Exhibit (g)(ii)
CUSTODIAN AGREEMENT
THIS AGREEMENT, dated as of December 14, 2004, between XXXXXXX
INSTITUTIONAL FUNDS, an open-end management investment company organized under
the laws of the State of Massachusetts and registered with the Securities and
Exchange Commission under the 1940 Act (the TRUST) on behalf of each series of
the Trust set forth on the attached Appendix A as the same may be amended from
time to time (each a Fund and collectively the Funds), and XXXXX BROTHERS
XXXXXXXX & CO., a limited partnership formed under the laws of the State of New
York (BBH&CO. or the CUSTODIAN),
W I T N E S S E T H:
WHEREAS, the Trust wishes to employ BBH&Co. to act as custodian for the
Trust and to provide related services, all as provided herein, and BBH&Co. is
willing to accept such employment, subject to the terms and conditions herein
set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Trust and BBH&Co. hereby agree, as follows:
1. APPOINTMENT OF CUSTODIAN. The Trust hereby appoints BBH&Co. as each Fund's
custodian, and BBH&Co. hereby accepts such appointment. All Investments of a
Fund delivered to the Custodian or its agents or Subcustodians shall be dealt
with as provided in this Agreement. The duties of the Custodian with respect to
a Fund's Investments shall be only as set forth expressly in this Agreement
which duties are generally comprised of safekeeping and various administrative
duties that will be performed in accordance with Instructions and as reasonably
required to effect Instructions.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE TRUST. The Trust hereby
represents and warrants that:
2.1 This Agreement has been, and at the time of delivery of each
Instruction such Instruction will have been, duly authorized, executed and
delivered by the Trust. This Agreement does not conflict with or
constitute a default a Fund's prospectus or other agreement, instrument,
judgment, order or decree to which a Fund is a party or by which it or its
Investments is bound.
2.2 The Trust shall safeguard and shall solely be responsible for
the safekeeping of any testkeys, identification codes, passwords, other
security devices or statements of account with which the Custodian
provides it. In furtherance and not limitation of the foregoing, in the
event the Fund utilizes any on-line service offered by the Custodian, the
Fund and the Custodian shall be fully responsible for the security of each
party's connecting terminal, access thereto and the proper and authorized
use thereof and the initiation and application of continuing effective
safeguards in respect thereof.
3. REPRESENTATION AND WARRANTY OF BBH&CO. BBH&Co. hereby represents and
warrants that this Agreement has been duly authorized, executed and delivered by
BBH&Co. and does not and will not violate any Applicable Law or conflict with or
constitute a default under BBH&Co.'s limited partnership agreement or any
agreement, instrument, judgment, order or decree to which BBH&Co. is a party or
by which it is bound.
4. INSTRUCTIONS. Unless otherwise explicitly indicated herein, the Custodian
shall perform its duties pursuant to Instruction(s). As used herein, the term
INSTRUCTION(S) shall mean a directive initiated by a Fund, acting directly or
through its board of directors, officers or other Authorized Persons, which
directive shall conform to the requirements of this Section 4.
4.1 AUTHORIZED PERSONS. For purposes hereof, an AUTHORIZED PERSON shall be
a person or entity authorized to give Instructions for or on behalf of a
particular Fund by written notices to the Custodian or otherwise in accordance
with procedures delivered to and acknowledged by the Custodian, including
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without limitation the Fund's Investment Adviser or Foreign Custody Manager.
Authorized Persons may be identified by the Board of Trustees of a Fund by name,
title or position and will include at least one officer empowered by the Board
to name other individuals who are authorized to give Instructions on behalf of
the Fund. The Custodian may treat any Authorized Person as having full authority
of the relevant Fund to issue Instructions hereunder unless the notice of
authorization contains explicit limitations as to said authority. The Custodian
shall be entitled to rely upon the authority of Authorized Persons until it
receives appropriate written notice from a Fund to the contrary. No Authorized
Person has the authority to deliver an Instruction directing the delivery of
securities or the payment of funds to such Authorized Person and no such
Instruction will be executed by the Custodian if delivered to the Custodian.
4.2 FORM OF INSTRUCTION. Each Instruction shall be transmitted by such
secured or authenticated electro-mechanical means as the Custodian shall make
available to a Fund from time to time unless the Fund shall elect to transmit
such Instruction in accordance with Subsections 4.2.1 through 4.2.3 of this
Section.
4.2.1 FUND DESIGNATED SECURED-TRANSMISSION METHOD. Instructions may
be transmitted through a secured or tested electro-mechanical means
identified by a Fund or by an Authorized Person of such Fund and
acknowledged and accepted by the Custodian.
4.2.2 WRITTEN INSTRUCTIONS. Instructions may be transmitted in a
writing that bears the manual signature of Authorized Persons.
4.2.3 OTHER FORMS OF INSTRUCTION. Instructions may also be
transmitted by another means determined by a Fund or Authorized Persons
and acknowledged and accepted by the Custodian including Instructions
given orally or by SWIFT, telex or telex or telefax (whether tested or
untested).
When an Instruction is given it shall be the responsibility of the Custodian to
use reasonable care to adhere to any security or other procedures established in
writing between the Custodian and the Authorized Person with respect to such
means of Instruction. Telephonic, or other oral Instructions given by any
Authorized
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Person will be considered proper instructions if the Custodian reasonably
believes them to have been given by an Authorized Person. Oral Instructions will
be confirmed by such Authorized Person through a secured or tested
electro-mechanical means in the manner set forth above. With respect to telefax
instructions, the parties agree and acknowledge that receipt of legible
instructions cannot be assured, that the Custodian cannot verify that authorized
signatures on telefax instructions are original or properly affixed, and that
the Custodian shall not be liable for losses or expenses incurred through
actions taken in reliance on inaccurately stated, illegible or unauthorized
telefax instructions. The provisions of Section 4A of the Uniform Commercial
Code shall apply to funds transfers performed in accordance with Instructions.
In the event that a Funds Transfer Services Agreement is executed between a Fund
or an Authorized Person and the Custodian, such an agreement shall comprise a
designation of form of a means of delivering Instructions for purposes of this
Section 4.2.
4.3 COMPLETENESS AND CONTENTS OF INSTRUCTIONS. The Authorized Person shall
be responsible for assuring the adequacy and accuracy of Instructions.
Particularly, upon any acquisition or disposition or other dealing in a Fund's
Investments and upon any delivery and transfer of any Investment or moneys, the
person initiating such Instruction shall give the Custodian an Instruction with
appropriate detail, including, without limitation:
4.3.1 The transaction date and the date and location of settlement;
4.3.2 The specification of the type of transaction;
4.3.4 A description of the Investments or moneys in question,
including, as appropriate, quantity, price per unit, amount of money to be
received or delivered and currency information. Where an Instruction is
communicated by electronic means, or otherwise where an Instruction
contains an identifying number such as a CUSIP, SEDOL or ISIN number, the
Custodian shall be entitled to rely on such number as controlling.
However, should the Custodian become actually aware of an inconsistency
contained in such Instruction with respect to Investment description, the
Custodian shall endeavor to contact an Authorized Person to resolve such
inconsistency;
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4.3.5 The name of the broker or similar entity concerned with
execution of the transaction.
If the Custodian shall determine that an Instruction is either unclear or
incomplete, or contains any inconsistency, the Custodian shall give prompt
notice of such determination to the affected Fund, and the Fund shall thereupon
amend or otherwise reform such Instruction. In such event, the Custodian shall
have no obligation to take any action in response to the Instruction initially
delivered until the redelivery of an amended or reformed Instruction.
4.4 TIMELINESS OF INSTRUCTIONS. In giving an Instruction, the Fund shall
take into consideration delays which may occur due to the involvement of a
Subcustodian or agent, differences in time zones, and other factors particular
to a given market, exchange or issuer. When the Custodian has established
specific timing requirements or deadlines with respect to particular classes of
Instruction, or when an Instruction is received by the Custodian at such a time
that it could not reasonably be expected to have acted on such instruction due
to time zone differences or other factors beyond its reasonable control, the
execution of any Instruction received by the Custodian after such deadline or at
such time (including any modification or revocation of a previous Instruction)
shall be at the risk of the relevant Fund.
5. SAFEKEEPING OF FUND ASSETS. The Custodian shall hold Investments delivered
to it or Subcustodians for the each Fund in accordance with the provisions of
this Section. The Custodian shall not be responsible for (a) the safekeeping of
Investments not delivered or that are not caused to be issued to it or its
Subcustodians; or, (b) pre-existing faults or defects in Investments that are
delivered to the Custodian, or its Subcustodians. The Custodian is hereby
authorized to hold with itself or a Subcustodian,
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and to record in one or more accounts, all Investments delivered to and accepted
by the Custodian, any Subcustodian or their respective agents pursuant to an
Instruction or in consequence of any corporate action. The Custodian shall hold
Investments for the account of each Fund and shall segregate Investments from
assets belonging to the Custodian and shall cause its Subcustodians to segregate
Investments from assets belonging to the Subcustodian in an account held for the
Fund or in an account maintained by the Subcustodian generally for
non-proprietary assets of the Custodian.
5.1 USE OF SECURITIES DEPOSITORIES. The Custodian may deposit and maintain
Investments in any Securities Depository, either directly or through one or more
Subcustodians appointed by the Custodian. Investments held in a Securities
Depository shall be held (a) subject to the agreement, rules, statement of terms
and conditions or other document or conditions effective between the Securities
Depository and the Custodian or the Subcustodian, as the case may be, and (b) in
an account for the Fund or in bulk segregation in an account maintained for the
non-proprietary assets of the entity holding such Investments in the Depository.
If market practice or the rules and regulations of the Securities Depository
prevent the Custodian, the Subcustodian or (any agent of either) from holding
its client assets in such a separate account, the Custodian, the Subcustodian or
other agent shall as appropriate segregate such Investments for benefit of the
Fund or for benefit of clients of the Custodian generally on its own books. At
the election of the Fund, it shall be entitled to be subrogated to the rights of
the Custodian or Subcustodian, to the extent allowable under local law or
regulation, with respect to any claim against the Securities Depository if and
to the extent that the Fund has not been made whole for such loss or damage.
5.2 CERTIFICATED ASSETS. Investments which are certificated may be held in
registered or bearer form: (a) in the Custodian's vault; (b) in the vault of a
Subcustodian or agent of the Custodian or a
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Subcustodian; or (c) in an account maintained by the Custodian, Subcustodian or
agent at a Securities Depository; all in accordance with customary market
practice in the jurisdiction in which any Investments are held.
5.3 REGISTERED ASSETS. Investments which are registered may be registered
in the name of the Custodian, a Subcustodian, or in the name of the Fund or a
nominee for any of the foregoing, and may be held in any manner set forth in
paragraph 5.2 above with or without any identification of fiduciary capacity in
such registration, provided that securities are held in an account of the
Custodian, Subcustodian or a nominee for the foregoing, containing only assets
of the Fund or only assets held as fiduciary or custodian for customers.
5.4 BOOK ENTRY ASSETS. Investments which are represented by book-entry may
be so held in an account maintained by the Book-Entry Agent on behalf of the
Custodian, a Subcustodian or another agent of the Custodian, or a Securities
Depository.
5.5 REPLACEMENT OF LOST INVESTMENTS. In the event of a loss of Investments
for which the Custodian is responsible under the terms of this Agreement, the
Custodian shall replace such Investment, or in the event that such replacement
cannot be effected, the Custodian shall pay to the affected Fund the fair market
value of such Investment based on the Fund's pricing procedures as of the close
of business in the relevant market on the date that the claim is paid by the
Custodian, or, if the fair market value of the Investment on such date is less
than the fair market value on the date that the loss was incurred, the Custodian
shall pay to the effected Fund the fair market value of such Investment based on
the fair market value of the Investment based on the Fund's pricing procedures
as of the close of business in the relevant market on the date that the loss was
incurred.
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6. ADMINISTRATIVE DUTIES OF THE CUSTODIAN. The Custodian shall perform the
following administrative duties with respect to Investments of each Fund.
6.1 PURCHASE OF INVESTMENTS. Pursuant to Instruction, Investments
purchased for the account of the Fund shall be paid for (a) against delivery
thereof to the Custodian or a Subcustodian, as the case may be, either directly
or through a Clearing Corporation or a Securities Depository (in accordance with
the rules of such Securities Depository or such Clearing Corporation), or (b)
otherwise in accordance with an Instruction, Applicable Law, generally accepted
trade practices, or the terms of the instrument representing such Investment.
6.2 SALE OF INVESTMENTS. Pursuant to Instruction, Investments sold for the
account of the Fund shall be delivered (a) against payment therefor in cash, by
certified check, bank cashier's check, bank credit or by bank wire transfer, (b)
by credit to the account of the Custodian or the applicable Subcustodian, as the
case may be, with a Clearing Corporation or a Securities Depository (in
accordance with the rules of such Securities Depository or such Clearing
Corporation), or (c) otherwise in accordance with an Instruction, Applicable
Law, generally accepted trade practices, or the terms of the instrument
representing such Investment.
6.3 DELIVERY IN CONNECTION WITH BORROWINGS OF THE FUND OR OTHER COLLATERAL
AND MARGIN REQUIREMENTS. Pursuant to Instruction, the Custodian may deliver
Investments or cash of the Fund to lenders or their agents as collateral in
connection with borrowings and other collateral and margin requirements. Such
borrowed money is payable to or upon the Custodian's order as Custodian for the
Fund.
6.4 FUTURES AND OPTIONS. If, pursuant to an Instruction, the Custodian
shall become a party to an agreement with the Fund and a futures commission
merchant or broker-dealer dealing in options regarding margin (TRI-PARTY
AGREEMENT), the Custodian shall (a) receive and retain, confirmations or other
documents evidencing the purchase or sale by the Fund of futures contracts and
commodity options, (b) when required by such Tri-Party Agreement, deposit and
maintain in an account opened pursuant to such Agreement (MARGIN ACCOUNT),
segregated either physically or by book-entry in a Securities Depository for the
benefit of any futures commission merchant or broker-dealer dealing in options,
such
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Investments as the Fund shall have designated as initial, maintenance or
variation "margin" deposits or other collateral intended to secure the Fund's
performance of its obligations under the terms of any futures contracts and
commodity options; and (c) thereafter pay, release or transfer Investments into
or out of the margin account in accordance with the provisions of such
Agreement. Alternatively, the Custodian may deliver Investments, in accordance
with an Instruction, to a futures commission merchant for purposes of margin
requirements in accordance with Rule 17f-6 of the 1940 Act. The Custodian shall
in no event be responsible for the acts and omissions of any futures commission
merchant or broker-dealer dealing in options to whom Investments are delivered
pursuant to this Section; for the sufficiency of Investments held in any Margin
Account; or, for the performance of any terms of any exchange-traded futures
contracts and commodity options.
6.5 RIGHTS, WARRANTS, ETC. Pursuant to Instruction, the Custodian shall
(a) deliver warrants, puts, calls, rights or similar securities to the issuer or
trustee thereof, or to any agent of such issuer or trustee, for purposes of
exercising such rights or selling such securities, provided that the new
securities and cash, if any, acquired by such action are to be delivered to the
Custodian, and (b) deposit securities in response to any invitation for the
tender thereof, provided that the consideration is to be paid or delivered or
the tendered securities are to be returned to the Custodian.
6.6 CONTRACTUAL OBLIGATIONS AND SIMILAR INVESTMENTS. From time to time,
the Fund's Investments may include Investments that are not ownership interests
as may be represented by certificate (whether registered or bearer), by entry in
a Securities Depository or by book entry agent, registrar or similar agent for
recording ownership interests in the relevant Investment. If the Fund shall at
any time acquire such Investments, including without limitation deposit
obligations, loan participations, repurchase agreements and derivative
arrangements, the Custodian shall (a) receive and retain, confirmations or other
documents evidencing the arrangement; and (b) perform on the Fund's account in
accordance with the terms of the applicable arrangement, but only to the extent
directed to do so by Instruction. The Custodian shall have no responsibility for
agreements running to the Fund as to which it is not a party other than to
retain, to the extent the same are provided to the Custodian, documents or
copies of documents evidencing the arrangement and, in accordance with
Instruction, to include such arrangements in reports made to the Fund.
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6.7 EXCHANGE OF SECURITIES. Unless otherwise directed by Instruction, the
Custodian shall: (a) exchange securities held for the account of the Fund for
other securities in connection with any reorganization, recapitalization,
conversion, split-up, change of par value of shares or similar event, and (b)
deposit any such securities in accordance with the terms of any reorganization
or protective plan.
6.8 SURRENDER OF SECURITIES. Unless otherwise directed by Instruction, the
Custodian may surrender securities: (a) in temporary form for definitive
securities; (b) for transfer into the name of an entity allowable under Section
5.3; and (c) for a different number of certificates or instruments representing
the same number of shares or the same principal amount of indebtedness.
6.09 MANDATORY CORPORATE ACTIONS. Unless otherwise directed by
Instruction, the Custodian shall: (a) comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions or similar rights of
securities ownership affecting securities held on the Fund's account and
promptly notify the Fund of such action, and (b) collect all stock dividends,
rights and other items of like nature with respect to such securities.
6.10 INCOME COLLECTION. Unless otherwise directed by Instruction, the
Custodian shall collect any amount due and payable to the Fund with respect to
Investments and promptly credit the amount collected to a Principal or Agency
Account; provided, however, that the Custodian shall not be responsible for: (a)
the collection of amounts due and payable with respect to Investments that are
in default, or (b) the collection of cash or share entitlements with respect to
Investments that are not registered in the name of the Custodian or its
Subcustodians. The Custodian is hereby authorized to endorse and deliver any
instrument required to be so endorsed and delivered to effect collection of any
amount due and payable to the Fund with respect to Investments.
6.11 OWNERSHIP CERTIFICATES AND DISCLOSURE OF THE FUND'S INTEREST. The
Custodian is hereby authorized to execute on behalf of the Fund ownership
certificates, affidavits or other disclosure required under Applicable Law or
established market practice in connection with the receipt of income, capital
gains or other payments by the Fund with respect to Investments, or in
connection with the sale, purchase or ownership of Investments.
6.12 PROXY MATERIALS. The Custodian shall deliver, or cause to be
delivered, to the Fund proxy forms, notices of meeting, and any other notices or
announcements materially affecting or relating to
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Investments received by the Custodian or any nominee, and pursuant to
Instruction to execute and deliver or cause its nominee to execute and deliver
such proxies or other authorizations as may be required. Neither the Custodian
nor its nominee shall vote upon any such securities or execute any proxy to vote
thereon or give any consent or take any other action with respect thereto
(except as otherwise herein provided) unless ordered to do so by Instruction.
6.13 TAXES. The Custodian shall, where applicable, assist the Fund in the
reclamation of taxes withheld on dividends and interest payments received by the
Fund. In the performance of its duties with respect to tax withholding and
reclamation, the Custodian shall be entitled to rely on the advice of counsel
and upon information and advice regarding the Fund's tax status that is received
from or on behalf of the Fund without duty of separate inquiry.
6.14 OTHER DEALINGS. The Custodian shall otherwise act as directed by
Instruction, including without limitation effecting the free payments of moneys
or the free delivery of securities, provided that such Instruction shall
indicate the purpose of such payment or delivery and that the Custodian shall
record the party to whom such payment or delivery is made.
The Custodian shall attend to all nondiscretionary details in connection
with the sale or purchase or other administration of Investments, except as
otherwise directed by an Instruction, and may make payments to itself or others
for minor expenses of administering Investments under this Agreement; provided
that the Fund shall have the right to request an accounting with respect to such
expenses.
In fulfilling the duties set forth in Sections 6.6 through 6.10 above, the
Custodian shall provide to the Fund all material information pertaining to a
corporate action which the Custodian actually receives; provided that the
Custodian shall not be responsible for the completeness or accuracy of such
information. Any advance credit of cash or shares expected to be received as a
result of any corporate action shall be subject to actual collection and may,
when the Custodian deems collection unlikely, be reversed by the Custodian.
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The Custodian may at any time or times in its discretion appoint (and may
at any time remove) agents (other than Subcustodians) to carry out some or all
of the administrative provisions of this Agreement (AGENTS), provided, however,
that the appointment of such agent shall not relieve the Custodian of its
administrative obligations under this Agreement.
7. CASH ACCOUNTS, DEPOSITS AND MONEY MOVEMENTS. Subject to the terms and
conditions set forth in this Section 7, each Fund hereby authorizes the
Custodian to open and maintain, with itself or with Subcustodians, cash accounts
in United States Dollars, in such other currencies as are the currencies of the
countries in which the Fund maintains Investments or in such other currencies as
the Fund shall from time to time request by Instruction.
7.1 TYPES OF CASH ACCOUNTS. Cash accounts opened on the books of the
Custodian (PRINCIPAL ACCOUNTS) shall be opened in the name of the Fund. Such
accounts collectively shall be a deposit obligation of the Custodian and shall
be subject to the terms of this Section 7 and the general liability provisions
contained in Section 9. Cash accounts opened on the books of a Subcustodian may
be opened in the name of the Fund or the Custodian or in the name of the
Custodian for its customers generally (AGENCY ACCOUNTS). Such deposits shall be
obligations of the Subcustodian and shall be treated as an Investment of the
Fund. Accordingly, the Custodian shall be responsible for exercising reasonable
care in the administration of such accounts but shall not be liable for their
repayment in the event such Subcustodian, by reason of its bankruptcy,
insolvency or otherwise, fails to make repayment except as provided in section
8.3.
7.2 PAYMENTS AND CREDITS WITH RESPECT TO THE CASH ACCOUNTS. The Custodian
shall make payments from or deposits to any of said accounts in the course of
carrying out its administrative duties,
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including but not limited to income collection with respect to the Fund's
Investments, and otherwise in accordance with Instructions. The Custodian and
its Subcustodians shall be required to credit amounts to the cash accounts only
when moneys are actually received in cleared funds in accordance with banking
practice in the country and currency of deposit. Any credit made to any
Principal or Agency Account before actual receipt of cleared Funds shall be
provisional and may be reversed by the Custodian in the event such payment is
not actually collected. Unless otherwise specifically agreed in writing by the
Custodian or any Subcustodian, all deposits shall be payable only at the branch
of the Custodian or Subcustodian where the deposit is made or carried.
7.3 CURRENCY AND RELATED RISKS. The Fund bears risks of holding or
transacting in any currency. The Custodian shall not be liable for any loss or
damage arising from the applicability of any law or regulation now or hereafter
in effect, or from the occurrence of any event, which may delay or affect the
transferability, convertibility or availability of any currency in the country
(a) in which such Principal or Agency Accounts are maintained or (b) in which
such currency is issued, and in no event shall the Custodian be obligated to
make payment of a deposit denominated in a currency during the period during
which its transferability, convertibility or availability has been affected by
any such law, regulation or event. Without limiting the generality of the
foregoing, neither the Custodian nor any Subcustodian shall be required to repay
any deposit made at a foreign branch of either the Custodian or Subcustodian if
such branch cannot repay the deposit due to a cause for which the Custodian
would not be responsible in accordance with the terms of Section 9 of this
Agreement unless the Custodian or such Subcustodian expressly agrees in writing
to repay the deposit under such circumstances. All currency transactions in any
account opened pursuant to this Agreement are subject to exchange control
regulations of the United States
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and of the country where such currency is the lawful currency or where the
account is maintained. Any taxes, costs, charges or fees imposed on the
convertibility of a currency held by the Fund shall be for the account of the
Fund.
7.4 FOREIGN EXCHANGE TRANSACTIONS. The Custodian shall, subject to the
terms of this Section, settle foreign exchange transactions (including
contracts, futures, options and options on futures) on behalf of and for the
account of the Fund with such currency brokers or banking institutions,
including Subcustodians, as the Fund may direct pursuant to Instructions. The
Custodian may act as principal in any foreign exchange transaction with the Fund
in accordance with Section 7.4.2 of this Agreement. The obligations of the
Custodian in respect of all foreign exchange transactions (whether or not the
Custodian shall act as principal in such transaction) shall be contingent on the
free, unencumbered transferability of the currency transacted on the actual
settlement date of the transaction.
7.4.1 THIRD PARTY FOREIGN EXCHANGE TRANSACTIONS. The Custodian
shall process foreign exchange transactions (including without
limitation contracts, futures, options, and options on futures),
where any third party acts as principal counterparty to the Fund on
the same basis it performs duties as agent for the Fund with respect
to any other of the Fund's Investments. Accordingly the Custodian
shall only be responsible for delivering or receiving currency on
behalf of the Fund in respect of such contracts pursuant to
Instructions. The Custodian shall not be responsible for the failure
of any counterparty (including any Subcustodian) in such agency
transaction to perform its obligations thereunder. The Custodian (a)
shall transmit cash and Instructions to and from the currency broker
or banking institution with which a foreign exchange contract or
option has been executed pursuant hereto, (b) may make free outgoing
payments of cash in the form of Dollars or foreign currency without
receiving confirmation of a foreign exchange contract or option or
confirmation that the countervalue currency completing the foreign
exchange contract has been delivered or received or that the option
has been delivered or received, and (c) shall hold all
confirmations, certificates and other documents and agreements
received by the Custodian and evidencing or relating to such foreign
exchange transactions in safekeeping. The Fund accepts full
responsibility for its use of third-party foreign exchange dealers
and for execution of said foreign exchange contracts and options and
understands that the Fund shall be responsible for any and all costs
and interest charges which may be incurred by the Fund or the
Custodian as a result of the failure or delay of third parties to
deliver foreign exchange.
7.4.2 FOREIGN EXCHANGE WITH THE CUSTODIAN AS PRINCIPAL. The
Custodian may undertake foreign exchange transactions with the Fund
as principal as the Custodian and the Fund may agree from time to
time. In such event, the foreign exchange transaction
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will be performed in accordance with the particular agreement of the
parties, or in the event a principal foreign exchange transaction is
initiated by Instruction in the absence of specific agreement, such
transaction will be performed in accordance with the usual
commercial terms of the Custodian.
7.5 DELAYS. In the event that a delay shall have been caused by the
negligence or willful misconduct of the Custodian in carrying out an Instruction
to credit or transfer cash, the Custodian shall be liable to the Fund: (a) with
respect to Principal Accounts, for interest to be calculated at the rate
customarily paid on such deposit and currency by the Custodian on overnight
deposits at the time the delay occurs for the period from the day when the
transfer should have been effected until the day it is in fact effected; and,
(b) with respect to Agency Accounts, for interest to be calculated at the rate
customarily paid on such deposit and currency by the Subcustodian on overnight
deposits at the time the delay occurs for the period from the day when the
transfer should have been effected until the day it is in fact effected. The
Custodian shall not be liable to the Fund for a delay caused by an event of
Force Majeure which shall have occurred and be continuing.
7.6 ADVANCES. If, for any reason in the conduct of its safekeeping duties
pursuant to Section 5 hereof or its administration of the Fund's assets pursuant
to Section 6 hereof, the Custodian or any Subcustodian advances monies to
facilitate settlement or otherwise for benefit of the Fund (whether or not any
Principal or Agency Account shall be overdrawn either during, or at the end of,
any business day), the Fund hereby does:
7.6.1 acknowledge that the Fund shall have no right or title to any
Investments purchased with such Advance save a right to receive such
Investments upon: (a) the debit of the Principal or Agency Account; or,
(b) if such debit would produce an overdraft in such account, other
reimbursement of the associated Advance;
7.6.2 grant to the Custodian a security interest in all Investments of the
particular Fund; and,
7.6.3 agree that the Custodian may secure the resulting Advance by
perfecting a security interest in all Investments of the particular Fund
under Applicable Law.
15
Neither the Custodian nor any Subcustodian shall be obligated to advance monies
to the Fund, and in the event that such Advance occurs, any transaction giving
rise to an Advance shall be for the account and risk of the Fund and shall not
be deemed to be a transaction undertaken by the Custodian for its own account
and risk. If such Advance shall have been made by a Subcustodian or any other
person, the Custodian may assign the security interest and any other rights
granted to the Custodian hereunder to such Subcustodian or other person. If the
Fund shall fail to repay when due the principal balance of an Advance and
accrued and unpaid interest thereon, the Custodian or its assignee, as the case
may be, shall be entitled to utilize the available cash balance in any Agency or
Principal Account and to dispose of any Investments of the particular Fund to
the extent necessary to recover payment of all principal of, and interest on,
such Advance in full. Before disposing of any Investments as is necessary to
meet the Fund's obligation under an Advance, the Custodian shall inform the
Fund's Investment Adviser and dispose of those Investments designated by the
Investment Adviser as the Investments to be used to meet the Fund's obligation
under the Advance. The Custodian may assign any rights it has hereunder to a
Subcustodian or third party. Any security interest in Investments taken
hereunder shall be treated as financial assets credited to securities accounts
under Articles 8 and 9 of the Uniform Commercial Code (1997). Accordingly, the
Custodian shall have the rights and benefits of a secured creditor that is a
securities intermediary under such Articles 8 and 9.
7.7 INTEGRATED ACCOUNT. For purposes hereof, deposits maintained in all
Principal Accounts (whether or not denominated in Dollars) shall collectively
constitute a single and indivisible current account with respect to the Fund's
obligations to the Custodian, or its assignee, and balances in such Principal
Accounts shall be available for satisfaction of the Fund's obligations under
this Section 7. The
16
Custodian shall further have a right of offset against the balances in any
Agency Account maintained hereunder to the extent that the aggregate of all
Principal Accounts is overdrawn.
8. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Subject to the provisions
hereinafter set forth in this Section 8, the each Fund hereby authorizes the
Custodian to utilize Securities Depositories to act on behalf of the Fund and to
appoint from time to time and to utilize Subcustodians. With respect to
securities and funds held by a Subcustodian, either directly or indirectly
(including by a Securities Depository or Clearing Corporation), notwithstanding
any provisions of this Agreement to the contrary, payment for securities
purchased and delivery of securities sold may be made prior to receipt of
securities or payment, respectively, and securities or payment may be received
in a form, in accordance with (a) governmental regulations, (b) rules of
Securities Depositories and clearing agencies, (c) generally accepted trade
practice in the applicable local market, (d) the terms and characteristics of
the particular Investment, or (e) the terms of Instructions.
8.1 DOMESTIC SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The Custodian may
deposit and/or maintain, either directly or through one or more agents appointed
by the Custodian, Property of the Fund in any Securities Depository in the
United States, including The Depository Trust Company, provided such Depository
meets applicable requirements of the Federal Reserve Bank or of the Securities
and Exchange Commission. The Custodian may, at any time and from time to time,
appoint any bank as defined in Section 2(a)(5) of the 1940 Act meeting the
requirements of a custodian under Section 17(f) of the 1940 Act and the rules
and regulations thereunder, to act on behalf of the Fund as a Subcustodian for
purposes of holding Investments of the Fund in the United States.
17
8.2 FOREIGN SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The Custodian may
deposit and/or maintain non-U.S. Investments of the Fund in any non-U.S.
Securities Depository provided such Securities Depository meets the requirements
of an "eligible foreign custodian" under Rule 17f-5 promulgated under the 1940
Act, or any successor rule or regulation ("Rule 17f-5") or which by order of the
Securities and Exchange Commission is exempted therefrom. Additionally, the
Custodian may, at any time and from time to time, appoint (a) any bank, trust
company or other entity meeting the requirements of an ELIGIBLE FOREIGN
CUSTODIAN under Rule 17f-5 or which by order of the Securities and Exchange
Commission is exempted therefrom, or (b) any bank as defined in Section 2(a)(5)
of the 1940 Act meeting the requirements of a custodian under Section 17(f) of
the 1940 Act and the rules and regulations thereunder, to act on behalf of the
Fund as a Subcustodian for purposes of holding Investments of the Fund outside
the United States. Such appointment of foreign Subcustodians shall be subject to
approval of the Fund in accordance with Subsections 8.2.1 and 8.2.2.
8.2.1 BOARD APPROVAL OF FOREIGN SUBCUSTODIANS. Unless and except to
the extent that review of certain matters concerning the appointment of
Subcustodians shall have been delegated to the Custodian pursuant to
Subsection 8.2.2, the Custodian shall, prior to the appointment of any
Subcustodian for purposes of holding Property of the Fund outside the
United States, obtain written confirmation of the approval of the Board of
Trustees or Directors of the Fund with respect to (a) the identity of a
Subcustodian, (b) the country or countries in which, and the Securities
Depositories, if any, through which, any proposed Subcustodian is
authorized to hold Investments of the Fund, and (c) the Subcustodian
agreement which shall govern such appointment. Each such duly approved
country, Subcustodian and Securities Depository shall be listed on
Appendix A attached hereto as the same may from time to time be amended.
8.2.2 DELEGATION OF BOARD REVIEW OF SUBCUSTODIANS. From time to
time, the Custodian may offer to perform, and the Fund may accept such
offer to perform certain reviews of Subcustodians and of Subcustodian
Contracts as delegate of the Fund's Board. In such event, the Custodian's
duties and obligations with respect to this delegated review will be
performed in accordance with the terms of a separate Foreign Custody
Manager Delegation Agreement between the Fund and the Custodian.
8.3 RESPONSIBILITY FOR SUBCUSTODIANS. The Custodian shall be liable to
the Fund for any loss
18
or damage to the Fund caused by or resulting from the acts or omissions of
any Subcustodian listed on Appendix A to the extent that (i) under the
terms set forth in the Subcustodian Agreement between the Custodian and
the Subcustodian or in the Sub-subcustodian Agreement between a
Subcustodian and a Sub-subcustodian, the Subcustodian or Sub-subcustodian
has failed to perform in accordance with the standard of conduct imposed
under such Subcustodian Agreement or Sub-subcustodian Agreement, provided
that the Subcustodian Agreement or Sub-subcustodian Agreement requires
that such Subcustodian or Sub-subcustodian exercise reasonable care based
on standards applicable to Custodians in the relevant market, or (ii) such
acts or omission would be deemed to be negligence, gross negligence or
willful misconduct under the laws, circumstances and practices prevailing
in the jurisdiction where the act or omission occurred. In the countries
indicated in Appendix B to this Agreement, (as it may be amended from time
to time with prospective effect only), the liability of the Custodian for
the acts or omissions of a Subcustodian under this Section 8.3 shall be
subject to the additional condition that the Custodian actually recovers
such loss or damage from the Subcustodian. The foregoing condition to the
Custodian's liability shall be operative only if the Custodian undertakes,
at its own expense, commercially reasonable means to enforce any
contractual or other claims the Custodian, on its own behalf or on behalf
of the affected Fund, may have against the relevant Subcustodian. At the
election of the affected Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any such claim against the
relevant Subcustodian. In the event the affected Fund makes such an
election, the Custodian shall have no obligation to pursue such claims
independently, but shall cooperate with the Fund in the Fund's prosecution
of such claims. The foregoing condition to the Custodian's liability in
such cases shall in no way limit, condition or diminish: (a) the duty of
care of the Custodian under Section 9 hereof or Section 8 of the Foreign
Custody
19
Manager Delegation Agreement; (b) the liability of the Custodian for the
Custodian's own negligence, bad faith, willful misconduct or other breach of
such duty; or (c) any other obligation arising hereunder or under the Foreign
Custody Manager Delegation Agreement.
8.4 NEW COUNTRIES. The Fund shall be responsible for informing the
Custodian sufficiently in advance of a proposed investment which is to be held
in a country in which no Subcustodian is authorized to act in order that the
Custodian shall, if it deems appropriate to do so, have sufficient time to
establish a subcustodial arrangement in accordance herewith. In the event,
however, the Custodian is unable to establish such arrangements prior to the
time such investment is to be acquired, the Custodian is authorized to designate
at its discretion a local safekeeping agent, and the use of such local
safekeeping agent shall be at the sole risk of the Fund, and accordingly the
Custodian shall be responsible to the Fund for the actions of such agent if and
only to the extent the Custodian shall have recovered from such agent for any
damages caused the Fund by such agent.
9. RESPONSIBILITY OF THE CUSTODIAN. In performing its duties and obligations
hereunder, the Custodian shall use reasonable care under the facts and
circumstances prevailing in the market where performance is effected. Subject to
the specific provisions of this Section, the Custodian shall be liable for any
direct damage incurred by the Fund in consequence of the Custodian's negligence,
bad faith or willful misconduct. In no event shall the Custodian be liable
hereunder for any special, indirect, punitive or consequential damages arising
out of, pursuant to or in connection with this Agreement even if the Custodian
has been advised of the possibility of such damages. It is agreed that the
Custodian shall have no duty to assess the risks inherent in a Fund's
Investments or to provide investment advice with respect to
20
such Investments and that the Fund as principal shall bear any risks attendant
to particular Investments such as failure of counterparty or issuer.
9.1 LIMITATIONS OF PERFORMANCE. The Custodian shall not be responsible
under this Agreement for any failure to perform its duties, and shall not be
liable hereunder for any loss or damage in association with such failure to
perform, for or in consequence of the following causes:
9.1.1 FORCE MAJEURE. FORCE MAJEURE shall mean any circumstance or
event described below which is beyond the reasonable control of the
Custodian, a Subcustodian or any agent of the Custodian or a Subcustodian
and which adversely affects the performance by the Custodian of its
obligations hereunder, by the Subcustodian of its obligations under its
Subcustody Agreement or by any other agent of the Custodian or the
Subcustodian, including any event caused by, arising out of or involving
(a) an act of God, (b) accident, fire, water damage or explosion, (c) any
computer, system or other equipment failure or malfunction caused by any
computer virus or the malfunction or failure of any communications medium,
(d) any interruption of the power supply or other utility service, (e) any
strike or other work stoppage, whether partial or total, (f) any delay or
disruption resulting from or reflecting the occurrence of any Sovereign
Risk, (g) any disruption of, or suspension of trading in, the securities,
commodities or foreign exchange markets, whether or not resulting from or
reflecting the occurrence of any Sovereign Risk, (h) any encumbrance on
the transferability of a currency or a currency position on the actual
settlement date of a foreign exchange transaction, whether or not
resulting from or reflecting the occurrence of any Sovereign Risk, or (i)
any other cause similarly beyond the reasonable control of the Custodian.
9.1.2 COUNTRY RISK. COUNTRY RISK shall mean, with respect to the
acquisition, ownership, settlement or custody of Investments in a
jurisdiction, all risks relating to, or arising in consequence of,
systemic and markets factors affecting the acquisition, payment for or
ownership of Investments including (a) the prevalence of crime and
corruption, (b) the inaccuracy or unreliability of business and financial
information, (c) the instability or volatility of banking and financial
systems, or the absence or inadequacy of an infrastructure to support such
systems, (d) custody and settlement infrastructure of the market in which
such Investments are transacted and held, (e) the acts, omissions and
operation of any Securities Depository, (f) the risk of the bankruptcy or
insolvency of banking agents, counterparties to cash and securities
transactions, registrars or transfer agents, and (g) the existence of
market conditions which prevent the orderly execution or settlement of
transactions or which affect the value of assets.
9.1.3 SOVEREIGN RISK. SOVEREIGN RISK shall mean, in respect of any
jurisdiction, including the United States of America, where Investments is
acquired or held hereunder or under a Subcustody Agreement, (a) any act of
war, terrorism, riot, insurrection or civil commotion, (b) the imposition
of any investment, repatriation or exchange control restrictions by any
governmental authority, (c) the confiscation, expropriation or
nationalization of any Investments by any governmental authority, whether
de facto or de jure, (iv) any devaluation or revaluation of the currency,
(d) the imposition of taxes, levies or other charges affecting Property,
(vi) any change in the Applicable Law, or (e) any other economic or
political risk incurred or experienced.
9.2. LIMITATIONS ON LIABILITY. The Custodian shall not be liable for any
loss, claim, damage or
21
other liability arising from the following causes:
9.2.1 FAILURE OF THIRD PARTIES. The failure of any third party
including: (a) any issuer of Investments or book-entry or other agent of
and issuer; (b) any counterparty with respect to any Investment, including
any issuer of exchange-traded or other futures, option, derivative or
commodities contract; (c) failure of an Investment Adviser, Foreign
Custody Manager or other agent of a Fund; or (d) failure of other third
parties similarly beyond the control or choice of the Custodian.
9.2.2 INFORMATION SOURCES. The Custodian may rely upon information
received from issuers of Investments or agents of such issuers,
information received from Subcustodians and from other commercially
reasonable sources such as commercial data bases and the like, but shall
not be responsible for specific inaccuracies in such information, provided
that the Custodian has relied upon such information in good faith, or for
the failure of any commercially reasonable information provider.
9.2.3 RELIANCE ON INSTRUCTION. Action by the Custodian or the
Subcustodian in accordance with an Instruction, even when such action
conflicts with, or is contrary to any provision of, the Fund's declaration
of trust, certificate of incorporation or by-laws, Applicable Law, or
actions by the trustees, directors or shareholders of the Fund.
9.2.4 RESTRICTED SECURITIES. The limitations inherent in the rights,
transferability or similar investment characteristics of a given
Investment of a Fund.
10. INDEMNIFICATION.
10.1 BY THE TRUST AND THE FUND. Each Fund hereby indemnifies the
Custodian and each Subcustodian, and their respective agents, nominees and
the partners, employees, officers and directors, and agrees to hold each
of them harmless from and against all claims and liabilities, including
counsel fees and taxes, incurred or assessed against any of them in
connection with the performance of this Agreement and any Instruction. If
a Subcustodian or any other person indemnified under the preceding
sentence, gives written notice of claim to the Custodian, the Custodian
shall promptly give written notice to the relevant Fund.
10.2 BY THE CUSTODIAN. The Custodian hereby indemnifies the Trust
and each Fund, and their agents, nominees and the trustees, employees,
officers and directors, and agrees to hold each of them harmless from and
against all claims and liabilities, including counsel fees and taxes,
incurred or assessed against any of them in connection with the
performance of this Agreement.
10.3 NOTICE OF LITIGATION, RIGHT TO PROSECUTE, ETC... No Fund shall be liable
for indemnification under this Section 10 unless the party seeking
indemnification shall have promptly notified such Fund in writing of the
commencement of any litigation or proceeding brought against such party seeking
indemnification in respect of which indemnity may be sought under this Section
10. With respect to such claims in such
22
litigation or proceedings for which indemnity by a Fund may be sought and
subject and to applicable law and the ruling of any court of competent
jurisdiction, such Fund shall be entitled to participate in any such litigation
or proceeding and, after written notice from such Fund to the party seeking
indemnification, such Fund may assume the defense of such litigation or
proceeding with counsel of its choice at its own expense in respect of that
portion of the litigation for which such Fund may be subject to an
indemnification obligation; provided, however, the party seeking indemnification
shall be entitled to participate in (but not control) at its own cost and
expense, the defense of any such litigation or proceeding if such Fund has not
acknowledged in writing its obligation to indemnify the party seeking
indemnification with respect to such litigation or proceeding. If such Fund is
not permitted to participate or control such litigation or proceeding under
applicable law or by a ruling of a court of competent jurisdiction, the party
seeking indemnification shall reasonably prosecute such litigation or
proceeding. The party seeking indemnification shall not consent to the entry of
any judgement or enter into any settlement in any such litigation or proceeding
without providing each applicable Fund with adequate notice of any such
settlement or judgement, and without each such Fund's prior written consent. The
party seeking indemnification shall submit written evidence to each applicable
Fund with respect to any cost or expense for which they are seeking
indemnification in such form and detail as such Fund may reasonably request.
11. POWERS AND DUTIES OF THE CUSTODIAN WITH RESPECT TO ITS ROLE AS FINANCIAL
AGENT: Each Fund hereby also appoints the Custodian as the Fund's financial
agent. With respect to the appointment as financial agent, the Custodian shall
have and perform the following powers and duties:
11.1 RECORDS - To create, maintain and retain such records relating to its
activities and obligations under this Agreement as are required under the 1940
Act and the rules and regulations thereunder (including Section 31 thereof and
Rules 31a-1 and 31a-2 thereunder) and under applicable Federal and State tax
laws. All such records will be the property of the Fund and in the event of
termination of this Agreement shall be delivered to the successor custodian.
11.2 ACCOUNTS. - To keep books of account and render statements, including
interim monthly and complete quarterly financial statements, or copies thereof,
from time to time as reasonably requested by
23
proper instructions.
11.3 ACCESS TO RECORDS - The books and records maintained by the Custodian
pursuant to Section 11.1 and 11.2 shall at all times during the Custodian's
regular business hours be open to inspection and audit by officers of, attorneys
for and auditors employed by the Fund and by employees and agents of the
Securities and Exchange Commission, provided that all such individuals shall
observe all security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as may be reasonably imposed by the Custodian.
11.4 DISBURSEMENTS - Upon receipt of proper instructions, to pay or cause
to be paid, insofar, as funds are available for the purpose, bulls, statements
and other obligations of the Fund (including but not limited to interest
charges, taxes, management fees, compensation to Fund officers and employees,
and other operating expenses of the Fund).
12. MISCELLANEOUS.
12.1 PROXIES, ETC. The each Fund will promptly execute and deliver,
upon request, such proxies, powers of attorney or other instruments as may be
necessary or desirable for the Custodian to provide, or to cause any
Subcustodian to provide, custody services.
12.2 ENTIRE AGREEMENT. Except as specifically provided herein, this
Agreement constitutes the entire agreement between the Trust and the Custodian
with respect to the subject matter hereof. Accordingly, this Agreement
supersedes any custody agreement or other oral or written agreements heretofore
in effect between the Trust and the Custodian with respect to the custody of the
Trust's Property.
12.3 WAIVER AND AMENDMENT. No provision of this Agreement may be
waived, amended or modified, and no addendum to this Agreement shall be or
become effective, or be waived, amended or modified, except by an instrument in
writing executed by the party against which enforcement of such waiver,
amendment or modification is sought; provided, however, that an Instruction
shall, whether or not such Instruction shall constitute a waiver, amendment or
modification for purposes hereof, shall be deemed to have been accepted by the
Custodian when it commences actions pursuant thereto or in
24
accordance therewith.
12.4 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND BE GOVERNED BY THE FEDERAL LAWS OF THE UNITED
STATES AND, TO THE EXTENT NOT GOVERNED THEREBY, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW OF SUCH STATE. THE PARTIES
HERETO CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND THE FEDERAL COURTS LOCATED IN NEW YORK CITY IN THE BOROUGH OF
MANHATTAN.
12.5 NOTICES. Notices and other writings contemplated by this
Agreement, other than Instructions, shall be delivered (a) by hand, (b) by first
class registered or certified mail, postage prepaid, return receipt requested,
(c) by a nationally recognized overnight courier or (d) by facsimile
transmission, provided that any notice or other writing sent by facsimile
transmission shall also be mailed, postage prepaid, to the party to whom such
notice is addressed. All such notices shall be addressed, as follows:
If to the Trust or a Fund:
Xxxxxxx Institutional Funds
c/o Deutsche Asset Management
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Assistant Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Custodian:
Xxxxx Brothers Xxxxxxxx & Co.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Manager, Securities Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000,
25
or such other address as the Trust a Fund or the Custodian may have
designated in writing to the other.
12.6 HEADINGS. Paragraph headings included herein are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
12.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
the Trust and the Custodian.
12.8 CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering or obtaining services pursuant
to this Agreement and, except as may be required in carrying out this Agreement,
shall not be disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any information that
is publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by or to any bank examiner of the Custodian or any Subcustodian, any
Regulatory Authority, any auditor of the parties hereto, or by judicial or
administrative process or otherwise by Applicable Law.
12.9 ASSISTANCE BY THE CUSTODIAN AS TO CERTAIN MATTERS: The
Custodian may assist generally in the preparation of reports to the Fund
shareholders and others, audits of accounts, and other ministerial matters of
the like nature.
12.10 LIMITATION OF LIABILITY. A copy of the Fund's Declaration of
Trust is on file
26
with the Secretary of State of the State of Massachusetts and notice is hereby
given that this Agreement has been executed on behalf of the Trust by an officer
of the Trust in such capacity and not individually. It is agreed that
obligations of the Trust hereunder shall not be binding personally upon any of
the Trustees, shareholders, officers, agents or employees of the Trust, but
shall bind only the Trust property of the Trust as provided in the Declaration
of Trust. No Fund of the Trust shall be liable for the obligations of any other
Fund of the Trust. No obligations of the Trust that relate to a particular Fund
shall be attributable to or affect any other Fund of the Trust but shall only
relate to the particular Fund.
12.11 CONVERSION TO THE EURO. The Custodian will take reasonable
steps to ensure that it has in place a euro conversion plan reasonably designed
to enable it to perform its obligations without interruption or error due to the
conversion of European currencies to the euro beginning on January 1, 1999. If
any changes are required, the Custodian will make the changes to its computer,
systems or other equipment at no cost to the Trust and in a commercially
reasonable time frame.
12.12 YEAR 2000. The Custodian will take reasonable steps to ensure
that its computer, systems or other equipment it will use to provide services
under this Agreement reflect the available state of the art technology to offer
services that are Year 2000 compliant, including, but not limited to, century
recognition of dates, calculations that correctly compute same century and
multi-century formulas and date values, and interface values that reflect the
date issues arising between now and the next one hundred years. If any changes
are require, the Custodian will make the changes to its computer systems or
other equipment at no cost to the Trust and in a commercially reasonable time
frame.
13. DEFINITIONS. The following defined terms will have the respective meanings
set forth below.
27
13.1 ADVANCE shall mean any extension of credit by or through the
Custodian or by or through any Subcustodian and shall include amounts paid to
third parties for account of a particular Fund or in discharge of any expense,
tax or other item payable by such Fund.
13.2 AGENCY ACCOUNT shall mean any deposit account opened on the books of
a Subcustodian or other banking institution in accordance with Section 7.1.
13.3 AGENT shall have the meaning set forth in the last sentence of
Section 6.
13.4 APPLICABLE LAW shall mean with respect to each jurisdiction, all (a)
laws, statutes, treaties, regulations, guidelines (or their equivalents); (b)
orders, interpretations licenses and permits; and (c) judgments, decrees,
injunctions writs, orders and similar actions by a court of competent
jurisdiction; compliance with which is required or customarily observed in such
jurisdiction.
13.5 AUTHORIZED PERSON shall mean any person or entity authorized to give
Instructions on behalf of the Fund in accordance with Section 4.1.
13.6 BOOK-ENTRY AGENT shall mean an entity acting as agent for the issuer
of Investments for purposes of recording ownership or similar entitlement to
Investments, including without limitation a transfer agent or registrar.
13.7 CLEARING CORPORATION shall mean any entity or system established for
purposes of providing securities settlement and movement and associated
functions for a given market.
13.8 COUNTRY RISK shall have the meaning set forth in Section 9.1 hereof.
13.9 DELEGATION AGREEMENT shall mean any separate agreement entered into
between the Custodian and the Trust or its authorized representative with
respect to certain matters concerning the appointment and administration of
Subcustodians delegated to the Custodian pursuant to Rule 17f-5.
13.10 FORCE MAJEURE shall have the meaning set forth in Section 9.1 hereof
13.11 FOREIGN CUSTODY MANAGER shall mean the Trust's foreign custody
manager appointed pursuant to Rule 17f-5 of the 1940 Act.
13.12 FUNDS TRANSFER SERVICES AGREEMENT shall mean any separate agreement
entered into between the Custodian and the Fund or its authorized representative
with respect to certain matters concerning the processing of payment orders from
Principal Accounts of the Fund.
13.13 INSTRUCTION(S) shall have the meaning assigned in Section 4.
13.14 INVESTMENT ADVISOR shall mean Deutsche Investment Management
Americas Inc. or any other person or entity who is authorized to give
Instructions with respect to the investment and reinvestment of a Fund's
Investments.
13.15 INVESTMENTS shall mean any investment asset of a Fund, including
without limitation securities, bonds, notes, and debentures as well as
receivables, derivatives, contractual rights or entitlements and other
intangible assets.
13.16 MARGIN ACCOUNT shall have the meaning set forth in Section 6.4
hereof.
13.17 PRINCIPAL ACCOUNT shall mean deposit accounts of the Fund carried on
the books of BBH&Co. as principal in accordance with Section 7.
28
13.18 SAFEKEEPING ACCOUNT shall mean an account established on the books
of the Custodian or any Subcustodian for purposes of segregating the interests
of a Fund (or clients of the Custodian or Subcustodian) from the assets of the
Custodian or any Subcustodian.
13.19 SECURITIES DEPOSITORY shall mean a central or book entry system or
agency established under Applicable Law for purposes of recording the ownership
and/or entitlement to investment securities for a given market.
13.20 SUBCUSTODIAN shall mean each foreign bank appointed by the Custodian
pursuant to Section 8, but shall not include Securities Depositories.
13.21 SOVEREIGN RISK shall have the meaning set forth in Section 9.1
hereof.
13.22 TRI-PARTY AGREEMENT shall have the meaning set forth in Section 6.4
hereof.
13.23 1940 ACT shall mean the Investment Company Act of 1940, as amended.
14. COMPENSATION. Each Fund agrees to pay to the Custodian (a) a fee in an
amount set forth in the fee letter between the Trust and the Custodian in effect
on the date hereof or as amended from time to time, and (b) all out-of-pocket
expenses incurred by the Custodian, including the fees and expenses of all
Subcustodians, and payable from time to time. Amounts payable by the Trust under
and pursuant to this Section 14 shall be payable by wire transfer to the
Custodian at BBH&Co. in New York, New York.
15. TERMINATION. This Agreement may be terminated by either party in
accordance with the provisions of this Section. The provisions of this Agreement
and any other rights or obligations incurred or accrued by any party hereto
prior to termination of this Agreement shall survive any termination of this
Agreement.
15.1 NOTICE AND EFFECT. This Agreement may be terminated by either
party by written notice effective no sooner than seventy-five days
following the date that notice to such effect shall be delivered to other
party at its address set forth in paragraph 12.5 hereof or such sooner
date as agreed to by the parties.
15.2 SUCCESSOR CUSTODIAN. In the event of the appointment of a
successor custodian, it is agreed that the Investments of the Fund held by
the Custodian or any Subcustodian shall be delivered to the successor
custodian in accordance with reasonable Instructions. The Custodian
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agrees to cooperate with the Trust in the execution of documents and
performance of other actions necessary or desirable in order to facilitate
the succession of the new custodian. If no successor custodian shall be
appointed, the Custodian shall in like manner transfer each Fund's
Investments in accordance with Instructions.
15.3 DELAYED SUCCESSION. If no Instruction has been given as of the
effective date of termination, Custodian may at any time on or after such
termination date and upon ten days written notice to the Trust either (a)
deliver the Investments of the Trust held hereunder to the Fund at the
address designated for receipt of notices hereunder; or (b) deliver any
investments held hereunder to a bank or trust company having a
capitalization of $2M USD equivalent and operating under the Applicable
Law of the jurisdiction where such Investments are located, such delivery
to be at the risk of the Trust. In the event that Investments or moneys of
the Fund remain in the custody of the Custodian or its Subcustodians after
the date of termination owing to the failure of the Trust to issue
Instructions with respect to their disposition or owing to the fact that
such disposition could not be accomplished in accordance with such
Instructions despite diligent efforts of the Custodian, the Custodian
shall be entitled to compensation for its services with respect to such
Investments and moneys during such period as the Custodian or its
Subcustodians retain possession of such items and the provisions of this
Agreement shall remain in full force and effect until disposition in
accordance with this Section is accomplished.
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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.
XXXXXXX INSTITUTIONAL FUNDS
By:_______________________________
XXXXX BROTHERS XXXXXXXX & CO.
By: ______________________________
APPENDIX A
XXXXXXX INSTITUTIONAL FUNDS ON BEHALF OF THE FOLLOWING SERIES:
XXXXXXX COMMODITY SECURITIES FUND
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