FOREIGN CUSTODY MANAGER AGREEMENT
AGREEMENT made as of September 29, 2000, between Xxxxxxx Xxxxxxx Funds,
on behalf of The International Equity Fund, The EAFE Fund and The Emerging
Markets Fund (each a "Fund") and The Bank of New York ("BNY").
W I T N E S S E T H:
WHEREAS, each Fund desires to appoint BNY as a Foreign Custody Manager
on the terms and conditions contained herein;
WHEREAS, BNY desires to serve as a Foreign Custody Manager and perform
the duties set forth herein on the terms and condition contained herein;
NOW THEREFORE, in consideration of the mutual promises hereinafter
contained in this Agreement, each Fund and BNY hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1. "BOARD" shall mean the board of directors or board of trustees,
as the case may be, of the Funds.
2. "ELIGIBLE FOREIGN CUSTODIAN" shall have the meaning provided in
the Rule.
3. "MONITORING SYSTEM" shall mean a system established by BNY to
fulfill the Responsibilities specified in clauses 1(d) and 1(e) of Article
III of this Agreement.
4. "RESPONSIBILITIES" shall mean the responsibilities delegated to
BNY under the Rule as a Foreign Custody Manager with respect to each
Specified Country and each Eligible Foreign Custodian selected by BNY, as
such responsibilities are more fully described in Article III of this
Agreement.
5. "RULE" shall mean Rule 17f-5 under the Investment Company Act of
1940, as amended on June 12, 2000.
6. "SPECIFIED COUNTRY" shall mean each country listed on Schedule I
attached hereto and each country, other than the United States, constituting
the primary market for a security with respect to which the Fund has given
settlement instructions to
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Xxx Xxxx xx Xxx Xxxx as custodian (the "Custodian") under its Custody
Agreement with the Fund.
ARTICLE II.
BNY AS A FOREIGN CUSTODY MANAGER
1. Each Fund on behalf of the Board hereby delegates to BNY with
respect to each Specified Country the Responsibilities.
2. BNY accepts the Board's delegation of Responsibilities with
respect to each Specified Country and agrees in performing the
Responsibilities as a Foreign Custody Manager to exercise reasonable care,
prudence and diligence such as a person having responsibility for the
safekeeping of each Fund's assets would exercise.
3. BNY shall provide to the Board at such times as the Board deems
reasonable and appropriate based on the circumstances of each Fund's foreign
custody arrangements written reports notifying the Board of the placement of
assets of the Fund with a particular Eligible Foreign Custodian within a
Specified Country and of any material change in the arrangements (including
the contract governing such arrangements) with respect to assets of each Fund
with any such Eligible Foreign Custodian.
ARTICLE III.
RESPONSIBILITIES
1. Subject to the provisions of this Agreement, BNY shall with
respect to each Specified Country select an Eligible Foreign Custodian. In
connection therewith, BNY shall: (a) determine that assets of each Fund held
by such Eligible Foreign Custodian will be subject to reasonable care, based
on the standards applicable to custodians in the relevant market in which
such Eligible Foreign Custodian operates, after considering all factors
relevant to the safekeeping of such assets, including, without limitation,
those contained in paragraph (c)(1) of the Rule; (b) determine that each
Fund's foreign custody arrangements with each Eligible Foreign Custodian are
governed by a written contract with the Custodian which will provide
reasonable care for the Fund's assets based on the standards specified in
paragraph (c)(1) of the Rule; (c) determine that each contract with an
Eligible Foreign Custodian shall include the provisions specified in
paragraph (c)(2)(i)(A) through (F) of the Rule or, alternatively, in lieu of
any or all of such (c)(2)(i)(A) through (F) provisions, such other provisions
as BNY determines will provide, in their entirety, the same or a greater
level of care and protection for the assets of each Fund as such specified
provisions; (d) monitor pursuant to the Monitoring System the appropriateness
of maintaining the assets of each Fund with a particular Eligible Foreign
Custodian pursuant to paragraph (c)(1) of the Rule and the performance of the
contract governing such arrangement; and (e) advise the relevant Fund
whenever BNY determines under the Monitoring System that an arrangement
(including, any material
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change in the contract governing such arrangement) described in preceding
clause (d) no longer meets the requirements of the Rule.
2. For purposes of clause (d) of preceding Section 1 of this
Article, BNY's determination of appropriateness shall not include, nor be
deemed to include, any evaluation of Country Risks associated with investment
in a particular country. For purposes hereof, "Country Risks" shall mean
systemic risks of holding assets in a particular country including but not
limited to (a) an Eligible Foreign Custodian's use of any depositories that
act as or operate a system or a transnational system for the central handling
of securities or any equivalent book-entries; (b) such country's financial
infrastructure; (c) such country's prevailing custody and settlement
practices; (d) nationalization, expropriation or other governmental actions;
(e) regulation of the banking or securities industry; (f) currency controls,
restrictions, devaluations or fluctuations; and (g) market conditions which
affect the orderly execution of securities transactions or affect the value
of securities.
ARTICLE IV.
REPRESENTATIONS
1. Each Fund hereby represents that: (a) this Agreement has been
duly authorized, executed and delivered by such Fund, constitutes a valid and
legally binding obligation of the Fund enforceable in accordance with its
terms, and no statute, regulation, rule, order, judgment or contract binding
on such Fund prohibits such Fund's execution or performance of this
Agreement; (b) this Agreement has been approved and ratified by the Board at
a meeting duly called and at which a quorum was at all times present; and (c)
the Board or its investment advisor has considered the Country Risks
associated with investment in each Specified Country and will have considered
such risks prior to any settlement instructions being given to the Custodian
with respect to any other Specified Country.
2. BNY hereby represents that: (a) BNY is duly organized and
existing under the laws of the State of New York, with full power to carry on
its businesses as now conducted, and to enter into this Agreement and to
perform its obligations hereunder; (b) this Agreement has been duly
authorized, executed and delivered by BNY, constitutes a valid and legally
binding obligation of BNY enforceable in accordance with its terms, and no
statute, regulation, rule, order, judgment or contract binding on BNY
prohibits BNY's execution or performance of this Agreement; and (c) BNY has
established the Monitoring System.
ARTICLE V.
CONCERNING BNY
1. BNY shall not be liable for any costs, expenses, damages,
liabilities or claims, including attorneys' and accountants' fees, sustained
or incurred by, or asserted
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against, each Fund except to the extent the same arises out of the
failure of BNY to exercise the care, prudence and diligence required by
Section 2 of Article II hereof. In no event shall BNY be liable to the Funds,
the Board, or any third party for special, indirect or consequential damages,
or for lost profits or loss of business, arising in connection with this
Agreement.
2. Each Fund shall indemnify BNY and hold it harmless from and
against any and all costs, expenses, damages, liabilities or claims,
including attorneys' and accountants' fees, sustained or incurred by, or
asserted against, BNY by reason or as a result of any action or inaction, or
arising out of BNY's performance hereunder, provided that no Fund shall
indemnify BNY to the extent any such costs, expenses, damages, liabilities or
claims arises out of BNY's failure to exercise the reasonable care, prudence
and diligence required by Section 2 of Article II hereof.
3. For its services hereunder, each Fund agrees to pay to BNY
such compensation and out-of-pocket expenses as shall be mutually agreed.
4. BNY shall have only such duties as are expressly set forth
herein. In no event shall BNY be liable for any Country Risks associated with
investments in a particular country.
ARTICLE VI.
MISCELLANEOUS
1. This Agreement constitutes the entire agreement between each
Fund and BNY, and no provision in the Custody Agreement between each such
Fund and the Custodian shall affect the duties and obligations of BNY
hereunder, nor shall any provision in this Agreement affect the duties or
obligations of the Custodian under the Custody Agreement.
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to BNY, shall be sufficiently given if
received by it at its offices at 000 Xxxxxx Xxxxxx, 00xx Xxxxx,, Xxx Xxxx,
Xxx Xxxx 00000, or at such other place as BNY may from time to time designate
in writing.
3. Any notice or other instrument in writing, authorized or required
by this Agreement to be given to a Fund shall be sufficiently given if
received by it at its offices at 0 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx [ZIP]
or at such other place as a Fund may from time to time designate in writing.
4. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected thereby. This Agreement may not be amended or modified in any
manner except by a written
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agreement executed by both parties. This Agreement shall extend to and shall
be binding upon the parties hereto, and their respective successors and
assigns; provided however, that this Agreement shall not be assignable by
either party without the written consent of the other.
5. This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to conflicts of
laws principles thereof. The Fund and BNY hereby consent to the jurisdiction
of a state or federal court situated in New York City, New York in connection
with any dispute arising hereunder. The Fund hereby irrevocably waives, to
the fullest extent permitted by applicable law, any objection which it may
now or hereafter have to the laying of venue of any such proceeding brought
in such a court and any claim that such proceeding brought in such a court
has been brought in an inconvenient forum. The Funds and BNY each hereby
irrevocably waive any and all rights to trial by jury in any legal proceeding
arising out of or relating to this Agreement.
6. The parties hereto agree that in performing hereunder, BNY is
acting solely on behalf of the Funds and no contractual or service
relationship shall be deemed to be established hereby between BNY and any
other person.
7. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
8. This Agreement shall terminate simultaneously with the
termination of the Custody Agreement between the Funds and the Custodian, and
may otherwise be terminated by either party giving to the other party a
notice in writing specifying the date of such termination, which shall be not
less than thirty (30) days after the date of such notice.
9. A copy of the Agreement and Declaration of Trust establishing the
Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trust by officers of the Trust as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the Trustees, officers or shareholders of any Fund individually
but are binding only upon the assets and property belonging to the Funds.
IN WITNESS WHEREOF, the Xxxxxxx Xxxxxxx Funds, on behalf of each Fund, and BNY
have caused this Agreement to be executed by their respective officers,
thereunto duly authorized, as of the date first above written.
XXXXXXX XXXXXXX FUNDS, INC.
By: /s/ Xxxxx Xxxxxxx
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R. Xxxxx Xxxxxxx
President
Tax Identification No.:
THE BANK OF NEW YORK
By: /S/ XXXXXX X. XXXXXX
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Title: Vice President
SCHEDULE 1
Specified Countries
