CUSTODIAN AGREEMENT
This AGREEMENT is effective as of April 1,
2010, and is between STATE STREET BANK AND TRUST COMPANY ("Bank") and each of
the investment companies listed on Appendix A hereto, as such Appendix may be
amended from time to time (each a "Customer").
WHEREAS, each
Customer is or may be organized with one or more series of shares, each of which
shall represent an interest in a separate investment portfolio of cash,
securities and other assets;
WHEREAS, each
Customer desires to appoint, in accordance with the provisions of the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder, Bank as custodian on behalf of itself or those of its existing or
additional series of shares that are also listed on Appendix A hereto (each such
listed investment portfolio being referred to hereinafter as a “Portfolio”), and
Bank has agreed to act as custodian for the Portfolios under the terms and
conditions hereinafter set forth;
WHEREAS, for
administrative purposes only, each Customer wishes to evidence its individual
agreement with Bank in a single instrument, notwithstanding each Customer’s
intention to be separately bound;
NOW THEREFORE, Bank
and each Customer agree as follows:
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Appointment
of Custodian; Customer Accounts.
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Customer hereby appoints Bank as its custodian
for each Portfolio. Bank hereby accepts such
appointment. Bank, acting as “Securities Intermediary” (as defined in
Section 2 hereof) shall establish and maintain the following accounts in the
name of Customer on behalf of each Portfolio:
(a) a
Custody Account for Securities and other Financial Assets (as such terms are
defined in Section 2 hereof); and
(b) an
account (“Deposit Account”) for any and all cash in any currency received by
Bank or its Subcustodian for the account of the Portfolio, which cash shall not
be subject to withdrawal by draft or check.
Customer warrants its authority on behalf of
each Portfolio to: (i) deposit the Financial Assets and cash (collectively,
"Assets") received in the Custody Account or the Deposit Account, as the case
may be (collectively, “Accounts”) and (ii) give Instructions concerning the
Accounts and such Instructions shall be clear as to which Portfolio they
relate. Bank may deliver Financial Assets with different certificate
number(s) but which are otherwise identical in all respects (including, without
limitation, any related CUSIP, ISN, rights and privileges) to Financial Assets
deposited in the Custody Account.
Bank shall be accountable under the terms of
this agreement to the Customer for all Assets held in the Accounts and shall
take prompt and appropriate action to remedy any discrepancies with respect to
such Assets. Upon written agreement between Bank and Customer, additional
Accounts may be established and separately accounted for as additional Accounts
hereunder.
As used herein, the following terms shall have
the following respective meanings:
(a) “Affiliate”
shall mean an entity controlling, controlled by, or under common control with,
another entity.
(b) “Authorized
Person" shall mean an employee or agent (including an investment manager)
designated by prior written notice from Customer or its designated agent to act
on behalf of Customer hereunder. Such persons shall continue to be
Authorized Persons until such time as Bank receives Instructions from Customer
or its designated agent that any such employee or agent is no longer an
Authorized Person.
(c) “Certificated
Security” shall mean a Security that is represented by a
certificate.
(d) “Custody
Account” shall mean each custody account on Bank’s records to which Financial
Assets are or may be credited pursuant hereto.
(e) “Eligible
Foreign Custodian” shall have the meaning assigned thereto in Rule 17f-5 (and
shall include any entity qualifying as such pursuant to an exemption, rule
or other appropriate action of the U.S. Securities and Exchange
Commission).
(f) “Eligible
Securities Depository” shall have the meaning assigned thereto in Rule 17f-7
(and shall include any entity qualifying as such pursuant to an exemption, rule
or other appropriate action of the U.S. Securities and Exchange
Commission).
(g) “Eligible
Contract” shall mean a currently effective written contract between Bank and a
Subcustodian satisfying the requirements of paragraph (c)(2) of Rule 17f-5
(including any amendments thereto or successor provisions).
(h) “Entitlement
Holder” shall mean the person on the records of a Securities Intermediary as the
person having a Securities Entitlement against the Securities
Intermediary.
(i) “Financial
Asset” shall have the meaning assigned thereto in Article 8 of the Uniform
Commercial Code, which, as of the date hereof, generally means:
(i) a
Security;
(ii) an
obligation of a person or a share, participation or other interest in a person
or property or enterprise of a person, which is, or is of a type, dealt in or
traded on financial markets, or which is recognized in any area in which it is
issued or dealt in as a medium for investment; or
(iii) any
property that is held by a Securities Intermediary for another person in a
Securities account if the Securities Intermediary has expressly agreed with the
other person that the property is to be treated as a financial asset under
Article 8 of the Uniform Commercial Code. As the context requires,
the term means either the interest itself or the means by which a person’s claim
to it is evidenced, including a Certificated Security or an Uncertificated
Security, a Security certificate, or a Security
Entitlement. Financial Asset shall in no event mean
cash.
(j) “Foreign
Assets” shall have the meaning assigned thereto under Rule 17f-5, which, as of
the date hereof, means any investments (including foreign currencies) for which
the primary market is outside the United States, and any cash and cash
equivalents that are reasonably necessary to effect Customer’s transactions in
those investments.
(k) “Instructions"
shall mean instructions of any Authorized Person received by Bank, via
telephone, telex, facsimile transmission, bank wire or other teleprocess or
electronic instruction or trade information system (which may include
Internet-based systems involving appropriate testing and authentication)
acceptable to Bank which Bank believes in good faith to have been given by, or
under the direction of, Authorized Persons. The term "Instructions"
includes, without limitation, instructions to sell, assign, transfer, deliver,
purchase or receive for the Custody Account, any and all stocks, bonds and other
Financial Assets or to transfer funds in the Deposit Account.
(l) “Local
Practice” shall mean the customary securities trading or securities processing
practices and procedures generally accepted by Institutional Investors in the
jurisdiction or market in which the transaction occurs, including, without
limitation:
(i) delivering Financial Assets to the
purchaser thereof or to a dealer therefor (or an agent for such purchaser or
dealer) with the expectation of receiving later payment for such securities from
such purchaser or dealer;
(ii) delivering cash to a seller or a dealer
(or an agent for such seller or dealer) against expectation of receiving later
delivery of purchased Financial Assets; or
(iii) in the case of a purchase or sale
effected through a securities system, in accordance with the rules governing the
operation of such system.
(m) “Institutional
Investor” shall mean a major commercial bank, corporation, insurance company, or
substantially similar institution, which, as a substantial part of its business
operations, purchases and sells Financial Assets and makes use of global
custodial services.
(n) “Intermediary
Custodian” shall mean any Subcustodian that is a Securities Intermediary and is
qualified to act as a custodian.
(o) “Riders”
shall have the meaning assigned thereto in Section 16(f) of this
Agreement.
(p) “Rule
17f-5” shall mean rule 17f-5 under the 1940 Act, including any amendments
thereto or successor rules.
(q) “Rule
17f-7” shall mean rule 17f-7 under the 1940 Act, including any amendments
thereto or successor rules.
(r) “Security”
shall have the meaning assigned thereto in Article 8 of the Uniform Commercial
Code, which, as of the date hereof, generally means an obligation of an issuer
or a share, participation, or other interest in an issuer or in property or an
enterprise of an issuer:
(i) which
is represented by a security certificate in bearer or registered form, or the
transfer of which may be registered upon books maintained for that purpose by or
on behalf of the issuer;
(ii) which
is one of a class or series or by its terms is divisible into a class or series
of shares, participations, interests, or obligations; and
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(iii)
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which:
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(A) is,
or is of a type, dealt in or traded on securities exchanges or securities
markets; or
(B) is
a medium for investment and by its terms expressly provides that it is a
security governed by Article 8 of the Uniform Commercial Code.
(s) “Securities
Depository” means a clearing corporation that is registered with the U.S.
Securities and Exchange Commission as a clearing agency under section 17A of the
Securities Exchange Act of 1934; or a Federal Reserve Bank or other person
authorized to operate the federal book entry system described in the regulations
of the Department of Treasury codified at 31 CFR 357, Subpart B, or book-entry
systems operated pursuant to comparable regulations of other federal
agencies.
(t) “Securities
Entitlement” shall mean the rights and property interest of an Entitlement
Holder with respect to a Financial Asset as set forth in Part 5 of Article 8 of
the Uniform Commercial Code.
(u) “Securities
Intermediary” shall have the meaning assigned thereto in Article 8 of the
Uniform Commercial Code, which, as of the date hereof, means Bank, a
Subcustodian, a securities depository, clearing corporation or any other person,
including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that
capacity.
(v) “Uncertificated
Security” shall mean a Security that is not represented by a
certificate.
(w) “Uniform
Commercial Code” shall mean the Uniform Commercial Code of the State of New
York, as amended from time to time.
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3.
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Maintenance
of Financial Assets and Cash at Bank and Subcustodian
Locations.
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Unless Instructions specifically require
another location reasonably acceptable to Bank:
(a) Financial
Assets shall be held in the country or other jurisdiction in which the principal
trading market for such Financial Assets is located, where such Financial Assets
are to be presented for payment or where such Financial Assets are acquired;
and
(b) Cash
shall be credited to an account in a country or other jurisdiction in which such
cash may be legally deposited or is the legal currency for the payment of public
or private debts.
Cash may be held pursuant to Instructions in
such accounts as may be available for the particular currency, recognizing that
accounts bearing commercially reasonable interest will be used to the extent
such use does not violate applicable law. To the extent Instructions
are issued and Bank can comply with such Instructions, Bank is authorized to
maintain cash balances on deposit for Customer with itself (or its Affiliates,
in accordance with applicable law and regulation), at such commercially
reasonable rates of interest as may from time to time be paid on such accounts,
or in non-interest bearing accounts as Customer may direct, if acceptable to
Bank.
If Customer wishes to have any Foreign Assets
belonging to one or more Portfolios held in the custody of an institution other
than the established Subcustodians as defined in Section 4 (or an Eligible
Securities Depository listed on Schedule B hereto), such arrangement must be
authorized by a written agreement, signed by Bank and Customer.
If Bank places and
maintains Customer’s Financial Assets, corresponding to a Securities
Entitlement, with a Securities Depository or Intermediary Custodian, Bank
must:
(x) at
a minimum exercise due care in accordance with reasonable commercial standards
in discharging its duty as a Securities Intermediary to obtain and thereafter
maintain such Financial Assets;
(y) provide,
promptly upon request by Customer, such reports as are available concerning the
internal accounting controls and financial strength of Bank; and
(z) require
any Intermediary Custodian at a minimum to exercise due care in accordance with
reasonable commercial standards in discharging its duty as a Securities
Intermediary to obtain and thereafter maintain Financial Assets corresponding to
the Securities Entitlements of its Entitlement Holders.
(a) Bank
may act under the Agreement through the subcustodians with which Bank has
entered into Eligible Contracts and which are listed on Schedule A attached
hereto (“Subcustodians”). Bank reserves the right, exercising
reasonable care, prudence and diligence, to amend Schedule A from time to
time. Any such amendment shall be effective upon 45 calendar days’
written notice to Customer in accordance with the Agreement, or such shorter
period as Bank reasonably believes is necessary, with due regard to the
continuing reasonable care of the Customer’s Foreign Assets in accordance with
Rule 17f-5.
(b) Bank
hereby represents to Customer that each Subcustodian is an Eligible Foreign
Custodian. If Schedule A is amended to add one or more Subcustodians,
this representation shall be effective as to the amended Schedule on the date of
such amendment. Bank shall promptly advise Customer if any Subcustodian ceases
to be an Eligible Foreign Custodian.
(c) Customer
authorizes Bank to hold Assets belonging to each Portfolio in accounts that Bank
has established with one or more of its branches or such Subcustodians,
provided that, in the case of an Eligible Foreign Custodian, Customer’s Foreign
Custody Manager has made the determinations required by Rule 17f-5 with respect
to the Portfolio’s Foreign Assets to be held by such Subcustodian. If
Bank is not acting as Foreign Custody Manager for the relevant Portfolio at such
time, Customer shall give Bank appropriate notice of such
determinations.
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5.
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Appointment
as Foreign Custody Manager.
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Customer hereby
appoints Bank as its Foreign Custody Manager for each Portfolio in accordance
with Rule 17f-5. Bank hereby accepts such
appointment. Customer and Bank shall act in conformity with such rule
(including any amendments thereto or successor provisions) for as long as Bank
acts as Customer’s Foreign Custody Manager. Bank’s appointment as
Foreign Custody Manager for a Portfolio (or for a particular country or other
political or geographical jurisdiction) may be terminated at any time by
Customer or Bank, regardless of whether Bank serves as custodian for such
Portfolio hereunder. Any such termination as to one or more
Portfolios (or jurisdictions) shall be effected in a manner consistent with the
provisions for notice and termination set forth elsewhere in this
Agreement. Bank shall not be obligated to serve in this capacity for
a Portfolio if Bank no longer acts as Customer’s custodian for such
Portfolio.
As of the date
hereof, Rule 17f-5 provides that Customer may from time to time place or
maintain in the care of an Eligible Foreign Custodian any of Customer’s Foreign
Assets, provided
that:
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(a)
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Customer’s
Foreign Custody Manager determines that Customer’s assets will be subject
to reasonable care, based on the standards applicable to custodians in the
relevant market, if maintained with the Eligible Foreign Custodian, after
considering all factors relevant to the safekeeping of such assets,
including, without limitation:
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(i)
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The Eligible
Foreign Custodian’s practices, procedures, and internal controls,
including, but not limited to, the physical protections available for
Certificated Securities (if applicable), the method of keeping custodial
records, and the security and data protection
practices;
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(ii)
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Whether the
Eligible Foreign Custodian has the requisite financial strength to provide
reasonable care for Foreign Assets;
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(iii)
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The Eligible
Foreign Custodian’s general reputation and standing;
and
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(iv)
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Whether
Customer will have jurisdiction over and be able to enforce judgments
against the Eligible Foreign Custodian, such as by virtue of the existence
of any offices of the custodian in the United States or the custodian’s
consent to service of process in the United
States.
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(b)
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The
arrangement with the Eligible Foreign Custodian is governed by a written
contract that Customer’s Foreign Custody Manager, has determined will
provide reasonable care for Customer’s assets based on the standards set
forth in paragraph (a) above.
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(i)
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Such contract
must provide:
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(A)
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For
indemnification or insurance arrangements (or any combination of the
foregoing) that will adequately protect Customer against the risk of loss
of Foreign Assets held in accordance with such
contract;
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(B)
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That Foreign
Assets will not be subject to any right, charge, security interest, lien
or claim of any kind in favor of the Eligible Foreign Custodian or its
creditors, except a claim of payment for their safe custody or
administration or, in the case of cash deposits, liens or rights in favor
of creditors of the custodian arising under bankruptcy, insolvency, or
similar laws;
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(C)
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That
beneficial ownership of the Foreign Assets will be freely transferable
without the payment of money or value other than for safe custody or
administration;
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(D)
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That adequate
records will be maintained identifying the assets as belonging to Customer
or as being held by a third party for the benefit of
Customer;
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(E)
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That
Customer’s independent public accountants will be given access to those
records or confirmation of the contents of those records;
and
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(F)
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That Customer
will receive periodic reports with respect to the safekeeping of
Customer’s assets, including, but not limited to, notification of any
transfer to or from Customer’s account or a third party account containing
assets held for the benefit of
Customer.
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(ii)
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Such contract
may contain, in lieu of any or all of the provisions specified in
paragraph (b)(i) above, such other provisions that Customer’s Foreign
Custody Manager, reasonably 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.
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(c)
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(i)
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Customer’s
Foreign Custody Manager, has established a system to monitor the
appropriateness of maintaining Customer’s assets with a particular
custodian under paragraph (a) above, and to monitor performance of the
contract under paragraph (b) above.
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(ii)
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If an
arrangement no longer meets these requirements, Customer must withdraw its
assets from the Eligible Foreign Custodian as soon as reasonably
practicable.
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Customer’s Foreign Custody Manager will provide
written reports in a form reasonably acceptable to Customer (or an Authorized
Person) notifying Customer’s Board of Trustees (or equivalent body; hereinafter,
“Board”) of the placement of Customer’s Foreign Assets with a particular
custodian and of any material change in Customer’s non-U.S. custody
arrangements, with the reports to be provided to the Board at such times as the
Board deems reasonable and appropriate based on the circumstances of Customer’s
non-U.S. custody arrangements.
Customer hereby confirms that Customer will
withdraw its Foreign Assets from any non-U.S. custodian as soon as reasonably
practicable upon written notification from Customer’s Foreign Custody Manager
that custody arrangements with such custodian no longer meet the requirements of
Rule 17f-5 (an “Adverse Notification”). Customer also confirms that,
if Bank is acting as Customer’s Foreign Custody Manager and has delivered an
Adverse Notification to Customer, Bank, as Foreign Custody Manager, shall have
no further responsibility under this Agreement in relation to Customer’s Foreign
Assets held under any custody arrangement covered by such Adverse Notification
following the Adverse Notification. (However, the existence of an
Adverse Notification shall not affect the scope of responsibilities, or the
standard of care, applicable to Bank in relation to such Assets under other
provisions of this Agreement.)
6. Securities
Depositories.
(a) Bank
hereby represents to Customer that each securities depository listed on Schedule
B is an Eligible Securities Depository. If Schedule B is amended,
this representation shall be effective as to the amended Schedule on the date of
such amendment. Bank shall promptly advise Customer if any securities
depository listed on Schedule B ceases to be an Eligible Securities
Depository.
(b) Bank
shall provide Customer an analysis of the custody risks (which analyses may be
provided to Customer electronically) associated with maintaining Customer’s
Foreign Assets with each Eligible Securities Depository used by
Bank and at which any Foreign Assets of Customer are held or are
expected to be held. Bank shall use reasonable efforts to provide
such analysis at least annually on March 31st of
each calendar year (or, in the case of an Eligible Securities Depository not
used by Bank as of the agreed upon date, prior to the initial placement of
Customer’s Foreign Assets at such Depository after such date). Bank
shall monitor the custody risks associated with maintaining Customer’s
Foreign Assets at each such Eligible Securities Depository on a continuing
basis, and shall promptly notify Customer or its investment adviser of any
material changes in such risks.
(c) Bank
shall, upon Customer’s reasonable request from time to time, provide certain
additional information (“Additional Information”) to Customer beyond the scope
of the information Bank is otherwise obligated to provide to Customer under this
Agreement, or any other agreement between the parties relating to Customer’s
Foreign Assets. For example, Additional Information may relate to a
country’s financial infrastructure, prevailing custody and settlement practices,
laws applicable to the safekeeping and recovery of Foreign Assets held in
custody, and the likelihood of nationalization, currency controls and similar
risks, but shall not include information required to be provided under this
Agreement or any other agreement between the parties relating to Customer’s
Foreign Assets.
(d) Bank’s
obligation to provide Customer with Additional Information shall be limited to
the extent Additional Information is (i) already in the possession of Bank, or
(ii) available to Bank using commercially reasonable means. Customer
hereby acknowledges that: (i) Additional Information is designed
solely to inform Customer of certain market conditions and procedures and is not
intended as a recommendation to invest or not invest in particular markets; and
(ii) Bank has gathered the information from sources it considers reliable, but
does not assume responsibility for inaccuracies or incomplete information
attributable to actions or omissions of third parties. (For this
purpose, “third parties” shall not include any of the Subcustodians listed on
Schedule A, except to the extent that, in a given case, a Subcustodian
accurately transmitted information it had itself received from a third party
(such as from a regulator or securities depository) rather than information it
had generated itself.)
(e) Customer
and Bank hereby acknowledge and agree that the decision to place Customer's
Foreign Assets with an Eligible Securities Depository shall be made by
Customer's investment adviser (subject to the Board's oversight) or the
Customer, after consideration of the information provided by Bank and other
information Customer deems relevant, and based on standards of care that are
generally applicable to investment advisers and the Board. Further,
the parties understand that the decision to place Customer’s Foreign Assets with
an Eligible Securities Depository does not have to be made separately, but may
be made in the overall context of the decision to invest in a particular
country.
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Use
of Subcustodians and Securities
Depositories.
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(a) Bank
shall identify the Assets on its books as belonging to Customer and identify the
Portfolio to which such Assets belong.
(b) A
Subcustodian shall hold such Assets together with assets belonging to other
customers of Bank in accounts identified on such Subcustodian's books as custody
accounts for the exclusive benefit of customers of Bank, such that it is readily
apparent that the Assets do not belong to Bank or the Subcustodian.
(c) Any
Financial Assets in the Accounts held by a Subcustodian shall be subject only to
the instructions of Bank or its agent. Any Financial Assets held in a
securities depository for the account of a Subcustodian shall be subject only to
the instructions of such Subcustodian or its agent.
(d) Where
Securities are deposited by a Subcustodian with a securities depository, Bank
shall cause the Subcustodian to identify on its books as belonging to Bank, as
agent, the Securities shown on the Subcustodian’s account on the books of such
securities depository, such that it is readily apparent that the Securities do
not belong to Bank or the Subcustodian.
(e) Bank
shall supply periodically, as mutually agreed upon, a statement in respect of
any Securities and cash, including identification of the foreign entities having
custody of the Securities and cash and descriptions thereof.
(a) Bank
(or the applicable Subcustodian) shall make payments from the Deposit Account
upon receipt of Instructions which include all information reasonably required
by Bank.
(b) In
the event that any payment to be made under this Section 8 exceeds the funds
available in the Deposit Account, Bank, in its discretion, may advance Customer
such excess amount which shall be deemed a loan payable on demand, bearing
interest at the rate customarily charged by Bank on similar loans.
(c) Bank
shall, or shall cause the applicable Subcustodian to: (i) subject to
the last sentence hereof, collect all amounts due and payable to Customer with
respect to Financial Assets and other assets held in the Accounts; (ii) promptly
notify Customer of the collection of income or other payments in a currency
other than US dollars that relate to Financial Assets or other Assets held by
Bank (or the applicable Subcustodian’s receipt) in a manner mutually agreeable
to Bank and Customer; (iii) promptly credit to the account of Customer all
income and other payments relating to Financial Assets or other Assets held by
Bank hereunder upon Bank’s receipt (or the applicable Subcustodian’s receipt) of
such income or payments or as otherwise agreed in writing by Customer and Bank;
and (iv) promptly endorse and deliver instruments required to effect such
collections. If Bank credits the Deposit Account on a payable date,
or at any time prior to actual collection and reconciliation to the Deposit
Account, with interest, dividends, redemptions or any other amount due, Customer
shall promptly return any such amount upon oral or written notification: (i)
that such amount has not been received in the ordinary course of business or
(ii) that such amount was incorrectly credited. If Customer does not
promptly return any amount upon such notification, Bank shall be entitled, upon
oral or written notification to Customer, to reverse such credit by debiting the
Deposit Account for the amount previously credited. Bank shall
furnish regular overdue income reports to Customer in writing (or by any means
by which Instructions may be transmitted hereunder, other than by telephone) of
any amounts payable with respect to Financial Assets or other Assets of Customer
if such amounts are not received by Bank (or the applicable Subcustodian) when
due (or otherwise in accordance with Local Practice). Bank or its
Subcustodian shall have no duty or obligation to institute legal proceedings,
file a claim or a proof of claim in any insolvency proceeding or take any other
action with respect to the collection of such amount, but will reasonably notify
Customer of any such proceedings known to Bank and may act for Customer upon
Instructions after consultation with Customer.
(a) Financial
Assets shall be transferred, exchanged or delivered by Bank or its Subcustodian
upon receipt by Bank of Instructions which include all information reasonably
required by Bank. Settlement and payment for Financial Assets
received for, and delivery of Financial Assets out of, the Custody Account shall
be made in accordance with Local Practice. In connection with the
foregoing, where Bank believes in good faith that use of a reasonably available
alternative practice to Local Practice would be more protective of Financial
Assets than Local Practice, Bank shall advise Customer of such practice and
Customer may authorize its use solely in such instance or consent that such
practice shall thereafter be deemed to be Local Practice.
(b) Bank
shall effect book entries on a contractual settlement date accounting basis with
respect to the settlement of trades in those markets where Bank generally offers
contractual settlement day accounting and shall notify Customer of these markets
from time to time. On the contractual settlement date for a sale,
Bank shall credit the Cash Account with the sales proceeds of the sale and
transfer the relevant Financial Assets to an account pending settlement of the
trade if not already delivered. On the contractual settlement date
for the purchase (or earlier if market practice requires delivery of the
purchase price before the contractual settlement date), Bank shall debit the
Cash Account with the settlement monies and credit a separate
account. Bank then shall post the Securities Account as awaiting
receipt of the expected Financial Assets. Customer shall not be
entitled to the delivery of Financial Assets that are awaiting receipt until
Bank or a Subcustodian actually receives them. Bank reserves the
right to restrict in good faith the availability of contractual date settlement
accounting for credit reasons. Bank, whenever reasonably possible,
will notify Customer prior to imposing such restrictions.
(i) Bank
may reverse credits or debits made to the Accounts in its discretion if the
related transaction fails to settle within a reasonable period, determined by
Bank in its discretion, after the contractual settlement date for the related
transaction; provided however that prior to taking action, Bank will use every
reasonable effort to give Customer written notice of any such reversal which may
include back valuation.
(ii) If
any Financial Assets delivered pursuant to this Section 9 are returned by the
recipient thereof, Bank may reverse the credits and debits of the particular
transaction at any time.
Bank shall follow Instructions received
regarding Assets held in the Accounts. However, until it receives
Instructions to the contrary, Bank shall:
(a) Present
for payment any Financial Assets which are called, redeemed or retired or
otherwise become payable and all coupons and other income items which call
for payment upon presentation, to the extent that Bank or Subcustodian is
actually aware of such opportunities.
(b) Execute
in the name of Customer such ownership and other certificates as may be required
to obtain payments in respect of Financial Assets.
(c) Exchange
interim receipts or temporary Financial Assets for definitive Financial
Assets.
(d) Appoint
brokers and agents for any transaction involving the Financial Assets,
including, without limitation, Affiliates of Bank or any
Subcustodian.
(e) Issue
statements to Customer, at times and in a form mutually agreed upon, identifying
the Assets in the Accounts.
Bank shall promptly send Customer an advice or
notification of any transfers of Assets to or from the Accounts. Such
statements, advices or notifications shall indicate the identity of the entity
having custody of the Assets.
All collections of funds or other property paid
or distributed in respect of Financial Assets in the Custody Account shall be
made at the risk of Customer until such funds or other property have been
received by Bank (or the applicable Subcustodian). Bank shall have no
liability for any loss occasioned by delay (other than its own) in the actual
receipt of notice by Bank or by its Subcustodians of any payment, redemption or
other transaction regarding Financial Assets in the Custody Account in
respect of which Bank has agreed to take any action hereunder.
(a) Corporate Actions.
Bank shall transmit promptly to Customer on behalf of each Portfolio summary
notification of corporate action information received on a timely basis by Bank
(including, without limitation, pendency of calls and maturities of Financial
Assets and expirations of rights in connection therewith and notices of exercise
of call and put options written by Customer on behalf of a Portfolio and the
maturity of futures contracts (and options thereon) purchased or sold by
Customer on behalf of a Portfolio) from issuers of the Financial Assets being
held for a Portfolio. Bank shall transmit promptly to Customer on
behalf of each Portfolio notice of the filing of any registration statement with
respect to Financial Assets held for a Portfolio if such information is received
by Bank or Bank’s central corporate actions department has actual knowledge of
the filing. With respect to tender or exchange offers, Bank shall
transmit promptly to Customer on behalf of each Portfolio notice of corporate
action information received on a timely basis by Bank from issuers of the
Financial Assets whose tender or exchange is sought and from the party (or its
agents) making the tender or exchange offer. If Customer desires to
take action with respect to any tender offer, exchange offer or any other
similar transaction, Customer shall notify Bank within such period as will give
Bank (including any Subcustodian) reasonably sufficient time to take such
action. Bank shall inform Customer of pertinent deadlines in each
case.
When a rights entitlement or a fractional
interest resulting from a rights issue, stock dividend, stock split or similar
corporate action is received which bears an expiration date, Bank shall use
reasonable efforts to obtain Instructions from Customer or its Authorized
Person, even if its own deadlines for receiving instructions have passed;
however, if Instructions are not received in time for Bank to take timely
action, or actual notice of such corporate action was received too late to seek
Instructions, Bank will notify Customer of the corporate action but shall not be
required to take further action.
(b) Proxy
Voting.
(i) Bank
shall, with respect to Financial Assets that are not Foreign Assets, cause to be
promptly executed by the registered holder of such Financial Assets, if the
Financial Assets are registered otherwise than in the name of Customer on behalf
of a Portfolio or a nominee thereof, all proxies, without indication of the
manner in which such proxies are to be voted, and shall promptly deliver to
Customer such proxies, all proxy soliciting materials and all notices relating
to such Financial Assets.
(ii) Bank
shall, with respect to Financial Assets that are Foreign Assets, use
commercially reasonable efforts (including the use of third party
representatives) to facilitate the exercise of voting and other shareholder
proxy rights; it being understood and agreed that (A) proxy voting may not be
available in all markets (it being understood that Bank shall make proxy voting
services available to Customer in a given market where Bank offers such services
to any other custody client), and (B) apart from voting, Bank will, upon request
and in its discretion, assist customer in exercising other shareholder rights
such as attending shareholder meetings, nominating directors and proposing
agenda items. In particular, and without limiting the generality of
the foregoing, Bank may provide written summaries of proxy materials in lieu of
providing original materials (or copies thereof) and while Bank shall attempt to
provide accurate summaries, whether or not translated, Bank shall not be liable
for any losses or other consequences that may result from reliance by Customer
upon the same where Bank prepared the same in good faith and with reasonable
efforts. Bank shall use reasonable efforts to notify Customer in
cases where, due to various circumstances beyond control of Bank, voting cannot
be exercised. Customer acknowledges that local conditions, including lack of
regulation, onerous procedural obligations, lack of notice, practical
constraints and other facts, may have the effect of severely limiting the
ability of Customer to exercise shareholder rights. In addition,
Customer acknowledges that: (A) in certain countries Bank may be unable to vote
individual proxies but shall only be able to vote proxies on a net basis (e.g., a net yes or no vote
given the voting instructions received from all customers); and (B) proxy voting
may be precluded or restricted in a variety of circumstances, including, without
limitation, where the relevant Financial Assets are: (1) on loan; (2) at
registrar for registration or reregistration; (3) the subject of a conversion or
other corporate action; (4) not held in a name subject to the control of Bank or
its Subcustodian or are otherwise held in a manner which precludes voting; (5)
held in a margin or collateral account; and (6) American Depository
Receipts.
(iii) Customer and each Authorized Person shall
respect the proprietary nature of information developed exclusively through the
efforts of Bank (or Subcustodians or other parties acting under Bank’s
direction) in relation to proxy voting services.
(c) Taxes.
(i) Customer
confirms that Bank is authorized to deduct from any cash received or credited to
the Deposit Account any taxes or levies required to be deducted by any revenue
or other governmental authority for whatever reason in respect of the
Custody Account.
(ii) Customer
shall provide Bank with all required tax-related documentation and other
information relating to Assets held hereunder (“Tax
Information”). Tax Information shall include, but shall not be
limited to, information necessary for submission to revenue or other
governmental authorities to establish taxable amounts or reduce tax burdens that
would otherwise be borne by a Portfolio. Upon receipt of Instructions
and all required Tax Information from Customer, Bank shall (A) execute ownership
and other certificates and affidavits for all tax purposes (within and outside
of the United States) in connection with receipt of income and other payments
with respect to Assets held hereunder, or in connection with the purchase, sale
or transfer of such Assets, and (B) where appropriate, file any certificates or
other affidavits for the refund or reclaim of non-U.S. taxes paid with respect
to such Assets. Customer warrants that, when given, Tax Information
shall be true and correct in all material respects. Customer shall
notify Bank promptly if any Tax Information requires updating or amendment
to correct misleading information.
(iii) Bank
shall have no responsibility or liability for any tax obligations (including
both taxes and any and all penalties, interest or additions to tax) now or
hereafter imposed on Customer, its Portfolio, or Bank as Customer’s custodian,
by any revenue or governmental authority, or penalties or other costs or
expenses arising out of the delivery of, or failure to deliver, Tax Information
by Customer
(iv) Bank
shall perform tax reclaim services only with respect to taxation levied by the
revenue authorities of the countries notified to Customer from time to time and
Bank may, by notification in writing, in Bank’s absolute discretion, supplement
or amend the markets in which tax reclaim services are offered; provided that,
Bank shall make tax reclaim services available to Customer in a given country
where Bank offers such services to any other custody client having the same tax
status. Other than as expressly provided in this sub-clause, Bank
shall have no responsibility with regard to Customer’s tax position or status in
any jurisdiction.
(v) Tax
reclaim services may be provided by Bank or, in whole or in part, by one or more
third parties appointed by Bank (which may be Bank’s affiliates); provided that
Bank shall be liable for the performance of any such third party to the same
extent as Bank would have been if Bank had performed such services.
(vi) If
Bank does not receive appropriate declarations, documentation and
information then any applicable United States withholding tax shall be
deducted from income received from Financial Assets.
(d) Class
Actions.
(i) Upon
receipt of a settled securities class action notification by its corporate
actions department, Bank shall research its records for each Custody Account to
endeavour to identify Customer’s interest, if any, with respect to any such
class action notification. Customer acknowledges that identifying its interest
may involve manually researching historic records and that Bank does not warrant
that the review will be error free.
(ii) Bank
will provide Customer with a summary of each class action notification that it
has identified as being pertinent to Customer (together with the information
discovered with regard to the applicable securities holding of Customer) and the
cut-off time by which Customer is required to inform Bank if it disagrees with
Bank’s record of such securities holdings and/or securities transactions or
wishes to instruct Bank not to file a claim on Customer’s behalf.
(iii) Unless
Customer instructs Bank not to do so by the applicable cut-off time, Bank shall
complete and file the required claim forms for the particular class action
insofar as they relate to transactions or holdings for which Bank acted as
custodian. Bank shall present with the claim any supporting information that it
has in its possession and that is required as part of the filing as set out in
the class action notification. Bank shall be authorized to disclose such
information as may be reasonably required to complete and file such
claims. Customer acknowledges that Bank is acting in a clerical
capacity in completing and filing such claim forms and that Bank will not be
using legal expertise in providing this service.
(iv) Bank's
liability with respect to class action filing services described in this section
11(d) shall be limited in amount as Customer and Bank may from time to time
agree in writing.
Financial Assets which are ordinarily held in
registered form may be registered in a nominee name of Bank, Subcustodian or
Eligible Securities Depository, as the case may be. Bank may without
notice to Customer cause any such Financial Assets to cease to be registered in
the name of any such nominee and to be registered in the name of
Customer. Bank shall, or shall cause the applicable Subcustodian or
Eligible Securities Depository, to use commercially reasonable efforts to
promptly register such Financial Assets that are or may be subject to ownership
limitations. In the event that any Financial Assets registered in a
nominee name are called for partial redemption by the issuer, Bank may allot the
called portion to the respective beneficial holders of such class of security in
any manner Bank deems to be fair and equitable. Customer shall hold
Bank, Subcustodians, and their respective nominees harmless from any liability
arising directly or indirectly from their status as a mere record holder of
Financial Assets in the Custody Account. Financial Assets accepted by
Custodian on behalf of a Portfolio under this Agreement shall be in a form and
delivered in a manner consistent with Local Practice.
Unless otherwise expressly provided, all
Instructions shall continue in full force and effect until canceled or
superseded. Any Instructions delivered to Bank by telephone shall
promptly thereafter be confirmed in writing by an Authorized Person (which
confirmation may bear the facsimile signature of such Person), but Customer
shall hold Bank harmless for the failure of an Authorized Person to send such
confirmation in writing, the failure of such confirmation to conform to the
telephone instructions received or Bank's failure to produce such confirmation
at any subsequent time. Bank shall notify Customer as soon as
reasonably practicable if Bank does not receive written confirmation or if such
written confirmation fails to conform to the telephone Instructions
received. Either party may electronically record any Instructions
given by telephone, and any other telephone discussions with respect to the
Custody Account. Customer shall be responsible for safeguarding any
testkeys, identification codes or other security devices which Bank shall make
available to Customer or its Authorized Persons.
(a) Bank
shall exercise reasonable care and diligence in carrying out all of its duties
and obligations under this Agreement, and shall be liable to Customer for any
and all claims, liabilities, losses, damages, fines, penalties, and expenses,
including out-of-pocket and incidental expenses and reasonable attorneys’ fees
(“Losses”) suffered or incurred by Customer resulting from failure of Bank
(including any branch thereof, regardless of location) to exercise such
reasonable care and diligence. Bank shall be liable to Customer in
respect of such Losses to the same extent that Bank would be liable to Customer
if Bank were holding the affected Assets in New York City, but only to the
extent of Customer’s direct damages, to be determined based on the market value
of the property which is the subject of the Loss at the date of discovery of
such Loss by Customer and without reference to any special conditions or
circumstances.
(b) Bank
shall be liable to Customer for all Losses resulting from the action or inaction
of any Subcustodian to the same extent that Bank would be liable to Customer if
Bank were holding the affected Assets in New York City, and such action or
inaction were that of the Bank or the fraud or willful default of such
Subcustodian.
(c) As
long as and to the extent that it has exercised reasonable care and acted in
good faith, Bank shall not be responsible for:
(i) the
title, validity or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Agreement; it being
understood that Bank shall be deemed to have exercised reasonable care in
respect of this subparagraph (i) if Financial Assets are received by Bank in
accordance with Local Practice for the particular Financial Asset in
question;
(ii) any
act, omission, default or for the solvency of any broker or agent which it or a
Subcustodian appoints and which is not a branch or Affiliate of the
Bank; it being understood that Bank or a Subcustodian shall be deemed to have
exercised reasonable care in respect of this subparagraph (ii) if it exercised
reasonable care in the selection and continued retention of any such broker or
agent; or
(iii) the
insolvency of any Subcustodian which is not a branch or Affiliate of Bank; it
being understood that Bank shall be deemed to have exercised reasonable care in
respect of this subparagraph (iii) where Bank used reasonable care in the
monitoring of a Subcustodian’s financial condition as reflected in its most
recently published financial statements and other publicly available financial
information.
(d) Neither Bank nor any Subcustodian shall be
liable for the acts or omissions of any Eligible Securities Depository (or, for
purposes of clarity, any domestic securities depository). In the
event Customer incurs a loss due to the negligence, bad faith, willful
misconduct or insolvency of an Eligible Securities Depository, Bank shall make
reasonable endeavors to seek recovery from the Eligible Securities
Depository.
(e) In
no event shall Bank incur liability hereunder if Bank or any Subcustodian, or
any nominee of Bank or any Subcustodian (each a “Person”), is prevented,
forbidden or delayed from performing, or omits to perform, any act or thing
which this Agreement provides shall be performed or omitted to be performed, by
reason of:
(i) any provision of any present or future law
or regulation or order of the United States of America, or any state thereof, or
any other country, or political subdivision thereof or of any court of competent
jurisdiction; or
(ii) events or circumstances beyond the
reasonable control of the applicable Person, including, without limitation, the
interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or
interruptions, computer viruses or communications disruptions, work stoppages,
natural disasters, or other similar events or acts, unless, in each case, such
delay or nonperformance is caused by (A) the negligence, misfeasance or
misconduct of the applicable Person, or (B) a malfunction or failure of
equipment operated or utilized by the applicable Person other than a malfunction
or failure beyond such Person’s control and which could not be reasonably
anticipated or prevented by such Person (each such provision, event or
circumstance being a “Force Majeure Event”).
Bank shall notify
Customer as soon as reasonably practicable of any material performance delay or
non-performance in accordance with this clause (e).
(f) In
no event shall Customer incur liability to Bank if it is prevented, forbidden or
delayed from performing, or omits to perform, any act or thing which this
Agreement provides shall be performed or omitted to be performed, by reason of a
Force Majeure Event.
(g) Customer
shall indemnify and hold Bank and its directors, officers, agents and employees
(collectively the “Indemnitees”) harmless from and against any and all Losses
that may be imposed on, incurred by, or asserted against, the Indemnitees or any
of them for following any Instructions or other directions upon which Bank is
authorized to rely pursuant to the terms of this Agreement, or for any
action taken or omitted by it in good faith, provided that such action or
omission is consistent with the standard of care applicable to Bank under this
Agreement and the Indemnitees have not acted with negligence or bad faith or
engaged in fraud or willful misconduct in connection with the Losses in
question.
(h) In
performing its obligations hereunder, Bank may rely on the genuineness of any
document which it believes in good faith to have been validly executed,
and, subject to the following sentence, shall be entitled to rely on and may act
upon advice of counsel (which may be counsel for Customer) on all matters, and
shall be without liability for action reasonably taken or omitted pursuant to
such advice. If Customer disputes an action or omission by Bank
within 45 days of when Customer became aware or reasonably should have become
aware of such action or omission, Bank shall be entitled to rely on and may act
upon advice of “independent legal counsel” (as defined by rule 0-1(6) of the
Investment Company Act of 1940) to Customer or such other counsel that is
mutually acceptable to Customer and Bank and shall be without liability for
action reasonably taken or omitted pursuant to such advice.
(i) Customer
shall pay for and hold Bank harmless from any liability or loss resulting from
the imposition or assessment of any taxes or other governmental charges, and any
related expenses (including, without limitation, penalties, interest or
additions to tax due), with respect to income from or Assets in the Accounts,
provided that Bank has complied with the standard of care set forth in Section
14(a) of this Agreement (it being understood that while Bank’s failure to comply
with such standard of care shall constitute a breach of this Agreement, Bank
shall have no liability for taxes or governmental charges and related expenses
imposed or assessed with respect to such Assets prior to such breach or that
would have been imposed or assessed even absent such breach).
(j) Bank
need not maintain any insurance for the benefit of Customer.
(k) Without
limiting the foregoing, Bank shall not be liable for any Loss which results from
(i) the general risk of investing, or (ii) investing or holding Assets in a
particular country including, but not limited to, losses resulting from
nationalization, expropriation or other governmental actions; regulation of the
banking or securities industry; currency restrictions, devaluations or
fluctuations; and market conditions which prevent the orderly execution of
securities transactions or affect the value of Assets.
(l) Consistent
with and without limiting the application of the foregoing paragraphs of this
Section 14, it is specifically acknowledged that Bank shall have no duty or
responsibility to:
(i) question
Instructions or make any suggestions to Customer or an Authorized Person
regarding such Instructions that Bank believes in good faith to have been given
by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions the Bank may
specify;
(ii) supervise
or make recommendations with respect to investments or the retention of
Financial Assets;
(iii) advise
Customer or an Authorized Person regarding any default in the payment of
principal or income of any security other than as provided in Section 8(c)
hereof;
(iv) evaluate
or report to Customer or an Authorized Person regarding the financial condition
of any broker, agent or other party to which Bank receives an Instruction to
deliver Financial Assets;
(v) except
for trades settled at DTC where the broker provides DTC trade confirmation and
Customer provides for Bank to receive the trade instruction, review or reconcile
trade confirmations received from brokers. Customer or its Authorized
Persons issuing Instructions shall bear any responsibility to review such
confirmations against Instructions issued to and statements issued by
Bank;
(vi) advise
Customer or an Authorized Person regarding information (i) held on a
confidential basis by an officer, director or employee of Bank (or any Affiliate
of Bank) and (ii) obtained by such person in connection with the provision of
services or other activities unrelated to global custody; and
(vii) advise
Customer or an Authorized Person promptly regarding corporate action information
obtained by an officer, director or employee of Bank (or any Affiliate of Bank)
who is not engaged directly in the provision of global custody
services.
(m) Customer
authorizes Bank to act hereunder notwithstanding that Bank or any of its
divisions or Affiliates may have a material interest in a transaction, or
circumstances are such that Bank may have a potential conflict of duty or
interest including the fact that Bank or any of its Affiliates may provide
brokerage services to other customers, act as financial advisor to the
issuer of Financial Assets, act as a lender to the issuer of Financial Assets,
act in the same transaction as agent for more than one customer, have a material
interest in the issue of Financial Assets, or earn profits from any of the
activities listed herein; provided that none of such services or actions would
violate applicable laws or regulations.
(n) Upon
the occurrence of any event which causes or may cause any Loss to the other
party, each of Customer and Bank shall (and Bank shall cause each applicable
Subcustodian to) use all commercially reasonable efforts and take all reasonable
steps under the circumstances to mitigate the effects of such event and to avoid
continuing harm to the other party. For this purpose, the obligations
of Customer and Bank to mitigate Losses (or potential Losses) hereunder shall
include (but shall not be limited to) the periodic review and reconciliation by
Bank and Customer (or Authorized Persons) of statements provided to Customer
under Section 10 of this Agreement; provided, however, that Bank's obligations
to Customer with respect to any transaction covered by a given statement shall
be reduced to the extent that Bank's ability to mitigate damages related to such
transaction has been compromised by Customer’s failure to object to such
statement within 180 days of Customer’s receipt thereof.
Customer agrees to pay Bank for its services
under this Agreement such amount as may be mutually agreed upon in
writing. Customer agrees to reimburse Bank for its reasonable
out-of-pocket or incidental expenses (including, without limitation, legal fees)
incurred on behalf of Customer, provided that, in respect of such expenses, Bank
has acted in conformity with the standard of care set forth in Section 14
hereof. Bank shall obtain Customer’s prior approval, which approval
shall not be unreasonably withheld, of out-of-pocket or incidental expenses that
Bank reasonably expects to exceed $10,000 or that approaches $10,000 during the
process of incurring such expenses. In the latter case, Customer
shall not withhold its approval on the ground that Bank had not obtained
Customer’s approval prior to beginning to incur such expenses if Bank believed
in good faith that the subject expenses would not exceed
$10,000. Subject to the foregoing, Bank shall have a lien on and is
authorized to charge or otherwise enforce its rights as lienholder against
Assets in any Account of the Customer for any amount owing in respect of such
Account by the Customer to the Bank under any provision of this
Agreement.
(a) Foreign Exchange
Transactions Other Than as Principal. Upon receipt of
Instructions, Bank shall settle foreign exchange contracts or options to
purchase and sell foreign currencies for spot and future delivery on behalf of
and for the account of a Portfolio with such currency brokers or banking
institutions as Customer may determine and direct pursuant to
Instructions. Bank shall be responsible for the transmission of cash
and instructions to and from the currency broker or banking institution with
which the contract or option is made, the safekeeping of all certificates and
other documents and agreements evidencing or relating to such foreign exchange
transactions and the maintenance of proper records in accordance with this
Agreement. Bank shall have no duty with respect to the selection of
currency brokers or banking institutions with which Customer deals on behalf of
its Portfolio or, as long as Bank acts in accordance with the standard of care
set forth in this Agreement, for the failure of such brokers or banking
institutions to comply with the terms of any contract or option; provided,
however, that Bank shall not be responsible for the insolvency of any such
broker or banking institution which is not a branch or Affiliate of
Bank.
(b) Foreign Exchange
Transactions as Principal. Bank shall not be obligated to
enter into foreign exchange transactions as principal. However, if
and to the extent that Bank makes available to Customer its services as
principal in foreign exchange transactions, upon receipt of Instructions, Bank
shall enter into foreign exchange contracts or options to purchase and sell
foreign currencies for spot and future delivery on behalf of and for the account
of Customer on behalf of its Portfolio with Bank as
principal. Instructions may be issued with respect to such contracts
but Bank may establish rules or limitations concerning any foreign exchange
facility made available. Bank shall be responsible for the selection
of currency brokers or banking institutions (which may include Affiliates of
Bank and Subcustodians) and the failure of such currency brokers or banking
institutions to comply with the terms of any contract or option.
(c) Certification of Residency,
etc. Customer certifies that it is a resident of the United
States and shall notify Bank of any changes in residency. Bank may
rely upon this certification or the certification of such other facts as may be
required to administer Bank's obligations hereunder. Customer shall
indemnify Bank against all losses, liability, claims or demands arising directly
or indirectly from any such certifications.
(d) Custodian’s Records; Access
to Records. Bank shall provide any assistance reasonably
requested by Customer in the preparation of reports to Customer’s shareholders
and others, audits of accounts, and other ministerial matters of like
nature. Bank shall maintain complete and accurate records with
respect to Financial Assets and other Assets held for the account of Customer as
required by the rules and regulations of the U.S. Securities and Exchange
Commission applicable to investment companies registered under the 0000
Xxx. All such books and records maintained by Bank shall be made
available to Customer upon request and shall, where required to be maintained by
Rule 31a-1 under the 1940 Act, be preserved for the periods prescribed in Rule
31a-2 under the 1940 Act. Bank shall allow Customer's independent
public accountant reasonable access to the records of Bank relating to Financial
Assets as is required in connection with their examination of books and records
pertaining to Customer's affairs. Subject to restrictions under
applicable law, Bank shall also obtain an undertaking to permit Customer's
independent public accountants reasonable access to the records of any
Subcustodian which has physical possession of any Financial Assets as may be
required in connection with the examination of Customer's books and
records. Upon reasonable request of Customer, Bank shall provide
Customer with a copy of Bank’s reports prepared in compliance with the
requirements of Statement of Auditing Standards No. 70 issued by the American
Institute of Certified Public Accountants, as it may be amended from time to
time (commonly referred to as a “SAS 70 report”). Bank shall use
commercially reasonable efforts to obtain and furnish Customer with such similar
reports as Customer may reasonably request with respect to each Subcustodian
holding Assets of Customer. Except as respects Bank’s SAS 70 Report,
as to which there shall be no charge, the Customer shall pay reasonable expenses
of the Bank and any Subcustodians under this provision. Bank shall
use commercially reasonable efforts to provide Customer and agents with such
reports as the Customer may reasonably request or otherwise reasonably require
to fulfill its duties under rule 38a-1 of the 1940 Act, and, in any case,
provide Customer with at least the same level of such reporting as Bank
furnishes to its other mutual fund clients.
(e) Confidential
Information. The parties hereto agree that each shall treat
confidentially all confidential information provided by each party to the other
regarding its business and operations in accordance with this Agreement and
represent that each has implemented controls that are reasonably designed to
achieve the purposes of this section. All confidential information provided by a
party hereto shall be used by the 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 affiliated division
or entity or third party in any form without the prior written consent of such
providing party. Confidential information for purposes hereof shall
include information traditionally recognized as confidential, such as financial
information, strategies, security practices, portfolio holdings, portfolio
trades, product and business proposals, business plans, and the like. 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, that is generally furnished to third parties by the providing
party without confidentiality restriction, or that is required to be disclosed
by any bank examiner of Bank or any Subcustodian, any auditor of the parties
hereto, by judicial or administrative process or otherwise by applicable law or
regulation. For this purpose, Customer and any Authorized Person
shall be permitted to disclose any information provided by Bank hereunder to the
U.S. Securities and Exchange Commission (or its staff) in connection with any
inspection or examination or other action or proceeding. If a party
becomes aware that it or its agents have breached the confidentiality
obligations under this Section 16(e), it will promptly notify the other party in
writing of the nature and extent of such breach.
(f) Governing Law; Successors
and Assigns; Immunity; Captions. THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN NEW YORK and shall not be assigned by either party, but shall
bind the successors in interest of Customer and Bank. To the extent
that in any jurisdiction Customer or Bank may now or hereafter be entitled to
claim, for itself or its assets, immunity from suit, execution, attachment
(before or after judgment) or other legal process, Customer or Bank, as the case
may be, irrevocably shall not claim, and it hereby waives, such
immunity. The captions given to the sections and subsections of this
Agreement are for convenience of reference only and are not to be used to
interpret this Agreement.
(g) Entire
Agreement. This Agreement consists exclusively of this
document (including Appendix A and Schedules A and B hereof). There
are no other provisions hereof and this Agreement supersedes any other
agreements, whether written or oral, between the parties. Any
amendment hereto must be in writing, executed by both parties.
(h) Severability. In
the event that one or more provisions hereof are held invalid, illegal or
unenforceable in any respect on the basis of any particular circumstances or in
any jurisdiction, the validity, legality and enforceability of such provision or
provisions under other circumstances or in other jurisdictions and of the
remaining provisions shall not in any way be affected or impaired.
(i) Waiver. Except
as otherwise provided herein, no failure or delay on the part of either party in
exercising any power or right hereunder operates as a waiver, nor does any
single or partial exercise of any power or right preclude any other or further
exercise, or the exercise of any other power or right. No waiver by a
party of any provision hereof, or waiver of any breach or default, is effective
unless in writing and signed by the party against whom the waiver is to be
enforced.
(j) Representations and
Warranties.
(i) Customer
hereby represents and warrants to Bank that: (A) it has full power and authority
to deposit and control the Financial Assets and cash deposited in the Accounts;
(B) it has all necessary authority to use Bank as its custodian; (C) this
Agreement constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; (D) it has taken all necessary action to authorize
the execution and delivery hereof.
(ii) Bank
hereby represents and warrants to Customer that: (A) it has the full power and
authority to perform its obligations hereunder, (B) this Agreement constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms; and (C) that it has taken all necessary action to authorize the execution
and delivery hereof.
(k) Notices. All
notices hereunder shall be effective when actually received. Any
notices or other communications which may be required hereunder are to be sent
to the parties at the following addresses or such other addresses as may
subsequently be given to the other party in writing: (a) Bank: State Street Bank
and Trust Company, 0 Xxxxxx xx Xxxxxxxxx, XXX-0, Xxxxxx, XX 00000, Attention:
Xxxx X. Xxxxxxx, Senior Vice President; and (b)
Customer: Capital Private Client Services Funds, c/o Capital Guardian
Trust Company, 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxx, XX 00000, Attention:
Xxxxxxxx X. Xxxxxx; with a copy to: c/o Capital Guardian Trust
Company, 000 X. Xxxx Xxxxxx, Xxx Xxxxxxx, XX 00000, Attention: Xxx
XxXxxx.
(l) Termination. This
Agreement may be terminated as to one or more Portfolios by Customer or Bank by
giving one hundred twenty (120) days’ written notice to the other, provided that
such notice to Bank shall specify the names of the persons to whom Bank shall
deliver the Assets belonging to the affected Portfolios in the
Accounts. If notice of termination is given by Bank, Customer shall,
within one hundred twenty (120) days following receipt of the notice, deliver to
Bank Instructions specifying the names of the persons to whom Bank shall deliver
the Assets belonging to the affected Portfolios. In either case Bank
shall deliver the Assets belonging to the affected Portfolios to the persons so
specified, after deducting any uncontested amounts which Bank determines in good
faith to be owed to it under Section 15. Customer shall reimburse
Bank promptly for all reasonable out-of-pocket expenses it incurs in delivering
Assets upon termination by Customer. Termination shall not affect any of the
liabilities either party owes to the other arising under this Agreement prior to
such termination. If within one hundred twenty (120) days following receipt of a
notice of termination by Bank, Bank does not receive Instructions from Customer
specifying the names of the persons to whom Bank shall deliver the Assets
belonging to the affected Portfolios, Bank, at its election, may deliver such
Assets to a bank or trust company doing business in the State of New York to be
held and disposed of pursuant to the provisions hereof, or to Authorized
Persons, or may continue to hold such Assets until Instructions are provided to
Bank. For avoidance of doubt, each Customer, Portfolio or the Bank
may terminate this Agreement pursuant to its provisions and the Agreement shall
survive such termination in respect of the remaining Customers and Portfolios
that have not so terminated or been terminated.
(m) Representative Capacity;
Non-recourse Obligations. A COPY OF THE DECLARATION OF TRUST
OR OTHER ORGANIZATIONAL DOCUMENT OF EACH CUSTOMER IS ON FILE WITH THE SECRETARY
OF STATE OF THE STATE OF THE CUSTOMER’S FORMATION, AND NOTICE IS HEREBY GIVEN
THAT THIS AGREEMENT IS NOT EXECUTED ON BEHALF OF THE TRUSTEES OF ANY CUSTOMER AS
INDIVIDUALS, AND THE OBLIGATIONS OF THIS AGREEMENT ARE NOT BINDING UPON ANY OF
THE TRUSTEES, OFFICERS, SHAREHOLDERS OR PARTNERS OF ANY FUND INDIVIDUALLY, BUT
ARE BINDING ONLY UPON THE ASSETS AND PROPERTY OF EACH CUSTOMER’S RESPECTIVE
PORTFOLIOS. BANK AGREES THAT NO SHAREHOLDER, TRUSTEE, OFFICER OR
PARTNER OF ANY FUND MAY BE HELD PERSONALLY LIABLE OR RESPONSIBLE FOR ANY
OBLIGATIONS OF ANY CUSTOMER ARISING OUT OF THIS AGREEMENT.
(n) Several Obligations of each
Customer and Portfolio. WITH RESPECT TO ANY OBLIGATIONS OF A
CUSTOMER ON BEHALF OF ANY OF ITS PORTFOLIOS ARISING OUT OF THIS AGREEMENT, BANK
SHALL LOOK FOR PAYMENT OR SATISFACTION OF ANY SUCH OBLIGATION SOLELY TO THE
ASSETS AND PROPERTY OF THE PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH
THAT CUSTOMER HAD SEPARATELY CONTRACTED WITH BANK BY SEPARATE WRITTEN AGREEMENT
WITH RESPECT TO EACH OF ITS PORTFOLIOS. THE RIGHTS AND BENEFITS TO
WHICH A GIVEN PORTFOLIO IS ENTITLED HEREUNDER SHALL BE SOLELY THOSE OF SUCH
PORTFOLIO AND NO OTHER PORTFOLIO HEREUNDER SHALL RECEIVE SUCH
BENEFITS.
(o) Information Relating to
Divisions. Upon written request by Customer, the
Bank shall use commercially reasonable efforts to provide information
regarding portfolio holdings, portfolio trades and proxy voting in a format that
is both technically practicable and reasonably acceptable to Customer so as to
allow any investment division of Capital Guardian Trust Company to receive
solely such information as is relevant to its own
operations. Customer shall pay reasonable expenses of Bank
arising from this section, provided that estimates of such expenses are approved
by the Customer before the expenses are incurred.
(p) Personal
Information. Bank will implement and maintain a
written information security program that contains appropriate security measures
to safeguard the personal information of Customer’s shareholders, employees,
directors and/or officers that the Bank receives, stores, maintains, processes
or otherwise accesses in connection with the provision of services
hereunder. For these purposes, “personal information” shall mean (i) an
individual’s name (first initial and last name or first name and last name),
address or telephone number plus (a) social
security number, (b) drivers license number, (c) state identification card
number, (d) debit or credit card number, (e) financial account number or (f)
personal identification number or password that would permit access to a
person’s account or (ii) any combination of the foregoing that would allow a
person to log onto or access an individual’s account. Notwithstanding the
foregoing “personal information” shall not include information that is lawfully
obtained from publicly available information, or from federal, state or local
government records lawfully made available to the general public.
IN WITNESS WHEREOF, each of the Customers and
Bank have executed this Agreement as of the date first-written
above. Execution of this Agreement by more than one Customer shall
not create a contractual or other obligation between or among such Customers (or
between or among their respective Portfolios) and this Agreement shall
constitute a separate agreement between Bank and each Customer on behalf of
itself or each of its Portfolios.
EACH OF THE CUSTOMERS LISTED ON
APPENDIX A ATTACHED
HERETO, ON
BEHALF OF ITSELF OR ITS
LISTED PORTFOLIOS
|
By:
|
||||
|
Name:
|
Xxxxxxx X.
Xxxxxxx
|
|||
|
Title:
|
President
|
| STATE STREET BANK AND TRUST COMPANY | ||||
|
By:
|
||||
|
Name:
|
Xxxxxx X.
Xxxxxxxxxx
|
|||
|
Title:
|
Vice
Chairman
|
|||
APPENDIX
A
CUSTOMERS AND
PORTFOLIOS
Dated as of April
1, 2010
The following is a list of Customers and their
respective Portfolios for which Bank shall serve under this
Agreement.
Capital Core
Municipal Fund
Capital Short-Term
Municipal Fund
Capital California
Core Municipal Fund
Capital California
Short-Term Municipal Fund
Capital Core Bond
Fund
IN WITNESS WHEREOF,
each of the Customers and Bank have executed this Appendix A as of the date
first-written above. Execution of this Appendix A by more than one
Customer shall not create a contractual or other obligation between or among
such Customers (or between or among their respective Portfolios) and this
Appendix shall constitute a separate agreement between Bank and each Customer on
behalf of itself or each of its Portfolios.
EACH
OF THE CUSTOMERS LISTED ON
APPENDIX
A, ON BEHALF OF ITSELF OR
ITS
LISTED PORTFOLIOS
|
By:
|
||||
|
Name:
|
Xxxxxxx X.
Xxxxxxx
|
|||
|
Title:
|
President
|
| STATE STREET BANK AND TRUST COMPANY | ||||
|
By:
|
||||
|
Name:
|
Xxxxxx X.
Xxxxxxxxxx
|
|||
|
Title:
|
Vice
Chairman
|
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