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Exhibit 99.8(a)
CUSTODY AGREEMENT
AGREEMENT, dated as of June __, 1998 by and between PUGET SOUND
ALTERNATIVE INVESTMENT SERIES TRUST (the "Trust"), a business trust organized
and existing under the laws of The Commonwealth of Massachusetts, acting with
respect to and on behalf of Puget Sound Market Neutral Portfolio and each of the
other series of the Trust that are identified on Exhibit A hereto, as amended
from time to time (each, a "Portfolio"), and CUSTODIAL TRUST COMPANY, a bank
organized and existing under the laws of the State of New Jersey (the
"Custodian").
WHEREAS, the Trust desires that the securities, funds and other assets
of the Portfolios be held and administered by Custodian pursuant to this
Agreement;
WHEREAS, each Portfolio is an investment portfolio represented by a
series of Shares included among the shares of beneficial interest issued by the
Trust, an open-end management investment company registered under the 1940 Act;
WHEREAS, Custodian represents that it is a bank having the
qualifications prescribed in the 1940 Act to act as custodian for management
investment companies registered under the 1940 Act;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Trust and Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following terms, unless the
context otherwise requires, shall mean:
1.1 "AUTHORIZED PERSON" means any person authorized by resolution of
the Board of Trustees to give Oral Instructions and Written Instructions on
behalf of the Trust and identified, by
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name or by office, in Exhibit B hereto, as amended from time to time, or any
person from Puget Sound Asset Management Co., LLC or a sub-adviser of any
Portfolio who is authorized by the Trust to do so and identified in Exhibit C
hereto, as amended from time to time.
1.2 "BOARD OF TRUSTEES" means the Board of Trustees of the Trust or,
when permitted under the 1940 Act, the Executive Committee thereof, if any.
1.3 "BOOK-ENTRY SYSTEM" means a book-entry system maintained by a
Federal Reserve Bank for securities of the United States government or of
agencies or instrumentalities thereof (including government-sponsored
enterprises).
1.4 "BUSINESS DAY" means any day on which banks in the State of New
Jersey and New York are open for business.
1.5 "CUSTODY ACCOUNT" means, with respect to a Portfolio, the account
in the name of such Portfolio, which is provided for in Section 3.2 below.
1.6 "DOMESTIC SECURITIES DEPOSITORY" means The Depository Trust Company
and any other clearing agency registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, which acts as a securities
depository.
1.7 "ELIGIBLE DOMESTIC BANK" means a bank as defined in the 1940 Act.
1.8 "ELIGIBLE FOREIGN CUSTODIAN" means any banking institution, trust
company or other entity (including any Foreign Securities Depository) organized
under the laws of a country other than the United States which is eligible under
the 1940 Act to act as a custodian for securities and other assets of a
Portfolio held outside the United States.
1.9 "FOREIGN CUSTODY MANAGER" has the same meaning as in the 1940 Act.
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1.10 "FOREIGN SECURITIES DEPOSITORY" means a foreign securities
depository or clearing agency that qualifies as an Eligible Foreign Custodian as
defined in the 1940 Act.
1.11 "MASTER REPURCHASE AGREEMENT" means the Master Repurchase
Agreement of even date herewith between the Trust and Bear, Xxxxxxx & Co. Inc.
as it may from time to time be amended.
1.12 "MASTER SECURITIES LOAN AGREEMENT" means the Master Securities
Loan Agreement of even date herewith between the Trust and Bear, Xxxxxxx
Securities Corp. as it may from time to time be amended.
1.13 "1940 ACT" means the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
1.14 "ORAL INSTRUCTIONS" means instructions orally transmitted to and
received by Custodian which are (a) reasonably believed by Custodian to have
been given by an Authorized Person and (b) completed in accordance with
Custodian's reasonable requirements from time to time as to content of
instructions and their manner and timeliness of delivery by the Trust.
1.15 "PROPER INSTRUCTIONS" means Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written Instructions when
deemed appropriate by the Trust and Custodian.
1.16 "SECURITIES DEPOSITORY" means any Domestic Securities Depository
or Foreign Securities Depository.
1.17 "SHARES" means, with respect to a Portfolio, those shares in a
series or class of beneficial interests of the Trust that represent interests in
such Portfolio.
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1.18 "WRITTEN INSTRUCTIONS" means written communications received by
Custodian that are (a) reasonably believed by Custodian to have been signed or
sent by an Authorized Person, (b) sent or transmitted by letter, facsimile,
central processing unit connection, on-line terminal or magnetic tape, and (c)
completed in accordance with Custodian's reasonable requirements from time to
time as to content of instructions and their manner and timeliness of delivery
by the Trust.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 APPOINTMENT. The Trust hereby appoints Custodian as custodian of
all such securities, funds and other assets of each Portfolio as may be
acceptable to Custodian and from time to time delivered to it by the Trust or
others for the account of such Portfolio.
2.2 ACCEPTANCE. Custodian hereby accepts appointment as such custodian
and agrees to perform the duties thereof as hereinafter set forth.
ARTICLE III
CUSTODY OF SECURITIES, FUNDS AND OTHER ASSETS
3.1 SEGREGATION. All securities and non-cash property of a Portfolio in
the possession of Custodian (other than securities maintained by Custodian with
a sub-custodian appointed pursuant to this Agreement or in a Securities
Depository or Book-Entry System) shall be physically segregated from other such
securities and non-cash property in the possession of Custodian. All cash,
securities and other non-cash property of a Portfolio shall be identified as
belonging to such Portfolio.
3.2 CUSTODY ACCOUNT. (a) Custodian shall open and maintain in its trust
department a custody account in the name of each Portfolio, subject only to
draft or order of Custodian, in which Custodian shall enter and carry all
securities, funds and other assets of such Portfolio which are delivered to
Custodian and accepted by it.
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(b) If, with respect to any Portfolio, Custodian at any time fails to
receive any of the documents referred to in Section 3.10(a) below, then, until
such time as it receives such document, it shall not be obligated to receive any
securities into the Custody Account of such Portfolio and shall be entitled to
return to such Portfolio any securities that it is holding in such Custody
Account.
3.3 SECURITIES IN PHYSICAL FORM. Custodian may, but shall not be
obligated to, hold securities that may be held only in physical form.
3.4 DISCLOSURE TO ISSUERS OF SECURITIES. Custodian is authorized to
disclose the Trust's and any Portfolio's names and addresses, and the securities
positions in such Portfolio's Custody Account, to the issuers of such securities
when requested by them to do so.
3.5 EMPLOYMENT OF DOMESTIC SUB-CUSTODIANS. At any time and from time to
time, Custodian in its discretion may appoint and employ, and may also cease to
employ, any Eligible Domestic Bank as sub-custodian to hold securities and other
assets of a Portfolio that are maintained in the United States and to carry out
such other provisions of this Agreement as it may determine, provided, however,
that the employment of any such sub-custodian has been approved by the Trust.
The employment of any such sub-custodian shall be at Custodian's expense and
shall not relieve Custodian of any of its obligations or liabilities under this
Agreement.
3.6 EMPLOYMENT OF FOREIGN SUB-CUSTODIANS. (a) At any time and from time
to time, Custodian in its discretion may appoint and employ in accordance with
the 1940 Act, and may also cease to employ, (i) any overseas branch of any
Eligible Domestic Bank, or (ii) any Eligible Foreign Custodian selected by the
Foreign Custody Manager, in each case as a foreign sub-custodian for securities
and other assets of a Portfolio that are maintained outside the United States,
provided, however, that the employment of any such overseas branch has been
approved by the Trust and, provided further that, in the case of any such
Eligible Foreign Custodian, the Foreign Custody Manager has approved, in
writing, the agreement (and/or, in the case of a Foreign Securities Depository,
the rules and/or established practices and procedures thereof) pursuant to which
Custodian employs such Eligible Foreign Custodian.
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(b) Set forth on Exhibit D hereto, with respect to each Portfolio, are
the foreign sub-custodians (including Foreign Securities Depositories) that
Custodian may employ pursuant to Section 3.6(a) above. Exhibit D shall be
revised from time to time as foreign sub-custodians are added or deleted.
(c) If the Trust proposes to have a Portfolio make an investment which
is to be held in a country in which Custodian does not have appropriate
arrangements in place with a foreign sub-custodian selected by the Foreign
Custody Manager, then the Trust shall inform Custodian sufficiently in advance
of such investment to allow Custodian to make such arrangements.
(d) Notwithstanding anything to the contrary in Section 8.1 below,
Custodian shall have no greater liability to any Portfolio or the Trust for the
actions or omissions of any foreign sub-custodian appointed pursuant to this
Agreement than any such foreign sub-custodian has to Custodian, and Custodian
shall not be required to discharge any such liability which may be imposed on it
unless and until such foreign sub-custodian has effectively indemnified
Custodian against it or has otherwise discharged its liability to Custodian in
full.
(e) Upon the request of the Foreign Custody Manager, Custodian shall
furnish to the Foreign Custody Manager (but no more often than once per year)
information concerning all foreign sub-custodians employed pursuant to this
Agreement which shall be similar in kind and scope to any such information that
may have been furnished to the Foreign Custody Manager in connection with the
initial approval by the Foreign Custody Manager of the agreements pursuant to
which Custodian employs such foreign sub-custodians or as otherwise required by
the 1940 Act.
3.7 EMPLOYMENT OF OTHER AGENTS. Custodian may employ other suitable
agents, which may include affiliates of Custodian such as Bear, Xxxxxxx & Co.
Inc. ("Bear Xxxxxxx") or Bear, Xxxxxxx Securities Corp.("BS Securities"), both
of which are securities broker-dealers, provided, however, that Custodian shall
not employ (a) BS Securities to hold any collateral pledged by BS Securities
under the Master Securities Loan Agreement or any other securities loan
agreement between the Trust and BS Securities, whether now or hereafter in
effect, (b) Bear Xxxxxxx to hold any securities
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purchased from Bear Xxxxxxx under the Master Repurchase Agreement or any other
repurchase agreement between the Trust and Bear Xxxxxxx, whether now or
hereafter in effect or (c) any agent that, to the best of Custodian's knowledge,
would subject a Portfolio to any special audits or other requirements pursuant
to Rule 17f-1 under the 1940 Act. The appointment of any agent pursuant to this
Section 3.7 shall not relieve Custodian of any of its obligations or liabilities
under this Agreement.
3.8 BANK ACCOUNTS. In its discretion and from time to time Custodian
may open and maintain one or more demand deposit accounts with any Eligible
Domestic Bank (any such accounts to be in the name of Custodian and subject only
to its draft or order), provided, however, that the opening and maintenance of
any such account shall be at Custodian's expense and shall not relieve Custodian
of any of its obligations or liabilities under this Agreement.
3.9 DELIVERY OF ASSETS TO CUSTODIAN. Provided they are acceptable to
Custodian, the Trust shall deliver to Custodian the securities, funds and other
assets of each Portfolio, including (a) payments of income, payments of
principal and capital distributions received by such Portfolio with respect to
securities, funds or other assets owned by such Portfolio at any time during the
term of this Agreement, and (b) funds received by such Portfolio for the
issuance, at any time during such term, of Shares of such Portfolio. Custodian
shall not be under any duty or obligation to require the Trust to deliver to it
any securities or other assets owned by a Portfolio and shall have no
responsibility or liability for or on account of securities or other assets not
so delivered.
3.10 DOMESTIC SECURITIES DEPOSITORIES AND BOOK-ENTRY SYSTEMS. Custodian
and any sub-custodian appointed pursuant to Section 3.5 above may deposit and/or
maintain securities of any Portfolio in a Domestic Securities Depository or in a
Book-Entry System, subject to the following provisions:
(a) Prior to a deposit of securities of a Portfolio in any Domestic
Securities Depository or Book-Entry System, the Trust shall deliver to Custodian
a resolution of the Board of Trustees, certified by an officer of the Trust,
authorizing and instructing Custodian (and any sub-custodian
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appointed pursuant to Section 3.5 above) on an on-going basis to deposit in such
Domestic Securities Depository or Book-Entry System all securities eligible for
deposit therein and to make use of such Domestic Securities Depository or
Book-Entry System to the extent possible and practical in connection with the
performance of its obligations hereunder (or under the applicable sub-custody
agreement in the case of such sub-custodian), including, without limitation, in
connection with settlements of purchases and sales of securities, loans of
securities, and deliveries and returns of collateral consisting of securities.
(b) Securities of a Portfolio kept in a Book-Entry System or Domestic
Securities Depository shall be kept in an account ("Depository Account") of
Custodian (or of any sub-custodian appointed pursuant to Section 3.5 above) in
such Book-Entry System or Domestic Securities Depository which includes only
assets held by Custodian (or such sub-custodian) as a fiduciary, custodian or
otherwise for customers.
(c) The records of Custodian with respect to securities of a Portfolio
that are maintained in a Book-Entry System or Domestic Securities Depository
shall at all times identify such securities as belonging to such Portfolio.
(d) If securities purchased by a Portfolio are to be held in a
Book-Entry System or Domestic Securities Depository, Custodian (or any
sub-custodian appointed pursuant to Section 3.5 above) shall pay for such
securities upon (i) receipt of advice from the Book-Entry System or Domestic
Securities Depository that such securities have been transferred to the
Depository Account, and (ii) the making of an entry on the records of Custodian
(or of such sub-custodian) to reflect such payment and transfer for the account
of such Portfolio. If securities sold by a Portfolio are held in a Book-Entry
System or Domestic Securities Depository, Custodian (or such sub-custodian)
shall transfer such securities upon (A) receipt of advice from the Book-Entry
System or Domestic Securities Depository that payment for such securities has
been transferred to the Depository Account, and (B) the making of an entry on
the records of Custodian (or of such sub-custodian) to reflect such transfer and
payment for the account of such Portfolio.
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(e) Custodian shall provide the Trust with copies of any report
obtained by Custodian (or by any sub-custodian appointed pursuant to Section 3.5
above) from a Book-Entry System or Domestic Securities Depository in which
securities of a Portfolio are kept on the internal accounting controls and
procedures for safeguarding securities deposited in such Book-Entry System or
Domestic Securities Depository.
(f) At its election, the Trust shall be subrogated to the rights of
Custodian (or of any sub-custodian appointed pursuant to Section 3.5 above) with
respect to any claim against a Book-Entry System or Domestic Securities
Depository or any other person for any loss or damage to a Portfolio arising
from the use of such Book-Entry System or Domestic Securities Depository, if and
to the extent that such Portfolio has not been made whole for any such loss or
damage.
3.11 RELATIONSHIP WITH SECURITIES DEPOSITORIES. No Book-Entry System,
Securities Depository, or other securities depository or clearing agency
(whether foreign or domestic) which it is or may become standard market practice
to use for the comparison and settlement of trades in securities shall be an
agent or sub-contractor of Custodian for purposes of Section 3.7 above or
otherwise.
3.12 PAYMENTS FROM CUSTODY ACCOUNT. Upon receipt of Proper Instructions
with respect to a Portfolio but subject to its right to foreclose upon and
liquidate collateral pledged to it pursuant to Section 9.3 below, Custodian
shall make payments from the Custody Account of such Portfolio, but only in the
following cases, provided, first, that such payments are in connection with the
clearance and/or custody of securities or other assets, second, that there are
sufficient funds in such Custody Account, whether belonging to such Portfolio or
advanced to it by Custodian in its sole and absolute discretion as set forth in
Section 3.18 below, for Custodian to make such payments, and, third, that after
the making of such payments, such Portfolio would not be in violation of any
margin or other requirements agreed upon pursuant to Section 3.18 below:
(a) For the purchase of securities for such Portfolio but only (i) in
the case of securities (other than options on securities, futures contracts and
options on futures contracts), against the delivery
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to Custodian (or any sub-custodian appointed pursuant to this Agreement) of such
securities registered as provided in Section 3.20 below or in proper form for
transfer or, if the purchase of such securities is effected through a Book-Entry
System or Domestic Securities Depository, in accordance with the conditions set
forth in Section 3.10 above, and (ii) in the case of options, futures contracts
and options on futures contracts, against delivery to Custodian (or such
sub-custodian) of evidence of title thereto in favor of such Portfolio, the
Custodian, any such sub-custodian, or any nominee referred to in Section 3.20
below;
(b) In connection with the conversion, exchange or surrender, as set
forth in Section 3.13(f) below, of securities owned by such Portfolio;
(c) For transfer in accordance with the provisions of any agreement
among the Trust, Custodian and a securities broker-dealer, relating to
compliance with rules of The Options Clearing Corporation and of any registered
national securities exchange (or of any similar organization or organizations)
regarding escrow or other arrangements in connection with transactions of such
Portfolio;
(d) For transfer in accordance with the provisions of any agreement
among the Trust, Custodian and a futures commission merchant, relating to
compliance with the rules of the Commodity Futures Trading Commission and/or any
contract market (or any similar organization or organizations) regarding margin
or other deposits in connection with transactions of such Portfolio;
(e) For the funding of any time deposit (whether certificated or not)
or other interest-bearing account with any banking institution (including
Custodian), provided that Custodian shall receive and retain such certificate,
advice, receipt or other evidence of deposit (if any) as such banking
institution may deliver with respect to any such deposit or account;
(f) For the purchase from a banking or other financial institution of
loan participations, but only if Custodian has in its possession a copy of the
agreement between the Trust and such banking
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or other financial institution with respect to the purchase of such loan
participations and provided that Custodian shall receive and retain such
participation certificate or other evidence of participation (if any) as such
banking or other financial institution may deliver with respect to any such loan
participation;
(g) For the purchase and/or sale of foreign currencies or of options to
purchase and/or sell foreign currencies, for spot or future delivery, for the
account of such Portfolio pursuant to contracts between the Trust and any
banking or other financial institution (including Custodian, any sub-custodian
appointed pursuant to this Agreement and any affiliate of Custodian);
(h) For transfer to a securities broker-dealer as margin for a short
sale of securities for such Portfolio, or as payment in lieu of dividends paid
on securities sold short for such Portfolio;
(i) For the payment of amounts in respect of equity swap contracts
entered into by such Portfolio;
(j) For the payment as provided in Article IV below of any dividends,
capital gain distributions or other distributions declared on the Shares of such
Portfolio;
(k) For the payment as provided in Article IV below of the redemption
price of the Shares of such Portfolio;
(l) For the payment of any expense or liability incurred by such
Portfolio, including but not limited to the following payments for the account
of such Portfolio: interest, taxes, and administration, investment advisory,
distribution, servicing, accounting, auditing, transfer agent, custodian,
trustee and legal fees, and other operating expenses of such Portfolio; in all
cases, whether or not such expenses are to be in whole or in part capitalized or
treated as deferred expenses; and
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(m) For any other proper purpose, but only upon receipt of Proper
Instructions, specifying the amount and purpose of such payment, certifying such
purpose to be a proper purpose of such Portfolio, and naming the person or
persons to whom such payment is to be made.
3.13 DELIVERIES FROM CUSTODY ACCOUNT. Upon receipt of Proper
Instructions with respect to a Portfolio but subject to its right to foreclose
upon and liquidate collateral pledged to it pursuant to Section 9.3 below,
Custodian shall release and deliver securities and other assets from the Custody
Account of such Portfolio, but only in the following cases, provided, first,
that such deliveries are in connection with the clearance and/or custody of
securities or other assets, second, there are sufficient amounts and types of
securities or other assets in such Custody Account for Custodian to make such
deliveries, and, third, that after the making of such deliveries, such Portfolio
would not be in violation of any margin or other requirements agreed upon
pursuant to Section 3.18 below:
(a) Upon the sale of securities for the account of such Portfolio but,
subject to Section 3.14 below, only against receipt of payment therefor or, if
such sale is effected through a Book-Entry System or Domestic Securities
Depository, in accordance with the provisions of Section 3.10 above;
(b) To an offeror's depository agent in connection with tender or other
similar offers for securities of such Portfolio; provided that, in any such
case, the funds or other consideration for such securities is to be delivered to
Custodian;
(c) To the issuer thereof or its agent when such securities are called,
redeemed or otherwise become payable, provided that in any such case the funds
or other consideration for such securities is to be delivered to Custodian;
(d) To the issuer thereof or its agent for exchange for a different
number of certificates or other evidence representing the same aggregate face
amount or number of units; provided that, in any such case, the new securities
are to be delivered to Custodian;
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(e) To the securities broker through whom securities are being sold for
such Portfolio, for examination in accordance with the "street delivery" custom;
(f) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the issuer of
such securities, or pursuant to provisions for conversion contained in such
securities, or pursuant to any deposit agreement, including surrender or receipt
of underlying securities in connection with the issuance or cancellation of
depository receipts; provided that, in any such case, the new securities and
funds, if any, are to be delivered to Custodian;
(g) In the case of warrants, rights or similar securities, to the
issuer of such warrants, rights or similar securities, or its agent, upon the
exercise thereof, provided that, in any such case, the new securities and funds,
if any, are to be delivered to Custodian;
(h) To the borrower thereof, or its agent, in connection with any loans
of securities for such Portfolio pursuant to any securities loan agreement
entered into by the Trust, but only against receipt by Custodian of such
collateral as is required under such securities loan agreement;
(i) To any lender, or its agent, as collateral for any borrowings from
such lender by such Portfolio that require a pledge of assets of such Portfolio,
but only against receipt by Custodian of the amounts borrowed;
(j) Pursuant to any authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of such Portfolio or the Trust;
(k) For delivery in accordance with the provisions of any agreement
among the Trust, Custodian and a securities broker-dealer, relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in connection with
transactions of such Portfolio;
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(l) For delivery in accordance with the provisions of any agreement
among the Trust, Custodian, and a futures commission merchant, relating to
compliance with the rules of the Commodity Futures Trading Commission and/or any
contract market (or any similar organization or organizations) regarding margin
or other deposits in connection with transactions of such Portfolio;
(m) For delivery to a securities broker-dealer as margin for a short
sale of securities for such Portfolio;
(n) To the issuer of American Depositary Receipts or International
Depositary Receipts (hereinafter, collectively, "ADRs") for such securities, or
its agent, against a written receipt therefor adequately describing such
securities, provided that such securities are delivered together with
instructions to issue ADRs in the name of Custodian or its nominee and to
deliver such ADRs to Custodian;
(o) In the case of ADRs, to the issuer thereof, or its agent, against a
written receipt therefor adequately describing such ADRs, provided that such
ADRs are delivered together with instructions to deliver the securities
underlying such ADRs to Custodian or an agent of Custodian; or
(p) For any other proper purpose, but only upon receipt of Proper
Instructions, specifying the securities or other assets to be delivered, setting
forth the purpose for which such delivery is to be made, certifying such purpose
to be a proper purpose of such Portfolio, and naming the person or persons to
whom delivery of such securities or other assets is to be made.
3.14 DELIVERY PRIOR TO FINAL PAYMENT. When instructed by the Trust to
deliver securities of a Portfolio against payment, Custodian shall be entitled,
but only if in accordance with generally accepted market practice, to deliver
such securities prior to actual receipt of final payment therefor and,
exclusively in the case of securities in physical form, prior to receipt of
payment therefor. In any such case, such Portfolio shall bear the risk that
final payment for such securities may not be
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made or that such securities may be returned or otherwise held or disposed of by
or through the person to whom they were delivered, and Custodian shall have no
liability for any of the foregoing.
3.15 CREDIT PRIOR TO FINAL PAYMENT. In its sole discretion and from
time to time, Custodian may credit the Custody Account of a Portfolio, prior to
actual receipt of final payment thereof, with (a) proceeds from the sale of
securities of such Portfolio which it has been instructed to deliver against
payment, (b) proceeds from the redemption of securities or other assets in such
Custody Account, and (c) income from securities, funds or other assets in such
Custody Account. Any such credit shall be conditional upon actual receipt by
Custodian of final payment and may be reversed if final payment is not actually
received in full. Custodian may, in its sole discretion and from time to time,
permit a Portfolio to use funds so credited to its Custody Account in
anticipation of actual receipt of final payment. Any funds so used shall
constitute an advance subject to Section 3.18 below.
3.16 DEFINITION OF FINAL PAYMENT. For purposes of this Agreement,
"final payment" means payment in funds which are (or have become) immediately
available, under applicable law are irreversible, and are not subject to any
security interest, xxxx, xxxx or other encumbrance.
3.17 PAYMENTS AND DELIVERIES OUTSIDE THE UNITED STATES. Notwithstanding
anything to the contrary that may be required by Section 3.12 or Section 3.13
above, or elsewhere in this Agreement, in the case of securities and other
assets maintained outside the United States and in the case of payments made
outside the United States, Custodian and any sub-custodian appointed pursuant to
this Agreement may receive and deliver such securities or other assets, and may
make such payments, in accordance with the laws, regulations, customs,
procedures and practices applicable in the relevant local market outside the
United States.
3.18 CLEARING CREDIT. Custodian may, in its sole discretion and from
time to time, advance funds to the Trust to facilitate the settlement of a
Portfolio's transactions in the Custody Account of such Portfolio. Any such
advance (a) shall be repayable immediately upon demand made by
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Custodian, (b) shall be fully secured as provided in Section 9.3 below, and (c)
shall bear interest at such rate, and be subject to such other terms and
conditions, as Custodian and the Trust may agree.
3.19 ACTIONS NOT REQUIRING PROPER INSTRUCTIONS. Unless otherwise
instructed by the Trust, Custodian shall with respect to all securities and
other assets held for a Portfolio:
(a) Subject to Section 8.4 below, receive into the Custody Account of
such Portfolio any funds or other property, including payments of principal,
interest and dividends, due and payable on or on account of such securities and
other assets;
(b) Deliver securities of such Portfolio to the issuers of such
securities or their agents for the transfer thereof into the name of such
Portfolio, Custodian or any of the nominees referred to in Section 3.20 below;
(c) Endorse for collection, in the name of such Portfolio, checks,
drafts and other negotiable instruments;
(d) Surrender interim receipts or securities in temporary form for
securities in definitive form;
(e) Execute, as custodian, any necessary declarations or certificates
of ownership under the federal income tax laws of the United States, or the laws
or regulations of any other taxing authority, in connection with the transfer of
such securities or other assets or the receipt of income or other payments with
respect thereto;
(f) Receive and hold for such Portfolio all rights and similar
securities issued with respect to securities or other assets of such Portfolio;
(g) As may be required in the execution of Proper Instructions,
transfer funds from the Custody Account of such Portfolio to any demand deposit
account maintained by Custodian pursuant to Section 3.8 above; and
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(h) In general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase and transfer of, and other
dealings in, such securities and other assets.
3.20 REGISTRATION AND TRANSFER OF SECURITIES. All securities held for a
Portfolio that are issuable only in bearer form shall be held by Custodian in
that form, provided that any such securities shall be held in a Securities
Depository or Book-Entry System if eligible therefor. All other securities and
all other assets held for a Portfolio may be registered in the name of (a)
Custodian as agent, (b) any sub-custodian appointed pursuant to this Agreement,
(c) any Securities Depository, or (d) any nominee or agent of any of them. The
Trust shall furnish to Custodian appropriate instruments to enable Custodian to
hold or deliver in proper form for transfer, or to register as in this Section
3.20 provided, any securities or other assets delivered to Custodian which are
registered in the name of a Portfolio.
3.21 RECORDS. (a) Custodian shall maintain complete and accurate
records with respect to securities, funds and other assets held for a Portfolio,
including (i) journals or other records of original entry containing an itemized
daily record in detail of all receipts and deliveries of securities and all
receipts and disbursements of funds; (ii) ledgers (or other records) reflecting
(A) securities in transfer, if any, (B) securities in physical possession, (C)
monies and securities borrowed and monies and securities loaned (together with a
record of the collateral therefor and substitutions of such collateral), (D)
dividends and interest received, and (E) dividends receivable and interest
accrued; and (iii) cancelled checks and bank records related thereto. Custodian
shall keep such other books and records with respect to securities, funds and
other assets of a Portfolio which are held hereunder as the Trust may reasonably
request.
(b) All such books and records maintained by Custodian for a Portfolio
shall (i) be maintained in a form acceptable to the Trust and in compliance with
the rules and regulations of the Securities and Exchange Commission, (ii) be the
property of such Portfolio and at all times during the regular business hours of
Custodian be made available upon request for inspection by duly authorized
officers, employees or agents of the Trust (including, without limitation,
independent
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auditors of the Trust) and employees or agents of the Securities and Exchange
Commission, and (iii) if required to be maintained under the 1940 Act, be
preserved for the periods prescribed therein.
3.22 ACCOUNT REPORTS BY CUSTODIAN. Custodian shall furnish the Trust
with a daily activity statement, including a summary of all transfers to or from
the Custody Account of each Portfolio (in the case of securities and other
assets maintained in the United States, on the day following such transfers). At
least monthly and from time to time, Custodian shall furnish the Trust with a
detailed statement of the securities, funds and other assets held for each
Portfolio under this Agreement.
3.23 OTHER REPORTS BY CUSTODIAN. Custodian shall provide the Trust with
such reports as the Trust may reasonably request from time to time on the
internal accounting controls and procedures for safeguarding securities which
are employed by Custodian or any sub-custodian appointed pursuant to this
Agreement.
3.24 PROXIES AND OTHER MATERIALS. (a) Unless otherwise instructed by
the Trust, Custodian shall promptly deliver to the Trust all notices of
meetings, proxy materials (other than proxies) and other announcements, which it
receives regarding securities held by it in the Custody Account of a Portfolio.
Whenever Custodian or any of its agents receives a proxy with respect to
securities in the Custody Account of a Portfolio, Custodian shall promptly
request instructions from the Trust on how such securities are to be voted, and
shall give such proxy, or cause it to be given, in accordance with such
instructions. If the Trust timely informs Custodian that the Trust wishes to
vote any such securities in person, Custodian shall promptly seek to have a
legal proxy covering such securities issued to the Trust. Unless otherwise
instructed by the Trust, neither Custodian nor any of its agents shall exercise
any voting rights with respect to securities held hereunder.
(b) Unless otherwise instructed by the Trust, Custodian shall promptly
transmit to the Trust all other written information received by Custodian from
issuers of securities held in the Custody Account of any Portfolio. With respect
to tender or exchange offers for such securities or with respect to other
corporate transactions involving such securities, Custodian shall promptly
transmit to the Trust all written information received by Custodian from the
issuers of such securities or from
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any party (or its agents) making any such tender or exchange offer or
participating in such other corporate transaction. If the Trust, with respect to
such tender or exchange offer or other corporate transaction, desires to take
any action that may be taken by it pursuant to the terms of such offer or other
transaction, the Trust shall notify Custodian (i) in the case of securities
maintained outside the United States, such number of Business Days prior to the
date on which Custodian is to take such action as will allow Custodian to take
such action in the relevant local market for such securities in a timely
fashion, and (ii) in the case of all other securities, at least three Business
Days prior to the date on which Custodian is to take such action.
3.25 CO-OPERATION. Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Trust to keep or audit
the books of account of a Portfolio, to record the owners of the Portfolios'
Shares and/or to compute the value of the assets of a Portfolio.
ARTICLE IV
REDEMPTION OF PORTFOLIO SHARES;
DIVIDENDS AND OTHER DISTRIBUTIONS
4.1 TRANSFER OF FUNDS. From such funds as may be available for the
purpose in the Custody Account of a Portfolio, and upon receipt of Proper
Instructions specifying that the funds are required to redeem Shares of such
Portfolio or to pay dividends or other distributions to holders of Shares of
such Portfolio, Custodian shall transfer each amount specified in such Proper
Instructions to such account of such Portfolio or of an agent thereof (other
than Custodian), at such bank, as the Trust may designate therein with respect
to such amount.
4.2 SOLE DUTY OF CUSTODIAN. Custodian's sole obligation with respect to
the redemption of Shares of a Portfolio and the payment of dividends and other
distributions thereon shall be its obligation set forth in Section 4.1 above,
and Custodian shall not be required to make any payments to the various holders
from time to time of Shares of a Portfolio nor shall Custodian be responsible
for the payment or distribution by the Trust, or any agent designated in Proper
Instructions given pursuant to Section 4.1 above, of any amount paid by
Custodian to the account of the Trust or such agent in accordance with such
Proper Instructions.
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ARTICLE V
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions to do so, Custodian shall establish
and maintain a segregated account or accounts for and on behalf of any
Portfolio, into which account or accounts may be transferred funds and/or
securities, including securities maintained in a Securities Depository:
(a) in accordance with the provisions of any agreement among the Trust,
Custodian and a securities broker-dealer (or any futures commission merchant),
relating to compliance with the rules of The Options Clearing Corporation or of
any registered national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions of such Portfolio,
(b) for purposes of segregating funds or securities in connection with
securities options purchased or written by such Portfolio or in connection with
financial futures contracts (or options thereon) purchased or sold by such
Portfolio,
(c) which constitute collateral for loans of securities made by such
Portfolio,
(d) for purposes of compliance by such Portfolio with requirements
under the 1940 Act for the maintenance of segregated accounts by registered
management investment companies in connection with reverse repurchase
agreements, when-issued, delayed delivery and firm commitment transactions, and
short sales of securities, and
(e) for other proper purposes, but only upon receipt of Proper
Instructions, specifying the purpose or purposes of such segregated account and
certifying such purposes to be proper purposes of such Portfolio.
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ARTICLE VI
CERTAIN REPURCHASE TRANSACTIONS
6.1 TRANSACTIONS. If and to the extent that the necessary funds and
securities of a Portfolio have been entrusted to it under this Agreement, and
subject to Custodian's right to foreclose upon and liquidate collateral pledged
to it pursuant to Section 9.3 below, Custodian, as agent of such Portfolio,
shall from time to time (and unless the Trust gives it Proper Instructions to do
otherwise) make from the Custody Account of such Portfolio the transfers of
funds and deliveries of securities which such Portfolio is required to make
pursuant to the Master Repurchase Agreement and shall receive for the Custody
Account of such Portfolio the transfers of funds and deliveries of securities
which the seller under the Master Repurchase Agreement is required to make
pursuant thereto. Custodian shall make and receive all such transfers and
deliveries pursuant to, and subject to the terms and conditions of, the Master
Repurchase Agreement.
6.2 COLLATERAL. Custodian shall daily xxxx to market the securities
purchased under the Master Repurchase Agreement and held in the Custody Account
of a Portfolio, and shall give to the seller thereunder any such notice as may
be required thereby in connection with such xxxx-to-market.
6.3 EVENTS OF DEFAULT. Custodian shall promptly notify the Trust of any
event of default under the Master Repurchase Agreement (as such term "event of
default" is defined therein) of which it has actual knowledge.
6.4 MASTER REPURCHASE AGREEMENT. Custodian hereby acknowledges its
receipt from the Trust of a copy of the Master Repurchase Agreement. The Trust
shall provide Custodian, prior to the effectiveness thereof, with a copy of any
amendment to the Master Repurchase Agreement.
ARTICLE VII
CERTAIN SECURITIES LENDING TRANSACTIONS
7.1 TRANSACTIONS. If and to the extent that the necessary funds and
securities of a Portfolio have been entrusted to it under this Agreement, and
subject to Custodian's right to foreclose upon and liquidate collateral pledged
to it pursuant to Section 9.3 below, Custodian, as agent of such
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Portfolio, shall from time to time (and unless the Trust gives it Proper
Instructions to do otherwise) make from the Custody Account of such Portfolio
the transfers of funds and deliveries of securities which such Portfolio is
required to make pursuant to the Master Securities Loan Agreement and shall
receive for the Custody Account of such Portfolio the transfers of funds and
deliveries of securities which the borrower under the Master Securities Loan
Agreement is required to make pursuant thereto. Custodian shall make and receive
all such transfers and deliveries pursuant to, and subject to the terms and
conditions of, the Master Securities Loan Agreement.
7.2 COLLATERAL. Custodian shall daily xxxx to market, in the manner
provided for in the Master Securities Loan Agreement, all loans of securities
which may from time to time be outstanding thereunder.
7.3 DEFAULTS. Custodian shall promptly notify the Trust of any default
under the Master Securities Loan Agreement (as such term "default" is defined
therein) of which it has actual knowledge.
7.4 MASTER SECURITIES LOAN AGREEMENT. Custodian hereby acknowledges its
receipt from the Trust of a copy of the Master Securities Loan Agreement. The
Trust shall provide Custodian, prior to the effectiveness thereof, with a copy
of any amendment to the Master Securities Loan Agreement.
ARTICLE VIII
CONCERNING THE CUSTODIAN
8.1 STANDARD OF CARE. Custodian shall be held to the exercise of
reasonable care in carrying out its obligations under this Agreement, and shall
be without liability to any Portfolio or the Trust for any loss, damage, cost,
expense (including attorneys' fees and disbursements), liability or claim which
does not arise from willful misfeasance, bad faith or negligence on the part of
Custodian. In no event shall Custodian be liable for special, incidental or
consequential damages, even if Custodian
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has been advised of the possibility of such damages, or be liable in any manner
whatsoever for any action taken or omitted upon instructions from an Authorized
Person of the Trust or any authorized agent of the Trust in conformity with such
instructions.
8.2 ACTUAL COLLECTION REQUIRED. So long as and to the extent that it is
in the exercise of reasonable care, Custodian shall not be liable for, or
considered to be the custodian of, any funds belonging to a Portfolio or any
money represented by a check, draft or other instrument for the payment of
money, until Custodian or its agents actually receive such funds or collect on
such instrument.
8.3 NO RESPONSIBILITY FOR TITLE, ETC. So long as and to the extent that
it is in the exercise of reasonable care, Custodian shall not be responsible for
the title, validity or genuineness of any assets or evidence of title thereto
received or delivered by it or its agents.
8.4 LIMITATION ON DUTY TO COLLECT. Custodian shall promptly notify the
Trust whenever any money or property due and payable from or on account of any
securities or other assets held hereunder for a Portfolio is not timely received
by it. Custodian shall not, however, be required to enforce collection, by legal
means or otherwise, of any such money or other property not paid when due, but
will use commercially reasonable efforts to obtain such money or property and
shall receive the proceeds of such collections as may be effected by it or its
agents in the ordinary course of Custodian's custody and safekeeping business or
of the custody and safekeeping business of such agents.
8.5 EXPRESS DUTIES ONLY. Custodian shall have no duties or obligations
whatsoever except such duties and obligations as are specifically set forth in
this Agreement, and no covenant or obligation shall be implied in this Agreement
against Custodian. Custodian shall have no discretion whatsoever with respect to
the management, disposition or investment of the Custody Account of any
Portfolio and is not a fiduciary to any Portfolio or the Trust. In particular,
Custodian shall not be under any obligation at any time to monitor or to take
any other action with respect to compliance by any Portfolio or the Trust with
the 1940 Act, the provisions of the Trust's trust instruments or
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by-laws, or any Portfolio's investment objectives, policies and limitations as
in effect from time to time.
ARTICLE IX
INDEMNIFICATION
9.1 INDEMNIFICATION. Each Portfolio shall indemnify and hold harmless
Custodian, any sub-custodian appointed pursuant to this Agreement and any
nominee of any of them, from and against any loss, damages, cost, expense
(including reasonable attorneys' fees and disbursements), liability (including,
without limitation, liability arising under the Securities Act of 1933, the
Securities Exchange Act of 1934, the 1940 Act, and any federal, state or foreign
securities and/or banking laws) or claim arising directly or indirectly (a) from
the fact that securities or other assets in the Custody Account of such
Portfolio are registered in the name of any such nominee, or (b) from any action
or inaction, with respect to such Portfolio, by Custodian or such sub-custodian
or nominee (i) at the request or direction of or in reliance on the advice of an
Authorized Person of the Trust or any of its authorized agents, or (ii) upon
Proper Instructions, or (c) generally, from the performance of its obligations
under this Agreement with respect to such Portfolio, provided that Custodian,
any such sub-custodian or any nominee of any of them shall not be indemnified
and held harmless from and against any such loss, damage, cost, expense,
liability or claim arising from willful misfeasance, bad faith or negligence on
the part of Custodian or any such sub-custodian or nominee.
9.2 INDEMNITY TO BE PROVIDED. If the Trust requests Custodian to take
any action with respect to securities or other assets of a Portfolio, which may,
in the opinion of Custodian, result in Custodian or its nominee becoming liable
for the payment of money or incurring liability of some other form, Custodian
shall not be required to take such action until such Portfolio shall have
provided indemnity therefor to Custodian in an amount and form satisfactory to
Custodian.
9.3 SECURITY. As security for the payment of any present or future
obligation or liability of a Portfolio arising under Section 3.18 or Section 9.1
or Section 9.2 hereof to Custodian (but not to any affiliate of Custodian or any
other person), the Trust hereby pledges to Custodian all securities, funds and
other assets of every kind which are in such Custody Account or otherwise held
for such
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Portfolio pursuant to this Agreement in an amount not to exceed the total amount
advanced under Section 3.18 and the total amount due and owing under Section 9.1
and 9.2 as agreed between the parties or finally determined in a court of
competent jurisdiction and hereby grants to Custodian a lien, right of set-off
and continuing security interest in such securities, funds and other assets.
ARTICLE X
FORCE MAJEURE
Custodian shall not be liable for any failure or delay in performance
of its obligations under this Agreement arising out of or caused, directly or
indirectly, by circumstances beyond its reasonable control.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES
11.1 REPRESENTATIONS WITH RESPECT TO PORTFOLIOS. The Trust represents
and warrants that (a) it has all necessary power and authority to perform the
obligations hereunder of each Portfolio, (b) the execution and delivery by it of
this Agreement, and the performance by it of the obligations hereunder of each
Portfolio, have been duly authorized by all necessary action and will not
violate any law, regulation, trust instrument, by-law, or other instrument,
restriction or provision applicable to it or such Portfolio or by which it or
such Portfolio, or their respective assets, may be bound, and (c) this Agreement
constitutes a legal, valid and binding obligation of the Trust, enforceable
against the Trust in accordance with its terms.
11.2 REPRESENTATIONS OF CUSTODIAN. Custodian represents and warrants
that (a) it has all necessary power and authority to perform its obligations
hereunder, (b) the execution and delivery by it of this Agreement, and the
performance by it of its obligations hereunder, have been duly authorized by all
necessary action and will not violate any law, regulation, charter, by-law, or
other instrument, restriction or provision applicable to it or by which it or
its assets may be bound, and (c) this Agreement constitutes a legal, valid and
binding obligation of it, enforceable against it in accordance with its terms.
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ARTICLE XII
COMPENSATION OF CUSTODIAN
Each Portfolio shall pay Custodian such fees and charges as are set
forth in Exhibit E hereto, as such Exhibit E may from time to time be revised by
mutual consent of the parties. Any annual fee or other charges payable by a
Portfolio shall be paid monthly by automatic deduction from funds available
therefor in the Custody Account of such Portfolio, or, if there are no such
funds, upon presentation of an invoice therefor. Out-of-pocket expenses incurred
by Custodian in the performance of its services hereunder for any Portfolio and
all other proper charges and disbursements of the Custody Account of such
Portfolio shall be charged to such Custody Account by Custodian and paid in the
same manner as the annual fee and other charges referred to in this Article XII.
ARTICLE XIII
TAXES
13.1 TAXES PAYABLE BY PORTFOLIOS. Any and all taxes, including any
interest and penalties with respect thereto, which may be levied or assessed
under present or future laws in respect of the Custody Account of any Portfolio
or any income thereof shall be charged to such Custody Account by Custodian and
paid in the same manner as the annual fee and other charges referred to in
Article XII above.
13.2 TAX RECLAIMS. Custodian shall exercise, on behalf of any
Portfolio, any tax reclaim rights of such Portfolio which arise in connection
with foreign securities in the Custody Account of such Portfolio.
ARTICLE XIV
AUTHORIZED PERSONS; NOTICES
14.1 AUTHORIZED PERSONS. Custodian may rely upon and act in accordance
with any notice, confirmation, instruction or other communication which is
reasonably believed by Custodian to have been given or signed on behalf of the
Trust by one of the Authorized Persons designated by the Trust in Exhibit B
hereto, as it may from time to time be revised. The Trust may revise Exhibit B
hereto
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at any time by notice in writing to Custodian given in accordance with Section
14.4 below, but no revision of Exhibit B hereto shall be effective until
Custodian actually receives such notice.
14.2 INVESTMENT ADVISER AND SUB-ADVISERS. Custodian may also rely upon
and act in accordance with any Written or Oral Instructions given with respect
to a Portfolio which are reasonably believed by Custodian to have been given or
signed by one of the persons from Puget Sound Asset Management Co., LLC or any
of the sub-advisers of such Portfolio who are designated from time to time by
the Trust and specified in Exhibit C hereto (if any) as it may from time to time
be revised. The Trust may revise Exhibit C hereto at any time by notice in
writing to Custodian given in accordance with Section 14.4 below, but no
revision of Exhibit C hereto (if any) shall be effective until Custodian
actually receives such notice.
14.3 ORAL INSTRUCTIONS. Custodian may rely upon and act in accordance
with Oral Instructions. All Oral Instructions shall be confirmed to Custodian in
Written Instructions. However, if Written Instructions confirming Oral
Instructions are not received by Custodian prior to a transaction, it shall in
no way affect the validity of the transaction authorized by such Oral
Instructions or the authorization given by an Authorized Person to effect such
transaction. Custodian shall incur no liability to any Portfolio or the Trust in
acting upon Oral Instructions. To the extent such Oral Instructions vary from
any confirming Written Instructions, Custodian shall advise the Trust of such
variance but unless confirming Written Instructions are timely received, such
Oral Instructions shall govern.
14.4 ADDRESSES FOR NOTICES. Unless otherwise specified herein, all
demands, notices, instructions, and other communications to be given hereunder
shall be sent, delivered or given to the recipient at the address, or the
relevant telephone number, set forth after its name hereinbelow:
If to the Trust:
PUGET SOUND ALTERNATIVE INVESTMENT SERIES TRUST
for [INSERT NAME OF PORTFOLIO]
Xxx Xxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
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Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Custodian:
CUSTODIAL TRUST COMPANY
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Vice President - Trust Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as either party hereto shall have provided to the other
by notice given in accordance with this Section 14.4. Writing shall include
transmissions by or through teletype, facsimile, central processing unit
connection, on-line terminal and magnetic tape.
14.5 REMOTE CLEARANCE. Written Instructions for the receipt, delivery
or transfer of securities may include, and Custodian shall accept, Remote
Clearance Instructions (as defined hereinbelow) and Bulk Input Instructions (as
defined hereinbelow), provided that such Instructions are given in accordance
with the procedures prescribed by Custodian from time to time as to content of
instructions and their manner and timeliness of delivery by Trust. Custodian
shall be entitled to conclusively assume that all Remote Clearance Instructions
and Bulk Input Instructions have been given by an Authorized Person, and
Custodian is hereby irrevocably authorized to act in accordance therewith. For
purposes of this Agreement, "Remote Clearance Instructions" means instructions
that are input directly via a remote terminal which is located on the premises
of the Trust, or Puget Sound Asset Management Co., LLC or a sub-adviser named in
Exhibit C hereto, and linked to Custodian; and "Bulk Input Instructions" means
instructions that are input by bulk input computer tape delivered to Custodian
by messenger or transmitted to it via such transmission mechanism as the Trust
and Custodian shall from time to time agree upon.
ARTICLE XV
TERMINATION
Either party hereto may terminate this Agreement with respect to one or
more of the Portfolios by giving to the other party a notice in writing
specifying the date of such termination,
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which shall be not less than thirty (30) days after the date of the giving of
such notice. Upon the date set forth in such notice, this Agreement shall
terminate with respect to each Portfolio specified in such notice, and Custodian
shall, upon receipt of a notice of acceptance by the successor custodian, on
that date (a) deliver directly to the successor custodian or its agents all
securities (other than securities held in a Book-Entry System or Securities
Depository) and other assets then owned by such Portfolio and held by Custodian
as custodian, and (b) transfer any securities held in a Book-Entry System or
Securities Depository to an account of or for the benefit of such Portfolio,
provided that such Portfolio shall have paid to Custodian all fees, expenses and
other amounts to the payment or reimbursement of which it shall then be
entitled.
ARTICLE XVI
LIMITATION OF LIABILITIES
To the extent that the trustees of the Trust are regarded as entering
into this Agreement, they do so only as trustees of the Trust and not
individually. The obligations under this Agreement of the Trust or any Portfolio
shall not be binding upon any trustee, officer or employee of the Trust
individually, or upon any holder of Shares individually, but shall be binding
only upon the assets and property of such Portfolio. Such trustees, officers,
employees and holders, when acting in such capacities, shall not be personally
liable under this Agreement, and Custodian shall look solely to the assets and
property of each Portfolio for the performance of this Agreement with respect to
such Portfolio and the payment of any claim against such Portfolio under this
Agreement.
ARTICLE XVII
MISCELLANEOUS
17.1 BUSINESS DAYS. Nothing contained in this Agreement shall require
Custodian to perform any function or duty on a day other than a Business Day.
17.2 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof.
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17.3 REFERENCES TO CUSTODIAN. The Trust shall not circulate any printed
matter which contains any reference to Custodian without the prior written
approval of Custodian, excepting printed matter contained in the prospectus or
statement of additional information for a Portfolio and such other printed
matter as merely identifies Custodian as custodian for a Portfolio. The Trust
shall submit printed matter requiring approval to Custodian in draft form,
allowing sufficient time for review by Custodian and its counsel prior to any
deadline for printing.
17.4 NO WAIVER. No failure by either party hereto to exercise, and no
delay by such party in exercising, any right hereunder shall operate as a waiver
thereof. The exercise by either party hereto of any right hereunder shall not
preclude the exercise of any other right, and the remedies provided herein are
cumulative and not exclusive of any remedies provided at law or in equity.
17.5 AMENDMENTS. This Agreement cannot be changed orally and, except as
otherwise provided herein with respect to the Exhibits attached hereto, no
amendment to this Agreement shall be effective unless evidenced by an instrument
in writing executed by the parties hereto.
17.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each of which
shall be deemed an original but all of which together shall constitute but one
and the same instrument.
17.7 SEVERABILITY. If any provision of this Agreement shall be invalid,
illegal or unenforceable in any respect under any applicable law, the validity,
legality and enforceability of the remaining provisions shall not be affected or
impaired thereby.
17.8 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that this Agreement shall not be assignable by
either party hereto without the written consent of the other party. Any
purported assignment in violation of this Section 17.8 shall be void.
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17.9 JURISDICTION. Any suit, action or proceeding with respect to this
Agreement may be brought in the Supreme Court of the State of New York, County
of New York, in the United States District Court for the Southern District of
New York, in the Superior Court of the State of Washington or in the United
States District Court for the Western District of Washington, and the parties
hereto hereby submit to the non-exclusive jurisdiction of such courts for the
purpose of any such suit, action or proceeding, and hereby waive for such
purpose any other preferential jurisdiction by reason of their present or future
domicile or otherwise.
17.10 HEADINGS. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its representative
thereunto duly authorized, all as of the day and year first above written.
PUGET SOUND ALTERNATIVE CUSTODIAL TRUST COMPANY
INVESTMENT SERIES TRUST,
on behalf of the Portfolios identified on
Exhibit A hereto
By: _________________________ By: __________________________
Name: Name: Xxxxxx X. Xxxxxx
Title: Title: President
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EXHIBIT A
PORTFOLIOS
- Puget Sound Market Neutral Portfolio
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EXHIBIT B
AUTHORIZED PERSONS
Set forth below are the names and specimen signatures of the persons
authorized by the Trust to administer the Custody Accounts of the Portfolios.
Name Signature
____________________________ ______________________________
____________________________ ______________________________
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EXHIBIT C
INVESTMENT ADVISERS
ALL PORTFOLIOS
Puget Sound Asset Management Co., LLC
SUB-ADVISERS
ALL PORTFOLIOS
Fiduciary Asset Management Co.
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EXHIBIT D
APPROVED FOREIGN SUB-CUSTODIANS AND SECURITIES DEPOSITORIES
ALL PORTFOLIOS
Foreign Sub-custodian Country(ies) Securities Depositories
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EXHIBIT E
CUSTODY FEES AND TRANSACTION CHARGES
(PUGET SOUND MARKET NEUTRAL PORTFOLIO)
DOMESTIC FEES. Assets maintained by the Custodian in the Custody
Account of Puget Sound Market Neutral Portfolio ("the Market Neutral Portfolio")
in the United States are hereinafter referred to as "Domestic Assets". For
purposes of calculating the annual fee hereinafter provided for and charging the
transaction fees hereinafter provided for, all Domestic Assets held in the
account established pursuant to the Special Custody Account among the Trust,
Custodian and Bear Xxxxxxx, dated as of June __, 1998, shall be deemed to be
held in the Custody Account of the Market Neutral Portfolio under this Agreement
and all transactions in such Domestic Assets shall be deemed to have occurred in
such Custody Account.
The Market Neutral Portfolio shall pay Custodian the following fees for
Domestic Assets and the following charges for transactions in the United States,
all such fees and charges to be payable monthly:
(1) an annual fee equal to the greater of (i) the sum of (a) 0.02% (two
basis points) per annum of the value of the Domestic Assets held in the Market
Neutral Portfolio's Custody Account up to $300 million, plus (b) 0.01% (one
basis point) per annum of the amount by which the value of such Domestic Assets
exceeds $300 million, with each such percentage fee to be based upon the average
daily net asset value of such Domestic Assets for the month for which such fee
is charged, or (ii) $5000;
(2) a transaction charge for each repurchase transaction in such
Custody Account which represents a cash sweep investment for the Market Neutral
Portfolio's account, computed on the basis of a 360-day year and for the actual
number of days such repurchase transaction is outstanding at a rate of 0.10%
(ten basis points) per annum on the amount of the purchase price paid by the
Market Neutral Portfolio in such repurchase transaction;
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(3) a charge of $10 for each "free" transfer of funds from such Custody
Account;
(4) a charge of $5 for each check disbursement from such Custody
Account;
(5) an administrative fee for each purchase in such Custody Account of
shares or other interests in a money market or other fund, which purchase
represents a cash sweep investment for the Market Neutral Portfolio's account,
computed for each day that there is a positive balance in such fund to equal
1/365th of 0.10% (ten basis points) on the amount of such positive balance for
such day; and
(6) a service charge for each holding of securities or other assets of
the Market Neutral Portfolio that are sold by way of private placement or in
such other manner as to require services by Custodian which in its reasonable
judgment are materially in excess of those ordinarily required for the holding
of publicly traded securities in the United States.
INTERNATIONAL FEES. The Market Neutral Portfolio shall pay Custodian
fees for assets maintained by the Custodian in the Custody Account of the Market
Neutral Portfolio outside the United States ("Foreign Assets") and charges for
transactions by the Market Neutral Portfolio outside the United States
(including, without limitation, charges for funds transfers and tax reclaims) in
accordance with such schedule of fees and charges for each country in which
Foreign Assets of the Market Neutral Portfolio are held as Custodian shall from
time to time provide to the Trust. Any asset-based fee shall be based upon the
average daily net asset value of the applicable Foreign Assets for the month for
which such fee is charged.
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