Exhibit (g)
CUSTODIAN AGREEMENT
(FOREIGN AND DOMESTIC SECURITIES)
This Custodian Agreement is made by and between THE COVENTRY FUNDS ON BEHALF OF
GENDEX FUND ("Principal") and UNION BANK OF CALIFORNIA, N.A. ("Custodian").
Principal desires that Custodian hold and administer on behalf of Principal
certain Securities (as herein defined). Custodian is willing to do so on the
terms and conditions set forth in this Agreement. Accordingly, Principal and
Custodian agree as follows:
1. DEFINITIONS. Certain terms used in this Agreement are defined as follows:
1.1 "Account" means, collectively, each account maintained by Custodian
pursuant to Paragraph 3 of this Agreement.
1.2 "Act" means the Investment Company Act of 1940, and the rules and
regulations thereunder, all as amended from time to time by the U.S. Securities
and Exchange Commission ("SEC").
1.3 "Board" means the Board of Trustees or the Board of Directors of
Principal.
1.4 "Eligible Foreign Custodian" ("Sub-Custodian", or collectively
"Sub-Custodians") means an entity that is incorporated or organized under the
laws of a country other than the United States and that is a Qualified Foreign
Bank, as defined in Section 270.17f-5(a)(5) of the Rule, or a majority-owned
direct or indirect subsidiary of a U.S. Bank or bank-holding company.
1.5 "Eligible Securities Depository", ("Depository", or collectively
"Depositories") means a system for the central handling of securities as defined
in Section 270.17f-7(b)(1) of the Act.
1.6 "Emerging Market" means each market so identified on Appendix A
attached hereto.
1.7 "Foreign Market" means each market so identified on Appendix A attached
hereto.
1.8 "Investment Manager" means an investment advisor or manager identified
by Principal in a written notice to Custodian as having the authority to direct
Custodian regarding the management, acquisition, or disposition of Securities.
1.9 "Monitoring System" means the policies and procedures established by
Custodian to fulfill its duties to monitor the custody risks associated with
maintaining securities with a Sub-Custodian or Depository on a continuing basis,
pursuant to this Agreement.
UNION BANK OF CALIFORNIA INSTITUTIONAL CUSTODY SERVICES Page 1 OF 15
1.10 "Rule" means collectively Section 270.17(f)-5 and Section 270.17(f)-7
of the Act, as amended from time to time.
1.11 "Securities" means domestic or foreign securities or both within the
meaning of Section 2(a)(36) of the Act and regulations issued by the SEC under
Section 270.17(f) of the Act, as amended, which are held by Custodian in the
Account, and shall include cash of any currency or other property of Principal
and all income and proceeds of sale of such securities or other property of
Principal.
2. REPRESENTATIONS
2.1 Principal represents that with respect to any Account established by
Principal to hold Securities, Principal is authorized to enter into this
Agreement and to retain Custodian on the terms and conditions and for the
purposes described herein.
2.2 Custodian represents that it (i) is organized under the laws of the
United States and has its principal place of business in the United States; (ii)
is a bank within the meaning of Section 202(a)(2) of the Investment Advisers Act
of 1940 and Section 2(a)(5) of the Act, as amended; and (iii) has equity capital
in excess of $1 million.
3. ESTABLISHMENT OF ACCOUNTS. Principal hereby establishes with Custodian, and
may in the future establish, one or more Accounts in Principal's name. The
Account shall consist of Securities delivered to and receipted for by Custodian
or by any Sub-Custodian. Custodian, in its sole discretion, may reasonably
refuse to accept any property now or hereafter delivered to it for inclusion in
the Account. Principal shall be notified promptly of such refusal and any such
property shall be immediately returned to Principal.
4. CUSTODY. Subject to the terms of this Agreement, Custodian shall be
responsible for the safekeeping and custody of the Securities. Custodian may (i)
retain possession of all or any portion of the Securities, including possession
in a foreign branch or other office of Custodian; or (ii) retain, in accordance
with Paragraph 5 of this Agreement, one or more Sub-Custodians to hold all or
any portion of the Securities. Custodian and any Sub-Custodian may, in
accordance with Paragraph 5 of this Agreement, deposit definitive or book-entry
Securities with one or more Depositories.
4.1 If Custodian retains possession of Securities, Custodian shall ensure
the Securities are at all times properly identified as being held for the
appropriate Account. Custodian shall segregate physically the Securities from
other securities or property held by Custodian. Custodian shall not be required
to segregate physically the Securities from other securities or property held by
Custodian for third parties as Custodian, but Custodian shall maintain adequate
records showing the true ownership of the Securities.
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4.2 If Custodian deposits Securities with a Sub-Custodian, Custodian shall
maintain adequate records showing the identity and location of the
Sub-Custodian, the Securities held by the Sub-Custodian, and each Account to
which such Securities belong.
4.3 If Custodian or any Sub-Custodian deposits Securities with a
Depository, Custodian shall maintain, or shall cause the Sub-Custodian to
maintain, adequate records showing the identity and location of the Depository,
the Securities held by the Depository, and each Account to which such Securities
belong.
4.4 If Principal directs Custodian to deliver certificates or other
physical evidence of ownership of Securities to any broker or other party, other
than a Sub-Custodian or Depository employed by Custodian for purposes of
maintaining the Account, Custodian's sole responsibility shall be to exercise
care and diligence in effecting the delivery as instructed by Principal. Upon
completion of the delivery, Custodian shall be discharged completely of any
further liability or responsibility with respect to the safekeeping and custody
of Securities so delivered.
4.5 Custodian shall ensure that (i) the Securities will not be subject to
any right, charge, security interest, lien, or claim of any kind in favor of
Custodian or any Sub-Custodian except for Custodian's expenses relating to the
Securities' safe custody or administration or, in the case of cash deposits,
liens or rights in favor of the creditors of the Sub-Custodian arising under
bankruptcy, insolvency, or similar laws, and (ii) the beneficial ownership of
the Securities will be freely transferable without the payment of money or value
other than for safe custody or administration.
4.6 Principal or its designee, shall have reasonable access upon reasonable
notice during regular business hours to the books and records, or shall be given
confirmation of the contents of the books and records, maintained by Custodian
or any Sub-Custodian holding Securities hereunder to verify the accuracy of such
books and records. Custodian shall notify Principal promptly of any applicable
law or regulation in any country where Securities are held that would restrict
such access or confirmation.
4.7 Upon receipt of proper instructions, Custodian shall establish and
maintain a segregated account or accounts for and on behalf of Principal, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained with a Depository (i) in accordance with the provisions of
any agreement among the Principal, the Custodian and a broker-dealer registered
under the 1934 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 organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Fund; (ii) for purposes of segregating cash or Securities in connection with
securities options purchased or written by Principal or in connection with
financial futures contracts (or options thereon) purchased or sold by Principal
(ii)
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which constitute collateral for loans of Securities made by Principal ; (iv) for
purposes of compliance by Principal with requirements under the 1940 Act for the
maintenance of segregated accounts by registered investment companies in
connection with reverse repurchase agreements and when-issued, delayed delivery,
short sales and firm commitment transactions; and (v) for other proper corporate
purposes, but only upon receipt of, in addition to proper instructions, a
certified copy of a resolution of the Board of Trustees of Principal, certified
by an Officer of Principal, setting forth the purpose or purposes of such
segregated account and declaring such purposes to be proper corporate purposes.
Each segregated account established under this Article VI shall be
established and maintained for Principal only. All proper instructions relating
to a segregated account shall specify Principal.
5. SUB-CUSTODIANS AND DEPOSITORIES; SELECTION AND MONITORING. With Principal's
advance approval, as provided in Subparagraph 5.5 of this Agreement, Custodian
may from time to time select one or more Sub-Custodians and, subject to the
provisions of Subparagraph 5.7, one or more Depositories, to hold Securities
hereunder.
5.1 Custodian, acting as Principal's foreign custody manager as described
in the Rule, shall establish a relationship with each Sub-Custodian governed by
a written contract providing for the reasonable care of Securities based on the
standards specified in section Section 270.17(f)-5(c)(1) of the Rule, and
including the provisions set forth in sections Section 270.17(f)-5(c)(2)(i)(A)
through (F) of the Rule, or provisions which Custodian determines provide the
same or greater protection of Principal's Securities.
5.2 In making its selection of each Sub-Custodian, Custodian shall consider
whether the Securities will be subject to reasonable care, based on the
standards applicable to custodians in the relevant market, including (i) the
Sub-Custodian's practices, procedures, and internal controls, including, but not
limited to, the physical protections available for certificated securities (if
applicable), the method of keeping custodial records, and the security and data
protection practices; (ii) the Sub-Custodian's financial strength, general
reputation and standing in the country in which it is located, its ability to
provide efficiently the custodial services required, and the relative cost of
such services; and, (iii) whether the Sub-Custodian has branch offices in the
United States, or consents to service of process in the United States, in order
to facilitate jurisdiction over and enforcement of judgments against it.
Custodian will not select a Sub-Custodian unless it has determined that
securities held by the Sub-Custodian will be subject to such reasonable care.
5.3 In making its selection of each Sub-Custodian and each Depository,
Custodian shall exercise reasonable care, prudence, and diligence in evaluating
the custody risks associated with maintaining Securities with each Depository
under Custodian's custody arrangements with each Sub-Custodian or Depository.
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5.4 Custodian shall give written notice to Principal of its intention to
deposit Securities with a Sub-Custodian or, directly or through a Sub-Custodian,
with a Depository. The notice shall identify the proposed Sub-Custodian or
Depository and shall include reasonably available information relied on by
Custodian in making the selection which shall include a report of the custody
risks of maintaining assets with the Depository.
5.5 Within 30 days of its receipt of a notice from Custodian pursuant to
Subparagraph 5.4 of this Agreement regarding Custodian's proposed selection of
one or more Sub-Custodians or Depositories, Principal shall give written notice
to Custodian of Principal's approval or disapproval of the proposed selection.
If Principal has not responded within 30 days of receipt of Custodian's request
for approval of a Sub-Custodian or Depository, Principal will be deemed to have
approved the proposed selection. Principal hereby approves Custodian's selection
and use of those Sub-Custodians and Depositories which are identified in
Appendix A of this Agreement.
5.6 Custodian shall monitor under its Monitoring System the appropriateness
of the continued custody or maintaining of Principal's Securities with each
Sub-Custodian or Depository and the performance of the Sub-Custodian under its
contract with Custodian. Custodian shall promptly notify Principal or Investment
Manager of any material changes in the risks of continued custody or maintenance
of Securities with a Sub-Custodian or Depository.
5.6.1 Custodian shall evaluate and determine at least annually the
continued eligibility of each Sub-Custodian and Depository approved by Principal
to act as such hereunder. In discharging this responsibility, Custodian shall
(i) monitor on a continuing basis the day to day services and reports provided
by each Sub-Custodian or Depository; (ii) at least annually, obtain and review
the annual financial report published by each Sub-Custodian, and to the extent
such reports are publicly available, each Depository, and other reports on each
Sub-Custodian or Depository which Custodian may obtain from a reputable
independent analyst; and, (iii) periodically as deemed appropriate, physically
inspect the operations of each Sub-Custodian or Depository.
5.6.2 Custodian shall provide to the Board annually and at such other
times as the Board may reasonably request based on the circumstances of the
Principal's foreign custody arrangements, written reports notifying the Board of
the placement of Securities of the Principal with a particular foreign
Sub-Custodian within a Foreign Market or an Emerging Market and of any material
change in the arrangements (including any material changes in any contracts
governing such arrangements or any material changes in the established practices
or procedures of Depositories) with respect to Securities of the Principal held
by any Sub-Custodian.
5.6.3 If at any time Custodian determines that (i) any Sub-Custodian
or Depository no longer satisfies the applicable requirements described in
Subparagraph 1.4 (in the case of a Sub-Custodian) or Subparagraph 1.5 (in the
case of a Depository) of this Agreement; or, (ii) any Sub-Custodian or
Depository is otherwise no longer
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capable or qualified to perform the functions contemplated herein; or, (iii) any
change in a contract with a Sub-Custodian or any change in established
Depository or market practices or procedures shall cause a custody arrangement
to no longer meet the requirements of the Rule, Custodian shall promptly give
written notice thereof to Principal. The notice shall, in addition, either
indicate Custodian's intention to transfer Securities held by the removed
Sub-Custodian or Depository to another Sub-Custodian or Depository previously
approved by Principal, or include a notice pursuant to Subparagraph 5.4 of this
Agreement of Custodian's intention to deposit Securities with a new
Sub-Custodian or Depository, in either instance such transfer of Securities to
be effected as soon as reasonably practical.
5.7 Notwithstanding the foregoing sub-sections of this Paragraph 5,
Custodian shall have no responsibility for the selection or monitoring of any
Depository or Depository's agent ("Compulsory Depository") (i) the use of which
is mandated by law or regulation; (ii) because securities cannot be withdrawn
from a depository; or (iii) because maintaining securities outside the
securities depository is not consistent with prevailing market practices in the
relevant market, provided however, that Custodian shall notify Principal if
Principal has directed a trade in a market containing a Compulsory Depository,
so Principal and Advisor shall have an opportunity to determine the
appropriateness of investing in such market.
5.8 Principal and Custodian agree that, for purposes of this Paragraph,
Custodian's determination of appropriateness shall only include custody risk,
and shall not include any evaluation of "country risk" or systemic risk
associated with the investment or holding of assets in a particular country or
market, including, but not limited to (i) the use of Compulsory Depositories,
(ii) the country's or market's financial infrastructure, (iii) the country's or
market's prevailing custody and settlement practices, (iv) risk of
nationalization, expropriation or other governmental actions, (v) regulation of
the banking or securities industries, (vi) currency controls, restrictions,
devaluation or fluctuation, and (vii) country or market conditions which may
affect the orderly execution of securities transactions or affect the value of
the transactions. Principal and Custodian further agree that the evaluation of
any such country and systemic risks shall be solely the responsibility of
Principal and the Adviser.
6. REGISTRATION. Subject to any specific instructions from Principal, Custodian
shall hold or cause to be held all Securities in the name of (i) Principal, or
(ii) Custodian, or any Sub-Custodian or Depository approved by Principal
pursuant to Paragraph 5 of this Agreement, or in the name of a nominee of any of
them, as Custodian shall determine to be appropriate under the circumstances.
7. TRANSACTIONS. Principal or any Investment Manager from time to time may
instruct Custodian (which in turn shall be responsible for giving appropriate
instructions to any Sub-Custodian or Depository) regarding the purchase or sale
of Securities in accordance with this Paragraph 7:
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7.1 Custodian shall effect and account for each Securities and currency
sale on the date such transaction actually settles; provided, however, that
Principal may in its sole discretion direct Custodian, in such manner as shall
be acceptable to Custodian, to account for Securities and currency purchases and
sales on contractual settlement date, regardless of whether settlement of such
transactions actually occurs on contractual settlement date. Principal may, from
time to time, direct Custodian to change the accounting method employed by
Custodian in a written notice delivered to Custodian at least thirty (30) days
prior to the date a change in accounting method shall become effective.
7.2 Custodian shall effect purchases by charging the Account with the
amount necessary to make the purchase and effecting payment to the seller or
broker for the securities or other property purchased. Custodian shall have no
liability of any kind to any person, including Principal, except in the case of
negligent or intentional tortuous acts, or willful misconduct, if the Custodian
effects payment on behalf of Principal, and the seller or broker fails to
deliver the securities or other property purchased. Custodian shall exercise
such ordinary care and diligence as would be employed by a reasonably prudent
custodian and due diligence in examining and verifying the certificates or other
indicia of ownership of the property purchased before accepting them.
7.3 Custodian shall effect sales by delivering certificates or other
indicia of ownership of the Property, and, as instructed, shall receive cash for
such sales. Custodian shall have no liability of any kind to any person,
including Principal, if Custodian exercises due diligence and delivers such
certificates or indicia of ownership and the purchaser or broker fails to effect
payment.
7.4 If a purchase or sale is effected through a Depository, Custodian shall
exercise such ordinary care and diligence as would be employed by a reasonably
prudent custodian and due diligence in verifying proper consummation of the
transaction by the Depository.
7.5 Principal or, where applicable, Investment Manager, is responsible for
ensuring that Custodian receives timely instructions and/or funds to enable
Custodian to effect settlement of any purchase or sale of Securities or Currency
Transactions. If Custodian does not receive such timely instructions or funds,
Custodian shall have no liability of any kind to any person, including
Principal, for failing to effect settlement. However, Custodian shall use
reasonable efforts to effect settlement as soon as possible after receipt of
appropriate instructions. Principal shall be liable for interest compensation
and/or principal amounts to Custodian and/or its counterparty for failure to
deliver instructions or funds in a timely manner to effect settlements of
foreign exchange funds movement.
7.6 At the direction of Principal or the Investment Manager, as the case
may be, Custodian shall convert currency in the Account to other currencies
through customary channels including, without limitation, Custodian or any of
its affiliates, as shall be necessary to effect any transaction directed by
Principal or the Investment
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Manager. Principal or the Investment Manager, as the case may be, acknowledges
that (i) the foreign currency exchange department is a part of Custodian or one
of its affiliates or subsidiaries; (ii) the Account is not obligated to effect
foreign currency exchange with Custodian; (iii) Custodian will receive benefits
for such foreign currency transactions which are in addition to the compensation
which Custodian receives for administering the Account; and (iv) Custodian will
make available the relevant data so that Principal or the Investment Manager, as
the case may be, can determine that the foreign currency exchange transactions
are as favorable to the Account as terms generally available in arm's length
transactions between unrelated parties. Foreign currency exchange transactions
will be performed in accordance with the Union Bank of California Foreign
Exchange Agreement in the form of Appendix "C" hereto and incorporated herein by
reference and Principal hereby agrees and acknowledges all of the terms and
conditions thereof. If the Principal or Investment Manager elects to give
standing instructions to Custodian to execute foreign currency exchange
transactions on their behalf, or in the event a foreign currency exchange
transaction is initiated in the absence of the specific Foreign Exchange
Agreement, such transaction will be performed at the Bank's prevailing rate, in
accordance with the usual commercial terms of the custodian.
7.7 Custodian shall have no responsibility to manage or recommend
investments of the Account or to initiate any purchase, sale, or other
investment transaction in the absence of instructions from Principal or, where
applicable, an Investment Manager.
8. MARKET TRANSACTIONS; SETTLEMENT DATES. Custodian has identified certain
Foreign Markets and certain Emerging Markets in Appendix A of this Agreement,
which Custodian may amend in writing to Principal from time to time.
8.1 Principal agrees that all settlements of Securities transactions shall
be transacted in accordance with the local laws, customs, market practices and
procedures to which Sub-Custodians and Depositories are subject in each Foreign
and Emerging Market.
8.2 Notwithstanding the foregoing Paragraph 7., Principal understands and
agrees that settlement of Securities transactions is available only on an actual
settlement date basis in certain Emerging Markets, which are identified in
Appendix A, and as may be amended by Custodian in writing to Principal from time
to time.
8.2.1 For Emerging Markets with actual settlement dates, cash of any
currency deposited or delivered to the Account shall be available for use by
Principal or Investment Manager only on the actual business day on which funds
of good value are available to Sub-Custodian in the Account.
8.2.2 For Emerging Markets with actual settlement dates, Securities
deposited or delivered to the Account shall be available for use by Principal or
Investment Manager only on the actual business day on which such Securities are
held
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in the nominee name or are otherwise subject to the control of, and in a form
for good delivery by, the Sub-Custodian.
9. CAPITAL CHANGES; INCOME.
9.1 Custodian may, without further instructions from Principal or any
Investment Manager, exchange temporary certificates and may surrender and
exchange Securities for other securities in connection with any reorganization,
recapitalization, or similar transaction in which the owner of the Securities is
not given an option. Custodian has no responsibility to effect any such exchange
unless it has received actual notice of the event permitting or requiring such
exchange at its office designated in Paragraph 15 of this Agreement or at the
office of its designated agents.
9.2 Custodian, or its designated agents, are authorized, as Principal's
agent, to surrender against payment maturing obligations and obligations called
for redemption, and to collect and receive payments of interest and principal,
dividends, warrants, and other things of value in connection with Securities.
Except as otherwise provided in Subparagraph 16.4 of this Agreement, Custodian
or its designated agents shall not be obligated to enforce collection of any
item by legal process or other means.
9.3 Custodian or its designated agents are authorized to sign for Principal
all declarations, affidavits, certificates, or other documents that may be
required to collect or receive payments or distributions with respect to
Securities. Custodian or its designated agents are authorized to disclose,
without further consent of Principal, Principal's identity to issuers of
Securities, or the agents of such issuers, who may request such disclosure.
10. NOTICES REGARDING ACCOUNT SECURITIES. Custodian shall notify Principal or,
where applicable, the Investment Manager, of any reorganization,
recapitalization, or similar transaction not covered by Paragraph 9, and any
subscription rights, proxies, and other shareholder information pertaining to
the Securities actual notice of which is received by Custodian at its office
designated in Paragraph 15 of this Agreement or at the offices of its designated
agents, and forward any related material to Principal. Custodian's sole
responsibility in this regard shall be to give such notices to Principal or the
Investment Manager, as the case may be, within a reasonable time after Custodian
receives them, and Custodian shall not otherwise be responsible for the
timeliness of such notices. Custodian has no responsibility to respond or
otherwise act with respect to any such notice unless and until Custodian has
received appropriate instructions from Principal or the Investment Manager.
11. TAXES. Custodian shall pay or cause to be paid from the Account all taxes
and levies in the nature of taxes imposed on the Account or the Securities
thereof by any country. Custodian will use its best efforts to give the
Investment Manager advance written notice of the imposition of such taxes.
However, Custodian shall use reasonable efforts to obtain refunds of taxes
withheld on Securities or the income thereof that are available under applicable
tax laws, treaties, and regulations.
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12. CASH. Principal may from time to time, direct Custodian to hold Account cash
in The HighMark(SM) Group of mutual funds or in any investment company for which
Custodian or its affiliates or subsidiaries, acts as investment advisor or
custodian, or provides other services. Principal shall designate the particular
HighMark fund or such other above-mentioned fund that Principal deems
appropriate for the Account. Principal or an Investment Manager, where
applicable, acknowledges that Custodian will receive fees for such services
which will be in addition to those fees charged by Custodian as agent for the
Account.
13. REPORTS AND RECORDS.
13.1 Custodian shall give written reports to Principal showing (i) each
transaction involving Securities effected by or reported to Custodian; (ii) the
identity and location of Securities held by Custodian as of the date of the
report; (iii) any transfer of location of Securities not otherwise reported; and
(iv) such other information as shall be agreed upon by Principal and Custodian.
Unless otherwise agreed upon by Principal and Custodian, Custodian shall provide
the reports described in this Paragraph 13 on a monthly basis.
13.2 Custodian shall maintain complete and accurate records with respect to
Securities, cash or other property held for Principal, including (i) journals or
other records of original entry containing an itemized daily record in detail of
all receipts and deliveries of Securities and all receipts and disbursements of
cash; (ii) ledgers (or other records) reflecting (A) Securities in transfer, (B)
Securities in physical possession, (C) monies and Securities borrowed and monies
and Securities loaned (together with a record of the collateral therefore and
substitutions of such collateral), (D) dividends and interest received, and (E)
dividends receivable and interest receivable; and (iii) canceled checks and bank
records related thereto. Custodian shall keep such other books and records of
Principal as the officers of Principal shall reasonably request, or as may be
required by the Act, including, but not limited to, Section 31 of the Act and
Rule 31a-2 promulgated thereunder.
13.3 All such books and records maintained by Custodian shall (i) be
maintained in a form acceptable to Principal and in compliance with the rules
and regulations applicable to Custodian, (ii) and at all times during the
regular business hours of Custodian be made available upon request for
inspection by duly authorized officers, employees or agents of Principal, and
(iii) be preserved for the periods prescribed in rules and regulations
applicable to Custodian.
14. INSTRUCTIONS FROM PRINCIPAL.
14.1 Principal shall certify or cause to be certified to Custodian in
writing the names and specimen signatures of all persons authorized to give
instructions, notices, or other communications on behalf of Principal or any
Investment Manager. Such certification shall remain effective until Custodian
receives notice to the contrary.
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14.2 Principal or authorized Investment Manager, as the case may be, may
give instruction, notice, or other communication called for by this Agreement to
Custodian in writing, or by telecopy, telex, telegram, or other form of
electronic communication acceptable to Custodian. Unless otherwise expressly
provided, all Instructions shall continue in full force and effect until
canceled or superseded. Principal or Investment Manager may give and Custodian
may accept oral instructions on an exception basis; provided, however, that
Principal or Investment Manager shall promptly confirm any oral communications
in writing or by telecopy or other means permitted hereunder. Principal will
hold Custodian harmless for the failure of Principal or Investment Manager to
send confirmation in writing, the failure of such confirmation to conform to the
telephone instructions received or Custodian's failure to produce such
confirmation at any subsequent time. Custodian may electronically record any
instruction given by telephone, and any other telephone discussions with respect
to the Custody Account.
14.3 All such communications shall be deemed effective upon receipt by
Custodian at its address specified in Paragraph 15 of this Agreement, as amended
from time to time. Custodian without liability may rely upon and act in
accordance with any instruction that Custodian using ordinary care believes has
been given by Principal or an Investment Manager.
14.4 Custodian may at any time request instructions from Principal and may
await such instructions without incurring liability. Custodian has no obligation
to act in the absence of such requested instructions, but may, however, without
liability take such action as it deems appropriate to carry out the purposes of
this Agreement.
15. ADDRESSES. Until further notice from either party, all communications called
for under this Agreement shall be addressed as follows:
If to Principal:
Name: ____________________________________
Street Address: ____________________________________
City, State, Zip: ____________________________________
Attn: ____________________________________
Telephone: ____________________________________
Facsimile: ____________________________________
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If to Investment Manager:
Name: ____________________________________
Street Address: ____________________________________
City, State, Zip: ____________________________________
Attn: ____________________________________
Telephone: ____________________________________
Facsimile: ____________________________________
If to Custodian:
UNION BANK OF CALIFORNIA, NATIONAL ASSOCIATION
Union Bank of California Global Custody
Attn: Xx. Xxxx Xxxx Xxx, Vice President
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
16. CUSTODIAN'S RESPONSIBILITIES AND LIABILITIES:
16.1 Custodian's duties and responsibilities shall be limited to those
expressly set forth in this Agreement, or as otherwise agreed by Custodian in
writing. In carrying out its responsibilities, Custodian shall exercise no less
than the same degree of care and diligence it usually exercises with respect to
similar property of its own.
16.2 Custodian (i) shall not be required to maintain any special insurance
for the benefit of Principal, and (ii) shall not be liable or responsible for
any loss, damage, expense, failure to perform or delay caused by accidents,
strikes, fire, flood, war, riot, electrical or mechanical or communication line
or facility failures, acts of third parties (including without limitation any
messenger, telephone or delivery service), acts of God, war, government action,
civil commotion, fire, earthquake, or other casualty or disaster or any other
cause or causes which are beyond Custodian's reasonable control. However,
Custodian shall use reasonable efforts to replace Securities lost or damaged due
to such causes with securities of the same class and issue with all rights and
privileges pertaining thereto. Custodian shall be liable to Principal for any
loss which shall occur as the result of the failure of a Sub-Custodian to
exercise reasonable care with respect to the safekeeping of assets to the same
extent that Custodian would be liable to Principal if Custodian were holding
such securities and cash in its own premises. In all cases, Custodian's
liability for any act or failure to act under this Agreement shall be limited to
the resulting direct loss, if any, of Principal. Under no circumstances shall
Custodian be liable for any consequential or indirect damage that is
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not reasonably foreseeable, or any punitive or special damage, which Principal
may incur or suffer in connection with this Agreement.
16.3 The parties intend that Custodian shall not be considered a fiduciary
of the Account. Accordingly, Custodian shall have no power to make decisions
regarding any policy, interpretation, practice, or procedure with respect to the
Account, but shall perform the ministerial and administrative functions
described in this Agreement as provided herein and within the framework of
policies, interpretations, rules, practices, and procedures made by Principal or
an Investment Manager, where applicable, as the same shall be reflected in
instructions to Custodian from Principal or any Investment Manager.
16.4 Custodian shall not be required to appear in or defend any legal
proceedings with respect to the Account or the Securities unless Custodian has
been indemnified to its reasonable satisfaction against loss and expense
(including reasonable attorneys' fees).
16.5 With respect to legal proceedings referred to in Subparagraph 16.4 of
this agreement, Custodian may consult with counsel acceptable to it after
written notification to Principal concerning its duties and responsibilities
under this Agreement, and shall not be liable for any action taken or not taken
in good faith on the advice of such counsel.
16.6 Custodian agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of Principal,
all records and other information relative to Principal and prior, present, or
potential shareholders of Principal (and clients of said shareholders), and not
to use such records and information for any purpose other than the performance
of its responsibilities and duties hereunder, except (i) after prior
notification to and approval in writing by Principal, which approval shall not
be unreasonably withheld and may not be withheld where Custodian may be exposed
to civil or criminal contempt proceedings for failure to comply, (ii) when
requested to divulge such information by duly constituted authorities, or (iii)
when so requested by Principal. Records and other information which have become
known to the public through no wrongful act of Custodian or any of its
employees, agents or representatives, and information that was already in the
possession of Custodian prior to receipt thereof from Principal or its agent,
shall not be subject to this paragraph.
Further, Custodian will adhere to the privacy policies adopted by Principal
pursuant to Title V of the Xxxxx-Xxxxx-Xxxxxx Act, as may be modified from time
to time. In this regard, Custodian shall have in place and maintain physical,
electronic and procedural safeguards reasonably designed to protect the
security, confidentiality and integrity of, and to prevent unauthorized access
to or use of, records and information relating to Principal and its
shareholders.
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17. INDEMNITIES.
17.1 Principal hereby agrees to indemnify Custodian against all liability,
claims, demands, damages, losses, and costs, including reasonable attorneys'
fees and expenses of legal proceedings, resulting from Custodian's compliance
with instructions from Principal or any Investment Manager and the terms of this
Agreement, except where Custodian has acted with negligence or willful
misconduct.
17.2 Custodian hereby agrees to indemnify Principal against all liability,
claims, demands, damages, losses, and costs, including reasonable attorneys'
fees and expenses of legal proceedings, resulting from Custodian's negligence or
willful misconduct.
17.3 Each party's right to indemnity under paragraph 17 of this Agreement
shall survive the termination of this Agreement.
18. COMPENSATION; EXPENSES. Principal shall reimburse Custodian for all
reasonable out-of-pocket expenses and processing costs incurred by Custodian in
the administration of the Account including, without limitation, reasonable
counsel fees incurred by Custodian pursuant to Subparagraph 16.5 of this
Agreement. Principal also shall pay Custodian reasonable compensation for its
services hereunder as specified in Appendix B. Custodian shall be entitled to
withdraw such expenses or compensation from the Account if Principal fails to
pay the same to Custodian within 45 days after Custodian has sent an appropriate
billing to Principal; provided, however, that Custodian will give Principal ten
(10) days prior written notice before withdrawing such funds.
19. AMENDMENT; TERMINATION. This Agreement may be amended at any time by a
written instrument signed by the parties. Either party may terminate this
Agreement and the Account upon 90 days' written notice to the other unless the
parties agree on a different time period. Upon such termination, Custodian shall
deliver or cause to be delivered the Securities, less any amounts due and owing
to Custodian under this Agreement, to a successor custodian designated by
Principal or, if a successor custodian has not accepted an appointment by the
effective date of termination of the Account, to Principal. Upon completion of
such delivery Custodian shall be discharged of any further liability or
responsibility with respect to the Securities so delivered.
20. SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors in interest. Without consent of the
parties, this agreement cannot be assigned to any third party.
21. GOVERNING LAW. The validity, construction, and administration of this
Agreement shall be governed by the applicable laws of the United States from
time to time in force and effect and, to the extent not preempted by such laws
of the United States, by the laws of the State of California from time to time
in force and effect. Any action or proceeding to enforce, interpret or
adjudicate the rights and responsibilities of the
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parties hereunder shall be commenced in the State or Federal courts located in
the State of California.
22. EFFECTIVE DATE. This Agreement shall be effective as of the date appearing
below, and shall supersede any prior or existing agreements between the parties
pertaining to the subject matter hereof.
Date:
-------------------------------
By: "Principal"
---------------------------------
Authorized Signature
---------------------------------
Name & Title
---------------------------------
Authorized Signature
---------------------------------
Name & Title
By: Union Bank of California,
National Association, "Bank"
---------------------------------
Authorized Signature
---------------------------------
Name & Title
---------------------------------
Authorized Signature
---------------------------------
Name & Title
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