any termination of this
Agreement.
13. FEES AND EXPENSES.
Customer shall pay Bank for its services hereunder the fees set forth in
Schedule B hereto or such other amounts as may be agreed upon in writing,
together with Bank's reasonable out-of-pocket or incidental expenses, including,
but not limited to, legal fees. Bank shall have a lien on and is authorized to
charge any Accounts of Customer for any amount owing to Bank under any provision
hereof.
14. MISCELLANEOUS.
(a) CERTIFICATION OF RESIDENCY, ETC. Customer certifies that it is a
resident of the United States and shall notify Bank of any changes in residency.
Bank may rely upon this certification or the certification of such other facts
as may be required to administer Bank's obligations hereunder. Customer shall
indemnify Bank against all losses, liability, claims or demands arising directly
or indirectly from any such certifications.
(b) ACCESS TO RECORDS. Bank shall allow Customer's independent public
accountant reasonable access to the records of Bank relating to Financial Assets
as is required in connection with their examination of books and records
pertaining to Customer's affairs. Subject to restrictions under applicable law,
Bank shall also obtain an undertaking to permit Customer's independent public
accountants reasonable access to the records of any Subcustodian which has
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physical possession of any Financial Assets as may be required in connection
with the examination of Customer's books and records.
(c) GOVERNING LAW; SUCCESSORS AND ASSIGNS; IMMUNITY; CAPTIONS. THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK and shall not be assignable by
either party, but shall bind the successors in interest of Customer and Bank. To
the extent that in any jurisdiction Customer may now or hereafter be entitled to
claim, for itself or its assets, immunity from suit, execution, attachment
(before or after judgment) or other legal process, Customer irrevocably shall
not claim, and it hereby waives, such immunity. The captions given to the
sections and subsections of this Agreement are for convenience of reference only
and are not to be used to interpret this Agreement.
(d) ENTIRE AGREEMENT; APPLICABLE RIDERS. Customer represents that
the Assets deposited in the Accounts are (Check one):
/X/ Investment Company assets subject to certain U.S. Securities and
Exchange Commission rules and regulations;
/ / Other (specify)
This Agreement consists exclusively of this document together with
Schedules A and B, Exhibits I - _______ and the following Rider(s) [Check
applicable rider(s)]:
/X/ INVESTMENT COMPANY
/X/ PROXY VOTING
/X/ SPECIAL TERMS AND CONDITIONS
There are no other provisions hereof and this Agreement supersedes any
other agreements, whether written or oral, between the parties. Any amendment
hereto must be in writing, executed by both parties.
(e) SEVERABILITY. In the event that one or more provisions hereof are
held invalid, illegal or unenforceable in any respect on the basis of any
particular circumstances or in any jurisdiction, the validity, legality and
enforceability of such provision or provisions under other circumstances or in
other jurisdictions and of the remaining provisions shall not in any way be
affected or impaired.
(f) WAIVER. Except as otherwise provided herein, no failure or delay on
the part of either party in exercising any power or right hereunder operates as
a waiver, nor does any single or partial exercise of any power or right preclude
any other or further exercise, or the exercise of any other power or right. No
waiver by a party of any provision hereof, or waiver of any breach or default,
is effective unless in writing and signed by the party against whom the waiver
is to be enforced.
(g) REPRESENTATIONS AND WARRANTIES. (i) Customer hereby represents and
warrants to Bank that: (A) it has full authority and power to deposit and
control the Financial Assets and cash deposited in the Accounts; (B) it has all
necessary authority to use Bank as its
11
custodian; (C) this Agreement constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms; (D) it shall have full
authority and power to borrow moneys and enter into foreign exchange
transactions; and (E) it has not relied on any oral or written representation
made by Bank or any person on its behalf, and acknowledges that this Agreement
sets out to the fullest extent the duties of Bank. (ii) Bank hereby represents
and warrants to Customer that: (A) it has the full power and authority to
perform its obligations hereunder, (B) this Agreement constitutes its legal,
valid and binding obligation, enforceable in accordance with its terms; and (C)
that it has taken all necessary action to authorize the execution and delivery
hereof.
(h) NOTICES. All notices hereunder shall be effective when
actually received. Any notices or other communications which may be required
hereunder are to be sent to the parties at the following addresses or such other
addresses as may subsequently be given to the other party in writing: (a) Bank:
The Chase Manhattan Bank, 4 Chase MetroTech Center, Brooklyn, N.Y. 11245,
Attention: Global Investor Services, Investment Management Group; and (b)
Customer: X.X. Xxxxxx Institutional Funds, c/o Chase Global Asset Management and
Mutual Funds, 0 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. XxXxx.
(i) TERMINATION. This Agreement may be terminated by Customer or Bank
by giving sixty (60) days' written notice to the other, provided that such
notice to Bank shall specify the names of the persons to whom Bank shall deliver
the Assets in the Accounts. If notice of termination is given by Bank, Customer
shall, within sixty (60) days following receipt of the notice, deliver to Bank
Instructions specifying the names of the persons to whom Bank shall deliver the
Assets. In either case Bank shall deliver the Assets to the persons so
specified, after deducting any amounts which Bank determines in good faith to be
owed to it under Section 13. If within sixty (60) days following receipt of a
notice of termination by Bank, Bank does not receive Instructions from Customer
specifying the names of the persons to whom Bank shall deliver the Assets, Bank,
at its election, may deliver the Assets to a bank or trust company doing
business in the State of New York to be held and disposed of pursuant to the
provisions hereof, or to Authorized Persons, or may continue to hold the Assets
until Instructions are provided to Bank.
(j) MONEY LAUNDERING. Customer warrants and undertakes to Bank for
itself and its agents that all Customer's customers are properly identified in
accordance with U.S. Money Laundering Regulations as in effect from time to
time.
(k) IMPUTATION OF CERTAIN INFORMATION. Bank shall not be held
responsible for and shall not be required to have regard to information held by
any person by imputation or information of which Bank is not aware by virtue of
a "Chinese Wall" arrangement. If Bank becomes aware of confidential information
which in good faith it feels inhibits it from effecting a transaction hereunder
Bank may refrain from effecting it.
15. DEFINITIONS.
As used herein, the following terms shall have the meaning hereinafter
stated:
a) "Certificated Security" shall mean a security that is represented by a
certificate.
b) "Custody Account" shall mean each Securities custody account on Bank's
records to which Financial Assets are or may be credited pursuant hereto.
12
c) "Entitlement Holder" shall mean the person on the records of a Securities
Intermediary as the person having a Securities Entitlement against the
Securities Intermediary.
d) "Financial Asset" shall mean, as the context requires, either the asset
itself or the means by which a person's claim to it is evidenced, including
a Certificated Security or Uncertificated Security, a security certificate,
or a Securities Entitlement. Financial Assets shall not include cash.
e) "Securities" shall mean stocks, bonds, rights, warrants and other
negotiable and non-negotiable paper whether issued as Certificated
Securities or Uncertificated Securities and commonly traded or dealt in on
securities exchanges or financial markets, and other obligations of an
issuer, or shares, participations and interests in an issuer recognized in
an area in which it is issued or dealt in as a medium for investment and
any other property as shall be acceptable to Bank for the Custody Account.
f) "Securities Entitlement" shall mean the rights and property interest of an
Entitlement Holder with respect to a Financial Asset as set forth in Part 5
of the Uniform Commercial Code.
g) "Securities Intermediary" shall mean Bank, a Subcustodian, a securities
depository, and any other financial institution which in the ordinary
course of business maintains custody accounts for others and acts in that
capacity.
h) "Uncertificated Security" shall mean a security that is not represented by
a certificate.
i) "Uniform Commercial Code" shall mean Article 8 of the Uniform Commercial
Code of the State of New York, as the same may be amended from time to
time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first-above written.
JPMorgan Chase Bank
By:
-------------------------------
Title: Vice President
Date: March 1, 2003
Customer
By:
-------------------------------
Title:
Date:
00
XXXXX XX XXX XXXX )
: ss.
COUNTY OF NEW YORK )
On this ___ day of March, 2003, before me personally came
____________________, to me known, who being by me duly sworn, did depose and
say that he resides in ______________________________________, that he is
President of the entity described in and which executed the foregoing
instrument; that he knows the seal of said entity, that the seal affixed to said
instrument is such seal, that it was so affixed by order of said entity, and
that he/she signed his/her name thereto by like order.
Sworn to before me this____ day
of January, 2003.
-------------------------
Notary
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this day of January, 2004, before me personally came, to me
known, who being by me duly sworn, did depose and say that he/she resides in at
; that he/she is a Vice President of JPMORGAN
CHASE, the corporation described in and which executed the foregoing
instrument; that he/she knows the seal of said corporation, that the seal
affixed to said instrument is such corporate seal, that it was so affixed by
order of the Board of Directors of said corporation, and that he/she signed
his/her name thereto by like order.
Sworn to before me this
____ day of January, 2004.
Notary
Investment Company Rider to Custody Agreement
Between JPMorgan Chase and
[Customer]
effective January ____, 2004
The following modifications are made to the Agreement:
A. Add a new Section 16 to the Agreement as follows:
"16. COMPLIANCE WITH SEC RULE 17f-5.
(a) Customer's board of directors (or equivalent body) (hereinafter
'Board') hereby delegates to Bank, and Bank hereby accepts the delegation to it,
of the obligation to perform as Customer's 'Foreign Custody Manager' (as that
term is defined in Securities and Exchange Commission ("SEC") rule 17f-5(a)(2)
as promulgated under the Investment Company Act of 1940, as amended ("1940
Act")), for the purposes of (i) selecting Eligible Foreign Custodians (as that
term is defined in SEC rule 17f-5(a)(1), and as the same may be amended from
time to time, or that have otherwise been made exempt pursuant to an SEC
exemptive order) to hold Financial Assets and Cash and (ii) evaluating the
contractual arrangements with such Eligible Foreign Custodians (as set forth in
SEC rule 17f-5(c)(2)). Anything in this Agreement to the contrary
notwithstanding, the Bank shall in no event be deemed to have selected any
Eligible Securities Depository (as defined in SEC rule 17f-7), the use of which
is mandatory by law or regulation.. (Eligible Securities Depositories used by
Bank as of the date hereof are set forth in Appendix 1-A hereto, and as the same
may be amended on notice to Customer from time to time.)
(b) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Customer's Board of the placement
of Financial Assets and Cash with particular Eligible Foreign Custodians
and of any material change in the arrangements with such Eligible Foreign
Custodians, with such reports to be provided to Customer's Board at such
times as the Board deems reasonable and appropriate based on the
circumstances of Customer's foreign custody arrangements (and until further
notice from Customer such reports shall be provided not less than quarterly
with respect to the placement of Financial Assets and Cash with particular
Eligible Foreign Custodians and with reasonable promptness upon the
occurrence of any material change in the arrangements with such Eligible
Foreign Custodians);
(ii) exercise such reasonable care, prudence and diligence in performing
as Customer's Foreign Custody Manager as a person having responsibility for
the safekeeping of Financial Assets and Cash would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined
that Financial Assets and Cash placed and maintained in the safekeeping of
such Eligible Foreign Custodian shall be subject to reasonable care, based
on the standards applicable to custodians in the relevant market, after
having considered all factors relevant to the safekeeping of such Financial
Assets and Cash, including, without limitation, those factors set forth in
SEC rule 17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible Foreign
Custodian requires that the Eligible Foreign Custodian will provide
reasonable care for Financial Assets and Cash based on the standards
applicable to custodians in the relevant market.
(v) have established a system to monitor the continued appropriateness
of maintaining Financial Assets and Cash with particular Eligible Foreign
Custodians and of the governing contractual arrangements; it being
understood, however, that in the event that Bank shall have determined that
the existing Eligible Foreign Custodian in a given country would no longer
afford Financial Assets and Cash reasonable care and that no other Eligible
Foreign Custodian in that country would afford reasonable care, Bank shall
promptly so advise Customer and shall then act in accordance with the
Instructions of Customer with respect to the disposition of the affected
Financial Assets and Cash.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
Financial Assets and Cash on behalf of Customer with Eligible Foreign Custodians
pursuant to a written contract deemed appropriate by Bank.
(c) Bank represents to Customer that it is a U.S. Bank as defined in
Rule 17f-5(a)(7). Customer represents to Bank that: (1) the Financial Assets and
Cash being placed and maintained in Bank's custody are subject to the 1940 Act,
as the same may be amended from time to time; (2) its Board: (i) has determined
that it is reasonable to rely on Bank to perform as Customer's Foreign Custody
Manager (ii) or its investment adviser shall have determined that Customer may
maintain Financial Assets and Cash in each country in which Customer's Financial
Assets and Cash shall be held hereunder and determined to accept the risks
arising therefrom (including, but not limited to, a country's financial
infrastructure), prevailing custody and settlement practices, laws applicable to
the safekeeping and recovery of Financial Assets and Cash held in custody, and
the likelihood of nationalization, currency controls and the like) (collectively
("Country Risk")). Nothing contained herein shall require Bank to make any
selection or to engage in any monitoring on behalf of Customer that would entail
consideration of Country Risk.
(d) Bank shall provide to Customer an analysis of the risks associated
with maintaining assets with Eligible Securities Depositories. Bank shall
monitor the custody risks associated with maintaining assets with the Eligible
Securities Depositories on a continuing basis, and promptly notify the Customer
of any material change in these risks. Customer hereby acknowledges that: (i)
such information is solely designed to inform Customer of market conditions and
procedures and is not intended as a recommendation to invest or not invest in
particular markets; and (ii) Bank has gathered the information from sources it
considers reliable, but that Bank shall have no responsibility for inaccuracies
or incomplete information unless the Bank knows such information is inaccurate
or incomplete.
B. Add the following after the first sentence of Section 3 of the
Agreement: "At the request of Customer, Bank may, but need not, add to Schedule
A an Eligible Foreign Custodian where Bank has not acted as Foreign Custody
Manager with respect to the selection thereof. Bank shall notify Customer in the
event that it elects to add any such entity."
C. Add the following language to the end of Section 3 of the Agreement:
"The term Subcustodian as used herein shall mean the following:
2
(a) a 'U.S. Bank,' which shall mean a U.S. bank as defined in SEC rule
17f-5(a)(7);
(b) an 'Eligible Foreign Custodian,' which shall mean (i) a banking
institution or trust company, incorporated or organized under the laws of a
country other than the United States, that is regulated as such by that
country's government or an agency thereof, (ii) a majority-owned direct or
indirect subsidiary of a U.S. bank or bank holding company which subsidiary
is incorporated or organized under the laws of a country other than the
United States; and (iii) any other entity (other than an Eligible
Securities Depository) that shall have been so qualified by exemptive
order, rule or other appropriate action of the SEC.
For purposes of clarity, it is agreed that as used in Section 12(a)(i), the term
Subcustodian shall not include any Eligible Foreign Custodian as to which Bank
has not acted as Foreign Custody Manager or any Eligible Securities Depository."
3
Appendix 1-A
ELIGIBLE SECURITIES DEPOSITORIES
4
Appendix 1-B
INFORMATION REGARDING COUNTRY RISK
1. To aid Customer in its determinations regarding Country Risk, Bank shall
furnish annually and upon the initial placing of Financial Assets and Cash into
a country the following information (check items applicable):
A Opinions of local counsel concerning:
/ / i. Whether applicable foreign law would restrict the access afforded
Customer's independent public accountants to books and records
kept by an eligible foreign custodian located in that country.
/ / ii. Whether applicable foreign law would restrict the Customer's
ability to recover its Financial Assets and Cash in the event of
the bankruptcy of an Eligible Foreign Custodian located in that
country.
/ / iii. Whether applicable foreign law would restrict the Customer's
ability to recover Financial Assets that are lost while under the
control of an Eligible Foreign Custodian located in the country.
B. Written information concerning:
/ / i. The foreseeability of expropriation, nationalization, freezes,
or confiscation of Customer's Financial Assets and Cash.
/ / ii. Whether difficulties in converting Customer's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.]
C. A market report with respect to the following topics:
(i) securities regulatory environment, (ii) foreign ownership restrictions,
(iii) foreign exchange, (iv) securities settlement and registration, (v)
taxation, and (vi) depositories (including depository evaluation), if any.
2. To aid Customer in monitoring Country Risk, Bank shall furnish
board the following additional information:
Market flashes, including with respect to changes in the information in
market reports.
GLOBAL PROXY SERVICE RIDER
To Custody Agreement
Between
JPMORGAN CHASE BANK
AND
[CUSTOMER]
Dated January , 2004
1. Global Proxy Services ("Proxy Services") shall be provided for the
countries listed in the procedures and guidelines ("Procedures") furnished
to Customer, as the same may be amended by Bank from time to time on prior
notice to Customer. The Procedures are incorporated by reference herein and
form a part of this Rider.
2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by Bank
to Customer of the dates of pending shareholder meetings, resolutions to be
voted upon and the return dates as may be received by Bank or provided to
Bank by its Subcustodians or third parties, and (b) voting by Bank of
proxies based on Customer Instructions. Original proxy materials or copies
thereof shall not be provided. Notifications shall generally be in English
and, where necessary, shall be summarized and translated from such
non-English materials as have been made available to Bank or its
Subcustodian. In this respect Bank's only obligation is to provide
information from sources it believes to be reliable and/or to provide
materials summarized and/or translated in good faith. Bank reserves the
right to provide Notifications, or parts thereof, in the language received.
Upon reasonable advance request by Customer, backup information relative to
Notifications, such as annual reports, explanatory material concerning
resolutions, management recommendations or other material relevant to the
exercise of proxy voting rights shall be provided as available, but without
translation.
3. While Bank shall attempt to provide accurate and complete Notifications,
whether or not translated, Bank shall not be liable for any losses or other
consequences that may result from reliance by Customer upon Notifications
where Bank prepared the same in good faith.
4. Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Proxy Services Bank shall be acting solely as the
agent of Customer, and shall not exercise any discretion with regard to
such Proxy Services.
5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Financial Assets are: (i)
on loan; (ii) at registrar for registration or reregistration; (iii) the
subject of a conversion or other corporate action; (iv) not held in a name
subject to the control of Bank or its Subcustodian or are otherwise held in
a manner which precludes voting; (v) not capable of being voted on account
of local market regulations or practices or restrictions by the issuer; or
(vi) held in a margin or collateral account.
6. Customer acknowledges that in certain countries Bank may be unable to vote
individual proxies but shall only be able to vote proxies on a net basis
(E.G., a net yes or no vote given the voting instructions received from all
customers).
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered hereby, and shall in
no event sell, license, give or otherwise make the information provided
hereunder available, to any third party, and shall not directly or
indirectly compete with Bank or diminish the market for Proxy Services by
provision of such information, in whole or in part, for compensation or
otherwise, to any third party.
8. The names of Authorized Persons for Proxy Services shall be furnished to
Bank in accordance with Section 10 of the Agreement. Proxy Services fees
shall be as set forth in Section 13 of the Agreement or as separately
agreed.
2
SPECIAL TERMS AND CONDITIONS RIDER
CUSTODY AGREEMENT
WITH [CUSTOMER]
DATE January , 2004
DOMESTIC ONLY
SPECIAL TERMS AND CONDITIONS RIDER
DOMESTIC CORPORATE ACTIONS AND PROXIES
With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the provisions of
Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody Account,
such proxies (signed in blank, if issued in the name of Bank's nominee or
the nominee of a central depository) and communications with respect to
Financial Assets in the Custody Account as call for voting or relate to
legal proceedings within a reasonable time after sufficient copies are
received by Bank for forwarding to its customers. In addition, Bank shall
follow coupon payments, redemptions, exchanges or similar matters with
respect to Financial Assets in the Custody Account and advise Customer or
the Authorized Person for such Account of rights issued, tender offers or
any other discretionary rights with respect to such Financial Assets, in
each case, of which Bank has received notice from the issuer of the
Financial Assets, or as to which notice is published in publications
routinely utilized by Bank for this purpose.
FEES
The fees referenced in Section 13 hereof cover only domestic and euro-dollar
holdings. There shall be no Schedule A hereto, as there are no foreign assets in
the Accounts.
DOMESTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
DOMESTIC CORPORATE ACTIONS AND PROXIES
With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the pertinent
provisions of Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of Bank's
nominee or the nominee of a central depository) and communications with
respect to Financial Assets in the Custody Account as call for voting
or relate to legal proceedings within a reasonable time after
sufficient copies are received by Bank for forwarding to its customers.
In addition, Bank shall follow coupon payments, redemptions, exchanges
or similar matters with respect to Financial Assets in the Custody
Account and advise Customer or the Authorized Person for such Account
of rights issued, tender offers or any other discretionary rights with
respect to such Financial Assets, in each case, of which Bank has
received notice from the issuer of the Financial Assets, or as to which
notice is published in publications routinely utilized by Bank for this
purpose.
JPMorgan Chase Bank
Global Investor Services
ADDENDUM TO FEE SCHEDULE FOR
[CUSTOMER]
Effective January , 2004
FUND ACCOUNTING FEE
{To be Completed]
Signed, for and on behalf of Signed, for and on behalf of
JPMorgan Chase Bank [Customer]
---------------------------- ----------------------------
Date: Date:
---------------------- ----------------------
Fee Schedule for [Customer]
DOMESTIC CUSTODY FEES DOMESTIC TRANSACTION FEES
FUND ACCOUNTING FEES
BASE FUND ACCOUNTING:
MULTICLASS ACCOUNTING FEE: PRICE QUOTES FEE:
New markets added, or additional services required that are not included in this
schedule will be negotiated separately and added to this schedule as the need
arises.
Agreed to on the day of
January, 2004
[Customer] JPMorgan Chase Bank
------------------------- -------------------------
President Name:
Title:
2
Annex A
UNDISCOVERED MANAGERS FUNDS
Undiscovered Managers Behavioral Growth Fund
Undiscovered Managers Behavioral Value Fund
Undiscovered Managers REIT Fund
UM Small Cap Growth Fund
Schedule D
FUND ACCOUNTING
Bank agrees to perform the following duties in accordance with the
requirements of Customer's Registration Statement, the 1940 Act, applicable
Internal Revenue Service ("IRS") regulations, and procedures as may be agreed
upon from time to time, including without limitation, those set forth in the
service level agreement pertaining to the Fund to which the Bank is a party. In
all instances, Bank agrees to perform such services in accordance with industry
standards and best practices, which may include those enumerated in the Audits
of Investment Companies Audit and Accounting Guide, as in effect from time to
time. Where appropriate, Bank agrees to keep all records on a class-by-class
basis for each of Customer's series (a "Fund"). Bank agrees to:
a. keep and maintain the books and records of each Fund pursuant to Rule
3la-1 under the 1940 Act, which are applicable to fund accounting and the
services to be performed pursuant to this Schedule D, including the
following:
(i) journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements
of cash and all other debits and credits, as required by
subsection (b)(1) of said Rule;
(ii) general and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including interest
accrued and interest received, as required by subsection
(b)(2)(i) of said Rule;
(iii) separate ledger accounts required by subsections (b)(2)(ii) and
(iii) of said Rule; and
(iv) a monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of said
Rule.
b. perform the following accounting services daily for each Fund:
(i) calculate the net asset value per share;
(ii) obtain security prices from independent pricing services, or if
such quotes are unavailable, obtain such prices from each Fund's
investment adviser or its designee (the "Investment Adviser"), as
approved by Customer's Board;
(iii) provide exception, stale and halted price reporting to the
Investment Adviser;
(iv) verify and reconcile with Bank's custody records all daily trade
activity;
(v) compute, as appropriate, each Fund's net income and capital
gains, dividend payables, dividend factors, 7-day yields, 7-day
effective yields, 30-day yields, weighted average portfolio
maturity and such other agreed-upon rates and yields;
(vi) review daily the net asset value calculation and dividend factor
(if any) for each Fund, check and confirm the net asset values
and dividend factors for reasonableness and deviations against
agreed-upon benchmarks and tolerance levels:
(vii) distribute net asset values and yields to NASDAQ, Customer's
transfer agent (the "Transfer Agent"), Customer's administrator
(the "Administrator") and such other third parties as are agreed
upon;
(viii) report to Customer, at least weekly, about the daily market
pricing of securities in any money market Funds, with the
comparison to the amortized cost basis;
(ix) determine unrealized appreciation and depreciation on securities
held in variable net asset value Funds;
(x) record all Corporate Actions affecting securities held by each
Fund, including dividends, stock splits and recapitalizations;
(xi) amortize premiums and accrete discounts on securities purchased
at a price other than face value, if requested by Customer;
(xii) record and reconcile with the Transfer Agent all capital stock
activity;
(xiii) update Customer accounting system to reflect rate changes on
variable interest rate instruments;
(xiv) post Fund transactions to appropriate categories;
(xv) accrue expenses of each Fund according to instructions received
from the Administrator;
(xvi) calculate book capital account balances;
(xvii) maintain books and records;
(xviii) determine the outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3) income and
expense accounts;
(xix) provide accounting reports in connection with Customer's regular
annual audit and other audits and examinations by regulatory
agencies; and
(xx) provide such periodic reports as Customer shall reasonably
request.
In connection with the provision of these services, Bank agrees:
(a) to maintain, in a format acceptable to Customer, documents in accordance
with the applicable provisions of Rule 31a-2 of the 1940 Act and with
requirements of other applicable domestic regulators, such as the IRS, or
Applicable Foreign Regulators (as hereinafter defined). Bank agrees to make
such documents available upon reasonable request for inspection by
officers, employees and auditors of Customer during Bank's normal business
hours. For purposes of this subclause (a), Applicable Foreign Regulator
shall mean a foreign regulator designated as such by the Fund by Proper
Instructions and a foreign regulator actually known to the Bank to have
authority over the Fund or its operations. Promptly after the
identification of an Applicable Foreign Regulator, appropriate
representatives of the Bank and the Fund shall meet and determine the
requirements to which the Applicable Foreign Regulator would subject the
Fund. If the Bank and the Fund determine, in the exercise of their
reasonable judgment, that complying with such requirements would impose a
substantial additional burden on the Bank, the Fund and the Bank agree to
negotiate in good faith, taking into account all relevant circumstances, an
appropriate change in the fees payable hereunder;
(b) that all records maintained and preserved by Bank pursuant to this
Agreement which Customer is required to maintain and preserve shall be and
remain the property of Customer and shall be surrendered to Customer
promptly upon request in the form in which such records have been
maintained and preserved. Upon reasonable request of Customer, Bank shall
provide, in the form reasonably requested by Customer, any records included
in any such delivery, and Customer shall reimburse Bank for its expenses of
providing such records in such form;
(c) to make reasonable efforts to determine (i) the taxable nature of any
distribution or amount received by or deemed received by, or payable to,
the Fund; (ii) the taxable nature or effect on the Fund or its shareholders
of any Corporate Actions, class actions, tax reclaims or similar events;
and (iii) taxable amount of any distribution or dividend paid, payable, or
deemed paid by the Portfolio to its shareholders; subject to the following
(w) with respect to determinations contemplated by this clause (c) that a
prudent fund accountant would reasonably consider to be, and that the Bank
considers to be, non-routine in nature, the Bank may seek in writing the
approval or authorization of the Fund or a designee of the Fund and shall
not be required to act in respect of any such determination (as to which a
written request for approval or authorization shall have been made) without
such approval or authorization; (x) the Bank need not make any such
accrual, unless and until such accrual has been approved and authorized by
the Fund or its designee; (y) the Fund shall, or shall cause its designee,
to provide such approval and
authorization, or approval and authorization of different
determinations(s), promptly; and (z) provided the Bank has made the
reasonable efforts described in this clause (c) and thereafter has acted in
accordance with the approvals and authorizations of the Fund or its
designee, the Bank shall have no liability for any such accrual if it
otherwise, in performing its services hereunder, is not in breach of this
Agreement. The Bank shall accrue for these actions appropriately; and
(d) to provide such records and assistance, including office space within
Bank's premises, to Customer's independent accountants in connection with
the services such accountants provide to Customer, as such accountants
shall reasonably request.
The parties further agree as follows with respect to the provision of services
pursuant to this Schedule D:
(a) Bank may rely on Customer's then currently effective Prospectus, and
Customer shall promptly advise Bank of any amendments thereto and provide
copies of such amendments to Bank.
(b) Both Bank and Customer or its designee shall use reasonable efforts to
identify any changes in domestic and foreign laws and regulations
applicable to Bank's providing of services under this Schedule D, and each
shall promptly advise the other of any changes it identifies and upon any
such identification Bank and Customer shall agree on any reasonable
alteration to the services to be provided to Bank under this Schedule D.
(c) Customer or its designee shall (i) furnish promptly to Bank (and Bank may
rely upon) the amounts of, or written formulas or methodologies to be used
by Bank to calculate the amounts of, Customer liabilities and (ii) specify
the timing for accruals of such liabilities. Bank shall request such
additional information as it deems reasonably necessary for it to perform
its services under this Schedule D.
(d) Bank shall not be required to include as Customer liabilities and expenses,
nor use in its calculations hereunder, including, without limitation, as a
reduction of net asset value, any accrual for any U.S. federal or state
income taxes, unless and until Customer or its designee shall have
specified to Bank the precise amount of the same to be included in
liabilities and expenses or used to reduce net asset value. Bank agrees to
include as a Customer liability proper accruals for foreign taxes, unless,
after being advised of the amount and the basis for the accrual, Customer
by Instructions directs Bank not to do so.
(e) Customer or its designee shall furnish to Bank, and Bank may rely upon, the
following types of information (and explanations thereof): (i) Customer's
tax basis in debt obligations acquired by Customer before Bank's becoming
Bank hereunder, the dates of such acquisitions, and the amount of premium
previously amortized and the discount previously included in income, (ii)
the amounts credited to any capital accounts, (iii) the amount of any
reserves, and (iv) similar information which is required by Bank for
performing the services and is neither possessed by Bank as Bank nor
available from a third party.
(f) The Bank shall not be responsible for, and shall not incur any loss or
liability with respect to: any errors or omissions in information supplied
by the Fund or its designee that the Bank has reviewed and has concluded to
be within reasonable tolerance limits, as agreed between the parties; any
improper use by the Fund, its designees, agents, distributor or investment
adviser of any valuations or computations supplied by the Bank under this
Agreement; any valuations of securities supplied by the Fund or an
independent pricing service approved by the Fund's Board, provided that,
with respect to such valuations, the Bank has otherwise complied with this
Schedule C, has reviewed the valuations and has concluded they are within
reasonable tolerance limits agreed to by the parties; any tax determination
authorized and approved by the Fund or its designee that the Bank has
reviewed and has concluded is within reasonable tolerance limits as agreed
to by the parties; or any changes in U.S. law or regulations applicable to
the Bank's
performance not identified by the Bank's use of reasonable efforts which
are not identified to the Bank by the Fund.
[XX XXXXXX LOGO]
XX Xxxxxx Chase Bank
FEE SCHEDULE FOR THE "FUNDS"
EFFECTIVE JANUARY 31, 2004
FUND ACCOUNTING FEES:
MONEY MARKETS:
Tier One 5,000,000,000 1.1 bps
Tier Two 10,000,000,000 0.8 bps
Tier Three 100,000,000,000 0.4 bps
Tier Four Over 100BN 0.25 bps
FIXED INCOME:
Tier One 10,000,000,000 1 bps
Tier Two 20,000,000,000 0.75 bps
Tier Three 30,000,000,000 0.5 bps
Tier Four Over 30BN 0.25 bps
DOMESTIC EQUITY:
Tier One 10,000,000,000 1.2 bps
Tier Two 20,000,000,000 0.5 bps
Tier Three 30,000,000,000 0.4 bps
Tier Four Over 30BN 0.25 bps
INTERNATIONAL FUNDS:
Tier One 10,000,000,000 3 bps
Tier Two Over 10BN 2.5 bps
EMERGING MARKETS:
Tier One 10,000,000,000 4 bps
Tier Two Over 10BN 3 bps
COMMINGLED FUND FEES - US:
Included in existing categories
COMMINGLED FUND FEES - INTERNATIONAL:
Included in existing categories
OTHER FEES:
Minimums: US Equity $ 20,000
US Fixed Income $ 25,000
Money Markets $ 10,000
International / Emerging Markets $ 55,000
Share Class $ 10,000
Multi-Manager (per manager) $ 6,000
SAFEKEEPING FEES:
BPS TRADES
--------- ---------
Argentina 25.00 100.00
Australia 5.00 50.00
Austria 8.00 50.00
Bahrain 60.00 150.00
Bangladesh 60.00 150.00
Belgium 5.00 50.00
Bermuda 20.00 75.00
Botswana 60.00 150.00
Brazil 15.00 58.00
Bulgaria 35.00 75.00
Canada (RBC) 3.00 25.00
Chile 35.00 75.00
China 25.00 75.00
Colombia 40.00 000.00
Xxxxx Xxxx 60.00 150.00
Croatia 40.00 115.00
Cyprus 60.00 150.00
Czech Republic 40.00 90.00
Denmark 4.00 50.00
ECU 1.50 24.00
Ecuador 50.00 100.00
Egypt 40.00 75.00
Estonia 35.00 75.00
Euroclear/Cedel 1.50 24.00
Euro CDs 2.00 25.00
Finland 5.25 50.00
France 4.75 47.00
Germany 2.50 27.00
Ghana 60.00 150.00
Greece 40.00 75.00
Hong Kong 4.00 50.00
Hungary 40.00 100.00
India (Deutsche) 40.00 45.00
India (HSBC) 40.00 50.00
Indonesia 10.00 75.00
Ireland 7.00 45.00
Israel 50.00 100.00
Italy 5.25 50.00
Ivory Coast 3.00 100.00
Jamaica 11.00 70.00
BPS TRADES
--------- ---------
Japan 2.75 25.00
Jersey 60.00 150.00
Jordan 50.00 100.00
Kenya 60.00 150.00
Korea 20.00 48.00
Latvia 20.00 115.00
Lebanon 50.00 140.00
Lithuania 35.00 140.00
Luxembourg 3.00 55.00
Malaysia 8.00 75.00
Mauritius 60.00 150.00
Mexico 6.00 42.00
Morocco 50.00 150.00
Namibia 60.00 150.00
Nepal 60.00 150.00
Netherlands 5.00 50.00
New Zealand 2.00 47.00
Nigeria 60.00 150.00
Norway 6.00 50.00
Oman 35.00 130.00
Pakistan 30.00 150.00
Peru 50.00 100.00
Philippines 15.00 83.00
Poland 40.00 150.00
Portugal 25.00 83.00
Romania 40.00 115.00
Russia 25.00 100.00
Singapore 4.00 50.00
Slovakia 40.00 100.00
Slovenia 35.00 100.00
South Africa 5.00 50.00
Spain 7.75 50.00
Sri Lanka 20.00 100.00
Swaziland 60.00 150.00
Sweden 5.00 50.00
Switzerland 6.00 75.00
Taiwan 13.00 100.00
Thailand 15.00 63.00
Tunisia 60.00 150.00
Turkey 20.00 75.00
United Kingdom 1.00 25.00
United States 0.10 7.50
Uruguay 60.00 150.00
BPS TRADES
--------- ---------
Venezuela 35.00 100.00
Vietnam 60.00 150.00
Zambia 60.00 150.00
Zimbabwe 50.00 115.00
This fee schedule will be in effect for a period of 2 years. New markets added,
or additional services required that are not included in this schedule will be
negotiated separately and added to this schedule as the need arises.
Signed on behalf of:
Undiscovered Managers Funds JPMorgan Chase Bank
-------------------------- ----------------------
Xxxxx Xxxxxxxx Xxx X. Osti
Vice President Vice President
Date: Date:
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