1. Mutual Fund/Business Trust/ Series
2. FCM Delegation
CUSTODIAN AGREEMENT
AGREEMENT dated as of September 3, 2002, between DEUTSCHE BANK TRUST
COMPANY AMERICAS (the "Custodian") and XXXXXXX RREEF SECURITIES TRUST (the
"Customer").
WHEREAS, the Customer may be organized with one or more series of
shares, each of which shall represent an interest in a separate portfolio of
Securities and Cash (each as hereinafter defined) (all such existing and
additional series now or hereafter listed on Exhibit A being hereafter referred
to individually as a "Portfolio" and collectively, as the "Portfolios"); and
WHEREAS, the Customer desires to appoint the Custodian as custodian on
behalf of the Portfolios under the terms and conditions set forth in this
Agreement, and the Custodian has agreed to so act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. Employment of Custodian. The Customer hereby employs the Custodian
as custodian of all assets of each Portfolio which are delivered to and accepted
by the Custodian or any Subcustodian (as that term is defined in Section 4) (the
"Property") pursuant to the terms and conditions set forth herein. For purposes
of this Agreement, "delivery" of Property shall include the acquisition of a
security entitlement (as that term is defined in the New York Uniform Commercial
Code ("UCC")) with respect thereto. Without limitation, such Property shall
include stocks and other equity interests of every type, evidences of
indebtedness, other instruments representing same or rights or obligations to
receive, purchase, deliver or sell same and other non-cash investment property
of a Portfolio ("Securities") and cash from any source and in any currency
("Cash"), provided that the Custodian shall have the right, in its sole
discretion, to refuse to accept as Property any property of a Portfolio that the
Custodian considers not to be appropriate or in proper form for deposit for any
reason. The Custodian shall not be responsible for any property of a Portfolio
held or received by the Customer or others and not delivered to the Custodian or
any Subcustodian.
2. Maintenance of Securities and Cash at Custodian and Subcustodian
Locations. Pursuant to Instructions, the Customer shall direct the Custodian to
(a) settle Securities transactions and maintain cash in the country or other
jurisdiction in which the principal trading market for such Securities is
located, where such Securities are to be presented for payment or where such
Securities are acquired and (b) maintain cash and cash equivalents in such
countries in amounts reasonably necessary to effect the Customer's transactions
in such Securities. Instructions to settle Securities transactions in any
country shall be deemed to authorize the holding of such Securities and Cash in
that country.
3. Custody Account. The Custodian agrees to establish and maintain one
or more custody accounts on its books each in the name of a Portfolio (each, an
"Account") for any and all Property from time to time delivered to and accepted
by the Custodian or any Subcustodian for the account of such Portfolio. Upon
delivery by the Customer to the Custodian of any acceptable Property belonging
to a Portfolio, the Customer shall, by Instructions (as hereinafter defined in
Section 15), specifically indicate which Portfolio such Property belongs or if
such Property belongs to more than one Portfolio shall allocate such Property to
the appropriate Portfolio, and the Custodian shall allocate such Property to the
Accounts in accordance with the Instructions. The Customer on behalf of each
Portfolio, acknowledges its responsibility as a principal for all of its
obligations to the Custodian arising under or in connection with this Agreement,
warrants its authority to deposit in the appropriate Account any Property
delivered therefor to the Custodian or a Subcustodian and to give, and authorize
others to give, instructions relative thereto. The Custodian may deliver
securities of the same quantity, issuer and class in place of those deposited in
or credited to the Account.
The Custodian shall hold, keep safe and protect as custodian for each
Account, on behalf of the Customer, all Property in such Account and, to the
extent such Property constitutes financial assets for purposes of the UCC, shall
maintain those financial assets in such Account as security entitlements in
favor of the Portfolio in whose name the Account is maintained. All
transactions, including, but not limited to, foreign exchange transactions,
involving the Property shall be executed or settled solely in accordance with
Instructions (which shall specifically reference the Account for which such
transaction is being settled), except that until the Custodian receives
Instructions to the contrary, the Custodian will directly or through a
Subcustodian:
(a) collect all interest and dividends and all other income and
payments, whether paid in cash or in kind, on the Property, as
the same become payable and credit the same to the appropriate
Account;
(b) present for payment all Securities credited to an Account
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 the Custodian or
Subcustodian is actually aware of such opportunities and
credit the cash delivered to such Account pursuant to this
Agreement;
(c) (i) exchange Securities where the exchange is purely
ministerial (including, without limitation, the exchange of
temporary securities for those in definitive form and the
exchange of warrants, or other documents of entitlement to
securities, for the Securities themselves) and (ii) when
notification of a tender or exchange offer (other than
ministerial exchanges described in (i) above) is received for
an Account, endeavor to receive Instructions, provided that if
such Instructions are not received in time for the Custodian
to take timely action, no action shall be taken with respect
thereto;
(d) whenever notification of a rights entitlement or a fractional
interest resulting from a rights issue, stock dividend or
stock split is received for an Account and such rights
entitlement or fractional interest bears an expiration date,
if after endeavoring to obtain Instructions such Instructions
are not received in time for the Custodian to take timely
action or if actual notice of such actions was received too
late to seek Instructions, may sell in the discretion of the
Custodian (which sale the Customer hereby authorizes the
Custodian to make) such rights entitlement or fractional
interest and credit the Account with the net proceeds of such
sale, if such rights entitlement or fractional interest is
marketable in accordance with local market practice, rules,
regulations or the terms of the offer, including but not
limited to tendering such right entitlement or fractional
interest to the offeror;
2
(e) execute in the Customer's name for an Account, whenever the
Custodian deems it appropriate, such ownership and other
certificates as may be required to obtain the payment of
income from the Property in such Account;
(f) pay for each Account, any and all taxes and levies in the
nature of taxes imposed on interest, dividends or other
similar income on the Property in such Account by any
governmental authority. In the event there is insufficient
Cash available in such Account to pay such taxes and levies,
the Custodian shall notify the Customer of the amount of the
shortfall and the Customer, at its option, may deposit
additional Cash in such Account or take steps to have
sufficient Cash available. The Customer agrees, when and if
requested by the Custodian and required in connection with the
payment of any such taxes to cooperate with the Custodian in
furnishing information, executing documents or otherwise; and
(g) appoint brokers and agents for any of the ministerial
transactions involving the Securities described in (a) - (f),
including, without limitation, affiliates of the Custodian or
any Subcustodian.
4. Subcustodians and Securities Systems. The Customer authorizes and
instructs the Custodian, subject to the provisions of this Section 4, to settle,
clear and maintain the Property in each Account directly in one of its U.S.
branches or indirectly through custody accounts which have been established by
the Custodian with the following other securities intermediaries: (a) another
U.S. bank or trust company or branch thereof located in the U.S. which is itself
qualified under the Investment Company Act of 1940, as amended ("1940 Act"), to
act as custodian (which may or may not be an affiliate of the Custodian)
(individually, a "U.S. Subcustodian"), or a U.S. securities depository or
clearing agency or system in which the Custodian or a U.S. Subcustodian
participates that is eligible to be utilized under Rule 17f-4 under the 1940 Act
(individually, a "U.S. Securities System") or (b) (i) an "eligible foreign
custodian" (as defined by Rule 17f-5 under the 1940 Act ("Rule 17f-5")) , (ii) a
non-U.S. branch of a U.S. bank or (iii) any other person with which Property may
be placed and maintained outside of the United States under the 1940 Act other
than pursuant to Rule 17f-5 thereunder including without limitation, pursuant to
an order granted by the U.S. Securities and Exchange Commission ("SEC")
exempting such agent or the subcustody arrangements thereto from all or part of
the provisions of Rule 17f-5 (an entity described in (i), (ii) or (iii) of this
subsection (b) may individually be referred to as a "non-U.S. Subcustodian";
U.S. Subcustodians and non-U.S. Subcustodians, collectively, "Subcustodians"),
or (c) a non-U.S. securities depository or clearing agency or system in which
the Custodian or any non-U.S. Subcustodian participates and which is an Eligible
Securities Depository as defined by Rule 17f-7 under the 1940 Act ("Rule 17f-7")
or is any other non-U.S. Securities System which the SEC by exemptive order has
permitted investment companies to maintain their foreign assets (individually, a
"non-U.S. Securities System"; U.S. Securities System and non-U.S. Securities
System, collectively, "Securities System"), provided that, in each case in which
a U.S. Subcustodian or U.S. Securities System is employed, each such
Subcustodian or Securities System shall have been approved by Instructions.
3
Subject to the provisions of this Agreement and requirements
of applicable law, including Rule 17f-5, the Customer hereby designates the
Custodian as its foreign custody manager within the meaning of Rule 17f-5(a)(3)
or any successor thereto ("Foreign Custody Manager") with respect to all
Property for which the primary market is outside of the United States and such
cash and cash equivalents, including foreign currency, that are reasonably
necessary to effect the Customer's transactions in such Property (collectively,
"Foreign Assets"). The authority granted by such designation shall include the
authority to withdraw Foreign Assets from a non-U.S. Subcustodian in any
jurisdiction in which this Agreement applies and place and maintain the Foreign
Assets so withdrawn in the care of another non-U.S. Subcustodian in the same
jurisdiction, if arrangements which would satisfy the requirements of the 1940
Act are available, and to enter into appropriate written contracts governing the
Customer's foreign custody arrangements with such successor non-U.S.
Subcustodian. If no other non-U.S. Subcustodian is available in that
jurisdiction, the Custodian will inform the Customer of that fact and await
Instructions from the Customer or its authorized representatives.
Notwithstanding any such designation, any Instruction to invest in Property to
be held in any jurisdiction outside of the United States shall be deemed to be
an approval by the Customer to hold such Property in the non-U.S. Securities
System utilized in the same jurisdiction and disclosed, and for which a risk
analysis has been furnished, to the Customer as provided below.
5. Guidelines and Procedures for the Exercise of Delegated Authority
as Foreign Custody Manager.
(a) In exercising its delegated authority under this Agreement, the
Custodian may assume, for all purposes, that the Customer has considered and,
pursuant to its fiduciary duties to its shareholders, determined to accept
"Country Risk" as is incurred by placing and maintaining Foreign Assets in the
jurisdictions to which this Agreement applies. The Custodian will accept
Instructions to settle transactions and such Instructions will be deemed
authorizations unless otherwise instructed, to hold or maintain such Foreign
Assets in the jurisdictions set forth in such Instructions. In exercising its
delegated authority under this Agreement, the Custodian may also assume that the
Board has, and will continue to monitor such Country Risk to the extent that the
Board deems necessary or appropriate. Nothing in this Agreement shall require
the Custodian to make any selection or to engage in any monitoring on behalf of
the Customer, except as specifically provided herein, that would entail the
consideration of Country Risk. For purposes of this Section 5(a) and Section 20,
"Country Risk" means all factors reasonably related to the prevailing or
systemic risk of holding or maintaining Foreign Assets in a particular country,
including, without limitation, such country's financial infrastructure;
prevailing custody and settlement practices; laws and regulations applicable to
the safekeeping and recovery of Foreign Assets held in custody or other laws and
regulations related to the banking or securities industry; currency controls or
restrictions; prevalence of crime and corruption; securities depository acts or
omissions; and bankruptcy or insolvency of banking agents, counterparties to
transactions, transfer agents or registrars.
(b) The Custodian agrees that, in the performance of its duties as
Foreign Custody Manager pursuant to the provisions of this Agreement, the
Custodian shall exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of the Customer's Foreign
Assets would exercise.
4
(c) In exercising the authority delegated under this Agreement to place
and maintain Foreign Assets with a non-U.S. Subcustodian, the Custodian shall
determine that Foreign Assets will be held or maintained by such non-U.S.
Subcustodian subject to reasonable care based on the standards applicable to
custodians in the market in which the Foreign Assets will be held or maintained
after considering all factors relevant to the safekeeping of such Foreign
Assets, including, without limitation, those set forth in Rule 17f-5(c)(1) of
the 1940 Act.
(d) The Custodian agrees to provide written reports notifying the Board
of the placement of Foreign Assets with a particular non-U.S. Subcustodian and
of any material change in the Customer's foreign custody arrangements. Such
reports shall be provided to the Board at such times as the Customer and the
Custodian may agree in writing. Upon request of the Customer, the Custodian
shall deliver annually to the Customer information concerning its foreign
custodial system, including: (a) the identity of each non-U.S. Subcustodian and
non-U.S. Securities System then acting on behalf of the Custodian and the name
and address of the governmental agency or other regulatory authority that
supervises or regulates such non-U.S. Subcustodian and non-U.S. Securities
System and (b) the countries in which each non-U.S. Subcustodian or non-U.S.
Securities System is located.
6. Use of Subcustodian. With respect to Property in an Account which is
maintained by the Custodian through a Subcustodian employed pursuant to Section
4:
(a) The Custodian will identify on its books as belonging to the
Customer on behalf of a Portfolio, any Property maintained
through such Subcustodian.
(b) Any Property in the Account held by or credited to a
Subcustodian will be subject only to the instructions of the
Custodian or its agents.
(c) Property deposited with or credited to a Subcustodian will be
maintained in an account holding only assets for customers of
the Custodian.
(d) In exercising the authority delegated under this Agreement as
Foreign Custody Manager to enter into written contracts
governing the Customer's foreign custody arrangements with a
non-U.S. Subcustodian, the Custodian shall determine that such
contracts provide reasonable care for Foreign Assets based on
the standards applicable to non-U.S. Subcustodians in the
relevant market. Any agreement the Custodian shall enter into
with a non-U.S. Subcustodian with respect to maintaining
Property shall require that (i) the Account will be adequately
indemnified or its losses adequately insured (or any
combination) against the risk of loss of Foreign Assets; (ii)
the Foreign Assets so maintained are not subject to any right,
charge, security interest, lien or claim of any kind in favor
of such Subcustodian or its creditors, except a claim for
payment for their safe custody or administration or, in the
case of cash deposits, liens or rights in favor of creditors
of the Subcustodian arising under bankruptcy, insolvency, or
similar laws; (iii) beneficial ownership of such ^ Foreign
Assets be freely transferable without the payment of money or
value other than for safe custody or administration, (iv)
adequate records will be maintained identifying the Foreign
Assets maintained pursuant to such Agreement as belonging to
the Custodian, for the benefit of its customers; (v) the
independent public accountants of or designated by the
Customer be given access to the records of such Subcustodian
described in (iv) above or confirmation of the contents of
those records; and (vi) the Customer will receive periodic
reports with respect to the safekeeping of the Foreign Assets,
including, but not limited to, notification of any transfer to
or from the Customer's account or a third party account
containing assets held for the benefit of the Customer;
provided that, the contract may contain, in lieu of any or all
of the provisions specified in this Section 6(d), other
provisions that the Custodian determines will provide, in
their entirety, the same or a greater level of care and
protection for the Foreign Assets as the = specified
provisions, in their entirety.
5
7. Monitoring of non-U.S. Subcustodians and Contracts. In each case in
which the Custodian has exercised the authority delegated under this Agreement
to place Foreign Assets with a non-U.S. Subcustodian, the Custodian is
authorized to, and shall on behalf of the Customer, establish a system
reasonably designed to monitor the appropriateness of maintaining the Customer's
Foreign Assets with such non-U.S. Subcustodian and compliance by such non-U.S.
Subcustodian with its contract with the Custodian.
8. Jurisdictions of Non-U.S. Subcustodians. The authority delegated by
this Agreement, subject to the provisions of the last paragraph of this Section
8, applies with respect to Property held in the jurisdictions covered by the
Custodian's subcustodial network and approved by the Customer or its authorized
representative. A listing of the Custodian's subcustodial network Is attached
hereto as Exhibit G Jurisdictions in the Custodian's network may be added and
the subcustodial network may be modified from time to time by notice ("flash
notice") from the Custodian to the Customer. Flash notices may be sent by the
Custodian to the Customer by any agreed upon means to the Customer's address set
forth below or otherwise furnished by the Customer to the Custodian. The
Custodian's responsibility and authority with respect to jurisdictions so added
shall commence, subject to the provisions of the last paragraph of this Section
8, on the date of, or set forth in, the flash notice or such other date as the
Foreign Assets are in the actual possession of such non-U.S. Subcustodian.
Each of the Customer and the Custodian may withdraw its delegation or
its acceptance of such delegation with respect to any jurisdiction upon written
notice to the Custodian or the Customer, as the case may be. Such withdrawal
shall be effective thirty (30) days after receipt of such notice by the party to
which notice has been sent and thereafter the Custodian shall have no further
responsibility or authority under this Agreement with respect to the
jurisdiction or jurisdictions as to which authority or acceptance of delegation
is so withdrawn. The Client hereby acknowledges that the Client is responsible
for assisting the Custodian if no alternative sub-custodian is available.
9. Use of U.S. Securities System. With respect to Property in the
Account(s) which is maintained by the Custodian or any Subcustodian through a
U.S. Securities System employed pursuant to Section 4:
(a) The Custodian shall, and the Subcustodian will be required by
its agreement with the Custodian to, identify on its books
such Property as being maintained for the account of the
Custodian or by the Subcustodian for the account of customers
of the Custodian or Subcustodian.
6
(b) Any Property maintained through a Securities System for the
account of the Custodian or a Subcustodian will be subject
only to the instructions of the Custodian or such
Subcustodian, as the case may be.
(c) Property deposited with a Securities System will be maintained
in an account holding only assets for customers of the
Custodian or Subcustodian, as the case may be, unless
precluded by applicable law, rule or regulation or local
market practice provides otherwise.
(d) The Custodian shall provide the Customer with any report
obtained by the Custodian on the Securities System's
accounting system, internal accounting control and procedures
for safeguarding securities deposited in the Securities
System.
10. Use of Non-U.S. Securities System.
(a) The Custodian shall, for evaluation by the Customer or its adviser,
provide an analysis of the custody risks associated with maintaining the
Customer's Foreign Assets with a non-U.S. Securities System utilized directly or
indirectly by the Custodian as of the date hereof (or, in the case of a non-U.S.
Securities System not so utilized as of the date hereof, prior to the initial
placement of the Customer's Foreign Assets at such non-U.S. Securities System)
and at which any Foreign Assets of the Customer are held or are expected to be
maintained. The Custodian shall monitor the custody risks associated with
maintaining the Customer's Foreign Assets at each such non-U.S. Securities
System on a continuing basis and shall promptly notify the Customer of any
material adverse changes in such risks.
(b) Based on the information available to it in the exercise of
diligence, the Custodian shall determine the eligibility under Rule 17f-7 or
applicable SEC exemptive order of each non-U.S. securities depository or
clearing agency before maintaining the Customer's Foreign Assets therewith and
shall promptly advise the Customer if it becomes aware that any non-U.S.
Securities System then being utilized ceases to be so eligible. A list of
non-U.S. Securities Systems used by the Custodian directly or indirectly as of
the date hereof is attached hereto as Exhibit G, and will be deemed to be
authorized for use by the Customer or its advisor unless the Customer furnishes
Instructions to the contrary. From time to time, non-U.S. Securities Systems
may, subject to Rule 17f-7(a)(11)(A), be added to the list by flash notice or
other agreed upon means of communication.
(c) In exercising the authority delegated under this Agreement and in
fulfilling its responsibilities under this Section 10, the Custodian will
exercise reasonable care, prudence and diligence in performing its duties but
subject to the provisions of this Agreement, including, without limitation, the
limitations on the Custodian's responsibility for identifying and monitoring
Country Risk as provided in Section 5(a) above.
11. Agents. The Custodian may at any time or times in its sole
discretion appoint (or remove) any other U.S. bank or trust company which is
itself qualified under the 1940 Act to act as custodian, as its agent
7
to carry out such of the provisions of this Agreement as the Custodian may from
time to time direct; provided, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities hereunder; and
provided further, that this Section 11 shall not apply to the appointment,
selection or use of any non-U.S. Subcustodian.
12. Records, Ownership of Property, Statements, Opinions of Independent
Certified Public Accountants and Electronic Access.
(a) The ownership of the Property whether Securities, Cash and/or other
property, and whether maintained directly by the Custodian or indirectly through
a Subcustodian or a Securities System as authorized herein, shall be clearly
recorded on the Custodian's books as belonging to the appropriate Account and
not for the Custodian's own interest. The Custodian shall keep accurate and
detailed accounts of all investments, receipts, disbursements and other
transactions for each Account. All accounts, books and records of the Custodian
relating thereto shall be open to inspection and audit at all reasonable times
during normal business hours by any person designated by the Customer. All such
accounts shall be maintained and preserved in the form reasonably requested by
the Customer. The Custodian will supply to the Customer from time to time, as
mutually agreed upon, a statement in respect to any Property in an Account
maintained by the Custodian or by a Subcustodian, including but not limited to,
the Property consisting of Foreign Assets held by a non-U.S. subcustodian,
including notification of the transfer to or from the Customer's account
containing Foreign Assets held for the benefit of the Customer. In the absence
of the filing in writing with the Custodian by the Customer of exceptions or
objections to any such statement within sixty (60) days of the mailing thereof,
the Customer shall be deemed to have approved such statement and in such case or
upon written approval of the Customer of any such statement, such statement
shall be presumed to be for all purposes correct with respect to all information
set forth therein.
(b) The Custodian shall take all reasonable action as the Customer may
request to obtain from year to year favorable opinions from the Customer's
independent certified public accountants with respect to the Custodian's
activities hereunder in connection with the preparation of the Customer's Form
N-1A and the Customer's Form N-SAR or other periodic reports to the SEC and with
respect to any other requirements of the SEC.
(c) At the request of the Customer, the Custodian shall deliver to the
Customer a written report prepared by the Custodian's independent certified
public accountants with respect to the services provided by the Custodian under
this Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding Cash and
Securities, including Cash and Securities deposited and/or maintained in a
securities system or with a Subcustodian. Such report shall be of sufficient
scope and in sufficient detail as may reasonably be required by the Customer and
as may reasonably be obtained by the Custodian.
8
(d) The Customer or any agent authorized in accordance with the terms
hereof may elect to access, subject to such procedures relating to the security
of such access as the Custodian may require and the provisions of Section 20,
through an electronic or other similar communications system for the purpose of
providing the Customer or such agent, on a daily basis, the ability to view
on-line or to print a hard copy of various reports of Account activity and of
Property being held in or credited to the Account by the Custodian or any
Subcustodian. With respect to daily or intraday Account information accessed
through an electronic or other similar communication system as provided herein,
Customer understands and agrees that all such information is indicative and
provisional only, is unaudited and subject to subsequent postings an adjustments
and that the Custodian shall have no responsibility for any actions which
Customer may take in reliance on such daily or intraday information.
Notwithstanding the ability to access daily information, Account statements will
continue to be provided to Customer pursuant to the provisions hereof and
Customer agrees that only such statements are intended to be the definitive
records relating to the Account. To the extent that such reports include market
values of Securities in the Account, the Customer hereby acknowledges that the
Custodian now obtains and may in the future obtain information on such values
from outside sources that the Custodian considers to be reliable and the
Customer agrees that the Custodian (i) does not verify nor represent or warrant
either the reliability of such service nor the accuracy or completeness of any
such information furnished or obtained by or through such service and (ii) shall
be without liability in selecting and utilizing such service or furnishing any
information derived therefrom.
13. Holding of Securities, Nominees, etc. Securities in an Account
which are maintained by the Custodian or any Subcustodian may be held directly
by such entity in the name of the Customer or in bearer form or maintained, on
behalf of a Portfolio, in the Custodian's or Subcustodian's name or in the name
of the Custodian's or Subcustodian's nominee. Securities that are maintained
through a Subcustodian or which are eligible for deposit in a Securities System
as provided above may be maintained with the Subcustodian or the Securities
System in an account for the Custodian's or Subcustodian's customers, unless
prohibited by law, rule, regulation or local market practice provides otherwise.
The Custodian or Subcustodian, as the case may be, may combine certificates
representing Securities held in an Account with certificates of the same issue
held by it as fiduciary or as a custodian. In the event that any Securities in
the name of the Custodian or its nominee or held by a Subcustodian and
registered in the name of such Subcustodian or its nominee, whether in physical
or book entry form, are called for partial redemption by the issuer of such
Security, the Custodian or the Subcustodian may, subject to local market
practice and the rules or regulations pertaining to allocation of any Securities
System in which such Securities may have been deposited, allot, or cause to be
allotted, the called portion of the respective beneficial holders of such class
of security in any manner the Custodian or Subcustodian deems to be fair and
equitable. Securities maintained with a Securities System shall be maintained
subject to the rules of that Securities System governing the rights and
obligations among the Securities System and its participants.
14. Proxies, etc. With respect to any proxies, notices, reports or
other communications relative to any of the Securities credited to the Account,
the Custodian shall perform such services and only such services relative
thereto as are (i) set forth in Section 3 of this Agreement, (ii) described in
Exhibit B attached hereto (the "Proxy Service") or (iii) as may otherwise be
agreed upon between the Custodian and the Customer. The liability and
responsibility of the Custodian in connection with the Proxy Service referred to
in (ii) of the immediately preceding sentence and in connection with any
additional services which the Custodian and the Customer may agree upon as
provided in (iii) of the immediately preceding sentence shall be as set forth in
the description of the Proxy Service and as may be agreed upon by the Custodian
and the Customer in connection with the furnishing of any such additional
service and shall not be affected by any other term of this Agreement. Neither
the Custodian nor its nominees or agents shall vote upon or in respect of any of
the Securities in the Account, execute any form of proxy to vote thereon, or
give any consent or take any action (except as provided in Section 3) with
respect thereto except upon the receipt of Instructions relative thereto.
9
15. Segregated Account. To assist the Customer in complying with the
requirements of the 1940 Act and the rules and regulations thereunder, the
Custodian shall, upon receipt of Instructions, establish and maintain a
segregated account or accounts on its books for and on behalf of a Portfolio.
16. Settlement Procedures. Securities will be transferred, exchanged or
delivered by the Custodian or a Subcustodian upon receipt by the Custodian of
Instructions which include all information required by the Custodian. Settlement
and payment for Securities received for an Account and delivery of Securities
out of such Account may be effected 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, 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, as such practices and procedures may be modified or
supplemented in accordance with the standard operating procedures of the
Custodian in effect from time to time for that jurisdiction or market. Neither
the Custodian nor the Subcustodian shall be liable for any loss which results
from effecting transactions in accordance with the customary or established
securities trading or securities processing practices and procedures in the
applicable jurisdiction or market.
Notwithstanding that the Custodian may, subject to the provisions of
Section 17, settle purchases and sales against, or credit income to, an Account,
on a contractual basis, as outlined in the applicable Service Standards as
defined below and provided to the Customer by the Custodian, the Custodian may,
at its sole discretion, reverse such credits or debits to the appropriate
Account in the event that the transaction does not settle, or the income is not
received in a timely manner, and the Customer agrees to hold the Custodian
harmless from any losses which may result therefrom.
The applicable Service Standards shall be defined as any document or
documents issued by the Custodian from time to time specifying the Custodian's
policies, procedures and practices in connection with transactions for, and the
maintenance of, Property, including Foreign Assets, in the Account, for
communicating with the Customer, the terms of any additional services to be
provided to the Customer, and such other matters as may be agreed between the
Customer and the Custodian from time to time.
17. Conditional Credits.
(a) Notwithstanding any other provision of this Agreement, the
Custodian shall not be required to comply with any Instructions to settle the
purchase of any securities for the Account, unless there are sufficient
immediately available funds in the relevant currency credited to the Account,
provided that, if, after all expenses, debits and withdrawals of Cash in the
relevant currency ("Debits," which term includes all advances made by the
Subcustodian in respect of the Account) applicable to the Account have been made
and if after all Conditional Credits, as defined below, applicable to the
Account have been made final entries as set forth in (c) below, the amount of
immediately available funds of the relevant currency in such Account is at least
equal to the aggregate purchase price of all securities for which the Custodian
has received Instructions to settle on that date ("Settlement Date"), the
Custodian, upon settlement, shall credit the Securities to the Account by making
a final entry on its books and records.
10
(b) Notwithstanding the foregoing, if after all Debits applicable to
the Account have been made, there remains outstanding any Conditional Credit (as
defined below) applicable to the Account or the amount of immediately available
funds in a given currency in such Account are less than the aggregate purchase
price in such currency of all securities for which the Custodian has received
Instructions to settle on the Settlement Date, the Custodian, upon settlement,
may credit the securities to the Account by making a conditional entry on its
books and records ("Conditional Credit"), pending receipt of sufficient
immediately available funds in the relevant currency in the Account.
(c) If, within a reasonable time from the posting of a Conditional
Credit and after all Debits applicable to the Account have been made,
immediately available funds in the relevant currency at least equal to the
aggregate purchase price in such currency of all securities subject to a
Conditional Credit on a Settlement Date are credited to or deposited into the
Account, the Custodian shall make the Conditional Credit a final entry on its
books and records. In such case, the Customer shall be liable to the Custodian
only for late charges at a rate which the Custodian customarily charges for
similar extensions of credit.
(d) If (i) within a reasonable time from the posting of a Conditional
Credit, immediately available funds at least equal to the resultant Debit on a
Settlement Date are not credited to or on deposit in the Account, or (ii) any
Proceeding shall occur, the Custodian may sell such of the Securities subject to
the Conditional Credit as it selects in its sole discretion and shall apply the
net proceeds of such sale to cover such Debit, including related late charges,
and any remaining proceeds shall be credited to the Account. If such proceeds
are insufficient to satisfy such debt in full, the Customer shall continue to be
liable to the Custodian for any shortfall. The Custodian shall make the
Conditional Credit a final entry on its books as to the Securities not required
to be sold to satisfy such Debit. Pending payment in full by the Customer of the
purchase price for Securities subject to a Conditional Credit, and the
Custodian's making a Conditional Credit a final entry on its books, and, unless
consented to by the Custodian, the Customer shall have no right to give further
Instructions in respect of Securities subject to a Conditional Credit. The
Custodian shall have the sole discretion to determine which Securities shall be
deemed to have been paid for by the Customer out of funds available in the
Account. Any such Conditional Credit may be reversed (and any corresponding
Debit shall be canceled) by the Custodian unless and until the Custodian makes a
final entry on its books crediting such Securities to the Account. The term
"Proceeding" shall mean any insolvency, bankruptcy, receivership, reorganization
or similar proceeding relating to the Customer, whether voluntary or
involuntary.
(e) The Customer agrees that it will not use the Account to facilitate
the purchase of securities without sufficient funds in the Account (which funds
shall not include the expected proceeds of the sale of the purchased
securities).
18. Permitted Transactions. The Customer agrees that it will cause
transactions to be made pursuant to this Agreement only upon Instructions in
accordance with Section 19 and for the purposes listed below.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions.
(b) When Securities are called, redeemed or retired, or otherwise
become payable.
11
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment.
(d) Upon conversion of Securities pursuant to their terms into other
securities.
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities.
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses.
(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed or in order
to satisfy requirements for additional or substitute collateral.
(h) In connection with any loans, but only against receipt of
collateral as specified in Instructions which shall reflect any restrictions
applicable to the Customer.
(i) For the purpose of redeeming shares of the capital stock of the
Customer against delivery of the shares to be redeemed to the Custodian, a
Subcustodian or the Customer's transfer agent.
(j) For the purpose of redeeming in kind shares of the Customer against
delivery of the shares to be redeemed to the Custodian, a Subcustodian or the
Customer's transfer agent.
(k) For delivery in accordance with the provisions of any agreement
among the Customer, on behalf of a Portfolio, the Portfolio's investment adviser
and a broker-dealer registered under the Securities Exchange Act of 1934 and a
member of the National Association of Securities Dealers, Inc., relating to
compliance with the rules of The Options Clearing Corporation, the Commodities
Futures Trading Commission or of any registered national securities exchange, or
of any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Customer.
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only upon
payment to the Custodian of monies for the premium due and a receipt for the
Securities which are to be held in escrow. Upon exercise of the option, or at
expiration, the Custodian will receive the Securities previously deposited from
broker. The Custodian will act strictly in accordance with Instructions in the
delivery of Securities to be held in escrow and will have no responsibility or
liability for any such Securities which are not returned promptly when due other
than to make proper request for such return.
(m) For spot or forward foreign exchange transactions to facilitate
security trading or receipt of income from Securities related transactions.
(n) Upon the termination of this Agreement as set forth in Section 25.
12
(o) For other proper purposes.
The Customer agrees that the Custodian shall have no obligation to
verify the purpose for which a transaction is being effected.
19. Instructions. The term "Instructions" means instructions from the
Customer in respect of any of the Custodian's duties hereunder which have been
received by the Custodian at its address as shall have been furnished by the
Custodian to the Customer pursuant to the provisions hereof (i) in writing
(including, without limitation, facsimile transmission) by tested telex or SWIFT
signed or given by such one or more person or persons as the Customer shall have
from time to time authorized in writing to give the particular class of
Instructions in question and whose name and (if applicable) signature and office
address have been filed with the Custodian, or (ii) which have been transmitted
electronically through an electronic or other similar communications system
acceptable to the Custodian, or (iii) a telephonic or oral communication by one
or more persons as the Customer shall have from time to time authorized to give
the particular class of Instructions in question and whose name has been filed
with the Custodian or (iv) upon receipt of such other form of instructions as
the Customer may from time to time authorize in writing and which the Custodian
has agreed in writing to accept. Notwithstanding the foregoing, no Instructions
may be furnished through an electronic or other similar communication system
unless expressly authorized by the Custodian. Such authorization may be subject
to such security procedures as the Custodian may reasonably require.
Instructions in the form of oral communications shall be confirmed by the
Customer as soon as possible by tested telex or writing in the manner set forth
in clause (i) above, but the lack of such confirmation or any conflict between
such confirmation and the relevant oral Instruction shall in no way affect any
action taken by the Custodian in reliance upon such oral Instructions prior to
the Custodian's receipt of such confirmation. Instructions in the form of
facsimile transmission shall not be deemed received until confirmed by the
Custodian in accordance with the provisions for the giving of notices under
Section 26 hereof. The Custodian has the right to record any such oral
Instructions, and the Customer hereby consents to such recording. Instructions
may relate to specific transactions or to types or classes of transactions, and
may be in the form of standing instructions.
The Custodian shall have the right to assume in the absence of notice
to the contrary from the Customer that any person whose name is on file with the
Custodian pursuant to this Section has been authorized by the Customer to give
the Instructions in question and that such authorization has not been revoked.
The Custodian may act upon and conclusively rely on, without any liability to
the Customer or any other person or entity for any losses resulting therefrom,
any Instructions reasonably believed by it to be furnished by the proper person
or persons as provided above.
20. Standard of Care. The Custodian shall be responsible for the
performance of only such duties as are set forth herein or contained in
Instructions given to the Custodian which are not contrary to the provisions of
this Agreement. The Custodian will use reasonable care with respect to the
safekeeping of Property in each Account and, except as otherwise expressly
provided herein, in carrying out its obligations under this Agreement. So long
as and to the extent that it has exercised reasonable care, the Custodian shall
not be responsible for the title, validity or genuineness of any Property or
other property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement and shall be held harmless in acting upon, and may
conclusively rely on, without liability for any loss resulting therefrom, any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed or furnished by the proper party or parties,
including, without limitation, Instructions, and shall be indemnified by the
Customer for any losses, damages, costs and expenses (including, without
limitation, the fees and expenses of counsel) incurred by the Custodian and
arising out of action taken or omitted with reasonable care by the Custodian
hereunder or under any Instructions. Without limiting the generality of the
foregoing, the Custodian shall not have any duty to make inquiry as to the
genuineness of any Instructions furnished by any person authorized as provided
above and shall be fully protected in relying on any Instructions furnished by
any person signing as, holding or identifying himself or herself as, or stating
that he or she is, a person who has been so authorized The Custodian shall be
liable to the Customer for any act or omission to act of any Subcustodian to the
same extent as if the Custodian committed such act itself, provided
13
notwithstanding the foregoing, the Custodian shall not be liable for any losses
due to the insolvency of a Subcustodian as long as it has exercised reasonable
care in the selection of such Subcustodian.. With respect to a U.S. Securities
System, the Custodian shall only be responsible or liable for losses arising
from employment of such Securities System caused by the Custodian's own failure
to exercise reasonable care. With respect to the placement and maintenance of
Customer's Foreign Assets with a non-U.S. Securities System, the Custodian shall
only be responsible or liable for losses caused by its failure to comply with
Section 10(c) of this Agreement. With respect to the placement and maintenance
of Customer's Foreign Assets with a non-U.S. Subcustodian, the Custodian shall
only be responsible or liable for losses caused by its failure to comply with
Section 5(b) of this Agreement. In the event of any loss to the Customer by
reason of the failure of the Custodian or a Subcustodian to utilize reasonable
care (or any other standard of care provided for in this Agreement), the
Custodian shall be liable to the Customer to the extent of the Customer's actual
damages at the time such loss was discovered without reference to any special
conditions or circumstances. In no event shall the Custodian be liable for any
consequential or special damages. The Custodian shall be entitled to rely, and
may act, on advice of counsel (who may be counsel for the Customer) on all
matters and shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
In the event the Customer utilizes an electronic or other similar
system to communicate with Custodian for any purpose, including, without
limitation, the furnishing of Instructions, the Customer shall be fully
responsible for the security of the connecting terminal utilized by Customer,
access thereto and the proper and authorized use thereof and the initiation and
application of continuing effective safeguards with respect thereto and agrees
to defend and indemnify the Custodian and hold the Custodian harmless from and
against any and all losses, damages, costs and expenses (including the fees and
expenses of counsel) incurred by the Custodian as a result of any improper or
unauthorized use of such terminal. Should the Customer authorize, in accordance
with the terms hereof, any agent to communicate with Custodian and such agent
utilizes any such system to so communicate, the Customer shall be responsible
for the use of such system and shall defend, indemnify and hold harmless
Custodian for such use to the same extent as if such system were being used by
the Customer to communicate with the Custodian. In the event Customer or any
agent authorized pursuant to the terms hereof, accesses Account information via
a Website, Customer confirms that it is aware that communications over the
internet cannot be guaranteed to be secure and that there is a risk that
information displayed via the internet or contained within any communication
made over the internet, including potentially confidential information, may be
intercepted, lost, destroyed or delayed in display or transmission. Customer
specifically agrees that the Custodian shall have no liability whether in
contract, tort or otherwise for any direct, indirect or consequential loss or
damage which may be suffered by Customer or any agent in connection with access
made to Account information via a Website.
14
All collections of funds or other property paid or distributed in
respect of Securities in an Account, including funds involved in third-party
foreign exchange transactions, shall be made at the risk of the Customer.
Subject to the exercise of reasonable care, the Custodian shall have no
liability for any loss occasioned by delay in the actual receipt of notice by
the Custodian or by a Subcustodian of any payment, redemption or other
transaction regarding Securities in each Account in respect of which the
Custodian has agreed to take action as provided in Section 3 hereof. The
Custodian shall not be liable for any loss, liability, claim or expense
resulting from, or caused by, anything which is a part of Country Risk (as
described in Section 5 hereof) or acts of governmental authorities (whether de
jure or de facto), including in each case, without limitation, (i)
nationalization, expropriation, and the imposition of currency restrictions;
devaluations of or fluctuations in the value of currencies; changes in laws and
regulations applicable to the banking or securities industry; (ii) market
conditions that prevent the orderly execution of securities transactions or
affect the value of Property or the inability of a local clearing and settlement
system to settle transactions for reasons beyond the control of the Custodian;
(iii) acts of war, terrorism, insurrection or revolution; strikes or work
stoppages; or (iv) hurricane, cyclone, earthquake, volcanic eruption, nuclear
fusion, fission or radioactivity, or other acts of God.
The Custodian shall have no liability in respect of any loss, damage or
expense suffered by the Customer, insofar as such loss, damage or expense arises
from the performance of the Custodian's duties hereunder by reason of the
Custodian's reliance upon records that were maintained for the Customer by
entities other than the Custodian prior to the Custodian's employment under this
Agreement.
The provisions of this Section shall survive termination of this
Agreement.
21. Investment Limitations and Legal or Contractual Restrictions or
Regulations. The Custodian shall not be liable to the Customer and the Customer
agrees to indemnify the Custodian and its nominees, for any loss, damage or
expense suffered or incurred by the Custodian or its nominees arising out of any
violation of any investment restriction or other restriction or limitation
applicable to the Customer or any Portfolio pursuant to any contract or any law
or regulation. The provisions of this Section shall survive termination of this
Agreement.
22. Fees and Expenses. The Customer agrees to pay to the Custodian such
compensation for its services pursuant to this Agreement as may be mutually
agreed upon in writing from time to time and the Custodian's reasonable
out-of-pocket or incidental expenses in connection with the performance of this
Agreement, including (but without limitation) legal fees as described herein
and/or deemed necessary in the judgment of the Custodian to keep safe or protect
the Property in the Account. The initial fee schedule is attached hereto as
Exhibit D. Such fees will not be abated by, nor shall the Custodian be required
to account for, any profits or commissions received by the Custodian in
connection with its provision of custody services under this agreement. The
Customer hereby agrees to hold the Custodian harmless from any liability or loss
resulting from any taxes or other governmental charges, and any expense related
thereto, which may be imposed, or assessed with respect to any Property in an
Account and also agrees to hold the Custodian, its Subcustodians, and their
respective nominees harmless from any liability as a record holder of Property
in such Account. The Custodian is authorized to charge the applicable Account
for such items and the Custodian shall have a lien on the Property in the
applicable Account for any amount payable to the Custodian under this Agreement,
including but not limited to amounts payable pursuant to Section 17 and pursuant
to indemnities granted by the Customer under this Agreement. Indemnities
provided in this Agreement for Custodian's costs and expenses shall include the
fees and expenses of counsel to enforce the provisions of this Agreement. The
provisions of this Section shall survive the termination of this Agreement.
15
23. Tax Reclaims. With respect to withholding taxes deducted and which
may be deducted from any income received from any Property in the Account, the
Custodian shall perform such services with respect thereto as are described in
Exhibit C attached hereto and shall in connection therewith be subject to the
standard of care set forth in such Exhibit. Such standard of care shall not be
affected by any other term of this Agreement.
24. Amendment, Modifications, etc. No provision of this Agreement may
be amended, modified or waived except in a writing signed by the parties hereto.
No waiver of any provision hereto shall be deemed a continuing waiver unless it
is so designated. No failure or delay on the part of either party in exercising
any power or right under this Agreement operates as a waiver, nor does any
single or partial exercise of any power or right preclude any other or further
exercise thereof or the exercise of any other power or right.
25. Termination. (a) Termination of Entire Agreement. This Agreement
may be terminated by the Customer or the Custodian by ninety (90) days' written
notice to the other; provided that notice by the Customer shall specify the
names of the persons to whom the Custodian shall deliver the Securities in each
Account and to whom the Cash in such Account shall be paid. If notice of
termination is given by the Custodian, the Customer shall, within ninety (90)
days following the giving of such notice, deliver to the Custodian a written
notice specifying the names of the persons to whom the Custodian shall deliver
the Securities in each Account and to whom the Cash in such Account shall be
paid. In either case, the Custodian will deliver such Property to the persons so
specified, after deducting therefrom any amounts which the Custodian determines
to be owed to it hereunder. In addition, the Custodian may in its discretion
withhold from such delivery such Property as may be necessary to settle
transactions pending at the time of such delivery. The Customer grants to the
Custodian a lien and right of setoff against the Account and all Property
credited to or held therein from time to time in the full amount of the
foregoing obligations. If within ninety (90) days following the giving of a
notice of termination by the Custodian, the Custodian does not receive from the
Customer a written notice specifying the names of the persons to whom the
Custodian shall deliver the Securities in each Account and to whom the Cash in
such Account shall be paid, the Custodian, at its election, may deliver such
Securities and pay such Cash to a bank or trust company doing business in the
State of New York to be held and disposed of pursuant to the provisions of this
Agreement, or may continue to hold such Securities and Cash until a written
notice as aforesaid is delivered to the Custodian, provided that the Custodian's
obligations shall be limited to safekeeping.
(b) Termination as to One or More Portfolios. This Agreement may be
terminated by the Customer or the Custodian as to one or more Portfolios (but
less than all of the Portfolios) by delivery of an amended Exhibit A deleting
such Portfolios, in which case termination as to such deleted Portfolios shall
take effect ninety (90) days after the date of such delivery, or such earlier
time as mutually agreed. The execution and delivery of an amended Exhibit A
which deletes one or more Portfolios shall constitute a termination of this
Agreement only with respect to such deleted Portfolio(s), shall be governed by
the preceding provisions of Section 25(a) as to the identification of a
successor custodian and the delivery of Cash and Securities of the Portfolio(s)
so deleted to such successor custodian, and shall not affect the obligations of
the Custodian and the Customer hereunder with respect to the other Portfolios
set forth in Exhibit A, as amended from time to time.
16
(c) Termination as to Delegated Authority as Foreign Custody Manager.
The authority delegated to the Custodian to act as Foreign Custody Manager under
Section 5 hereof, may be terminated by the Customer or the Custodian as to one
or more or all jurisdictions where Foreign Assets are maintained by ninety (90)
days' written notice to the other, provided that such termination shall only be
a termination as to such delegated duties and shall not affect the obligations
of the Custodian and the Customer hereunder with respect to the other duties
specified herein, provided further, that if the Custodian's responsibilities as
Foreign Custody Manager are being terminated with respect to some but not all
jurisdictions, the terminated jurisdiction or jurisdictions shall be set forth
in the notice of termination..
26. Notices. Except as otherwise provided in this Agreement, all
requests, demands or other communications between the parties or notices in
connection herewith (a) shall be in writing, hand delivered or sent by
registered mail, telex or facsimile addressed to such address as shall have been
furnished by the receiving party pursuant to the provisions hereof and (b) shall
be deemed effective when received, or, in the case of a facsimile transmission
confirmed as received by the Custodian, or in the case of a telex, when sent to
the proper number and acknowledged by a proper answerback. In addition to the
forms of notices and other communications permitted above, it is hereby agreed
that any such notices and other communications may be sent by electronic mail
("e mail") to addresses specified by the parties for such purpose. Each party
hereby acknowledges and agrees that it is strictly responsible for the
maintenance of security for any terminal from which such party's e mails are
sent, access thereto and the proper and authorized use thereof and the
initiation and application of continuing effective safeguards with respect
thereto. Each party has furnished to the other party a list of persons who are
authorized to send e mail notices and communications on behalf of such party in
connection with this Agreement. Each receiving party may treat all notices and
other communications issued by or over the name of any such authorized person as
having been issued by the party whose list of authorized persons contains the
name of such person. The parties hereto further understand that e mail
communications cannot be made completely secure, and that third parties may be
able to intercept or alter messages sent by e mail and that no party hereto
shall be liable for acting in reliance on any e mail notice or communication
which has been altered prior to receipt or for the non receipt of e mail notices
or communications which have been intercepted. Subject to the foregoing, each
party hereto may rely on and act upon any e mail notice or communication
furnished by any other party to such party as a notice or communication under
this Agreement and in doing so shall be subject to and entitled to the benefits
of all of the provisions of this Agreement, including, without limitation, any
indemnification and limitation of liability provisions contained herein.
27. Several Obligations of the Portfolios. With respect to any
obligations of the Customer on behalf of each Portfolio and each of its related
Accounts arising out of this Agreement, the Custodian shall look for payment or
satisfaction of any obligation solely to the assets and property of the
Portfolio and such Accounts to which such obligation relates as though the
Customer had separately contracted with the Custodian by separate written
instrument with respect to each Portfolio and its related Accounts.
17
28. Security for Payment. To secure payment of all obligations due
hereunder, the Customer hereby grants to the Custodian a continuing security
interest in and right of setoff against each Account and all Property held
therein or credited thereto from time to time in the full amount of such
obligations; provided that, if there is more than one Account and the
obligations secured pursuant to this Section can be allocated to a specific
Account or the Portfolio related to such Account, such security interest and
right of setoff will be limited to Property held for that Account only and its
related Portfolio. Should the Customer fail to pay promptly any amounts owed
hereunder, the Custodian shall be entitled to use available Cash credited to the
Account or applicable Account, as the case may be, and to dispose of Securities
credited to the Account or such applicable Account as is necessary. In any such
case and without limiting the foregoing, the Custodian shall be entitled to take
such other actions or exercise such other options, powers and rights as the
Custodian now or hereafter has as a secured creditor under the New York Uniform
Commercial Code or any other applicable law.
29. Representations and Warranties.
(a) The Customer hereby represents and warrants to the Custodian that:
(i) the employment of the Custodian and the allocation of
fees, expenses and other charges to any Account as herein provided, is not
prohibited by law or any governing documents or contracts to which it is
subject;
(ii) the terms of this Agreement do not violate any obligation
by which it is bound, whether arising by contract, operation of law or
otherwise;
(iii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon it and each
Portfolio in accordance with its terms; and
(iv) it will deliver to the Custodian a duly executed
Secretary's Certificate in the form of Exhibit E hereto or such other evidence
of such authorization as the Custodian may reasonably require, whether by way of
a certified resolution or otherwise.
(b) The Custodian hereby represents and warrants to the Customer that:
(i) the terms of this Agreement do not violate any obligation
by which it is bound, whether arising by contract, operation of law or
otherwise;
(ii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon it in accordance
with its terms;
(iii) it will deliver to the Customer such evidence of such
authorization as the Customer may reasonably require, whether by way of a
certified resolution or otherwise; and
18
(iv) Custodian is qualified as a custodian under Section 26(a)
of the 1940 Act and warrants that it will remain so qualified or upon ceasing to
be so qualified shall promptly notify the Customer in writing.
30. Governing Law and Successors and Assigns. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Custodian.
31. Publicity. Customer shall furnish to Custodian at its office in any
manner referred to in Section 26 above, prior to any distribution thereof,
copies of any material prepared for distribution to any persons who are not
parties hereto that refer in any way to the Custodian. Customer shall not
distribute or permit the distribution of such materials if Custodian reasonably
objects in writing within ten (10) business days of receipt thereof (or such
other time as may be mutually agreed) after receipt thereof. The provisions of
this Section shall survive the termination of this Agreement.
32. Representative Capacity and Binding Obligation. A copy of the
Declaration of Trust of the Customer is on file with The Secretary of the State
of Delaware, and notice is hereby given that this Agreement is not executed on
behalf of the Trustees of the Customer as individuals, and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of the Customer individually but are binding only upon the assets
and property of the Portfolios.
The Custodian agrees that no shareholder, trustee or officer of the
Customer may be held personally liable or responsible for any obligations of the
Customer arising out of this Agreement.
33. Submission to Jurisdiction. Any suit, action or proceeding arising
out of this Agreement may be instituted in any State or Federal court sitting in
the City of Xxx Xxxx, Xxxxx xx Xxx Xxxx, Xxxxxx Xxxxxx of America, and the
Customer irrevocably submits to the non-exclusive jurisdiction of any such court
in any such suit, action or proceeding and waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding brought in such a court and any
claim that such suit, action or proceeding was brought in an inconvenient forum.
34. Confidentiality. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall
not be disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other than
through a breach of this Agreement, or that is required or requested to be
disclosed by any bank or other regulatory examiner of the Custodian, Customer,
or any Subcustodian, any auditor of the parties hereto, by judicial or
administrative process or otherwise by applicable law or regulation. The
provisions of this Section shall survive the termination of this Agreement.
19
35. Severability. If any provision of this Agreement is determined to
be invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other provision of this Agreement.
36. Entire Agreement. This Agreement together with any Exhibits
attached hereto, contains the entire agreement between the parties relating to
the subject matter hereof and supersedes any oral statements and prior writings
with respect thereto.
37. Headings. The headings of the paragraphs or Sections hereof are
included for convenience of reference only and do not form a part of this
Agreement.
38. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties hereto.
20
IN WITNESS WHEREOF, each of the parties has caused its duly authorized
signatories to execute this Agreement as of the date first written above.
XXXXXXX RREEF SECURITIES TRUST
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: President
DEUTSCHE BANK TRUST
COMPANY AMERICAS
By: /s/ Xxx Xxxx
-----------------------------
Name: Xxx Xxxx
Title: Vice President
EXHIBIT A
To Custodian Agreement dated as of September 3, 2002, between Deutsche
Bank Trust Company Americas and Xxxxxxx RREEF Securities Trust.
LIST OF PORTFOLIOS
The following is a list of Portfolios referred to in the first WHEREAS
clause of the above-referred to Custodian Agreement. Terms used herein as
defined terms unless otherwise defined shall have the meanings ascribed to them
in the above-referred to Custodian Agreement.
Xxxxxxx RREEF Real Estate Securities Fund
XXXXXXX RREEF SECURITIES TRUST
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: President
DEUTSCHE BANK TRUST
COMPANY AMERICAS
By: /s/ Xxx Xxxx
-----------------------------
Name: Xxx Xxxx
Title: Vice President
22
EXHIBIT B
To Custodian Agreement dated as of September 3, 2002 between Deutsche Bank Trust
Company Americas and Xxxxxxx RREEF Securities Trust.
PROXY SERVICE
ADP Global Proxy Services Corporation ("GPSC") provides
Deutsche Bank Trust Company Americas's clients with a service for the
transmission of corporate communications in connection with shareholder
meetings relating to securities held or maintained in Euroclear and the
following countries:
Argentina Malaysia
Australia Mexico
Austria Netherlands
Canada New Zealand
Finland Pakistan
France Singapore
Germany South Africa
Greece Spain
Hong Kong Sri Lanka
Indonesia Sweden
Ireland Switzerland (only bearer shares)
Italy United Kingdom
Japan United States
Korea Venezuela
GPSC will provide a notice to you indicating the deadline for receipt
of your instructions to enable the voting process to take place
effectively and efficiently. However, voting procedures will vary from
market-to-market. If voting instructions are not timely received,
Deutsche Bank Trust Company Americas shall have no liability or
obligation to take any action.
GPSC also has the ability to act upon standing instructions with
respect to routine items. Your proxy instructions provided to GPSC can
provide that
(a) all proxies must have your signature;
(b) GPSC may vote proxies in accordance with your standing instructions
but must send a copy for your files, or
(c) same as above but no file copy is required.
Please contact your Investment Assistant for more information on these
options.
23
GPSC's process for transmitting and translating meeting agendas is as
follows:
1) If the meeting agenda is not provided by the issuer in the
English language, and if the language of such agenda is in the
official language of the country in which the related security
is held, GPSC will as soon as practicable after receipt of the
original meeting agenda by a Sub-Custodian provide an English
translation prepared by that Sub-Custodian.
2) If an English translation of the meeting agenda is furnished,
the local language agenda will not be furnished unless
requested.
Translations will be free translations prepared by the Sub-Custodian
and neither Deutsche Bank Trust Company Americas, GPSC, nor any
Sub-Custodian will be liable or held responsible for the accuracy
thereof or any direct or indirect consequences arising therefrom,
including without limitation arising out of any action taken or omitted
to be taken based thereon.
For the United States and Canada, the term "corporate communications"
means the proxy statements or meeting agenda, proxy cards, annual
reports and any other meeting materials received by Deutsche Bank Trust
Company Americas or its Sub-Custodian. For countries other than the
United States and Canada, the term "corporate communications" means the
meeting agenda only or an English translation thereof and does not
include any meeting circulars, proxy statements or any other corporate
communications furnished by the issuer in connection with such meeting.
Non-meeting related corporate communications are not included in the
transmission service. If requested, Deutsche Bank Trust Company
Americas will, on a reasonable efforts basis, endeavor to obtain any
additional corporate communications not included within the term
"corporate communications" as defined above, and provide them in the
form obtained.
If Deutsche Bank Trust Company Americas, or any Sub-Custodian, incurs
expenses beyond mailing in a proxy or other form of written instruction
in exercising voting rights related to any securities held in markets
or the depository set forth above (e.g., physical presence is required
at a meeting and/or travel expenses are incurred), or if Deutsche Bank
Trust Company Americas incurs expenses in exercising voting rights with
respect to securities not held in such markets or depository or
otherwise incurs expenses in accordance with the preceding paragraph,
such expenses will be reimbursed out of the account containing such
securities unless other arrangements have been made for reimbursement.
For securities held in markets or in transnational depositories other
than those set forth above, neither Deutsche Bank Trust Company
Americas nor GPSC will furnish corporate communications or translations
of corporate communications or seek voting instructions. However, if
requested to exercise voting rights at a specific meeting, Deutsche
Bank Trust Company Americas may agree from time to time to do so on a
reasonable efforts basis without any assurance that such rights will be
so exercised at such meeting.
We continue to be committed to expanding our service and are
endeavoring to add additional markets.
24
EXHIBIT C
To Custodian Agreement dated as of September 3, 2002 between Deutsche Bank Trust
Company Americas and Xxxxxxx RREEF Securities Trust.
TAX RECLAIMS
Pursuant to Section 23 of the above referred to Custodian Agreement,
the Custodian shall perform the following services with respect to withholding
taxes imposed or which may be imposed on income from Property in the Account in
certain countries. Terms used herein as defined terms shall unless otherwise
defined have the meanings ascribed to them in the above referred to Custodian
Agreement.
Summary
The Custodian provides a tax reclaim service which consists of
assisting those global custody clients referred to below in processing
applications for tax reclaims or exemptions as more fully described
below with respect to income received by such clients from investments
in certain countries in which we provide global custody services for
such clients.(1)
Scope
The tax reclaim service provided by the Custodian consists of the
following: (i) assisting clients in processing applications to the
taxing authorities in the applicable jurisdictions for an exemption
from, or reduction in the rates of, withholding taxes on investment
income (dividends and interest) at source and/or (ii) assisting clients
in processing applications to the taxing authorities in the applicable
jurisdictions to recover taxes which have been withheld at source from
investment income (dividends and interest) at rates in excess of the
applicable treaty rates. Any amounts received as a result of engaging
in the foregoing process are posted to a client's account upon receipt.
The Custodian will use reasonable efforts in pursuing the reclaim
process for its clients but shall not be required to institute any
legal or administrative proceedings against any person in connection
therewith.
The tax reclaim service is provided only to global custody clients that
are direct contractual counterparties with the Custodian and are also
the sole beneficial owners of the investments held in custody by the
Custodian. Accordingly, the tax reclaim service is not provided to
wholesale relationships where the investments reflected in a client's
account belong to more than one beneficial owner. In addition,
investment funds including collective investment vehicles may not
qualify for reduced withholding under an income tax treaty as a result
--------
(1) The tax reclaim service is provided with respect to investments in any
country that has a double tax treaty with the country of residence of a client
or where special laws apply to such client in the jurisdiction in which such
investments are made.
26
of a "limitations on benefit" article contained in a treaty or a legal
position taken by the taxing authority. When such is the case, the
investment fund will be treated as a wholesale relationship in the tax
jurisdiction and no tax reclaim service will be provided. Note, in
certain instances, where the taxing authority has not made a final
determination on the tax status of an investment fund, protective tax
reclaims should still be filed in the name of the investment fund.
At the onset of a new relationship, a client, if it wishes to avail
itself of the Custodian's tax reclaim service, must furnish the
Custodian with a certification that the client's account qualifies as a
resident entitled to treaty benefits for each jurisdiction in which its
assets are held (or intended to be held). Upon receipt of such
certification and based on information available to the Custodian from
the sources set forth below, the Custodian will inform the client of
the documentation and other requirements at the onset and as they may
change over time to reclaim taxes in excess of treaty rates in the
various jurisdictions. In addition, if the Custodian becomes aware that
an exemption from withholding at source can be obtained, the Custodian
will advise as to the documentation and other requirements to obtain
such an exemption. It is important to note that the Custodian's work in
the tax reclaim area cannot begin until the Custodian receives from its
clients properly completed documentation and any other materials needed
to be furnished by the income recipient. The Custodian is entitled to
rely, without liability, on the information furnished by clients with
respect to its tax position or status in any jurisdiction and on
information furnished by clients in the documentation and other
materials required for the application process. If the availability of
a tax exemption in a jurisdiction is unclear, the Custodian will not
submit a certificate claiming an exemption on behalf of a client unless
the client provides appropriate documentation that substantiates that
the client has been granted an exemption by the tax authority.
In connection with providing the foregoing services, the Custodian
shall be entitled to apply categorical treatment to the account
according to nationality, the particulars of the organization and other
relevant details that shall be supplied by the client. It shall be the
client's duty to inform the Custodian of any change in the
organization, domicile or other relevant fact concerning tax treatment
of the account and further to inform the Custodian if the client is or
becomes the beneficiary of any special ruling or treatment not
applicable to the general nationality and category or entity of which
it is a party under general laws and treaty provisions. The Custodian
may rely on any such information provided by the client.
In providing its services, the Custodian works closely with its
Sub-Custodians, local tax offices, and international tax authorities.
In connection with providing the foregoing services, the Custodian may
also rely on professional tax services published by a major
international accounting firm and/or advice received from a
Sub-Custodian in the jurisdictions in question. In addition, the
Custodian may seek the advice of counsel or other professional tax
advisers in such jurisdictions. The Custodian is entitled to rely, and
may act, on information set forth in such services and on advice
received from a Sub-Custodian, counsel or other professional tax
advisers and shall be without liability to any client for any action
reasonably taken or omitted pursuant to information contained in such
services or such advice.
27
Clients should note that reclaim collection times will vary from market
to market and may take an extended period of time due to the processing
required at local government tax offices. In addition, in certain
markets including Italy and Spain, our Sub-Custodians may deduct
charges from the reclaim amounts to cover the personalized assistance
they provide in the process.
28
EXHIBIT D
To Custodian Agreement dated as of September 3, 2002 between Deutsche
Bank Trust Company Americas and Xxxxxxx RREEF Securities Trust.
US CUSTODY FEE SCHEDULE
SAFEKEEPING CHARGES
==============================================================================
Country Assets Under Custody Annual
Asset Fee
------------------------------------------------------------------------------
United States All Assets 0.25 Basis Point
==============================================================================
TRANSACTION CHARGES
------------------------------------------------------------------------------
Transaction Type* Cost per Transaction
------------------------------------------------------------------------------
DTC ID Affirmed $6
------------------------------------------------------------------------------
DTC Manual / Non ID $8
------------------------------------------------------------------------------
Federal Book Entry $10
------------------------------------------------------------------------------
PTC $10
------------------------------------------------------------------------------
Physicals $25
------------------------------------------------------------------------------
Maturities (Depository) $10
------------------------------------------------------------------------------
Maturities (Physical) $20
------------------------------------------------------------------------------
P&I Payments (Book Entry) $3
------------------------------------------------------------------------------
P&I Payments (Physical) $10
------------------------------------------------------------------------------
Fed Wires (from Custody account) $10
------------------------------------------------------------------------------
Fed Wires Received $8
------------------------------------------------------------------------------
Free Receives and Delivers $10
------------------------------------------------------------------------------
Futures Transactions $20
------------------------------------------------------------------------------
Options Open /Close Position $20
------------------------------------------------------------------------------
SHE (Shares Held Elsewhere) Trades $20
------------------------------------------------------------------------------
NOTES
o Domestic Securities accounts utilize actual
settlement and are subject to the guidelines
indicated in the Custodian's Policies and Standards
manual.
o Out-of-pocket expenses are borne by the client.
Out-of-pocket expenses include but are not
necessarily limited to: stamp charges, duties,
application and/or registration fees incurred outside
of the United States, the cost of building and/or
setting up an interface with your (i) investment
managers, or (ii) other vendors, as well as postage
and legal fees. These charges are passed on at cost.
o This fee schedule does not include the
costs of any cash accounts or services which the
Customer may determine it requires. These and any
other unanticipated services will be quoted
separately.
29
This Exhibit D shall be amended upon delivery by the Custodian of a new Exhibit
D to the Customer and acceptance thereof by the Customer and shall be effective
as of the date of acceptance by the Customer or a date agreed upon between the
Custodian and the Customer.
Dated as of: September 3, 2002 XXXXXXX RREEF SECURITIES TRUST
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: President
DEUTSCHE BANK TRUST
COMPANY AMERICAS
By: /s/ Xxx Xxxx
-----------------------------
Name: Xxx Xxxx
Title: Vice President
00
XXXXXXX X
XXXXX Xxxx Xxxxxx Securities Fund
Certificate of the Secretary
I, Xxxxxx X. Xxxxxx, hereby certify that I am the Secretary of
RREEF Securities Trust, a business trust organized under the laws of the State
of Delaware (the "Company"), and as such I am duly authorized to, and do hereby,
certify that:
1. Organizational Documents. The Company's organizational
documents, and all amendments thereto, have been filed with the appropriate
governmental officials of the State of Delaware, the Company continues to be in
existence and is in good standing, and no action has been taken to repeal such
organizational documents, the same being in full force and effect on the date
hereof.
2. Bylaws. The Company's Bylaws have been duly adopted and no
action has been taken to repeal such Bylaws, the same being in full force and
effect.
3. Resolutions. Resolutions have been duly adopted on behalf
of the Company, which resolutions (i) have not in any way been revoked or
rescinded, (ii) have been in full force and effect since their adoption, to and
including the date hereof, and are now in full force and effect, and (iii) are
the only corporate proceedings of the Company now in force relating to or
affecting the matters referred to therein, including, without limitation,
confirming that the Company is duly authorized to enter into a certain custody
agreement with Deutsche Bank Trust Company Americas (the "Agreement"), and that
certain designated officers, including those identified in paragraph 4 of this
Certificate, are authorized to execute said Agreement on behalf of the Company,
in conformity with the requirements of the Company's organizational documents,
Bylaws, and other pertinent documents to which the Company may be bound.
4. Incumbency. The following named individuals are duly
elected (or appointed), qualified, and acting officers of the Company holding
those offices set forth opposite their respective names as of the date hereof,
each having full authority, acting individually, to bind the Company, as a legal
matter, with respect to all matters pertaining to the Agreement, and to execute
and deliver said Agreement on behalf of the Company, and the signatures set
forth opposite the respective names and titles of said officers are their true,
authentic signatures:
Name Title Signature
---- ----- ---------
Xxxxxxx Xxxxxx President /s/ Xxxxxxx Xxxxxx
Xxxxxx X. Xxxxxx Secretary /s/ Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxx Assistant Secretary /s/ Xxxxx Xxxxxxxxx
IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day
of September, 2002.
31
By: /s/ Xxxxxx X. Xxxxxx
------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary
I, Xxxxx X. Xxxxxxxxx, Assistant Secretary of the Company,
hereby certify that on this 3rd day of September, 2002, Xxxxxx X. Xxxxxx is the
duly elected Secretary of the Company and that the signature above is his
genuine signature.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Assistant Secretary
32
EXHIBIT F
CASH MANAGEMENT ADDENDUM (this "Addendum") to the CUSTODIAN
AGREEMENT (the "Agreement") between DEUTSCHE BANK TRUST COMPANY AMERICAS (the
"Custodian") and XXXXXXX RREEF SECURITIES TRUST (the "Customer").
WHEREAS, the Custodian will provide cash management services
to the Customer, and the Custodian and the Customer desire to confirm their
understanding with respect to such services;
NOW, THEREFORE, the Custodian and the Customer agree as
follows:
1. Until the Custodian receives Instructions to the contrary,
the Custodian will (a) hold with Subcustodians, in deposit accounts maintained
for the benefit of the Custodian's clients, all Cash received for the Account,
(b) credit such interest, if any, on Cash in the Account as the Custodian shall
from time to time determine and (c) receive compensation out of any amounts paid
by Subcustodians in respect of Cash in the Account.
2. The Custodian may (on an overnight or other short-term
basis) move certain, or all, currencies of Cash in the Account from any
Subcustodian and place it, as deposits or otherwise, with one or more other
Subcustodians (including branches and affiliates of the Custodian). The
Custodian will notify the Customer of any placement procedures it implements and
will move Cash in accordance with such procedures until it notifies the Customer
otherwise or receives Instructions to the contrary. The Custodian may credit
interest and receive compensation as described in 1 above with respect to any
Cash moved. If any Cash is held in an investment fund managed by Deutsche Bank
Trust Company Americas, it will notify the fund (as opposed to the Customer) as
provided herein with respect to such Cash.
3. The Customer acknowledges that it has received and reviewed
the current policies of the Custodian regarding cash management services, which
are attached to this Addendum.
4. Capitalized terms used but not defined in this Addendum are
used with the respective meanings assigned to them in the Agreement.
IN WITNESS WHEREOF, this Addendum has been executed as of the
date of the Agreement.
DEUTSCHE BANK TRUST COMPANY
AMERICAS
By: /s/ Xxx Xxxx
--------------------------
XXXXXXX RREEF SECURITIES TRUST
By: /s/ Xxxxxxx Xxxxxx
--------------------------
33
Global Custody Cash Management Program
In the Global Custody cash management program, currencies on
which Deutsche Bank Trust Company Americas pays interest are divided into two
categories: (1) currencies on which we pay interest based on a market benchmark
rate for overnight deposits, and (2) currencies on which we pay interest based
on a rate paid by the London branch of Deutsche Bank AG or the local
subcustodian.
Currencies on which we pay interest based on a market
benchmark rate for overnight deposits (which we call "Benchmark Rate
Currencies"):
o For each of these currencies, the interest rate we pay is
based on a specific market benchmark (such as Effective Fed
Funds) and is calculated by taking an average of the benchmark
rate and subtracting a spread. (See Schedule A)
o Currently, the only Benchmark Rate Currency is the U.S.
Dollar. Over time we will be considering additional currencies
to include in this category.
o Operationally, most balances in U.S. Dollars are swept
overnight into deposits at the Nassau branch of Deutsche Bank
Trust Company Americas. Where you have selected a short-term
investment fund, your U.S. Dollar balances in the U.S. will be
swept overnight in accordance with your instructions.
Currencies on which we pay interest based on a rate paid by
the London branch of Deutsche Bank AG or the local subcustodian (which we call
"Base Rate Currencies"):
o For each of these currencies, the interest rate we pay is
based on the rate paid by the London branch of Deutsche Bank
AG or the local subcustodian on overnight deposits in the
currency. In either case, interest is calculated by using the
overnight rate (which will be the actual overnight, a weekly
average, monthly average rate, depending on the month and
currency) and subtracting a spread. (See Schedule A)
o Currencies that are part of the sweep program will earn
interest based on the base rate, which will be the higher of
the rate offered by the London branch of Deutsche Bank AG or
the local subcustodian.
o Currencies that are not part of the sweep program will
generally earn interest based on the rate paid by the local
subcustodian. We may at times be able to sweep certain
currency balances into deposits of Deutsche Bank AG's London
branch in order to be able to earn a higher rate for you. On
those days, any such currency will be treated as part of the
sweep program, and you will earn interest on all of your
balances in that currency at the higher rate for that day.
34
o Currently, there are 30 Base Rate Currencies, 10 of which are
included in our sweep program to the London branch of Deutsche
Bank AG.
o Operationally, most balances in Base Rate Currencies that are
part of our sweep program are swept overnight into deposits at
the London branch of Deutsche Bank AG, while balances in Base
Rate Currencies that are not part of our sweep program remain
with the local subcustodian.
For each currency on which we pay interest:
o We will notify you periodically in writing of changes in
spreads and updates to the cash management program. These
program updates also will be available through Global Custody
Flash Notices.
o For markets where we maintain one or more omnibus cash
accounts, you earn interest at the calculated rate on your
entire contractual balance without any action on your part and
without any minimum balance requirements. This is the case
regardless of whether we are able to invest your balances at
or near the applicable benchmark or base rate and regardless
of whether your contractual balance may exceed your actual
balance.
o For markets where we maintain one or more omnibus cash
accounts, the minimum rate paid is 0.50%, except for the
Japanese Yen (for which the minimum rate of 0.05% has been
suspended for the time being due to market conditions) and the
Singapore Dollar (for which the minimum rate is 0.25%). Please
note that this is also subject to change as appropriate for
any currency. Notwithstanding the foregoing, in no event will
interest be negative.
o For the currencies of "client specific markets," those markets
where for regulatory or other reasons we do not maintain
omnibus accounts for client cash, on which we pay credit
interest (which at this time are the Hungarian Forint, Israeli
Shekel, Polish Zloty, Korean Won and Taiwanese Dollar), we
will no longer be taking a spread for providing interest on
cash balances. The credit interest you earn on overnight
balances will be based on actual balances, as opposed to
contractual balances, and the minimum credit interest rate
will no longer be applied.
o You will have continuous access through Globe*View, BTWorld,
or Globe*Link or other agreed electronic on-line system to the
interest rate earned during the previous "rate averaging
period". Because we may use weekly or monthly average rates to
calculate the interest you earn, we do not know the actual
interest rate until the weekly or monthly period is completed.
35
o Our program generally requires that overnight balances in each
currency remain with (or are swept to) a subcustodian we
designate for that currency. Nevertheless, we pay our stated
rate of interest on any balances that, because of transactions
in your account, are held overnight with an alternate
subcustodian if we receive interest on that currency from that
subcustodian. If the alternate subcustodian does not pay
interest, however, these balances are excluded from our
program.
o For swept currencies, from time to time we may not be able to
sweep the full amount of your balances to the London branch of
Deutsche Bank AG because of operational constraints or because
your balance on a contractual basis temporarily exceeds your
actual balance. You will, however, always receive credit for
interest based on your entire contractual balance. To the
extent you would have earned a lower rate on balances not
swept, we will make up the difference. To the extent that
actual balances are higher than contractually posted balances
due to purchase fails or otherwise, we will retain the
interest earned as compensation.
o The effective rate we pay on overnight balances will generally
differ from the effective rate we receive (whether from the
London branch of Deutsche Bank AG or the local subcustodian).
Any difference between the effective rate we receive and the
effective rate we pay (which may be positive or negative, but
is generally positive) is kept by us and covers our fee for
running the cash management program and the related costs we
absorb.
Obviously, there will be currencies on which we will not pay
interest because of local regulations, insufficient scale, or other reasons.
However, we hope to identify additional currencies where we can begin paying
interest and we will announce those to you as soon as practical.
Currently most cash balances in our overnight sweep program
are swept into deposits at the London branch of Deutsche Bank AG. We reserve the
right to utilize other branches or affiliates for the overnight sweep program.
In the event of such change, we will notify you in writing, which may be through
Global Custody Flash Notice.
As you know, overdrafts are not permitted in the normal course
of business in any currency. Should they occur in any currency, your account
will be charged a fee to settle transactions in advance of receipt of funds. If
the overdraft is not promptly cured (and in any event upon the expiration of 30
days) after the investment manager has been notified of the outstanding
overdraft, the account's home currency will be used to cure the overdraft and
the associated foreign exchange will be done by Deutsche Bank Trust Company
Americas at market rates. (Other currencies may be utilized to the extent the
home currency is insufficient.) Investment managers that have not cured
overdrafts within such period will be deemed to have directed such foreign
exchange transaction. Accounts subject to ERISA will be deemed to have engaged
in the transaction under the authority of the class exemptions available to
qualified professional asset managers and in-house investment managers. To the
extent that the overdraft is less than the U.S. dollar equivalent of $50,000,
Deutsche Bank Trust Company Americas's foreign exchange desk will bundle the
transaction with other small amounts for other clients.
36
---------------------------- -------------------------------------------- --------------------------------------------
JURISDICTION NAME OF SUBCUSTODIAN NAME OF DEPOSITORY
---------------------------- -------------------------------------------- --------------------------------------------
Argentina Deutsche Bank S.A., Argentina (1) Caja de Valores, S.A.
(2) Central de Registracion y
Liquidacion de Instrumentos de
Endeudamiento Publico
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Australia National Australia Bank Limited, Melbourne (1) Austraclear Limited
(2) The Clearing House Electronic
Sub-Register System
(3) The Reserve Bank Information and
Transfer System
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Austria Bank Austria Creditanstalt AG, Vienna Wertpapiersarmmelbank bei der
Oesterreichische Kontrollbank AG
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Bangladesh Standard Chartered Bank, Dhaka None
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Belgium Fortis Bank, Brussels (1) Caisse Interprofessionnelle de Depots
et de Virements de Titres S.A.
(2) Banque Nationale de Belgique
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Botswana Barclays Bank of Botswana Limited, Gaborone None
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Brazil Citibank, N.A., Sao Paolo (1) Companhia Brasileira de Liquidacao e
Custodia
(2) Sistema Especial de Liquidacao e
Custodia
(3) CETIP
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Canada The Royal Bank of Canada, Toronto The Canadian Depository for Securities
Limited
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Chile Citibank, N.A., Santiago Deposito Central de Valores S.A.
---------------------------- -------------------------------------------- --------------------------------------------
People's Republic of Deutsche Bank AG, Hong Kong The Shanghai Securities Central Clearing
China-Shanghai and Registration Corporation
---------------------------- -------------------------------------------- --------------------------------------------
People's Republic of Deutsche Bank AG, Hong Kong The Shenzhen Securities Central Clearing
China-Shenzhen Co., Ltd
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Colombia Cititrust Colombia, S.A., Bogota (1) Deposito Central de Valores
(2) Deposito Centralizado de Valores de
Colombia
---------------------------- -------------------------------------------- --------------------------------------------
37
---------------------------- -------------------------------------------- --------------------------------------------
Czech Republic Ceskoslovenska Obchodni Banka, A.S., Prague (1) Stredisko Cennych Papiru
(2) The Czech National Bank
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Denmark Danske Bank, Copenhagen Vaerdipapircentralen - The Danish
Securities Center
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Ecuador Citibank, N.A., Quito Deposito Centralizado de Valores S.A.
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Egypt The National Bank of Egypt, Cairo The Misr Company for Clearing, Settlement
and Central Depository
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Finland Nordea Bank Finland Plc, Helsinki The Finnish Central Securities Depository
Ltd.
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
France BNP Paribas Securities Services, Paris EUROCLEAR FRANCE
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Germany Deutsche Bank AG, Frankfurt Clearstream Banking AG
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Ghana Barclays Bank of Ghana Limited, Accra None
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Greece The National Bank of Greece S.A., Athens (1) The Central Securities Depository
(C.S.D.)
(2) Bank of Greece
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Xxxx Xxxx Xxxxxxxx Xxxx XX, Xxxx Xxxx (1) Central Clearing and Settlement System
(2) The Central Money Markets Unit
---------------------------- -------------------------------------------- --------------------------------------------
38
---------------------------- -------------------------------------------- --------------------------------------------
Hungary Citibank, Budapest Rt., Budapest KELER - The Central Depository and
Clearing House (Budapest) Ltd.
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
India Deutsche Bank AG, Mumbai (1) The National Securities
Depository Limited
(2) Central Depository Services
(India) Limited
(3) Reserve Bank of India
---------------------------- -------------------------------------------- --------------------------------------------
Indonesia Deutsche Bank AG, Jakarta (1) Bank Indonesia
(2) PT Kustodian Sentral Efek
Indonesia/PT KSEI
---------------------------- -------------------------------------------- --------------------------------------------
Ireland Bank of Ireland Securities Services, Dublin (1) The Central Bank of Ireland
Securities Settlements Office
(2) CRESTCo Limited
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Israel Bank Leumi Le-Israel B.M., Tel Aviv The Clearing House of The Tel Aviv Stock
Exchange
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Italy IntesaBci S.p.A., Milan Monte Titoli, S.p.A.
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Japan The Sumitomo Mitsui Banking Corporation, (1) The Japan Securities Depository Center
Ltd., Tokyo (2) The Bank of Japan
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Jordan Arab Bank, PLC, Amman Jordan Securities Depository Center
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Kenya Barclays Bank of Kenya Limited, Nairobi The Central Bank of Kenya
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Luxembourg Assets are held with Clearstream Clearstream International
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Malaysia United Overseas Bank (Malaysia) Bhd, Kuala (1) Malaysian Central Depository Sdn. Bhd.
Lumpur (2) Bank Negara Malaysia
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Malta Bank of Valletta PLC Malta Stock Exchange - Central Securities
Depository (C.S.D.)
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Mauritius The Hongkong and Shanghai Banking (1) Central Depository and Settlement
Corporation Limited, Port Louis Co. Ltd.
(2) Bank of Mauritius
---------------------------- -------------------------------------------- --------------------------------------------
39
---------------------------- -------------------------------------------- --------------------------------------------
Mexico Bancomer, S.A., Institucion de Banca S.D. Indeval, S.A., de C.V.
Multiple, Grupo Financiero, Mexico City
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Morocco Banque Marocaine du Commerce Exterieur, MAROCLEAR
Casablanca
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Netherlands Deutsche Bank AG, Amsterdam Nederlands Centraal Instituut voor Giraal
Effectenverkeer B.V.
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
New Zealand National Nominees Limited, Auckland New Zealand Central Securities Depository
Limited
---------------------------- -------------------------------------------- --------------------------------------------
Norway Den Norske Bank ASA, Oslo Verdipapirsentralen - The Norwegian
Central Securities Depository (VPS)
---------------------------- -------------------------------------------- --------------------------------------------
Pakistan Deutsche Bank AG, Karachi (1) The Central Depository Company of
Pakistan Limited
(2) State Bank of Pakistan
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Peru Citibank, N.A., Lima Caja de Valores de Lima, CSD
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Philippines Deutsche Bank AG, Manila (1) The Philippines Central Depository
Inc.
(2) The Registry of Scripless Securities
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Poland Bank Handlowy w Warszawie S.A.., Warsaw (1) The National Depository of Securities
(2) Central Register for Treasury Bills
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Portugal Banco Espirito Santo, Lisbon Central de Valores Mobiliarios e Sistema
de Liquidacao e Compensacao
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Russia Credit Suisse First Boston AO, Moscow (1) Bank for Foreign Trade of the
Russian Federation
(2) Depository Clearing Company
(3) National Depository Center
---------------------------- -------------------------------------------- --------------------------------------------
40
---------------------------- -------------------------------------------- --------------------------------------------
Singapore United Overseas Bank, Singapore (1) The Central Depository (Pte)
Limited
(2) Monetary Authority of Singapore
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Slovak Republic Ceskoslovenska Obchodni Banka, A.S., (1) Stredisko Cennych Papierov
Bratislava (2) The National Bank of Slovakia
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
South Africa ABSA, Johannesburg (1) The Central Depository (Pty) Ltd.
(2) Share Transaction Totally
Electronic
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
South Korea Deutsche Bank AG, Seoul The Korean Securities Depository
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Spain Deutsche Bank SAE, Barcelona (1) Servico de Compensacion y Liquidacion
de Valores, S.A.
(2) Banco de Espana
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Sri Lanka Deutsche Bank AG, Colombo The Central Depository System (Pvt) Limited
---------------------------- -------------------------------------------- --------------------------------------------
Sweden Svenska Handelsbanken AB, Stockholm Vardepapperscentralen (PC) Swedish Central
Securities Depository and Clearing
Organization
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Switzerland Credit Suisse First Boston, Zurich SIS SEGAINTERSETTLE AG
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Taiwan Deutsche Bank AG, Taipei The Taiwan Securities Central Depository
Company, Ltd.
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Thailand Deutsche Bank AG, Bangkok (1) The Thailand Securities
Depository Company Limited
(2) Bank of Thailand
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Tunisia Banque Internationale Arabe de Tunisie, STICODEVAM
Tunis
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Turkey Garanti Bank (1) Takasbank - ISE Settlement and Custody
Bank Inc.
(2) The Central Bank of Turkey
---------------------------- -------------------------------------------- --------------------------------------------
41
---------------------------- -------------------------------------------- --------------------------------------------
United Kingdom Deutsche Bank AG, London (1) The Central Moneymarkets Office
(2) CRESTCo Limited
(3) Bank One-Depository and Clearing
Center
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Venezuela Citibank, N.A., Caracas (1) The Caja Venezolana de Valores
S.A.C.A.
(2) Banco Central de Venezuela
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Zambia Barclays Bank of Zambia Limited, Lusaka (1) The XxXX Central Share Depository
Limited
(2) The Bank of Zambia
---------------------------- -------------------------------------------- --------------------------------------------
---------------------------- -------------------------------------------- --------------------------------------------
Zimbabwe Barclays Bank of Zimbabwe Limited, Harare None
---------------------------- -------------------------------------------- --------------------------------------------
42
