EXHIBIT (g)(10)
17f-5 DELEGATION SCHEDULE
By its execution of this Delegation Schedule, between
XXXXXXXX-XXXXXXXXX INSTITUTIONAL FUNDS (the FUND), an open-end management
investment company organized under the laws of the State of Delaware and
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended (the 1940 ACT), on behalf of each of the
portfolios listed on the Appendix "C" to the Custodian Agreement, as the same
may be amended from time to time (each a PORTFOLIO and collectively the
PORTFOLIOS) acting through its Board of Directors/Trustees or its duly
appointed representative, hereby appoints BROWN BROTHERS XXXXXXXX & CO., a
New York limited partnership with an office in Boston, Massachusetts (the
"Delegate") as its delegate to perform certain functions with respect to the
custody of Fund's Assets outside the United States.
1. MAINTENANCE OF FUND'S ASSETS ABROAD. The Fund, acting through its Board or
its duly authorized representative, hereby instructs Delegate pursuant to the
terms of the Custodian Agreement, and specifically Sections 8.2, 8.3 and 8.4,
to place and maintain the Fund's Assets in countries outside the United
States in accordance with Instructions received from the Fund's investment
advisor. Such instruction shall represent a Proper Instruction under the
terms of the Custodian Agreement which Custodian acknowledges it has properly
received. The Fund acknowledges that - (a) the Delegate shall perform
services hereunder only with respect to the countries where it provides
custodial services to the Fund under the Custodian Agreement; (b) depending
on conditions in the particular country, advance notice, upon the request of
the Delegate, may be required before the Delegate shall be able to perform
its duties hereunder in or with respect to such country (such advance notice
to be reasonable in light of the specific facts and circumstances attendant
to performance of duties in such country); and (c) nothing in this Delegation
Schedule shall require the Delegate to provide delegated or custodial
services in any country, and there may from time to time be countries as to
which the Delegate determines it will not provide delegation services.
2. DELEGATION. Pursuant to the provisions of Rule 17f-5 under the 1940 Act,
the Board hereby delegates to the Delegate, and the Delegate hereby accepts
such delegation and agrees to perform, only those duties set forth in this
Delegation Schedule concerning the safekeeping of the Fund's Assets in each
of the countries as to which it acts as the Board's Delegate. The Delegate is
hereby authorized to take
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such actions on behalf of or in the name of the Fund as are reasonably
required to discharge its duties under this Delegation Schedule, including,
without limitation, to cause the Fund's Assets to be placed with a particular
Eligible Foreign Custodian in accordance herewith. The Fund confirms to the
Delegate that the investment adviser to the Fund has considered, or shall
consider, the Sovereign Risk and prevailing country risk as part of its
continuing investment decision process, including such factors as may be
reasonably related to the systemic risk of maintaining the Fund's Assets in a
particular country, including, but not limited to, financial infrastructure,
prevailing custody and settlement systems and practices (including the use of
any Securities Depository in the context of information provided by the
Custodian in the performance of its duties as required under Rule 17f-7 and
the terms of the Custodian Agreement governing such duties).
3. SELECTION OF ELIGIBLE FOREIGN CUSTODIAN AND CONTRACT ADMINISTRATION. The
Delegate shall perform the following duties exercising reasonable care,
prudence and diligence with respect to the selection of Eligible Foreign
Custodians and administration of certain contracts governing the Fund's
foreign custodial arrangements:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIAN. The Delegate shall
place and maintain the Fund's Assets with an Eligible Foreign Custodian;
PROVIDED that the Delegate shall have determined that the Fund's Assets will
be subject to reasonable care based on the standards applicable to custodians
in the relevant market after considering all factors relevant to the
safekeeping of such Assets including without limitation:
(i) 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
controls and procedures for dealing with any Securities Depository,
the method of keeping custodial records, and the security and data
protection practices;
(ii) Whether the Eligible Foreign Custodian has the requisite
financial strength to provide reasonable care for the Fund's Assets;
(iii) The Eligible Foreign Custodian's general reputation and
standing; and
(iv) Whether the Fund 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 such Eligible Foreign
Custodian in the United States or such Eligible Foreign Custodian's
appointment of an agent for service of process in the United States or
consent to jurisdiction in the United
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States.
The Delegate shall be required to make the foregoing determination to the
best of its knowledge and belief based on information reasonably available to
it after diligent efforts.
(b) CONTRACT ADMINISTRATION. The Delegate shall cause the
foreign custody arrangements with an Eligible Foreign Custodian to be
governed by a written contract that the Delegate has determined will provide
reasonable care for Fund Assets based on the standards applicable to
custodians in the relevant market. Each such contract shall, except as set
forth in the last paragraph of this subsection (b), include provisions that
provide:
(i) For indemnification or insurance arrangements (or any
combination of the foregoing) such that the Fund will be adequately
protected against the risk of loss of assets held in accordance with
such contract;
(ii) That the Fund's 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 such Custodian
arising under bankruptcy, insolvency or similar laws;
(iii) That beneficial ownership of the Fund's Assets will be
freely transferable without the payment of money or value other
than for safe custody or administration;
(iv) That adequate records will be maintained identifying the
Fund's Assets as belonging to the Fund or as being held by a third
party for the benefit of the Fund;
(v) That the Fund's independent public accountants will be given
access to those records described in (iv) above or confirmation of the
contents of such records; and
(vi) That the Delegate will receive sufficient and timely
periodic reports with respect to the safekeeping of the Fund's Assets,
including, but not limited to, notification of any transfer to
or from the Fund's account or a third party account containing the
Fund's Assets.
Such contract may contain, in lieu of any or all of the provisions
specified in this Section 3(b), such other provisions that the
Delegate determines will provide, in their entirety, the same or a
greater level of care and protection for the Fund's Assets as the
specified provisions, in their entirety.
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(c) LIMITATION TO DELEGATED SELECTION. Notwithstanding anything in
this Delegation Schedule to the contrary, the duties under this Section 3
shall apply only to Eligible Foreign Custodians selected by the Delegate and
shall not apply to Securities Depositories or to any Eligible Foreign
Custodian that the Delegate is directed to use pursuant to Section 7.
4. MONITORING. The Delegate shall establish a system to monitor the
appropriateness of maintaining the Fund's Assets with each Eligible Foreign
Custodian that has been selected by the Delegate pursuant to Section 3 of
this Delegation Schedule. The Delegate shall monitor the continuing
appropriateness of placement of the Fund's Assets in accordance with the
criteria established under Section 3(a) of this Delegation Schedule. The
Delegate shall monitor the continuing appropriateness of the contract
governing the Fund's arrangements in accordance with the criteria established
under Section 3(b) of this Delegation Schedule.
5. REPORTING. At least annually and more frequently as reasonably requested
by the Fund, the Delegate shall provide to the Board written reports
specifying placement of the Fund's Assets with each Eligible Foreign
Custodian selected by the Delegate pursuant to Section 3 of this Delegation
Schedule and shall promptly report any material changes to such foreign
custody arrangements. The Delegate will prepare such a report with respect to
any Eligible Foreign Custodian that the Delegate has been instructed to use
pursuant to Section 7 only to the extent specifically agreed with respect to
the particular situation.
6. WITHDRAWAL OF FUND'S ASSETS. If the Delegate determines that an
arrangement with a specific Eligible Foreign Custodian selected by the
Delegate under Section 3 of this Delegation Schedule no longer meets the
requirements of said Section, Delegate shall withdraw the Fund's Assets from
the non-complying arrangement as soon as reasonably practicable; PROVIDED,
however, that if in the reasonable judgment of the Delegate, such withdrawal
would require liquidation of any of the Fund's Assets or would materially
impair the liquidity, value or other investment characteristics of the Fund's
Assets, it shall be the duty of the Delegate promptly to provide information
regarding the particular circumstances and to act only in accordance with
Proper Instructions of the Fund or its Investment Advisor with respect to
such liquidation or other withdrawal.
7. DIRECTION AS TO ELIGIBLE FOREIGN CUSTODIAN. Notwithstanding this
Delegation Schedule, the Fund, acting through its Board, its Investment
Adviser or its other authorized representative, may direct the
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Delegate to place and maintain the Fund's Assets with a particular Eligible
Foreign Custodian, including without limitation with respect to investment in
countries as to which the Custodian will not provide delegation services. In
such event, the Delegate shall be entitled to rely on any such instruction as
a Proper Instruction under the terms of the Custodian Agreement and shall
have no duties under this Delegation Schedule with respect to such
arrangement save those that it may undertake specifically in writing with
respect to each particular instance.
8. STANDARD OF CARE. In carrying out its duties under this Delegation
Schedule, the Delegate agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for safekeeping and
maintaining the Fund's Assets would exercise.
9. REPRESENTATIONS. The Delegate hereby represents and warrants that it is a
U.S. Bank and that this Delegation Schedule has been duly authorized,
executed and delivered by the Delegate and is a legal, valid and binding
agreement of the Delegate.
The Fund hereby represents and warrants that its Board of
Directors/Trustees has determined that it is reasonable to rely on the
Delegate to perform the delegated responsibilities provided for herein and
that this Delegation Schedule has been duly authorized, executed and
delivered by the Fund and is a legal, valid and binding agreement of the Fund.
10. EFFECTIVENESS; TERMINATION. This Delegation Schedule shall be effective
as of the date on which this Delegation Schedule shall have been accepted by
the Delegate, as indicated by the date set forth below the Delegate's
signature. This Delegation Schedule may be terminated at any time, without
penalty, by written notice from the terminating party to the non-terminating
party. Such termination shall be effective on the 30th day following the date
on which the non-terminating party shall receive the foregoing notice. The
foregoing to the contrary notwithstanding, this Delegation Schedule shall be
deemed to have been terminated concurrently with the termination of the
Custodian Agreement.
11. NOTICES. Notices and other communications under this Delegation Schedule
are to be made in accordance with the arrangements designated for such
purpose under the Custodian Agreement unless otherwise indicated in a writing
referencing this Delegation Schedule and executed by both parties.
12. DEFINITIONS. Capitalized terms in this Delegation Schedule have the
following meanings:
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a. ELIGIBLE FOREIGN CUSTODIAN - shall have the meaning set forth
in Rule 17f-5(a)(1) of the 1940 Act and shall also include a U.S.
Bank.
b. FUND'S ASSETS - shall mean any of the Fund's investments
(including foreign currencies) for which the primary market is
outside the United States, and such cash and cash equivalents as
are reasonably necessary to effect the Fund's transactions in
such investments.
c. PROPER INSTRUCTIONS - shall have the meaning set forth in the
Custodian Agreement.
d. SECURITIES DEPOSITORY - shall have the meaning set forth in
Rule 17f-7 of the 1940 Act.
e. SOVEREIGN RISK - shall have the meaning set forth in
Section 9.1.3 of the Custodian Agreement.
f. U.S. BANK - shall mean a bank which qualifies to serve as
a custodian of assets of investment companies under Section 17(f)
of the 1940 Act.
13. GOVERNING LAW AND JURISDICTION. This Delegation Schedule shall be
construed in accordance with the laws of the State of New York. The parties
hereby submit to the exclusive jurisdiction of the Federal courts sitting in
the State of New York or of the state courts of such State.
14. FEES. Delegate shall perform its functions under this Delegation
Schedule for the compensation determined under the Custodian Agreement.
15. INTEGRATION. This Delegation Schedule sets forth all of the Delegate's
duties with respect to the selection and monitoring of Eligible Foreign
Custodians, the administration of contracts with Eligible Foreign Custodians,
the withdrawal of assets from Eligible Foreign Custodians and the issuance of
reports in connection with such duties. This Delegation Schedule constitutes
the entire agreement between the Fund and Delegate with respect to the
subject matter hereof. Accordingly, this Delegation Schedule supercedes the
Foreign Custody Manager Delegation Agreement heretofore in effect. The terms
of the Custodian Agreement shall apply generally as to matters not expressly
covered in this Delegation Schedule, including dealings with the Eligible
Foreign Custodians in the course of discharge of the Delegate's obligations
under the Custodian Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed as of the date first above written.
XXXXXXXX-XXXXXXXXX INSTITUTIONAL FUNDS
on behalf of each of the portfolios listed on the Appendix "C"
to the Custodian Agreement
By:_______________________________
By: BROWN BROTHERS XXXXXXXX & CO.
By: ________________________________
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