CUSTODIAN AGREEMENT
AGREEMENT made as of this November 1, 2005, between HSBC Investor
Portfolios, a Massachusetts business trust on behalf of its series, the HSBC
Investor High Yield Fixed Income Portfolio. HSBC Investor Funds, a Massachusetts
business trust on behalf of its series, HSBC Investor High Yield Fixed Income
Fund, and HSBC Investor High Yield Fixed Income Fund, Ltd., a Cayman Islands
exempted company (collectively, the "Fund") and Investors Bank & Trust Company,
a Massachusetts trust company (the "Bank").
WHEREAS, the Fund desires to place and maintain all of its portfolio
securities and cash in the custody of the Bank. The Bank has indicated its
willingness to act as custodian of the portfolio securities and cash of the
Fund, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Fund hereby appoints the Bank as custodian
of its portfolio securities and cash delivered to the Bank as hereinafter
described and the Bank agrees to act as such upon the terms and conditions
hereinafter set forth. For the services rendered pursuant to this Agreement the
Fund agrees to pay to the Bank fees as may be agreed to from time to time in
writing between the parties.
2. Definitions. Whenever used herein, the terms listed below will have the
following meaning:
2.1 Authorized Person. Authorized Person will mean any of the persons
duly authorized to give Proper Instructions or otherwise act on behalf of the
Fund by appropriate resolution of its Manager, and set forth in a certificate as
required by Section 4 hereof.
2.2 Manager. The term Manager shall mean HSBC Investments (USA) Inc..
2.3 Security. The term security as used herein will have the same
meaning assigned to such term in the Securities Act of 1933, as amended,
including, without limitation, any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any profit
sharing agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any security, certificate of deposit, or group or index of securities (including
any interest therein or based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national securities exchange relating to
a foreign currency, or, in general, any interest or instrument commonly known as
a "security", or any certificate of interest or participation in, temporary or
interim certificate for, receipt for, guarantee of, or warrant or right to
subscribe to, or option contract to purchase or sell any of the foregoing, and
futures, forward contracts and options thereon.
2.4 Portfolio Security. Portfolio Security will mean any security
owned by the Fund.
2.5 Officers' Certificate. Officers' Certificate will mean, unless
otherwise indicated, any request, direction, instruction, or certification in
writing signed by any two Authorized Persons of the Fund.
Custody Agrmt
1
2.6 Book-Entry System. Book-Entry System shall mean the Federal
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.
2.7 Depository. Depository shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 ("Exchange
Act"), its successor or successors and its nominee or nominees. The term
"Depository" shall further mean and include any other person authorized to act
as a depository, its successor or successors and its nominee or nominees,
specifically identified in a certified copy of a resolution of the Manager.
2.8 Proper Instructions. Proper Instructions shall mean (i)
instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized Person,
such instructions to be given in such form and manner as the Bank and the Fund
shall agree upon from time to time, and (ii) instructions (which may be
continuing instructions) regarding other matters signed or initialed by an
Authorized Person. Oral instructions will be considered Proper Instructions if
the Bank reasonably believes them to have been given by an Authorized Person.
The Fund shall cause all oral instructions to be promptly confirmed in writing.
The Bank shall act upon and comply with any subsequent Proper Instruction which
modifies a prior instruction and the sole obligation of the Bank with respect to
any follow-up or confirmatory instruction shall be to make reasonable efforts to
detect any discrepancy between the original instruction and such confirmation
and to report such discrepancy to the Fund. The Fund shall be responsible, at
the Fund's expense, for taking any action, including any reprocessing, necessary
to correct any such discrepancy or error, and to the extent such action requires
the Bank to act, the Fund shall give the Bank specific Proper Instructions as to
the action required. Upon receipt by the Bank of an Officers' Certificate as to
the authorization by the Manager accompanied by a detailed description of
procedures approved by the Fund, Proper Instructions may include communication
effected directly between electro-mechanical or electronic devices; the Fund
hereby agrees that such procedures afford adequate safeguards for the Fund's
assets.
3. Separate Accounts. If the Fund has more than one series or portfolio,
the Bank will segregate the assets of each series or portfolio to which this
Agreement relates into a separate account for each such series or portfolio
containing the assets of such series or portfolio (and all investment earnings
thereon). Unless the context otherwise requires, any reference in this Agreement
to any actions to be taken by the Fund shall be deemed to refer to the Fund
acting on behalf of one or more of its series, any reference in this Agreement
to any assets of the Fund, including, without limitation, any portfolio
securities and cash and earnings thereon, shall be deemed to refer only to
assets of the applicable series, any duty or obligation of the Bank hereunder to
the Fund shall be deemed to refer to duties and obligations with respect to such
individual series and any obligation or liability of the Fund hereunder shall be
binding only with respect to such individual series, and shall be discharged
only out of the assets of such series.
4. Certification as to Authorized Persons. The Secretary or Assistant
Secretary of the Fund will at all times maintain on file with the Bank his or
her certification to the Bank, in such form as may be acceptable to the Bank, of
the names and signatures of the Authorized Persons, it being understood that
upon the occurrence of any change in the information set forth in the most
recent certification on file (including without limitation any person named in
the most recent certification who is no longer an Authorized Person as
designated therein), the Secretary or Assistant Secretary of the Fund will sign
a new or amended certification setting forth the change and the new, additional
or omitted names or signatures. The Bank will be entitled to rely and act upon
any Officers' Certificate given to it by the Fund which has been signed by
Authorized Persons named in the most recent certification received by the Bank.
Custody Agrmt
2
5. Custody of Cash. As custodian for the Fund, the Bank will open and
maintain a separate account or accounts in the name of the Fund or in the name
of the Bank, as Custodian of the Fund, and will deposit to the account of the
Fund all of the cash of the Fund, except for cash held by a subcustodian
appointed pursuant to Sections 14.2 or 14.3 hereof, including borrowed funds,
delivered to the Bank, subject only to draft or order by the Bank acting
pursuant to the terms of this Agreement. Pursuant to the Bank's internal
policies regarding the management of cash accounts, the Bank may segregate
certain portions of the cash of the Fund into a separate savings deposit account
upon which the Bank reserves the right to require seven (7) days notice prior to
withdrawal of cash from such an account. Upon receipt by the Bank of Proper
Instructions (which may be continuing instructions) or in the case of payments
for redemptions and repurchases of outstanding units of the Fund, notification
from the Fund's transfer agent as provided in Section 7, requesting such
payment, designating the payee or the account or accounts to which the Bank will
release funds for deposit, and stating that it is for a purpose permitted under
the terms of this Section 5, specifying the applicable subsection, the Bank will
make payments of cash held for the accounts of the Fund, insofar as funds are
available for that purpose, only as permitted in subsections 5.1-5.9 below.
5.1 Purchase of Securities. Upon the purchase of securities for the
Fund, against contemporaneous receipt of such securities by the Bank or against
delivery of such securities to the Bank in accordance with generally accepted
settlement practices and customs in the jurisdiction or market in which the
transaction occurs registered in the name of the Fund or in the name of, or
properly endorsed and in form for transfer to, the Bank, or a nominee of the
Bank, or receipt for the account of the Bank pursuant to the provisions of
Section 6 below, each such payment to be made at the purchase price shown on a
broker's confirmation (or transaction report in the case of Book Entry Paper (as
that term is defined in Section 6.6 hereof)) of purchase of the securities
received by the Bank before such payment is made, as confirmed in the Proper
Instructions received by the Bank before such payment is made.
5.2 Redemptions. In such amount as may be necessary for the repurchase
or redemption of common shares of the Fund offered for repurchase or redemption
in accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of Fund. For the payment on the account
of the Fund of dividends or other distributions to shareholders as may from time
to time be declared by the Manager, interest, taxes, management or supervisory
fees, distribution fees, fees of the Bank for its services hereunder and
reimbursement of the expenses and liabilities of the Bank as provided hereunder,
fees of any transfer agent, fees for legal, accounting, and auditing services,
or other operating expenses of the Fund.
5.4 Payment in Respect of Securities. For payments in connection with
the conversion, exchange or surrender of Portfolio Securities or securities
subscribed to by the Fund held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans of money made to the Fund, but,
in the case of final payment, only upon redelivery to the Bank of any Portfolio
Securities pledged or hypothecated therefor and upon surrender of documents
evidencing the loan;
5.6 Repayment of Cash. To repay the cash delivered to the Fund for the
purpose of collateralizing the obligation to return to the Fund certificates
borrowed from the Fund representing Portfolio Securities, but only upon
redelivery to the Bank of such borrowed certificates.
Custody Agrmt
3
5.7 Foreign Exchange Transactions.
(a) For payments in connection with foreign exchange contracts or
options to purchase and sell foreign currencies for spot and future delivery
(collectively, "Foreign Exchange Agreements") which may be entered into by the
Bank on behalf of the Fund upon the receipt of Proper Instructions, such Proper
Instructions to specify the currency broker or banking institution (which may be
the Bank, or any other subcustodian or agent hereunder, acting as principal)
with which the contract or option is made, and the Bank shall have no duty with
respect to the selection of such currency brokers or banking institutions with
which the Fund deals or for their failure to comply with the terms of any
contract or option.
(b) In order to secure any payments in connection with Foreign
Exchange Agreements which may be entered into by the Bank pursuant to Proper
Instructions, the Fund agrees that the Bank shall have a continuing lien and
security interest, to the extent of any payment due under any Foreign Exchange
Agreement, in and to any property at any time held by the Bank for the Fund's
benefit or in which the Fund has an interest and which is then in the Bank's
possession or control (or in the possession or control of any third party acting
on the Bank's behalf). The Fund authorizes the Bank, in the Bank's sole
discretion, at any time to charge any such payment due under any Foreign
Exchange Agreement against any balance of account standing to the credit of the
Fund on the Bank's books.
5.8 Other Authorized Payments. For other authorized transactions of
the Fund, or other obligations of the Fund incurred for proper Fund purposes;
provided that before making any such payment the Bank will also receive a
certified copy of a resolution of the Manager signed by an Authorized Person
(other than the Person certifying such resolution) and certified by its
Secretary or Assistant Secretary, naming the person or persons to whom such
payment is to be made, and either describing the transaction for which payment
is to be made and declaring it to be an authorized transaction of the Fund, or
specifying the amount of the obligation for which payment is to be made, setting
forth the purpose for which such obligation was incurred and declaring such
purpose to be a proper corporate purpose.
5.9 Termination: Upon the termination of this Agreement as hereinafter
set forth pursuant to Section 8 and Section 16 of this Agreement.
6. Securities.
6.1 Segregation and Registration. Except as otherwise provided herein,
and except for securities to be delivered to any subcustodian appointed pursuant
to Sections 14.2 or 14.3 hereof, the Bank as custodian will receive and hold
pursuant to the provisions hereof, in a separate account or accounts and
physically segregated at all times from those of other persons, any and all
Portfolio Securities which may now or hereafter be delivered to it by or for the
account of the Fund. All such Portfolio Securities will be held or disposed of
by the Bank for, and subject at all times to, the instructions of the Fund
pursuant to the terms of this Agreement. Subject to the specific provisions
herein relating to Portfolio Securities that are not physically held by the
Bank, the Bank will register all Portfolio Securities (unless otherwise directed
by Proper Instructions or an Officers' Certificate), in the name of a registered
nominee of the Bank as defined in the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder, and will execute and deliver all
such certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state.
The Fund will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee, any Portfolio Securities which
may from time to time be registered in the name of the Fund.
Custody Agrmt
4
6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank
will vote any of the Portfolio Securities held hereunder, except in accordance
with Proper Instructions or an Officers' Certificate. The Bank will execute and
deliver, or cause to be executed and delivered, to the Fund all notices, proxies
and proxy soliciting materials delivered to the Bank with respect to such
Securities, such proxies to be executed by the registered holder of such
Securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
6.3 Corporate Action. If at any time the Bank is notified that an
issuer of any Portfolio Security has taken or intends to take a corporate action
(a "Corporate Action") that affects the rights, privileges, powers, preferences,
qualifications or ownership of a Portfolio Security, including without
limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or stock
dividend, which Corporate Action requires an affirmative response or action on
the part of the holder of such Portfolio Security (a "Response"), the Bank shall
notify the Fund promptly of the Corporate Action, the Response required in
connection with the Corporate Action and the Bank's deadline for receipt from
the Fund of Proper Instructions regarding the Response (the "Response
Deadline"). The Bank shall forward to the Fund via telecopier and/or overnight
courier all notices, information statements or other materials relating to the
Corporate Action promptly after receipt of such materials by the Bank.
(a) The Bank shall act upon a required Response only after
receipt by the Bank of Proper Instructions from the Fund no later than 5:00 p.m.
on the date specified as the Response Deadline and only if the Bank (or its
agent or subcustodian hereunder) has actual possession of all necessary
Securities, consents and other materials no later than 5:00 p.m. on the date
specified as the Response Deadline.
(b) The Bank shall have no duty to act upon a required Response
if Proper Instructions relating to such Response and all necessary Securities,
consents and other materials are not received by and in the possession of the
Bank no later than 5:00 p.m. on the date specified as the Response Deadline.
Notwithstanding, the Bank may, in its sole discretion, use its best efforts to
act upon a Response for which Proper Instructions and/or necessary Securities,
consents or other materials are received by the Bank after 5:00 p.m. on the date
specified as the Response Deadline, it being acknowledged and agreed by the
parties that any undertaking by the Bank to use its best efforts in such
circumstances shall in no way create any duty upon the Bank to complete such
Response prior to its expiration.
(c) In the event that the Fund notifies the Bank of a Corporate
Action requiring a Response and the Bank has received no other notice of such
Corporate Action, the Response Deadline shall be 48 hours prior to the Response
expiration time set by the depository processing such Corporate Action.
(d) Section 14.3(g) of this Agreement shall govern any Corporate
Action involving Foreign Portfolio Securities held by a Selected Foreign
Sub-Custodian.
(e) The Bank provides the ability for Funds to respond to
Corporate Actions through electronic means using either (i) the Bank's
InvestCaps function or (ii) appropriate SWIFT messaging. In the event any Fund
or its agent provides a Corporate Action Response other than by the
aforementioned electronic means, the Bank shall not be responsible for any delay
or failure to process such Response in a timely manner. In addition, the Bank
may assess additional processing fees to cover the cost of manually processing
Corporate Actions Responses provided to the Bank other than by the
aforementioned electronic means.
6.4 Book-Entry System. Provided (i) the Bank has received a certified
copy of a resolution of the Manager specifically approving deposits of Fund
assets in the Book-Entry System, and (ii) for any
Custody Agrmt
5
subsequent changes to such arrangements following such approval, the Manager has
reviewed and approved the arrangement and has not delivered an Officer's
Certificate to the Bank indicating that the Manager has withdrawn its approval:
(a) The Bank may keep Portfolio Securities in the Book-Entry
System provided that such Portfolio Securities are represented in an account
("Account") of the Bank (or its agent) in such System which shall not include
any assets of the Bank (or such agent) other than assets held as a fiduciary,
custodian, or otherwise for customers;
(b) The records of the Bank (and any such agent) with respect to
the Fund's participation in the Book-Entry System through the Bank (or any such
agent) will identify by book entry the Portfolio Securities which are included
with other securities deposited in the Account and shall at all times during the
regular business hours of the Bank (or such agent) be open for inspection by
duly authorized officers, employees or agents of the Fund. Where securities are
transferred to the Fund's account, the Bank shall also, by book entry or
otherwise, identify as belonging to the Fund a quantity of securities in a
fungible bulk of securities (i) registered in the name of the Bank or its
nominee, or (ii) shown on the Bank's account on the books of the Federal Reserve
Bank;
(c) The Bank (or its agent) shall pay for securities purchased
for the account of the Fund or shall pay cash collateral against the return of
Portfolio Securities loaned by the Fund upon (i) receipt of advice from the
Book-Entry System that such Securities have been transferred to the Account, and
(ii) the making of an entry on the records of the Bank (or its agent) to reflect
such payment and transfer for the account of the Fund. The Bank (or its agent)
shall transfer securities sold or loaned for the account of the Fund upon
(i) receipt of advice from the Book-Entry System that
payment for securities sold or payment of the initial cash collateral against
the delivery of securities loaned by the Fund has been transferred to the
Account; and
(ii) the making of an entry on the records of the Bank (or
its agent) to reflect such transfer and payment for the account of the Fund.
Copies of all advices from the Book-Entry System of transfers of securities for
the account of the Fund shall identify the Fund, be maintained for the Fund by
the Bank and shall be provided to the Fund at its request. The Bank shall send
the Fund a confirmation of any transfers to or from the account of the Fund;
(d) The Bank will promptly provide the Fund with any report
obtained by the Bank or its agent on the Book-Entry System's accounting system,
internal accounting control and procedures for safeguarding securities deposited
in the Book-Entry System;
6.5 Use of a Depository. Provided (i) the Bank has received a
certified copy of a resolution of the Manager specifically approving deposits in
DTC or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval, the Manager has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Manager has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive, exchange,
release, lend, deliver and otherwise deal with Portfolio Securities including
stock dividends, rights and other items of like nature, and to receive and remit
to the Bank on behalf of the Fund all income and other payments thereon and to
take all steps necessary and proper in connection with the collection thereof;
Custody Agrmt
6
(b) Registration of Portfolio Securities may be made in the name
of any nominee or nominees used by such Depository;
(c) Payment for securities purchased and sold may be made through
the clearing medium employed by such Depository for transactions of participants
acting through it. Upon any purchase of Portfolio Securities, payment will be
made only upon delivery of the securities to or for the account of the Fund and
the Fund shall pay cash collateral against the return of Portfolio Securities
loaned by the Fund only upon delivery of the Securities to or for the account of
the Fund; and upon any sale of Portfolio Securities, delivery of the Securities
will be made only against payment therefor or, in the event Portfolio Securities
are loaned, delivery of Securities will be made only against receipt of the
initial cash collateral to or for the account of the Fund; and
(d) The Bank shall use its best efforts to provide that:
(i) The Depository obtains replacement of any certificated
Portfolio Security deposited with it in the event such Security is lost,
destroyed, wrongfully taken or otherwise not available to be returned to the
Bank upon its request;
(ii) Proxy materials received by a Depository with respect
to Portfolio Securities deposited with such Depository are forwarded immediately
to the Bank for prompt transmittal to the Fund;
(iii) Such Depository promptly forwards to the Bank
confirmation of any purchase or sale of Portfolio Securities and of the
appropriate book entry made by such Depository to the Fund's account;
(iv) Such Depository prepares and delivers to the Bank such
records with respect to the performance of the Bank's obligations and duties
hereunder as may be necessary for the Fund to comply with applicable
recordkeeping requirements; and
(v) Such Depository delivers to the Bank all internal
accounting control reports, whether or not audited by an independent public
accountant, as well as such other reports as the Fund may reasonably request in
order to verify the Portfolio Securities held by such Depository.
6.6 Use of Book-Entry System for Commercial Paper. Provided (i) the
Bank has received a certified copy of a resolution of the Manager specifically
approving participation in a system maintained by the Bank for the holding of
commercial paper in book-entry form ("Book-Entry Paper") and (ii) for each year
following such approval the Manager has received and approved the arrangements,
upon receipt of Proper Instructions and upon receipt of confirmation from an
Issuer (as defined below) that the Fund has purchased such Issuer's Book-Entry
Paper, the Bank shall issue and hold in book-entry form, on behalf of the Fund,
commercial paper issued by issuers with whom the Bank has entered into a
book-entry agreement (the "Issuers"). In maintaining procedures for Book-Entry
Paper, the Bank agrees that:
(a) The Bank will maintain all Book-Entry Paper held by the Fund
in an account of the Bank that includes only assets held by it for customers;
(b) The records of the Bank with respect to the Fund's purchase
of Book-Entry Paper through the Bank will identify, by book-entry, commercial
paper belonging to the Fund which is included in the Book-Entry System and shall
at all times during the regular business hours of the Bank be open for
inspection by duly authorized officers, employees or agents of the Fund;
Custody Agrmt
7
(c) The Bank shall pay for Book-Entry Paper purchased for the
account of the Fund upon contemporaneous (i) receipt of advice from the Issuer
that such sale of Book-Entry Paper has been effected, and (ii) the making of an
entry on the records of the Bank to reflect such payment and transfer for the
account of the Fund;
(d) The Bank shall cancel such Book-Entry Paper obligation upon
the maturity thereof upon contemporaneous (i) receipt of advice that payment for
such Book-Entry Paper has been transferred to the Fund, and (ii) the making of
an entry on the records of the Bank to reflect such payment for the account of
the Fund; and
(e) The Bank will send to the Fund such reports on its system of
internal accounting control with respect to the Book-Entry Paper as the Fund may
reasonably request from time to time.
6.7 Use of Immobilization Programs. Provided (i) the Bank has received
a certified copy of a resolution of the Manager specifically approving the
maintenance of Portfolio Securities in an immobilization program operated by a
bank, and (ii) for each year following such approval the Manager has reviewed
and approved the arrangement and has not delivered an Officer's Certificate to
the Bank indicating that the Manager has withdrawn its approval, the Bank shall
enter into such immobilization program with such bank acting as a subcustodian
hereunder.
6.8 Eurodollar CDs. Any Portfolio Securities which are Eurodollar CDs
may be physically held by the European branch of the U.S. banking institution
that is the issuer of such Eurodollar CD (a "European Branch"), provided that
such Portfolio Securities are identified on the books of the Bank as belonging
to the Fund and that the books of the Bank identify the European Branch holding
such Portfolio Securities. Notwithstanding any other provision of this Agreement
to the contrary, except as stated in the first sentence of this subsection 6.8,
the Bank shall be under no other duty with respect to such Eurodollar CDs
belonging to the Fund.
6.9 Options and Futures Transactions.
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or
Over-the-Counter.
(i) The Bank shall take action as to put options ("puts")
and call options ("calls") purchased or sold (written) by the Fund regarding
escrow or other arrangements (i) in accordance with the provisions of any
agreement entered into upon receipt of Proper Instructions among the Bank, any
broker-dealer registered with the National Association of Securities Dealers,
Inc. (the "NASD"), and, if necessary, the Fund, relating to the compliance with
the rules of the Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations.
(ii) Unless another agreement requires it to do so, the Bank
shall be under no duty or obligation to see that the Fund has deposited or is
maintaining adequate margin, if required, with any broker in connection with any
option, nor shall the Bank be under duty or obligation to present such option to
the broker for exercise unless it receives Proper Instructions from the Fund.
The Bank shall have no responsibility for the legality of any put or call
purchased or sold on behalf of the Fund, the propriety of any such purchase or
sale, or the adequacy of any collateral delivered to a broker in connection with
an option or deposited to or withdrawn from a Segregated Account (as defined in
subsection 6.10 below). The Bank specifically, but not by way of limitation,
shall not be under any duty or obligation to: (i) periodically check or notify
the Fund that the amount of such collateral held by a broker or held in a
Segregated Account is sufficient to protect such broker or the Fund against any
loss; (ii) effect the return of any collateral delivered
Custody Agrmt
8
to a broker; or (iii) advise the Fund that any option it holds, has or is about
to expire. Such duties or obligations shall be the sole responsibility of the
Fund.
(b) Puts, Calls and Futures Traded on Commodities Exchanges
(i) The Bank shall take action as to puts, calls and futures
contracts ("Futures") purchased or sold by the Fund in accordance with the
provisions of any agreement entered into upon the receipt of Proper Instructions
among the Fund, the Bank and a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in connection with
transactions by the Fund.
(ii) The responsibilities of the Bank as to futures, puts
and calls traded on commodities exchanges, any Futures Commission Merchant
account and the Segregated Account shall be limited as set forth in subparagraph
(a)(ii) of this Section 6.9 as if such subparagraph referred to Futures
Commission Merchants rather than brokers, and Futures and puts and calls thereon
instead of options.
6.10 Segregated Account. The Bank shall upon receipt of Proper
Instructions establish and maintain a Segregated Account or Accounts for and on
behalf of the Fund.
(a) Cash and/or Portfolio Securities may be transferred into a
Segregated Account upon receipt of Proper Instructions in the following
circumstances:
(i) in accordance with the provisions of any agreement among
the Fund, the Bank and a broker-dealer registered under the Exchange Act and a
member of the NASD or any Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities exchange or the
Commodity Futures Trading Commission or any registered Contract Market, or of
any similar organizations regarding escrow or other arrangements in connection
with transactions by the Fund;
(ii) for the purpose of segregating cash or securities in
connection with options purchased or written by the Fund or commodity futures
purchased or written by the Fund;
(iii) for the deposit of liquid assets, such as cash, U.S.
Government securities or other high grade debt obligations, having a market
value (marked to market on a daily basis) at all times equal to not less than
the aggregate purchase price due on the settlement dates of all the Fund's then
outstanding forward commitment or "when-issued" agreements relating to the
purchase of Portfolio Securities and all the Fund's then outstanding commitments
under reverse repurchase agreements entered into with broker-dealer firms;
(iv) for the purposes of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of Segregated Accounts by registered investment
companies;
(v) for other proper corporate purposes, but only, in the
case of this clause (v), upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Manager, or of the executive committee of
the Manager signed by an officer of the Fund and certified by the Secretary or
an Assistant Secretary, setting forth the purpose or purposes of such Segregated
Account and declaring such purposes to be proper corporate purposes.
Custody Agrmt
9
(b) Cash and/or Portfolio Securities may be withdrawn from a
Segregated Account pursuant to Proper Instructions in the following
circumstances:
(i) with respect to assets deposited in accordance with the
provisions of any agreements referenced in (a)(i) or (a)(ii) above, in
accordance with the provisions of such agreements;
(ii) with respect to assets deposited pursuant to (a)(iii)
or (a)(iv) above, for sale or delivery to meet the Fund's obligations under
outstanding forward commitment or when-issued agreements for the purchase of
Portfolio Securities and under reverse repurchase agreements;
(iii) for exchange for other liquid assets of equal or
greater value deposited in the Segregated Account;
(iv) to the extent that the Fund's outstanding forward
commitment or when-issued agreements for the purchase of portfolio securities or
reverse repurchase agreements are sold to other parties or the Fund's
obligations thereunder are met from assets of the Fund other than those in the
Segregated Account;
(v) for delivery upon settlement of a forward commitment or
when-issued agreement for the sale of Portfolio Securities; or
(vi) with respect to assets deposited pursuant to (a)(v)
above, in accordance with the purposes of such account as set forth in Proper
Instructions.
6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon
receipt of Proper Instructions relating to the purchase by the Fund of
interest-bearing fixed-term and call deposits, transfer cash, by wire or
otherwise, in such amounts and to such bank or banks as shall be indicated in
such Proper Instructions. The Bank shall include in its records with respect to
the assets of the Fund appropriate notation as to the amount of each such
deposit, the banking institution with which such deposit is made (the "Deposit
Bank"), and shall retain such forms of advice or receipt evidencing the deposit,
if any, as may be forwarded to the Bank by the Deposit Bank. Such deposits shall
be deemed Portfolio Securities of the Fund and the responsibility of the Bank
therefore shall be the same as and no greater than the Bank's responsibility in
respect of other Portfolio Securities of the Fund.
6.12 Transfer of Securities. The Bank will transfer, exchange, deliver
or release Portfolio Securities held by it hereunder, insofar as such Securities
are available for such purpose, provided that before making any transfer,
exchange, delivery or release under this Section only upon receipt of Proper
Instructions. The Proper Instructions shall state that such transfer, exchange
or delivery is for a purpose permitted under the terms of this Section 6.12, and
shall specify the applicable subsection, or describe the purpose of the
transaction with sufficient particularity to permit the Bank to ascertain the
applicable subsection. After receipt of such Proper Instructions, the Bank will
transfer, exchange, deliver or release Portfolio Securities only in the
following circumstances:
(a) Upon sales of Portfolio Securities for the account of the
Fund, against contemporaneous receipt by the Bank of payment therefor in full,
or against payment to the Bank in accordance with generally accepted settlement
practices and customs in the jurisdiction or market in which the transaction
occurs, each such payment to be in the amount of the sale price shown in a
broker's confirmation of sale received by the Bank before such payment is made,
as confirmed in the Proper Instructions received by the Bank before such payment
is made;
Custody Agrmt
10
(b) In exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise, upon exercise of subscription,
purchase or sale or other similar rights represented by such Portfolio
Securities, or for the purpose of tendering shares in the event of a tender
offer therefor, provided, however, that in the event of an offer of exchange,
tender offer, or other exercise of rights requiring the physical tender or
delivery of Portfolio Securities, the Bank shall have no liability for failure
to so tender in a timely manner unless such Proper Instructions are received by
the Bank at least two business days prior to the date required for tender, and
unless the Bank (or its agent or subcustodian hereunder) has actual possession
of such Security at least two business days prior to the date of tender;
(c) Upon conversion of Portfolio Securities pursuant to their
terms into other securities;
(d) For the purpose of redeeming in-kind shares of the Fund upon
authorization from the Fund;
(e) In the case of option contracts owned by the Fund, for
presentation to the endorsing broker;
(f) When such Portfolio Securities are called, redeemed or
retired or otherwise become payable;
(g) For the purpose of effectuating the pledge of Portfolio
Securities held by the Bank in order to collateralize loans made to the Fund by
any bank, including the Bank; provided, however, that such Portfolio Securities
will be released only upon payment to the Bank for the account of the Fund of
the moneys borrowed, provided further, however, that in cases where additional
collateral is required to secure a borrowing already made, and such fact is made
to appear in the Proper Instructions, Portfolio Securities may be released for
that purpose without any such payment. In the event that any pledged Portfolio
Securities are held by the Bank, they will be so held for the account of the
lender, and after notice to the Fund from the lender in accordance with the
normal procedures of the lender and any loan agreement between the fund and the
lender that an event of deficiency or default on the loan has occurred, the Bank
may deliver such pledged Portfolio Securities to or for the account of the
lender;
(h) for the purpose of releasing certificates representing
Portfolio Securities, against contemporaneous receipt by the Bank of the fair
market value of such security, as set forth in the Proper Instructions received
by the Bank before such payment is made;
(i) for the purpose of delivering securities lent by the Fund to
a bank or broker dealer, but only against receipt in accordance with street
delivery custom except as otherwise provided herein, of adequate collateral as
agreed upon from time to time by the Fund and the Bank, and upon receipt of
payment in connection with any repurchase agreement relating to such securities
entered into by the Fund;
(j) for other authorized transactions of the Fund or for other
proper corporate purposes; provided that before making such transfer, the Bank
will also receive a certified copy of resolutions of the Manager, signed by an
authorized officer of the Fund (other than the officer certifying such
resolution) and certified by its Secretary or Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to be
an authorized transaction of the Fund or such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made; and
Custody Agrmt
11
(k) upon termination of this Agreement as hereinafter set forth
pursuant to Section 8 and Section 16 of this Agreement.
As to any deliveries made by the Bank pursuant to this Section 6.12,
securities or cash receivable in exchange therefor shall be delivered to the
Bank.
7. Redemptions. In the case of payment of assets of the Fund held by the
Bank in connection with redemptions and repurchases by the Fund of outstanding
common shares, the Bank will rely on notification by the Fund's transfer agent
of receipt of a request for redemption and certificates, if issued, in proper
form for redemption before such payment is made. Payment shall be made in
accordance with the Articles of Incorporation or Declaration of Trust and
By-laws of the Fund (the "Articles"), from assets available for said purpose.
8. Merger, Dissolution, etc. of Fund. In the case of the following
transactions, not in the ordinary course of business, namely, the merger of the
Fund into or the consolidation of the Fund with another investment company, the
sale by the Fund of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, the Bank will, after the payment to the Bank of the
fees through the end of the then current term of this Agreement and
disbursements and expenses of the Bank, deliver the Portfolio Securities held by
it under this Agreement and disburse cash only upon the order of the Fund set
forth in an Officers' Certificate, accompanied by a certified copy of a
resolution of the Manager authorizing any of the foregoing transactions. Upon
completion of such delivery and disbursement, this Agreement will terminate and
the Bank shall be released from any and all obligations hereunder.
9. Actions of Bank Without Prior Authorization. Notwithstanding anything
herein to the contrary, unless and until the Bank receives an Officers'
Certificate to the contrary, the Bank will take the following actions without
prior authorization or instruction of the Fund or the transfer agent:
9.1 Endorse for collection and collect on behalf of and in the name of
the Fund all checks, drafts, or other negotiable or transferable instruments or
other orders for the payment of money received by it for the account of the Fund
and hold for the account of the Fund all income, dividends, interest and other
payments or distributions of cash with respect to the Portfolio Securities held
thereunder;
9.2 Present for payment all coupons and other income items held by it
for the account of the Fund which call for payment upon presentation and hold
the cash received by it upon such payment for the account of the Fund;
9.3 Receive and hold for the account of the Fund all securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar securities
issued with respect to any Portfolio Securities held by it hereunder.
9.4 Execute as agent on behalf of the Fund all necessary ownership and
other certificates and affidavits required by the Internal Revenue Code or the
regulations of the Treasury Department issued thereunder, or by the laws of any
state, now or hereafter in effect, inserting the Fund's name on such
certificates as the owner of the securities covered thereby, to the extent it
may lawfully do so and as may be required to obtain payment in respect thereof.
The Bank will execute and deliver such certificates in connection with Portfolio
Securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any State;
Custody Agrmt
12
9.5 Present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by it upon
payment for the account of the Fund; and
9.6 Exchange interim receipts or temporary securities for definitive
securities.
10. Collections and Defaults. The Bank will use reasonable efforts to
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Fund notice actually received by it of any call for redemption,
offer of exchange, right of subscription, reorganization or other proceedings
affecting such Securities. If Portfolio Securities upon which such income is
payable are in default or payment is refused after due demand or presentation,
the Bank will notify the Fund in writing of any default or refusal to pay within
two business days from the day on which it receives knowledge of such default or
refusal.
11. Maintenance of Records. The Bank will maintain records with respect to
transactions for which the Bank is responsible pursuant to the terms and
conditions of this Agreement. The books and records of the Bank pertaining to
its actions under this Agreement and reports by the Bank or its independent
accountants concerning its systems, procedures for safeguarding securities and
internal accounting controls will be open to inspection and audit at reasonable
times by auditors employed by the Fund and will be preserved by the Bank in the
manner and in accordance with applicable rules and regulations under the 1940
Act.
The books and records maintained by the Bank on behalf of the Fund are the
property of the Fund and will be surrendered upon request in accordance with
Section 16.
12. RESERVED
13. Additional Services. The Bank shall perform the additional services for
the Fund as are set forth on Appendix A hereto. Appendix A may be amended from
time to time upon agreement of the parties to include further additional
services to be provided by the Bank to the Fund, at which time the fees shall be
appropriately increased.
14. Duties of the Bank.
14.1 Performance of Duties and Standard of Care. In performing its
duties hereunder and any other duties listed on any Schedule hereto, if any, the
Bank will be entitled to receive and act upon the advice of independent counsel
of its own selection, which may be counsel for the Fund, and will be without
liability for any action taken or thing done or omitted to be done in accordance
with this Agreement in good faith in conformity with such advice.
The Bank will be under no duty or obligation to inquire into and will not
be liable for:
(a) the validity of the issue of any Portfolio Securities
purchased by or for the Fund, the legality of the purchases thereof or the
propriety of the price incurred therefor;
(b) the legality of any sale of any Portfolio Securities by or
for the Fund or the propriety of the amount for which the same are sold;
(c) the legality of an issue or sale of any common shares of the
Fund or the sufficiency of the amount to be received therefor;
Custody Agrmt
13
(d) the legality of the repurchase of any common shares of the
Fund or the propriety of the amount to be paid therefor;
(e) the legality of the declaration of any dividend by the Fund
or the legality of the distribution of any Portfolio Securities as payment in
kind of such dividend; and
(f) any property or moneys of the Fund unless and until received
by it, and any such property or moneys delivered or paid by it pursuant to the
terms hereof.
Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to or held by
it for the account of the Fund are such as may properly be held by the Fund
under the provisions of its Articles, By-laws, any federal or state statutes or
any rule or regulation of any governmental agency.
14.2 Agents and Subcustodians with Respect to Property of the Fund
Held in the United States. The Bank may employ agents of its own selection in
the performance of its duties hereunder and shall be responsible for the acts
and omissions of such agents as if performed by the Bank hereunder. Without
limiting the foregoing, certain duties of the Bank hereunder may be performed by
one or more affiliates of the Bank.
Upon receipt of Proper Instructions, the Bank may employ subcustodians
selected by or at the direction of the Fund to act as a custodian of the Fund's
assets with respect to property of the Fund held in the United States. The Bank
shall have no liability to the Fund or any other person by reason of any act or
omission of any such subcustodian and the Fund shall indemnify the Bank and hold
it harmless from and against any and all actions, suits and claims, arising
directly or indirectly out of the performance of any subcustodian. Upon request
of the Bank, the Fund shall assume the entire defense of any action, suit, or
claim subject to the foregoing indemnity. The Fund shall pay all fees and
expenses of any subcustodian.
14.3 Duties of the Bank with Respect to Property of the Fund Held
Outside of the United States.
(a) Appointment of Foreign Sub-Custodians. The Fund hereby
authorizes and instructs the Bank to employ as sub-custodians for the Fund's
Portfolio Securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories customarily
used by Bank for such purposes (each, a "Selected Foreign Sub-Custodian"). Upon
receipt of Proper Instructions, the Bank and the Fund may agree to designate
additional foreign banking institutions and foreign securities depositories to
act as Selected Foreign Sub-Custodians hereunder. Upon receipt of Proper
Instructions, the Fund may instruct the Bank to cease the employment of any one
or more such Selected Foreign Sub-Custodians for maintaining custody of the
Fund's assets, and the Bank shall so cease to employ such sub-custodian as soon
as alternate custodial arrangements have been implemented. The Bank shall serve
as the Foreign Custody Manager delegate of the Fund's Board of Trustees for
purposes of Rule 17f-5(c) under the 1940 Act.
(b) Foreign Securities Depositories. Except as may otherwise be
agreed upon in writing by the Bank and the Fund, assets of the Fund shall be
maintained in foreign securities depositories only through arrangements
implemented by the foreign banking institutions serving as Selected Foreign Sub-
Custodians pursuant to the terms hereof. Where possible, such arrangements shall
include entry into agreements containing the provisions set forth in
subparagraph (d) hereof. Notwithstanding the foregoing, except as may otherwise
be agreed upon in writing by the Bank and the Fund, the Fund authorizes the
deposit in Euro-clear, the securities clearance and depository facilities
operated by Xxxxxx Guaranty Trust Company of New York in Brussels, Belgium, of
Foreign Portfolio Securities eligible for deposit therein and the use of
Custody Agrmt
14
Euro-clear in connection with settlements of purchases and sales of securities
and deliveries and returns of securities, until notified to the contrary
pursuant to subparagraph (a) hereunder.
(c) Segregation of Securities. The Bank shall identify on its
books as belonging to the Fund the Foreign Portfolio Securities held by each
Selected Foreign Sub-Custodian. Each agreement pursuant to which the Bank
employs a foreign banking institution shall require that such institution
establish a custody account for the Bank and hold in that account Foreign
Portfolio Securities and other assets of the Fund, and, in the event that such
institution deposits Foreign Portfolio Securities in a foreign securities
depository, that it shall identify on its books as belonging to the Bank the
securities so deposited.
(d) Agreements with Foreign Banking Institutions. Each of the
agreements pursuant to which a foreign banking institution holds assets of the
Fund (each, a "Foreign Sub-Custodian Agreement") shall be substantially in the
form provided to the Fund and shall provide that: (a) the Fund's assets will not
be subject to any right, charge, security interest, lien or claim of any kind in
favor of the foreign banking institution or its creditors or agent, except a
claim of payment for their safe custody or administration (including, without
limitation, any fees or taxes payable upon transfers or reregistration of
securities); (b) beneficial ownership of the Fund's assets will be freely
transferable without the payment of money or value other than for custody or
administration (including, without limitation, any fees or taxes payable upon
transfers or reregistration of securities); (c) adequate records will be
maintained identifying the assets as belonging to the Bank; (d) officers of or
auditors employed by, or other representatives of the Bank, including to the
extent permitted under applicable law, the independent public accountants for
the Fund, will be given access to the books and records of the foreign banking
institution relating to its actions under its agreement with the Bank; and (e)
assets of the Fund held by the Selected Foreign Sub-Custodian will be subject
only to the instructions of the Bank or its agents.
(e) Access of Independent Accountants of the Fund. Upon request
of the Fund, the Bank will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records of any
foreign banking institution employed as a Selected Foreign Sub-Custodian insofar
as such books and records relate to the performance of such foreign banking
institution under its Foreign Sub-Custodian Agreement.
(f) Reports by Bank. The Bank will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the securities and
other assets of the Fund held by Selected Foreign Sub-Custodians, including but
not limited to an identification of entities having possession of the Foreign
Portfolio Securities and other assets of the Fund and advice of any transfers of
assets into or out of the accounts of such Selected Foreign Sub-Custodians.
(g) Transactions in Foreign Custody Account. Transactions with
respect to the assets of the Fund held by a Selected Foreign Sub-Custodian shall
be effected pursuant to Proper Instructions from the Fund to the Bank and shall
be effected in accordance with the applicable Foreign Sub-Custodian Agreement.
If at any time any Foreign Portfolio Securities shall be registered in the name
of the nominee of the Selected Foreign Sub-Custodian, the Fund agrees to hold
any such nominee harmless from any liability by reason of the registration of
such securities in the name of such nominee.
Notwithstanding any provision of this Agreement to the
contrary, settlement and payment for Foreign Portfolio Securities received for
the account of the Fund and delivery of Foreign Portfolio Securities maintained
for the account of the Fund may be effected in accordance with the customary
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivering securities to the purchaser thereof or to
Custody Agrmt
15
a dealer therefor (or an agent for such purchaser or dealer) against a receipt
with the expectation of receiving later payment for such securities from such
purchaser or dealer.
In connection with any action to be taken with respect to
the Foreign Portfolio Securities held hereunder, including, without limitation,
the exercise of any voting rights, subscription rights, redemption rights,
exchange rights, conversion rights or tender rights, or any other action in
connection with any other right, interest or privilege with respect to such
Securities (collectively, the "Rights"), the Bank shall promptly transmit to the
Fund such information in connection therewith as is made available to the Bank
by the Foreign Sub-Custodian, and shall promptly forward to the applicable
Foreign Sub-Custodian any instructions, forms or certifications with respect to
such Rights, and any instructions relating to the actions to be taken in
connection therewith, as the Bank shall receive from the Fund pursuant to Proper
Instructions. Notwithstanding the foregoing, the Bank shall have no further duty
or obligation with respect to such Rights, including, without limitation, the
determination of whether the Fund is entitled to participate in such Rights
under applicable U.S. and foreign laws, or the determination of whether any
action proposed to be taken with respect to such Rights by the Fund or by the
applicable Foreign Sub-Custodian will comply with all applicable terms and
conditions of any such Rights or any applicable laws or regulations, or market
practices within the market in which such action is to be taken or omitted.
(h) Liability of Selected Foreign Sub-Custodians. Each Foreign
Sub-Custodian Agreement with a foreign banking institution shall require the
institution to exercise reasonable care in the performance of its duties and to
indemnify, and hold harmless, the Bank and the Fund from and against certain
losses, damages, costs, expenses, liabilities or claims arising out of or in
connection with the institution's performance of such obligations, all as set
forth in the applicable Foreign Sub-Custodian Agreement. The Bank shall grant
the Fund a right of subrogation with regard to the rights of the Bank as they
affect the Fund under any applicable Foreign Sub-Custodian Agreement. The Fund
acknowledges that the Bank, as a participant in Euro-clear, is subject to the
Terms and Conditions Governing the Euro-clear System, a copy of which has been
made available to the Fund. The Fund acknowledges that pursuant to such Terms
and Conditions, Xxxxxx Guaranty Brussels shall have the sole right to exercise
or assert any and all rights or claims in respect of actions or omissions of, or
the bankruptcy or insolvency of, any other depository, clearance system or
custodian utilized by Euro-clear in connection with the Fund's securities and
other assets.
(i) Tax Law. The Bank shall have no responsibility or liability
for any obligations now or hereafter imposed on the Fund or the Bank as
custodian of the Fund by the tax laws of any jurisdiction, and it shall be the
responsibility of the Fund to notify the Bank of the obligations imposed on the
Fund, or its partners or the Bank as the custodian of the Fund by the tax law of
any non-U.S. jurisdiction, including responsibility for withholding and other
taxes, assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Selected Foreign
Sub-custodian with regard to such tax law shall be to use reasonable efforts to
assist the Fund with respect to any claim for exemption or refund under the tax
law of jurisdictions for which the Fund has provided such information.
14.4 Insurance. The Bank shall use the same care with respect to the
safekeeping of Portfolio Securities and cash of the Fund held by it as it uses
in respect of its own similar property but it need not maintain any special
insurance for the benefit of the Fund.
14.5. Fees and Expenses of the Bank. For the services rendered by the
Bank hereunder, the Fund will pay to the Bank such fees at such rate as shall be
agreed upon in writing by the parties from time to time. The Fund will also pay
or reimburse the Bank from time to time for any transfer taxes payable upon any
transfers made hereunder, and for all necessary proper disbursements, expenses
and charges made or incurred by the Bank in the performance of this Agreement
(including any duties listed on any Schedule hereto, if any) including any
indemnities for any loss, liabilities or expense to the Bank as provided herein.
Custody Agrmt
16
The Bank will also be entitled to reimbursement by the Fund for all reasonable
expenses incurred in conjunction with termination of this Agreement and any
conversion or transfer work done in connection therewith.
Fees and expenses will be calculated monthly. Fees and expenses owed
to the Bank for any month may be charged against any cash balance held by the
Fund beginning on the first (1st) business day after the end of such month based
on information then available. Fees charged to an account may result in an
overdraft that will be subject to normal interest charges. The Fund will have
thirty (30) days after the receipt of an invoice to dispute any charge that
appears on such invoice. After such thirty (30) day period, the invoice will be
deemed to be complete and accurate and may no longer be disputed.
14.6 Advances by the Bank. The Bank may, in its sole discretion,
advance funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this Agreement
for such payments by the Fund. Should such a payment or payments, with advanced
funds, result in an overdraft (due to insufficiencies of the Fund's account with
the Bank, or for any other reason) this Agreement deems any such overdraft or
related indebtedness a loan made by the Bank to the Fund payable on demand. Such
overdraft shall bear interest at the current rate charged by the Bank for such
loans unless the Fund shall provide the Bank with agreed upon compensating
balances. The Fund agrees that the Bank shall have a continuing lien and
security interest to the extent of any overdraft or indebtedness and to the
extent required by law, in and to any property at any time held by it for the
Fund's benefit or in which the Fund has an interest and which is then in the
Bank's possession or control (or in the possession or control of any third party
acting on the Bank's behalf). The Fund authorizes the Bank, in the Bank's sole
discretion, at any time to charge any overdraft or indebtedness, together with
interest due thereon, against any balance of account standing to the credit of
the Fund on the Bank's books.
15. Limitation of Liability.
15.1 Notwithstanding anything in this Agreement to the contrary, in no
event shall the Bank or any of its officers, directors, employees or agents
(collectively, the "Indemnified Parties") be liable to the Fund or any third
party, and the Fund shall indemnify and hold the Bank and the Indemnified
Parties harmless from and against any and all loss, damage, liability, actions,
suits, claims, costs and expenses, including legal fees, (a "Claim") arising as
a result of any act or omission of the Bank or any Indemnified Party under this
Agreement, except for any Claim resulting from the gross negligence, willful
misfeasance or bad faith of the Bank or any Indemnified Party in the performance
of its duties or reckless disregard of its duties hereunder. Without limiting
the foregoing, neither the Bank nor the Indemnified Parties shall be liable for,
and the Bank and the Indemnified Parties shall be indemnified against, any Claim
arising as a result of:
(a) Any act or omission by the Bank or any Indemnified Party in
good faith reliance upon the terms of this Agreement, any Officer's Certificate,
Proper Instructions, resolution of the Manager, telegram, telecopier, notice,
request, certificate or other instrument reasonably believed by the Bank to
genuine;
(b) Any act or omission of any subcustodian selected by or at the
direction of the Fund;
(c) Any act or omission of any Selected Foreign Sub-Custodian to
the extent to which such Selected Foreign Sub-Custodian is not liable to the
Bank;
(d) Any Corporate Action, distribution or other event related to
Portfolio Securities which, at the direction of the Fund, have not been
registered in the name of the Bank or its nominee;
Custody Agrmt
17
(e) Any Corporate Action requiring a Response for which the Bank
has not received Proper Instructions or obtained actual possession of all
necessary Securities, consents or other materials by 5:00 p.m. on the date
specified as the Response Deadline;
(f) Any act or omission of any European Branch of a U.S. banking
institution that is the issuer of Eurodollar CDs in connection with any
Eurodollar CDs held by such European Branch;
(g) Information relied on in good faith by the Bank and supplied
by any Authorized Person in connection with the calculation of (i) the net asset
value and public offering price of the units of the Fund or (ii) the Yield
Calculation; or
(h) Any acts of God, earthquakes, fires, floods, storms or other
disturbances of nature, epidemics, strikes, riots, nationalization,
expropriation, currency restrictions, acts of war, civil war or terrorism,
insurrection, nuclear fusion, fission or radiation, the interruption, loss or
malfunction of utilities, transportation or computers (hardware or software) and
computer facilities, the unavailability of energy sources and other similar
happenings or events.
15.2 Notwithstanding anything to the contrary in this Agreement, in no
event shall the Bank or the Indemnified Parties be liable to the Fund or any
third party for lost profits or lost revenues or any special, consequential,
punitive or incidental damages of any kind whatsoever in connection with this
Agreement or any activities hereunder.
16. Termination.
16.1 The term of this Agreement shall be one year commencing upon the
date hereof (the "Initial Term"), unless earlier terminated as provided herein.
After the expiration of the Initial Term, the term of this Agreement shall
automatically renew for successive one-year terms (each a "Renewal Term") unless
written notice of non-renewal is delivered by the non-renewing party to the
other party no later than ninety days prior to the expiration of the Initial
Term or any Renewal Term, as the case may be.
Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term or any Renewal Term in the event the other party
violates any material provision of this Agreement, provided that the
non-violating party gives written notice of such violation to the violating
party and the violating party does not cure such violation within 90 days of
receipt of such notice.
16.2 In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of all
cash and the delivery of all Portfolio Securities duly endorsed and all records
maintained under Section 11 to the successor custodian when appointed by the
Fund. The obligation of the Bank to deliver and transfer over the assets of the
Fund held by it directly to such successor custodian will commence as soon as
such successor is appointed and will continue until completed as aforesaid. If
the Fund does not select a successor custodian within ninety (90) days from the
date of delivery of notice of termination the Bank may, subject to the
provisions of subsection 16.3, deliver the Portfolio Securities and cash of the
Fund held by the Bank to a bank or trust company of the Bank's own selection
which has a reported capital, surplus and undivided profits aggregating not less
than $2,000,000, to be held as the property of the Fund under terms similar to
those on which they were held by the Bank, whereupon such bank or trust company
so selected by the Bank will become the successor custodian of such assets of
the Fund with the same effect as though selected by the Manager. Thereafter, the
Bank shall be released from any and all obligations under this Agreement.
Custody Agrmt
18
16.3 Prior to the expiration of ninety (90) days after notice of
termination has been given, the Fund may furnish the Bank with an order of the
Fund advising that a successor custodian cannot be found willing and able to act
upon reasonable and customary terms and that there has been submitted to the
shareholders of the Fund the question of whether the Fund will be liquidated or
will function without a custodian for the assets of the Fund held by the Bank.
In that event the Bank will deliver the Portfolio Securities and cash of the
Fund held by it, subject as aforesaid, in accordance with one of such
alternatives which may be approved by the requisite vote of shareholders, upon
receipt by the Bank of a copy of the minutes of the meeting of shareholders at
which action was taken, certified by the Fund's Secretary and an opinion of
counsel to the Fund in form and content satisfactory to the Bank. Thereafter,
the Bank shall be released from any and all obligations under this Agreement.
16.4 The Fund shall reimburse the Bank for any reasonable expenses
incurred by the Bank in connection with the termination of this Agreement.
16.5 At any time after the termination of this Agreement, the Fund
may, upon written request, have reasonable access to the records of the Bank
relating to its performance of its duties as custodian.
17. Confidentiality. Both parties hereto agree than any non-public
information obtained hereunder concerning the other party is confidential and
may not be disclosed without the consent of the other party, except as may be
required by applicable law or at the request of a governmental agency. The
parties further agree that a breach of this provision would irreparably damage
the other party and accordingly agree that each of them is entitled, in addition
to all other remedies at law or in equity to an injunction or injunctions
without bond or other security to prevent breaches of this provision.
18. Notices. Any notice or other instrument in writing authorized or
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and delivered via (i) United
States Postal Service registered mail, (ii) telecopier with written
confirmation, (iii) hand delivery with signature to such party at its office at
the address set forth below, namely:
(a) In the case of notices sent to the Fund to:
HSBC Investor High Yield Fixed Income Portfolio
HSBC Investor High Yield Fixed Income Fund
HSBC Investor High Yield Fixed Income Fund, Ltd.
c/o BISYS Funds Services
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attention: President
with a copy to:
HSBC Investor High Yield Fixed Income Portfolio
HSBC Investor High Yield Fixed Income Fund
HSBC Investor High Yield Fixed Income Fund, Ltd.
c/o HSBC Investments (USA) Inc.
000 Xxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
(b) In the case of notices sent to the Bank to:
Custody Agrmt
19
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxx, Senior Director - Client Management
With a copy to: Xxxxxx Xxxxx, Assistant General Counsel
or at such other place as such party may from time to time
designate in writing.
19. Amendments. This Agreement may not be altered or amended, except by an
instrument in writing, executed by both parties.
20. Parties. This Agreement will be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank or by the Bank without the written
consent of the Fund, authorized and approved by its Manager; and provided
further that termination proceedings pursuant to Section 16 hereof will not be
deemed to be an assignment within the meaning of this provision.
21. Governing Law. This Agreement and all performance hereunder will be
governed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.
22. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
23. Entire Agreement. This Agreement, together with its Appendices,
constitutes the sole and entire agreement between the parties relating to the
subject matter herein and does not operate as an acceptance of any conflicting
terms or provisions of any other instrument and terminates and supersedes any
and all prior agreements and undertakings between the parties relating to the
subject matter herein.
24. Limitation of Liability. The Bank agrees that the obligations assumed
by the Fund hereunder shall be limited in all cases to the assets of the Fund
and that the Bank shall not seek satisfaction of any such obligation from the
officers, agents, employees, trustees, or shareholders of the Fund
Custody Agrmt
20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first written above.
HSBC INVESTOR PORTFOLIOS, on behalf of
HSBC INVESTOR HIGH YIELD FIXED INCOME
PORTFOLIO
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
[SEAL]
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxxx XxXxxxx
------------------------------------
Name: Xxxxxxx XxXxxxx
Title: Managing Director
HSBC INVESTOR FUNDS, on behalf of
HSBC HIGH YIELD FIXED INCOME FUND
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
HSBC INVESTOR FUNDS, on behalf of
HSBC HIGH YIELD FIXED INCOME FUND LTD.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
Custody Agrmt
21
Appendices
Appendix A............................ Additional Services
Custody Agrmt
22
November 1,2005
HSBC Investor Funds
Xxxxxxx Xxxxxxxx
000 0xx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xxxxxxx:
Reference is made to the Custody Agreement (the "Agreement"), dated as of
November 1, 2005, between HSBC Investor Portfolios, a Massachusetts business
trust on behalf of its series, the HSBC Investor High Yield Fixed Income
Portfolio. HSBC Investor Funds, a Massachusetts business trust on behalf of its
series, HSBC Investor High Yield Fixed Income Fund, and HSBC Investor High Yield
Fixed Income Fund, Ltd., a Cayman Islands exempted company (collectively, the
"Fund") and Investors Bank & Trust Company, a Massachusetts trust company (the
"Bank").
Attached hereto is a fee schedule that sets forth the compensation,
including fees and expenses, to be paid by the Fund to the Bank for the services
provided under the Custody Agreement. By signing below, you acknowledge receipt
of this schedule and agree to pay the Bank for all fees, expenses and other
costs as set forth in the attached fee schedule.
[SEAL]
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxxx XxXxxxx
----------------------------------------
Name: Xxxxxxx XxXxxxx
Title: Managing Director
ACKNOWLEDGED AND AGREED
HSBC INVESTOR PORTFOLIOS, on behalf of
HSBC INVESTOR HIGH YIELD FIXED INCOME FUND
By:
------------------------------------
Name:
Title:
HSBC INVESTOR FUNDS, on behalf of
HSBC HIGH YIELD FIXED INCOME FUND
By:
------------------------------------
Name:
Title:
HSBC INVESTOR FUNDS, on behalf of
HSBC HIGH YIELD FIXED INCOME FUND LTD.
By:
------------------------------------
Name:
Title:
HSBC Investor Portfolios
HSBC Investor High Yield Fixed Income Portfolio
HSBC Investor Funds, on behalf of its series, HSBC
Investor High Yield Fixed Income Fund, and HSBC
Investor High Yield Fixed Income Fund, Ltd.
Fee Schedule
November 1, 2005
--------------------------------------------------------------------------------
Global Custody Services
--------------------------------------------------------------------------------
A. Domestic Custody
First 100 million of net assets per fund 3bp
$100-200 million 2bp
Assets in excess of $200 million 1bp
1. Transaction-Based Charges (per transaction)
a) DTC $ 10
b) Fed Book Entry $ 12
c) Commercial Paper Depository Eligible $ 20
d) Futures $ 18
e) Options $ 18
f) Eurodeposits $ 18
g) Incoming $ 5
h) Outgoing $7.50
i) 3rd party FX $ 75
j) GNMA $ 25
k) Paydowns $ 5
* There are no transaction charges for FX contracts executed by Investors Bank.
B. Foreign Custody
Incremental basis point and transaction fees will be charged for all
foreign assets for which Investors Bank acts as custodian. The asset based
fees and transaction fees vary by country, based upon a global fee
schedule. Local duties, script fees, reclaims, registration, exchange fees,
and other foreign market charges are out-of-pocket.
Investors Bank & Fund Confidential
Investors Bank will require the Fund to hold all international assets at
the subcustodian of our choice.
The Fund is subject to an annual minimum fee of $50,000.
C. Out-of-Pocket Expenses
o Printing, Faxing, Delivery & Postage
o Forms & Supplies
o Telecommunications
o Extraordinary Legal Expenses
o Support Equipment
o Travel
o Third Party Audit
o Micro Rental
o Storage
o International Corporate Actions
D. We allow the use of balance credit against fees (excluding out-of pocket
charges) for balances arising out of the custody relationship. The credit
is based on collected balances reduced by balances required to support the
activity charges of the accounts. The monthly earnings allowance is equal
to 75% of the 90-day T-xxxx rate.
E. Systems
The details of any systems work will be determined after a thorough
business analysis. Any systems work will be billed on a time and material
basis. Investors Bank provides an allowance of 10 systems hours for data
extract set-up and reporting extract set-up. Additional systems hours will
be billed on a time and material basis.
F. Payment
Fees and expenses will be calculated monthly. Fees and expenses owed to the
Bank for any month may be charged against any cash balance held by the Fund
beginning on the first (1st) business day after the end of such month based
on the information then available. Fees charged to an account may result in
an overdraft that will be subject to normal interest charges.
This fee schedule is confidential information of the parties and shall not be
disclosed to any third party without prior written consent of both parties.
Investors Bank & Fund Confidential
Global Custody Fee Schedule
Country Basis Point Charge Trade
------------------ ------------------ -----
Argentina* 17 75
Australia 5 45
Austria 5 60
Xxxxxxxxxx 00 000
Xxxxxxx 5 60
Bermuda 20 75
Bharain 41 140
Xxxxxxxx 00 000
Xxxxxx** 00 00
Xxxxxxxx 40 125
Canada 4 25
Xxxxx 00 000
Xxxxx A Shares 10 100
China B Shares 10 00
Xxxxxxxx*** 00 000
Xxxxxxx 00 000
Xxxxxx 00 000
Xxxxx Xxxxxxxx 00 00
Xxxxxxx 0 00
Xxxxx 00 000
Xxxxxxx 00 000
Euroclear 3 20
Euroclear Equities 3 60
Xxxxxxx 0 00
Xxxxxx 0 00
Xxxxxxx 4 25
Xxxxx 00 000
Xxxxxx 15 75
Hong Kong 7 50
Xxxxxxx 00 00
Xxxxxxx 0 00
Xxxxx 20 150
Indonesia 13 65
Ireland 5 00
Xxxxxx 00 00
Xxxxx 0 00
Xxxxx 4 25
Jordan 41 120
Kazakhstan**** 45 150
Xxxxx 00 000
Xxxxx 0 00
Xxxxxx 30 125
Lebanon 41 140
Xxxxxxxxx 00 00
Xxxxxxxxx T Bills 25 75
Luxembourg 5 60
Malaysia 10 00
Xxxxxxxxx 00 000
Xxxxxx 8 40
Morocco 40 150
Page 1 of 2
Investors Bank & Fund Confidential
Global Custody Fee Schedule
Country Basis Point Charge Trade
------------------- ------------------ -----
Namibia 50 200
Netherlands 5 35
New Zealand 5 50
Norway 5 45
Xxxx 00 000
Xxxxxxxx 00 000
Xxxx 35 000
Xxxxxxxxxxx 13 00
Xxxxxx 00 000
Xxxxxxxx 00 000
Xxxxxxx 45 125
Russia equities**** 00 000
Xxxxxx Xxx Xxxx 00 00
Xxxxxx & Montenegro 60 175
Singapore 7 60
Xxxxxxxx 00 00
Xxxxxxxx 41 000
Xxxxx Xxxxxx 7 00
Xxxxx 0 00
Xxx Xxxxx 13 65
Xxxxxxxxx 00 000
Xxxxxx 5 35
Switzerland 4 40
Xxxxxx 00 00
Xxxxxxxx 00 00
Xxxxxx 15 100
UK***** 3 00
Xxxxxxx**** 00 000
Xxxxxxx 50 150
Venezuela** 45 140
Zambia 00 000
Xxxxxxxx 00 000
Most common out of pocket charges:
* Bonds billed at face value
** Local administrator fees passed through as actuals
*** Local administration charge on month end market value each month. ($400
minimum, $4,000 maximum per account)+VAT
**** Transaction fees are charged for corporate actions. Registrar & depository
fees are charged as actuals
***** $30 surcharge for non-STP trades
Euroclear charges apply to only approved continental European countries
All other local market Out-of Pocket charges, including Euroclear Cross Border
fees, are passed through as actuals
Investors Bank & Fund Confidential
November 1,2005
HSBC Investor Funds
Xxxxxxx Xxxxxxxx
000 0xx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xxxxxxx:
Reference is made to the Custody Agreement (the "Agreement"), dated as of
November 1, 2005, between HSBC Investor Portfolios, a Massachusetts business
trust on behalf of its series, the HSBC Investor High Yield Fixed Income
Portfolio. HSBC Investor Funds, a Massachusetts business trust on behalf of its
series, HSBC Investor High Yield Fixed Income Fund, and HSBC Investor High Yield
Fixed Income Fund, Ltd., a Cayman Islands exempted company (collectively, the
"Fund") and Investors Bank & Trust Company, a Massachusetts trust company (the
"Bank").
Attached hereto is a fee schedule that sets forth the compensation,
including fees and expenses, to be paid by the Fund to the Bank for the services
provided under the Custody Agreement. By signing below, you acknowledge receipt
of this schedule and agree to pay the Bank for all fees, expenses and other
costs as set forth in the attached fee schedule.
[SEAL]
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxxx XxXxxxx
-------------------------------
Name: Xxxxxxx XxXxxxx
Title: Managing Director
ACKNOWLEDGED AND AGREED
HSBC INVESTOR PORTFOLIOS, on behalf of
HSBC INVESTOR HIGH YIELD FIXED INCOME FUND
By:
-------------------------------
Name:
Title:
HSBC INVESTOR FUNDS, on behalf of
HSBC HIGH YIELD FIXED INCOME FUND
By:
-------------------------------
Name:
Title:
HSBC INVESTOR FUNDS, on behalf of
HSBC HIGH YIELD FIXED INCOME FUND LTD.
By:
-------------------------------
Name:
Title:
November 1,2005
HSBC Investor Funds
Xxxxxxx Xxxxxxxx
000 0xx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xxxxxxx:
Reference is made to the Custody Agreement (the "Agreement"), dated as of
November 1st, 2005, by and between HSBC Investor High Yield Fixed Income Fund
(the "Fund") and Investors Bank & Trust Company (the "Bank").
Attached hereto is a fee schedule that sets forth the compensation,
including fees and expenses, to be paid by the Fund to the Bank for the services
provided under the Custody Agreement. By signing below, you acknowledge receipt
of this schedule and agree to pay the Bank for all fees, expenses and other
costs as set forth in the attached fee schedule.
INVESTORS BANK & TRUST COMPANY
By:
-------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED
HSBC INVESTOR PORTFOLIOS, on behalf of
HSBC INVESTOR HIGH YIELD FIXED INCOME
PORTFOLIO
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
HSBC INVESTOR FUNDS, on behalf of
HSBC HIGH YIELD FIXED INCOME FUND
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
HSBC INVESTOR FUNDS, on behalf of
HSBC HIGH YIELD FIXED INCOME FUND LTD.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
HSBC Investor Portfolios
HSBC Investor High Yield Fixed Income Portfolio
HSBC Investor Funds, on behalf of its series, HSBC
Investor High Yield Fixed Income Fund, and HSBC
Investor High Yield Fixed Income Fund, Ltd.
Fee Schedule
November 1, 2005
--------------------------------------------------------------------------------
Global Custody Services
--------------------------------------------------------------------------------
A. Domestic Custody
First 100 million of net assets per fund 3bp
$100-200 million 2bp
Assets in excess of $200 million 1bp
1. Transaction-Based Charges (per transaction)
a) DTC $ 10
b) Fed Book Entry $ 12
c) Commercial Paper Depository Eligible $ 20
d) Futures $ 18
e) Options $ 18
f) Eurodeposits $ 18
g) Incoming $ 5
h) Outgoing $7.50
i) 3rd party FX $ 75
j) GNMA $ 25
k) Paydowns $ 5
* There are no transaction charges for FX contracts executed by Investors Bank.
B. Foreign Custody
Incremental basis point and transaction fees will be charged for all
foreign assets for which Investors Bank acts as custodian. The asset based
fees and transaction fees vary by country, based upon a global fee
schedule. Local duties, script fees, reclaims, registration, exchange fees,
and other foreign market charges are out-of-pocket.
Investors Bank & Fund Confidential
Investors Bank will require the Fund to hold all international assets at
the subcustodian of our choice.
The Fund is subject to an annual minimum fee of $50,000.
C. Out-of-Pocket Expenses
o Printing, Faxing, Delivery & Postage
o Forms & Supplies
o Telecommunications
o Extraordinary Legal Expenses
o Support Equipment
o Travel
o Third Party Audit
o Micro Rental
o Storage
o International Corporate Actions
D. We allow the use of balance credit against fees (excluding out-of pocket
charges) for balances arising out of the custody relationship. The credit
is based on collected balances reduced by balances required to support the
activity charges of the accounts. The monthly earnings allowance is equal
to 75% of the 90-day T- xxxx rate.
E. Systems
The details of any systems work will be determined after a thorough
business analysis. Any systems work will be billed on a time and material
basis. Investors Bank provides an allowance of 10 systems hours for data
extract set-up and reporting extract set-up. Additional systems hours will
be billed on a time and material basis.
F. Payment
Fees and expenses will be calculated monthly. Fees and expenses owed to the
Bank for any month may be charged against any cash balance held by the Fund
beginning on the first (1st) business day after the end of such month based
on the information then available. Fees charged to an account may result in
an overdraft that will be subject to normal interest charges.
This fee schedule is confidential information of the parties and shall not be
disclosed to any third party without prior written consent of both parties.
Investors Bank & Fund Confidential
Global Custody Fee Schedule
Country Basis Point Charge Trade
------------------- ------------------ -----
Argentina* 17 75
Australia 5 45
Austria 5 60
Xxxxxxxxxx 00 000
Xxxxxxx 5 60
Bermuda 20 75
Bharain 41 140
Xxxxxxxx 00 000
Xxxxxx** 00 00
Xxxxxxxx 40 125
Canada 4 25
Xxxxx 00 000
Xxxxx A Shares 10 100
China B Shares 10 00
Xxxxxxxx*** 00 000
Xxxxxxx 00 000
Xxxxxx 00 000
Xxxxx Xxxxxxxx 00 00
Xxxxxxx 0 00
Xxxxx 00 000
Xxxxxxx 00 000
Euroclear 3 20
Euroclear Equities 3 60
Xxxxxxx 0 00
Xxxxxx 0 00
Xxxxxxx 4 25
Xxxxx 00 000
Xxxxxx 15 75
Hong Kong 7 50
Xxxxxxx 00 00
Xxxxxxx 0 00
Xxxxx 20 150
Indonesia 13 65
Ireland 5 00
Xxxxxx 00 00
Xxxxx 0 00
Xxxxx 4 25
Jordan 41 120
Kazakhstan**** 45 150
Xxxxx 00 000
Xxxxx 0 00
Xxxxxx 30 125
Lebanon 41 140
Xxxxxxxxx 00 00
Xxxxxxxxx T Bills 25 75
Luxembourg 5 60
Malaysia 10 00
Xxxxxxxxx 00 000
Xxxxxx 8 40
Morocco 40 150
Page 1 of 2
Investors Bank & Fund Confidential
Global Custody Fee Schedule
Country Basis Point Charge Trade
------------------- ------------------ -----
Namibia 50 200
Netherlands 5 35
New Zealand 5 50
Norway 5 45
Xxxx 00 000
Xxxxxxxx 00 000
Xxxx 35 000
Xxxxxxxxxxx 13 00
Xxxxxx 00 000
Xxxxxxxx 00 000
Xxxxxxx 45 125
Russia equities**** 00 000
Xxxxxx Xxx Xxxx 00 00
Xxxxxx & Montenegro 60 175
Singapore 7 60
Xxxxxxxx 00 00
Xxxxxxxx 41 000
Xxxxx Xxxxxx 7 00
Xxxxx 0 00
Xxx Xxxxx 13 65
Xxxxxxxxx 00 000
Xxxxxx 5 35
Switzerland 4 40
Xxxxxx 00 00
Xxxxxxxx 00 00
Xxxxxx 15 100
UK***** 3 00
Xxxxxxx**** 00 000
Xxxxxxx 50 150
Venezuela** 45 140
Zambia 00 000
Xxxxxxxx 00 000
Most common out of pocket charges:
* Bonds billed at face value
** Local administrator fees passed through as actuals
*** Local administration charge on month end market value each month. ($400
minimum, $4,000 maximum per account)+VAT
**** Transaction fees are charged for corporate actions. Registrar & depository
fees are charged as actuals
***** $30 surcharge for non-STP trades
Euroclear charges apply to only approved continental European countries
All other local market Out-of Pocket charges, including Euroclear Cross Border
fees, are passed through as actuals
Investors Bank & Fund Confidential
