-------------------------------------------------------
GLOBAL CUSTODY AGREEMENT
BETWEEN
BLACK DIAMOND FUNDS
AND
JPMORGAN CHASE BANK
___________________, 200__
GLOBAL CUSTODY AGREEMENT
TABLE OF CONTENTS
1. Intention of the Parties; DEFINITIONS--------------------1
1.1 INTENTION OF THE PARTIES-------------------------------1
1.2 DEFINITIONS--------------------------------------------1
2. WHAT BANK IS REQUIRED TO DO-------------------------------3
2.1 SET UP ACCOUNTS----------------------------------------3
2.2 CASH ACCOUNT-------------------------------------------3
2.3 SEGREGATION OF ASSETS; NOMINEE NAME--------------------4
2.4 SETTLEMENT OF TRADES-----------------------------------4
2.5 CONTRACTUAL SETTLEMENT DATE ACCOUNTING-----------------5
2.6 ACTUAL SETTLEMENT DATE ACCOUNTING----------------------5
2.7 INCOME COLLECTION (AUTOCREDIT(R))----------------------5
2.8 CERTAIN MINISTERIAL ACTS-------------------------------6
2.9 CORPORATE ACTIONS--------------------------------------6
2.10 PROXIES----------------------------------------------7
2.11 STATEMENTS-------------------------------------------8
2.12 ACCESS TO BANK'S RECORDS-----------------------------9
2.13 MAINTENANCE OF FINANCIAL ASSETS AT
SUBCUSTODIAN LOCATIONS-------------------------------9
2.14 TAX RECLAIMS-----------------------------------------9
2.15 FOREIGN EXCHANGE TRANSACTIONS------------------------9
3. Instructions---------------------------------------------10
3.1 ACTING ON INSTRUCTIONS; UNCLEAR INSTRUCTIONS----------10
3.2 CONFIRMATION OF ORAL INSTRUCTIONS/SECURITY DEVICES----10
3.3 INSTRUCTIONS; CONTRARY TO LAW/MARKET PRACTICE---------10
3.4 CUT-OFF TIMES---------------------------------------10
4. Fees Expenses and Other Amounts Owing to Bank------------11
4.1 FEES AND EXPENSES-------------------------------------11
4.2 OVERDRAFTS--------------------------------------------11
4.3 BANK'S RIGHT OVER SECURITIES; SET-OFF----------------11
5. Subcustodians, Securities Depositories AND OTHER AGENTS--12
5.1 APPOINTMENT OF SUBCUSTODIANS--------------------------12
5.2 LIABILITY FOR SUBCUSTODIANS---------------------------12
5.3 USE OF AGENTS-----------------------------------------13
6. ADDITIONAL PROVISIONS RELATING TO Customer---------------13
6.1 REPRESENTATIONS OF CUSTOMER AND BANK------------------13
6.2 CUSTOMER TO PROVIDE CERTAIN INFORMATION TO BANK-------14
6.3 CUSTOMER IS LIABLE TO BANK EVEN IF IT IS ACTING
FOR ANOTHER PERSON------------------------------------14
7. When Bank is liable to Customer--------------------------14
7.1 STANDARD OF CARE; LIABILITY---------------------------14
7.2 FORCE MAJEURE-----------------------------------------15
7.3 BANK CAN CONSULT WITH COUNSEL-------------------------15
7.4 BANK PROVIDES DIVERSE FINANCIAL SERVICES AND MAY
GENERATE PROFITS AS A RESULT--------------------------15
8. TAXATION-------------------------------------------------16
8.1 TAX OBLIGATIONS---------------------------------------16
8.2 TAX RECLAIMS------------------------------------------16
9. Termination----------------------------------------------17
10. Miscellaneous--------------------------------------------17
10.1 NOTICES---------------------------------------------17
10.2 SUCCESSORS AND ASSIGNS------------------------------17
10.3 INTERPRETATION--------------------------------------18
10.4 ENTIRE AGREEMENT------------------------------------18
10.5 INFORMATION CONCERNING DEPOSITS AT BANK'S
LONDON BRANCH---------------------------------------18
10.6 INSURANCE-------------------------------------------18
10.7 GOVERNING LAW AND JURISDICTION----------------------18
10.8 SEVERABILITY; WAIVER; AND SURVIVAL------------------19
10.9 COUNTERPARTS----------------------------------------19
10.10 NO THIRD PARTY BENEFICIARIES------------------------20
GLOBAL CUSTODY AGREEMENT
This Agreement, dated ____________________, 200__, is
between JPMORGAN CHASE BANK ("Bank"), with a place of business at
______________ ________________; and _____________________
("Customer") with a place of business at __________________.
1. Intention of the Parties; DEFINITIONS
1.1 INTENTION OF THE PARTIES.
------------------------
(a) This Agreement sets out the terms governing
custodial, settlement and certain other associated services
offered by Bank to Customer. Bank will be responsible for the
performance of only those Securities custody duties that are set
forth in this Agreement. Customer acknowledges that Bank is not
providing any legal, tax or investment advice in connection with
the services hereunder.
(b) Investing in foreign markets may be a risky
enterprise. The holding of Financial Assets and cash in foreign
jurisdictions may involve risks of loss or other special
considerations. Bank will not be liable for any loss that results
from the general risks of investing or Country Risk.
1.2 DEFINITIONS.
-----------
(a) As used herein, the following terms have the
meaning hereinafter stated.
"Account" has the meaning set forth in Section 2.1 of
this Agreement.
"Affiliate" means an entity controlling, controlled by,
or under common control with, Bank.
"Affiliated Subcustodian" means a Subcustodian that is
an Affiliate.
"Applicable Law" means any statute, whether national,
state or local, applicable in the United States or any other
country, the rules of the treaty establishing the European
Community, any other law, rule, regulation or interpretation of
any governmental entity, any applicable common law, and any
decree, injunction, judgment, order, ruling, or writ of any
governmental entity.
"Authorized Person" means any person who has been
designated by written notice from Customer (or by any agent
designated by Customer, including, without limitation, an
investment manager) to act on behalf of Customer hereunder. Such
persons will continue to be Authorized Persons until such time as
Bank receives Instructions from Customer (or its agent) that any
such person is no longer an Authorized Person.
"Bank Indemnitees" means Bank, its Subcustodians, and
their respective nominees, directors, officers, employees and
agents.
"Bank's London Branch" means the London branch office of
JPMorgan Chase Bank.
"Cash Account" has the meaning set forth in Section
2.1(a)(ii).
"Corporate Action" means any subscription right, bonus
issue, stock repurchase plan, redemption, exchange, tender offer,
or similar matter with respect to a Financial Asset in the
Securities Account that require discretionary action by the
holder, but does not include proxy solicitations.
"Country Risk" means the risk of investing or holding
assets in a particular country or market, including, but not
limited to, risks arising from nationalization, expropriation or
other governmental actions; the country's financial
infrastructure, including prevailing custody and settlement
practices; laws applicable to the safekeeping and recovery of
Financial Assets and cash held in custody; the regulation of the
banking and securities industries, including changes in market
rules; currency restrictions, devaluations or fluctuations; and
market conditions affecting the orderly execution of securities
transactions or the value of assets.
"Entitlement Holder" means the person named on the
records of a Securities Intermediary as the person having a
Securities Entitlement against the Securities Intermediary.
"Financial Asset" means a Security and refers, as the
context requires, either to the asset itself or to the means by
which a person's claim to it is evidenced, including a Security,
a security certificate, or a Securities Entitlement. "Financial
Asset" does not include cash.
"Instructions" means instructions which: (i) contain all
necessary information required by Bank to enable Bank to carry
out the Instructions; (ii) are received by Bank in writing or via
Bank's electronic instruction system, SWIFT, telephone, tested
telex, facsimile or such other methods as are for the time being
agreed by Customer (or an Authorized Person) and Bank; and (iii)
Bank believes in good faith have been given by an Authorized
Person or are transmitted with proper testing or authentication
pursuant to terms and conditions which Bank may specify.
"Liabilities" means any liabilities, losses, claims,
costs, damages, penalties, fines, obligations, or expenses of any
kind whatsoever (including, without limitation, reasonable
attorneys', accountants', consultants' or experts' fees and
disbursements).
"Securities" means stocks, bonds, rights, warrants and
other negotiable and non-negotiable instruments, whether issued
in certificated or uncertificated form, that are commonly traded
or dealt in on securities exchanges or financial markets.
"Securities" also means other obligations of an issuer, or
shares, participations and interests in an issuer recognized in
the country in which it is issued or dealt in as a medium for
investment and any other property as may be acceptable to Bank
for the Securities Account.
"Securities Account" means each Securities custody
account on Bank's records to which Financial Assets are or may be
credited pursuant hereto.
"Securities Depository" has the meaning set forth in
Section 5.1 of this Agreement.
"Securities Entitlement" means the rights and property
interests of an Entitlement Holder with respect to a Financial
Asset as set forth in Part 5 of Article 8 of the Uniform
Commercial Code of the State of New York, as the same may be
amended from time to time.
"Securities Intermediary" means Bank, a Subcustodian, a
Securities Depository, and any other financial institution which
in the ordinary course of business maintains Securities custody
accounts for others and acts in that capacity.
"Subcustodian" has the meaning set forth in Section 5.1
and includes Affiliated Subcustodians.
(b) All terms in the singular will have the same meaning
in the plural unless the context otherwise provides and visa
versa.
2. WHAT BANK IS REQUIRED TO DO
2.1 SET UP ACCOUNTS.
---------------
(a) Bank will establish and maintain the following
accounts ("Accounts"):
(i) a Securities Account in the name of
Customer for Financial Assets, which
may be received by or on behalf of
Bank or its Subcustodian for the
account of Customer, including as an
Entitlement Holder; and
(ii) an account in the name of Customer
("Cash Account") for any and all cash
in any currency received by or on
behalf of Bank for the account of
Customer.
Notwithstanding paragraph (ii), cash held in respect of those
markets where Customer is required to have a cash account in its
own name held directly with the relevant Subcustodian or a
Securities Depository will be held in that manner and will not be
part of the Cash Account.
(b) At the request of Customer, additional Accounts may
be opened in the future, which will be subject to the terms of
this Agreement.
2.2 CASH ACCOUNT.
------------
Except as otherwise provided in Instructions acceptable
to Bank, all cash held in the Cash Account will be deposited
during the period it is credited to the Accounts in one or more
deposit accounts at Bank or at Bank's London Branch. Any cash so
deposited with Bank's London Branch will be payable exclusively
by Bank's London Branch in the applicable currency, subject to
compliance with Applicable Law, including, without limitation,
any restrictions on transactions in the applicable currency
imposed by the country of the applicable currency.
2.3 SEGREGATION OF ASSETS; NOMINEE NAME.
-----------------------------------
(a) Bank will identify in its records that Financial
Assets credited to Customer's Securities Account belong to
Customer (except as otherwise may be agreed by Bank and
Customer).
(b) To the extent permitted by Applicable Law or market
practice, Bank will require each Subcustodian to identify in its
own records that Financial Assets held at such Subcustodian by
Bank on behalf of its customers belong to customers of Bank, such
that it is readily apparent that the Financial Assets do not
belong to Bank or the Subcustodian.
(c) Bank is authorized, in its discretion:
(i) to hold in bearer form, such Financial
Assets as are customarily held in
bearer form or are delivered to Bank
or its Subcustodian in bearer form;
(ii) to hold Securities in or deposit
Securities with any Securities
Depository, settlement system or
dematerialized book entry or similar
systems; and
(iii) to register in the name of Customer,
Bank, a Subcustodian, a Securities
Depository, or their respective
nominees, such Financial Assets as are
customarily held in registered form..
(d) Bank is authorized, when directed to do so by
Customer, to hold Financial Assets at third parties and to
register Financial Assets in broker "street name" or in the name
of other third parties (or their nominees). Notwithstanding
Section 7.1, Bank shall have no liability for any loss of
Financial Assets or other damages resulting from holding or
registering Financial Assets as so directed by Customer.
Customer authorizes Bank or its Subcustodian to hold Financial
Assets in omnibus accounts and will accept delivery of Financial
Assets of the same class and denomination as those with Bank or
its Subcustodian.
2.4 SETTLEMENT OF TRADES.
--------------------
When Bank receives an Instruction directing settlement
of a transaction in Financial Assets that includes all
information required by Bank, Bank will use reasonable care to
effect such settlement as instructed. Settlement of transactions
in Financial Assets will be conducted in accordance with
prevailing standards of the market in which the transaction
occurs. Without limiting the generality of the foregoing, the
risk of loss will be Customer's whenever Bank delivers Financial
Assets or payment in accordance with applicable market practice
in advance of receipt or settlement of the expected
consideration. In the case of the failure of Customer's
counterparty (or other appropriate party) to deliver the expected
consideration as agreed, Bank will contact the counterparty to
seek settlement, but Bank will not be obligated to institute
legal proceedings, file a proof of claim in any insolvency
proceeding, or take any similar action.
2.5 CONTRACTUAL SETTLEMENT DATE ACCOUNTING.
--------------------------------------
(a) Bank will effect book entries on a "contractual
settlement date accounting" basis as described below with respect
to the settlement of trades in those markets where Bank generally
offers contractual settlement date accounting and will notify
Customer of those markets from time to time.
(i) Sales: On the settlement date for a
sale, Bank will credit the Cash
Account with the proceeds of the sale
and transfer the relevant Financial
Assets to an account at Bank pending
settlement of the trade where not
already delivered.
(ii) Purchases: On the settlement date for
the purchase (or earlier, if market
practice requires delivery of the
purchase price before the settlement
date), Bank will debit the Cash
Account for the settlement amount and
credit a separate account at Bank.
Bank then will post the Securities
Account as awaiting receipt of the
expected Financial Assets. Customer
will not be entitled to the Financial
Assets that are awaiting receipt until
Bank or a Subcustodian actually
receives them.
Bank reserves the right to restrict in good faith the
availability of contractual settlement date accounting for credit
or operational reasons.
(b) Bank may (in its absolute discretion) upon oral or
written notification to Customer reverse any debit or credit made
pursuant to Section 2.5(a) prior to a transaction's actual
settlement, and Customer will be responsible for any costs or
liabilities resulting from such reversal. Customer acknowledges
that the procedures described in this sub-section are of an
administrative nature, and Bank does not undertake to make loans
and/or Financial Assets available to Customer.
2.6 ACTUAL SETTLEMENT DATE ACCOUNTING.
---------------------------------
With respect to any sale or purchase transaction that is
not posted to the Account on the contractual settlement date as
referred to in Section 2.5, Bank will post the transaction on the
date on which the cash or Financial Assets received as
consideration for the transaction is actually received by Bank.
2.7 INCOME COLLECTION (AUTOCREDIT(R)).
---------------------------------
(a) Bank will credit the Cash Account with income and
redemption proceeds on Financial Assets in accordance with the
times notified by Bank from time to time on or after the
anticipated payment date, net of any taxes that are withheld by
Bank or any third party. Where no time is specified for a
particular market, income and redemption proceeds from Financial
Assets will be credited only after actual receipt and
reconciliation. Bank may reverse such credits upon oral or
written notification to Customer that Bank believes that the
corresponding payment will not be received by Bank within a
reasonable period or such credit was incorrect.
(b) Bank will make good faith efforts in its discretion
to contact appropriate parties to collect unpaid interest,
dividends or redemption proceeds, but neither Bank nor its
Subcustodians will be obliged to file any formal notice of
default, institute legal proceedings, file a proof of claim in
any insolvency proceeding, or take any similar action.
2.8 CERTAIN MINISTERIAL ACTS.
------------------------
(a) Until Bank receives Instructions to the
contrary, Bank will:
(i) present all Financial Assets for which
Bank has received notice of a call for
redemption or that have otherwise
matured, and all income and interest
coupons and other income items that
call for payment upon presentation;
(ii) execute in the name of Customer such
certificates as may be required to
obtain payment in respect of Financial
Assets; and
(iii) exchange interim or temporary
documents of title held in the
Securities Account for definitive
documents of title.
(b) Bank may provide information concerning the Accounts
to Subcustodians, Securities Depositories, counterparties,
issuers of Financial Assets, governmental entities, securities
exchanges, self-regulatory entities, and similar entities to the
extent required by Applicable Law or as may be required in the
ordinary course by market practice or otherwise in order to
provide the services contemplated by this Agreement.
2.9 CORPORATE ACTIONS.
-----------------
(a) Bank will notify Customer of any Corporate Action of
which information is either (i) received by it or a Subcustodian
to the extent that Bank's central corporate actions department
has actual knowledge of the Corporate Action in time to notify
its customers in a timely manner; or (ii) published via a formal
notice in publications and reporting services routinely used by
Bank for this purpose in time for Bank to notify its customers in
a timely manner. Bank also will use its reasonable efforts to
notify Customer of any class action litigation for which
information is actually received by Bank's central corporate
actions department but shall not be liable for any Liabilities
arising out of Bank's failure to identify Customer's interest in
any class action litigation. Bank does not commit, however, to
provide information concerning Corporate Actions or class action
litigation relating to Financial Assets being held at Customer's
request in a name not subject to the control of Bank or its
Subcustodian.
(b) If an Authorized Person fails to provide Bank with
timely Instructions with respect to any Corporate Action or class
action, neither Bank nor its Subcustodians or their respective
nominees will take any action in relation to that Corporate
Action or class action, except as otherwise agreed in writing by
Bank and Customer or as may be set forth by Bank as a default
action in the notification it provides under Section 2.9 (a) with
respect to that Corporate Action or class action.
(c) Bank may sell or otherwise dispose of fractional
interests in Financial Assets arising out of a Corporate Action
or class action litigation and, to the extent necessary to
protect Customer's interest in that Corporate Action or class
action, credit the Cash Account with the proceeds of the sale or
disposition. If some, but not all, of an outstanding class of
Financial Asset is called for redemption, Bank may allot the
amount redeemed among the respective beneficial holders of such
class of Financial Asset in any manner Bank deems to be fair and
equitable.
(d) Notices of Corporate Actions and class actions
dispatched to Customer may have been obtained from sources which
Bank does not control and may have been translated or summarized.
Although Bank believes such sources to be reliable, Bank has no
duty to verify the information contained in such notices nor the
faithfulness of any translation or summary and therefore does not
guarantee its accuracy, completeness or timeliness, and shall not
be liable to Customer for any loss that may result from relying
on such notice.
2.10 PROXIES.
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(a) Subject to and upon the terms of this sub-section,
Bank will provide Customer with information which it receives on
matters to be voted upon at meetings of holders of Financial
Assets ("Notifications"), and Bank will act in accordance with
Customer's Instructions in relation to such Notifications ("the
active proxy voting service"). If information is received by Bank
at its proxy voting department too late to permit timely voting
by Customer, Bank's only obligation will be to provide, so far as
reasonably practicable, a Notification (or summary information
concerning a Notification) on an "information only" basis.
(b) The active proxy voting service is available only in
certain markets, details of which are available from Bank on
request. Provision of the active proxy voting service is
conditional upon receipt by Bank of a duly completed enrollment
form as well as additional documentation that may be required for
certain markets.
(c) Bank will act upon Instructions to vote on matters
referred to in a Notification, provided Instructions are received
by Bank at its proxy voting department by the deadline referred
to in the relevant Notification. If Instructions are not received
in a timely manner, Bank will not be obligated to provide further
notice to Customer and shall not be obliged to vote. It is
Customer's obligation to monitor the agreed means of providing
Notifications to determine if new Notifications have been
received.
(d) Bank reserves the right to provide Notifications or
parts thereof in the language received. Bank will attempt in good
faith to provide accurate and complete Notifications, whether or
not translated.
(e) Customer acknowledges that Notifications and other
information furnished pursuant to the active proxy voting service
("information") are proprietary to Bank and that Bank owns all
intellectual property rights, including copyrights and patents,
embodied therein. Accordingly, Customer will not make any use of
such information except in connection with the active proxy
voting service.
(f) In markets where the active proxy voting service is
not available or where Bank has not received a duly completed
enrollment form or other relevant documentation, Bank will not
provide Notifications to Customer but will endeavor to act upon
Instructions to vote on matters before meetings of holders of
Financial Assets where it is reasonably practicable for Bank (or
its Subcustodians or nominees as the case may be) to do so and
where such Instructions are received in time for Bank to take
timely action (the "passive proxy voting service").
(g) Customer acknowledges that the provision of proxy
voting services (whether active or passive) may be precluded or
restricted under a variety of circumstances. These circumstances
include, but are not limited to:
(i) the Financial Assets being on loan or
out for registration,
(ii) the pendency of conversion or another
Corporate Action;
(iii) Financial Assets being held at
Customer's request in a name not
subject to the control of Bank or its
Subcustodian;
(iv) Financial Assets being held in a
margin or collateral account at Bank
or another bank or broker, or
otherwise in a manner which affects
voting;
(v) local market regulations or practices,
or restrictions by the issuer; and
(vi) Bank may be required to vote all
shares held for a particular issue for
all of Bank's customers on a net basis
(i.e. a net yes or no vote based on
voting instructions received from all
its customers). Where this is the
case, Bank will inform Customer by
means of the Notification.
(h) Notwithstanding the fact that Bank may act in a
fiduciary capacity with respect to Customer under other
agreements, in performing active or passive proxy voting services
Bank will be acting solely as the agent of Customer, and will not
exercise any discretion, with regard to such proxy services or
vote any proxy except when directed by an Authorized Person.
2.11 STATEMENTS AND INFORMATION AVAILABLE ON-LINE.
--------------------------------------------
(a) Bank will send, or make available on-line, to
Customer, at times mutually agreed upon, a formal statement of
account in Bank's standard format for each Account maintained by
Customer with Bank, identifying the Financial Assets and cash
held in each Account (each such statement a "Statement of
Account"). Additionally, Bank will send (or make available
on-line to) Customer an advice or notification of any transfers
of cash or Financial Assets with respect to each Account. Bank
will not be liable with respect to any matter set forth in those
portions of any Statement of Account or any such advice (or
reasonably implied therefrom) to which Customer has not given
Bank a written exception or objection within sixty (60) days of
receipt of the Statement of Account, provided such matter is not
the result of Bank's willful misconduct or bad faith. References
in this Agreement to Statements of Account include Statements of
Account in electronic form.
(b) Prices and other information obtained from third
parties which may be contained in any Statement of Account or
other statement sent to Customer have been obtained from sources
Bank believes to be reliable. Bank does not, however, make any
representation as to the accuracy of such information or that the
prices specified necessarily reflect the proceeds that would be
received on a disposal of the relevant Financial Assets.
(c) Customer acknowledges that, except for Statements of
Account or as otherwise expressly agreed by Bank, records and
reports available to it on-line may not be accurate due to
mis-postings, delays in updating Account records, and other
causes. Bank will not be liable for any loss or damage arising
out of the inaccuracy of any such records or reports accessed
on-line.
2.12 ACCESS TO BANK'S RECORDS.
------------------------
Bank will allow Customer's independent public
accountants such reasonable access to the records of Bank
relating to Financial Assets as is required in connection with
their examination of books and records pertaining to Customer's
affairs. Subject to restrictions under Applicable Law, Bank also
will obtain an undertaking to permit Customer's independent
public accountants, reasonable access to the records of any
Subcustodian of Securities held in the Securities Account as may
be required in connection with such examination.
2.13 MAINTENANCE OF FINANCIAL ASSETS
AT SUBCUSTODIAN LOCATIONS.
-------------------------------
(a) Unless Instructions require another location
acceptable to Bank, Financial Assets will be held in the country
or jurisdiction in which their principal trading market is
located, where such Financial Assets may be presented for
payment, where such Financial Assets were acquired, or where such
Financial Assets are held. Bank reserves the right to refuse to
accept delivery of Financial Assets or cash in countries and
jurisdictions other than those referred to in Schedule 1 to this
Agreement, as in effect from time to time.
(b) Bank will not be obliged to follow an Instruction to
hold Financial Assets with, or have them registered or recorded
in the name of, any person not chosen by Bank. However, if
Customer does instruct Bank to hold Securities and/or cash with
or register or record Securities in the name of a person not
chosen by Bank and Bank agrees to do so, the consequences of
doing so are at Customer's own risk and Bank (i) will not be
liable therefor and (ii) may not provide services under this
Agreement with respect to Securities or cash so held, including,
without limitation, services provided under Sections 2.8, 2.9,
2.10, and 8.2.
2.14 TAX RELIEF SERVICES.
-------------------
Bank will provide tax relief services as provided in
Section 8.2.
2.15 FOREIGN EXCHANGE TRANSACTIONS.
-----------------------------
To facilitate the administration of Customer's trading
and investment activity, Bank may, but will not be obliged to,
enter into spot or forward foreign exchange contracts with
Customer, or an Authorized Person, and may also provide foreign
exchange contracts and facilities through its Affiliates or
Subcustodians. Instructions, including standing Instructions, may
be issued with respect to such contracts, but Bank may establish
rules or limitations concerning any foreign exchange facility
made available. In all cases where Bank, its Affiliates or
Subcustodians enter into a master foreign exchange contract that
covers foreign exchange transactions for the Accounts, the terms
and conditions of that foreign exchange contract and, to the
extent not inconsistent, this Agreement, will apply to such
transactions.
3. Instructions
3.1 ACTING ON INSTRUCTIONS; UNCLEAR INSTRUCTIONS.
--------------------------------------------
(a) Customer authorizes Bank to accept and act upon any
Instructions received by it without inquiry. Customer will
indemnify the Bank Indemnitees against, and hold each of them
harmless from, any Liabilities that may be imposed on, incurred
by, or asserted against the Bank Indemnitees as a result of any
action or omission taken in accordance with any Instructions or
other directions upon which Bank is authorized to rely under the
terms of this Agreement.
(b) Unless otherwise expressly provided, all
Instructions will continue in full force and effect until
canceled or superseded.
(c) Bank may (in its sole discretion and without
affecting any part of this Section 3.1) seek clarification or
confirmation of an Instruction from an Authorized Person and may
decline to act upon an Instruction if it does not receive
clarification or confirmation satisfactory to it. Bank will not
be liable for any loss arising from any delay while it seeks such
clarification or confirmation.
(d) In executing or paying a payment order Bank may rely
upon the identifying number (e.g. Fedwire routing number or
account) of any party as instructed in the payment order.
Customer assumes full responsibility for any inconsistency
between the name and identifying number of any party in payment
orders issued to Bank in Customer's name.
3.2 CONFIRMATION OF ORAL INSTRUCTIONS/SECURITY DEVICES.
--------------------------------------------------
Any Instructions delivered to Bank by telephone will
promptly thereafter be confirmed in writing by an Authorized
Person. Each confirmation is to be clearly marked "Confirmation."
Bank will not be liable for having followed such Instructions
notwithstanding the failure of an Authorized Person to send such
confirmation in writing or the failure of such confirmation to
conform to the telephone Instructions received. Either party may
record any of their telephonic communications. Customer will
comply with any security procedures reasonably required by Bank
from time to time with respect to verification of Instructions.
Customer will be responsible for safeguarding any test keys,
identification codes or other security devices that Bank will
make available to Customer or any Authorized Person.
3.3 INSTRUCTIONS; CONTRARY TO LAW/MARKET PRACTICE.
---------------------------------------------
Bank need not act upon Instructions which it reasonably
believes to be contrary to law, regulation or market practice,
but Bank will be under no duty to investigate whether any
Instructions comply with Applicable Law or market practice.
3.4 CUT-OFF TIMES.
-------------
Bank has established cut-off times for receipt of some
categories of Instruction, which will be made available to
Customer. If Bank receives an Instruction after its established
cut-off time, Bank will attempt to act upon the Instruction on
the day requested if Bank deems it practicable to do so or
otherwise as soon as practicable on the next business day.
4. Fees, Expenses and Other Amounts Owing to Bank
4.1 FEES AND EXPENSES.
-----------------
Customer will pay Bank for its services hereunder the
fees set forth in Schedule A hereto or such other amounts as may
be agreed upon in writing from time to time, together with Bank's
reasonable out-of-pocket or incidental expenses, including, but
not limited to, legal fees and tax or related fees incidental to
processing by governmental authorities, issuers, or their agents.
Customer authorizes Bank to deduct amounts owing to it from the
Cash Account, for any such fees or expenses from time to time in
arrears. Bank may increase such fees by not less than thirty
days' notice in writing to Customer. Without prejudice to Bank's
other rights, Bank reserves the right to charge interest on
overdue amounts from the due date until actual payment at such
rate as Bank may reasonably determine.
4.2 OVERDRAFTS.
----------
If a debit to any currency in the Cash Account results
(or will result) in a debit balance, then Bank may, in its
discretion, (i) advance an amount equal to the overdraft, (ii)
refuse to settle in whole or in part the transaction causing such
debit balance, or (iii) if any such transaction is posted to the
Securities Account, reverse any such posting. If Bank elects to
make such an advance, the advance will be deemed a loan to
Customer, payable on demand, bearing interest at the applicable
rate charged by Bank from time to time, for such overdrafts, from
the date of such advance to the date of payment (both after as
well as before judgment) and otherwise on the terms on which Bank
makes similar overdrafts available from time to time. No prior
action or course of dealing on Bank's part with respect to the
settlement of transactions on Customer's behalf will be asserted
by Customer against Bank for Bank's refusal to make advances to
the Cash Account or to settle any transaction for which Customer
does not have sufficient available funds in the applicable
currency in the Cash Account.
4.3 BANK'S RIGHT OVER SECURITIES; SET-OFF.
-------------------------------------
(a) Customer grants Bank a security interest in and a
lien on the Financial Assets held in the Securities Account as
security for any and all amounts which are now or become owing to
Bank under any provision of this Agreement, whether or not
matured or contingent ("Indebtedness").
(b) Without prejudice to Bank's rights under Applicable
Law, Bank may set off against any Indebtedness any amount in any
currency standing to the credit of any of Customer's accounts
(whether deposit or otherwise) with any Bank branch or office or
with any Affiliate of Bank. For this purpose, Bank shall be
entitled to accelerate the maturity of any fixed term deposits
and to effect such currency conversions as may be necessary at
its current rates for the sale and purchase of the relevant
currencies.
5. Subcustodians, Securities Depositories, AND OTHER AGENTS
5.1 APPOINTMENT OF SUBCUSTODIANS;
USE OF SECURITIES DEPOSITORIES.
------------------------------
(a) Bank is authorized under this Agreement to act
through and hold Customer's Financial Assets with subcustodians,
being at the date of this Agreement the entities listed in
Schedule 1 and/or such other entities as Bank may appoint as
subcustodians ("Subcustodians"). Bank will use reasonable care in
the selection and continued appointment of such Subcustodians. In
addition, Bank and each Subcustodian may deposit Financial Assets
with, and hold Financial Assets in, any securities depository,
settlement system, dematerialized book entry system or similar
system (together a "Securities Depository") on such terms as such
systems customarily operate and Customer will provide Bank with
such documentation or acknowledgements that Bank may require to
hold the Financial Assets in such systems.
(b) Any agreement Bank enters into with a Subcustodian
for holding Bank's customers' assets will provide that such
assets will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of such Subcustodian
or its creditors except a claim for payment for their safe
custody or administration, or, in the case of cash deposits,
except for liens or rights in favor of creditors of the
Subcustodian arising under bankruptcy, insolvency or similar law,
and that the beneficial ownership thereof will be freely
transferable without the payment of money or value other than for
safe custody or administration. Where a Subcustodian deposits
Securities with a Securities Depository, Bank will cause the
Subcustodian to identify on its records as belonging to Bank, as
agent, the Securities shown on the Subcustodian's account at such
Securities Depository. This Section 5.1(b) will not apply to the
extent of any special agreement or arrangement made by Customer
with any particular Subcustodian.
(c) Bank will not be liable for any act or omission by
(or the insolvency of) any Securities Depository. In the event
Customer incurs a loss due to the negligence, willful misconduct,
or insolvency of a Securities Depository, Bank will make good
faith efforts, in its discretion, to seek recovery from the
Securities Depository, but Bank will not be obligated to
institute legal proceedings, file a proof of claim in any
insolvency proceeding, or take any similar action.
5.2 LIABILITY FOR SUBCUSTODIANS.
---------------------------
(a) Subject to Section 7.1(b), Bank will be liable for
direct losses incurred by Customer that result from:
(i) the failure by a Subcustodian to use
reasonable care in the provision of
custodial services by it in accordance
with the standards prevailing in the
relevant market or from the fraud or
willful misconduct of such
Subcustodian in the provision of
custodial services by it; or
(ii) the insolvency of any Affiliated
Subcustodian.
(b) Subject to Section 5.1(a) and Bank's duty to use
reasonable care in the monitoring of a Subcustodian's financial
condition as reflected in its published financial statements and
other publicly available financial information concerning it
customarily reviewed by Bank in its oversight process, Bank will
not be responsible for the insolvency of any Subcustodian which
is not a branch or an Affiliated Subcustodian.
(c) Bank reserves the right to add, replace or remove
Subcustodians. Bank will give prompt notice of any such action,
which will be advance notice if practicable. Upon request by
Customer, Bank will identify the name, address and principal
place of business of any Subcustodian and the name and address of
the governmental agency or other regulatory authority that
supervises or regulates such Subcustodian.
5.3 USE OF AGENTS.
-------------
(a) Bank may provide certain services under this
Agreement through third parties, which may be Affiliates. Except
to the extent provided in Section 5.2 with respect to
Subcustodians, Bank will not be responsible for any loss as a
result of a failure by any broker or any other third party that
it selects and retains using reasonable care to provide ancillary
services that it may not customarily provide itself, including,
without limitation, delivery services and providers of
information regarding matters such as pricing, proxy voting,
Corporate Actions and class action litigation. Nevertheless, Bank
will be liable for the performance of any such broker selected by
Bank that is an Affiliate to the same extent as Bank would have
been liable if it performed such services itself.
(b) In the case of the sale under Section 2.9(c) of a
fractional interest (or in other cases where Customer has
requested Bank to arrange for execution of a trade) Bank will
place trades with a broker which is an Affiliate to the extent
that Bank has established a program for such trading with such
Affiliate. An affiliated broker may charge its customary
commission (or retain its customary spread) with respect to any
such transaction.
6. ADDITIONAL PROVISIONS RELATING TO CUSTOMER
6.1 REPRESENTATIONS OF CUSTOMER AND BANK.
------------------------------------
(a) Customer represents and warrants that (i) it has
full authority and power, and has obtained all necessary
authorizations and consents, to deposit and control the Financial
Assets and cash in the Accounts, to use Bank as its custodian in
accordance with the terms of this Agreement, to borrow money or
otherwise incur indebtedness as contemplated by this Agreement,
to pledge Financial Assets as contemplated by Section 4.3, and to
enter into foreign exchange transactions; (ii) assuming execution
and delivery of this Agreement by Bank, this Agreement is
Customer's legal, valid and binding obligation, enforceable in
accordance with its terms and it has full power and authority to
enter into and has taken all necessary corporate action to
authorize the execution of this Agreement (iii) it has not relied
on any oral or written representation made by Bank or any person
on its behalf, and acknowledges that this Agreement sets out to
the fullest extent the duties of Bank; and (iv) it is a resident
of the United States and shall notify Bank of any changes in
residency.
(b) Bank represents and warrants that (i) assuming
execution and delivery of this Agreement by Customer, this
Agreement is Bank's legal, valid and binding obligation,
enforceable in accordance with its terms and (ii) it has full
power and authority to enter into and has taken all necessary
corporate action to authorize the execution of this Agreement.
Bank may rely upon the above or the certification of such other
facts as may be required to administer Bank's obligations
hereunder. Customer shall indemnify Bank against all losses,
liability, claims or demands arising directly or indirectly from
any such certifications.
6.2 CUSTOMER TO PROVIDE CERTAIN INFORMATION TO BANK.
-----------------------------------------------
Upon request, Customer will promptly provide to Bank
such information about itself and its financial status as Bank
may reasonably request, including Customer's organizational
documents and its current audited and unaudited financial
statements.
6.3 CUSTOMER IS LIABLE TO BANK EVEN IF
IT IS ACTING FOR ANOTHER PERSON.
----------------------------------
If Customer is acting as an agent for a disclosed or
undisclosed principal in respect of any transaction, cash, or
Financial Asset, Bank nevertheless will treat Customer as its
principal for all purposes under this Agreement. In this regard,
Customer will be liable to Bank as a principal in respect of any
transactions relating to the Account. The foregoing will not
affect any rights Bank might have against Customer's principal.
7. When Bank is liable to Customer
7.1 STANDARD OF CARE; LIABILITY.
---------------------------
(a) Bank will use reasonable care in performing its
obligations under this Agreement. Bank will not be in violation
of this Agreement with respect to any matter as to which it has
satisfied its obligation of reasonable care.
(b) Bank will be liable for Customer's direct damages to
the extent they result from Bank's negligence or willful
misconduct in performing its duties as set out in this Agreement
and to the extent provided in Section 5.2(a). Nevertheless, under
no circumstances will Bank be liable for any indirect,
incidental, consequential or special damages (including, without
limitation, lost profits) of any form incurred by any person or
entity, whether or not foreseeable and regardless of the type of
action in which such a claim may be brought, with respect to the
Accounts, Bank's performance hereunder, or Bank's role as
custodian.
(c) Customer will indemnify the Bank Indemnitees
against, and hold them harmless from, any Liabilities that may be
imposed on, incurred by or asserted against any of the Bank
Indemnitees in connection with or arising out of (i) Bank's
performance under this Agreement, provided the Bank Indemnitees
have not acted with negligence or engaged in fraud or willful
misconduct in connection with the Liabilities in question or (ii)
any Bank Indemnitee's status as a holder of record of Customer's
Financial Assets. Nevertheless, Customer will not be obligated to
indemnify any Bank Indemnitee under the preceding sentence with
respect to any Liability for which Bank is liable under Section
5.2 of this Agreement.
(d) Without limiting Subsections 7.1(a), (b) or (c),
Bank will have no duty or responsibility to: (i) question
Instructions or make any suggestions to Customer or an Authorized
Person regarding such Instructions; (ii) supervise or make
recommendations with respect to investments or the retention of
Financial Assets; (iii) advise Customer or an Authorized Person
regarding any default in the payment of principal or income of
any security other than as provided in Section 2.7(b) of this
Agreement; (iv) evaluate or report to Customer or an Authorized
Person regarding the financial condition of any broker, agent or
other party to which Bank is instructed to deliver Financial
Assets or cash; or (v) review or reconcile trade confirmations
received from brokers (and Customer or its Authorized Persons
issuing Instructions will bear any responsibility to review such
confirmations against Instructions issued to and Statements of
Account issued by Bank).
7.2 FORCE MAJEURE.
-------------
Bank will maintain and update from time to time business
continuation and disaster recovery procedures with respect to its
global custody business that it determines from time to time meet
reasonable commercial standards. Bank will have no liability,
however, for any damage, loss, expense or liability of any nature
that Customer may suffer or incur, caused by an act of God, fire,
flood, civil or labor disturbance, war, act of any governmental
authority or other act or threat of any authority (de jure or de
facto), legal constraint, fraud or forgery, malfunction of
equipment or software (except where such malfunction is primarily
attributable to Bank's negligence in maintaining the equipment or
software), failure of or the effect of rules or operations of any
external funds transfer system, inability to obtain or
interruption of external communications facilities, or any cause
beyond the reasonable control of Bank (including without
limitation, the non-availability of appropriate foreign
exchange).
7.3 BANK MAY CONSULT WITH COUNSEL.
------------------------------
Bank will be entitled to rely on, and may act upon the
advice of professional advisers in relation to matters of law,
regulation or market practice (which may be the professional
advisers of Customer), and will not be liable to Customer for any
action taken or omitted pursuant to such advice.
7.4 BANK PROVIDES DIVERSE FINANCIAL SERVICES
AND MAY GENERATE PROFITS AS A RESULT.
----------------------------------------
Customer acknowledges that Bank or its Affiliates may
have a material interest in transactions entered into by Customer
with respect to the Account or that circumstances are such that
Bank may have a potential conflict of duty or interest. For
example, Bank or its Affiliates may act as a market maker in the
Financial Assets to which Instructions relate, provide brokerage
services to other customers, act as financial adviser to the
issuer of such Financial Assets, act in the same transaction as
agent for more than one customer, have a material interest in the
issue of the Financial Assets; or earn profits from any of these
activities. Customer further acknowledges that Bank or its
Affiliates may be in possession of information tending to show
that the Instructions received may not be in the best interests
of Customer but that Bank is not under any duty to disclose any
such information.
8. TAXATION
8.1 TAX OBLIGATIONS.
---------------
(a) Customer confirms that Bank is authorized to deduct
from any cash received or credited to the Cash Account any taxes
or levies required by any revenue or governmental authority for
whatever reason in respect of Customer's Accounts.
(b) Customer will provide to Bank such certifications,
documentation, and information as it may require in connection
with taxation, and warrants that, when given, this information is
true and correct in every respect, not misleading in any way, and
contains all material information. Customer undertakes to notify
Bank immediately if any information requires updating or
correcting. Bank shall not be liable for any taxes, penalties,
interest or additions to tax, payable or paid that result from
(i) the inaccurate completion of documents by Customer or any
third party; (ii) the provision to Bank or a third party of
inaccurate or misleading information by Customer or any third
party; (iii) the withholding of material information by Customer
or any third party; or (iv) as a result of any delay by any
revenue authority or any other cause beyond Bank's control.
(c) If Bank does not receive appropriate certifications,
documentation and information then, as and when appropriate and
required, additional tax shall be deducted from all income
received in respect of the Financial Assets issued (including,
but not limited to, United States non-resident alien tax and/or
backup withholding tax which shall be deducted from United States
source income).
(d) Customer will be responsible in all events for the
timely payment of all taxes relating to the Financial Assets in
the Securities Account.. Customer will indemnify and hold Bank
harmless from and against any and all liabilities, penalties,
interest or additions to tax with respect to or resulting from,
any delay in, or failure by, Bank (i) to pay, withhold or report
any U.S. federal, state or local taxes or foreign taxes imposed
on, or (ii) to report interest, dividend or other income paid or
credited to the Cash Account, regardless of the reason for such
delay or failure, provided, however, that Customer will not be
liable to Bank for any penalty or additions to tax due solely as
a result of Bank's negligent acts or omissions with respect to
paying or withholding tax or reporting interest, dividend or
other income paid or credited to the Cash Account.
8.2 TAX RELIEF SERVICES.
-------------------
(a) Subject to the provisions of this Section, Bank will
apply for a reduction of withholding tax and any refund of any
tax paid or tax credits in respect of income payments on
Financial Assets credited to the Securities Account that Bank
believes may be available. To defray expenses pertaining to
nominal tax claims, Bank may from time-to-time set minimum
thresholds as to a de minimus value of tax reclaims or reduction
of withholding which it will pursue in respect of income payments
under this section.
(b) The provision of a tax relief service by Bank is
conditional upon Bank receiving from Customer (i) a declaration
of its identity and place of residence and (ii) certain other
documentation (pro forma copies of which are available from
Bank), prior to the receipt of Financial Assets in the Account or
the payment of income.
(c) Bank will perform tax relief services only with
respect to taxation levied by the revenue authorities of the
countries advised to Customer from time to time and Bank may, by
notification in writing, in its absolute discretion, supplement
or amend the countries in which the tax relief services are
offered. Other than as expressly provided in this Section 8.2,
Bank will have no responsibility with regard to Customer's tax
position or status in any jurisdiction.
(d) Customer confirms that Bank is authorized to
disclose any information requested by any revenue authority or
any governmental entity in relation to the processing of any tax
relief claim.
9. Termination
Either party may terminate this Agreement on sixty (60)
days' written notice to the other party. If Customer gives notice
of termination, it must provide full details of the persons to
whom Bank must deliver Financial Assets and cash. If Bank gives
notice of termination, then Customer must, within sixty days,
notify Bank of details of its new custodian, failing which Bank
may elect (at any time after the sixty day notice period) either
to retain the Financial Assets and cash until such details are
given, continuing to charge fees due (in which case Bank's sole
obligation will be for the safekeeping of the Financial Assets
and cash), or deliver the Financial Assets and cash to Customer.
Bank will in any event be entitled to deduct any amounts owing to
it prior to delivery of the Financial Assets and cash (and,
accordingly, Bank will be entitled to sell Financial Assets and
apply the sale proceeds in satisfaction of amounts owing to it).
Customer will reimburse Bank promptly for all out-of-pocket
expenses it incurs in delivering Financial Assets upon
termination. Termination will not affect any of the liabilities
either party owes to the other arising under this Agreement prior
to such termination.
10. Miscellaneous
10.1 NOTICES.
-------
Notices (other than Instructions) will be served by
registered mail or hand delivery to the address of the respective
parties as set out on the first page of this Agreement, unless
notice of a new address is given to the other party in writing.
Notice will not be deemed to be given unless it has been
received.
10.2 SUCCESSORS AND ASSIGNS.
----------------------
This Agreement will be binding on each of the parties'
successors and assigns, but the parties agree that neither party
can assign its rights and obligations under this Agreement
without the prior written consent of the other party, which
consent will not be unreasonably withheld.
10.3 INTERPRETATION.
--------------
Headings are for convenience only and are not intended
to affect interpretation. References to sections are to sections
of this Agreement and references to sub-sections and paragraphs
are to sub-sections of the sections and paragraphs of the
sub-sections in which they appear.
10.4 ENTIRE AGREEMENT.
----------------
(a) The following Rider(s) are incorporated into this
Agreement:
___ Cash Trade Execution;
___ Cash Sweep;
___ Accounting Services;
___ Mutual Fund.
(b) This Agreement, including the Schedules, Exhibits,
and Riders (and any separate agreement which Bank and Customer
may enter into with respect to any Cash Account), sets out the
entire Agreement between the parties in connection with the
subject matter, and this Agreement supersedes any other
agreement, statement, or representation relating to custody,
whether oral or written. Amendments must be in writing and signed
by both parties.
10.5 INFORMATION CONCERNING DEPOSITS AT BANK'S LONDON BRANCH.
-------------------------------------------------------
Under U.S federal law, deposit accounts that Customer
maintains in Bank's foreign branches (outside of the U.S.) are
not insured by the Federal Deposit Insurance Corporation
("FDIC"); in the event of Bank's liquidation, foreign branch
deposits have a lesser preference than U.S. deposits; and such
foreign deposits are subject to cross-border risks. However,
Bank's London Branch is a member of the United Kingdom Deposit
Protection Scheme (the "Scheme") established under Banking Xxx
0000 (as amended). This Scheme provides that in the event of
Bank's insolvency payments may be made to certain customers of
Bank's London Branch. Payments under the Scheme are limited to
90% of a depositor's total cash deposits subject to a maximum
payment to any one depositor of (pound)18,000 (or 20,000 euros if
greater). Most deposits denominated in sterling and other
European Economic Area Currencies and euro made with Bank within
the United Kingdom are covered. Further details of the Scheme are
available on request.
10.6 INSURANCE.
---------
Bank will not be required to maintain any insurance
coverage for the benefit of Customer.
10.7 GOVERNING LAW AND JURISDICTION.
------------------------------
This Agreement will be construed, regulated, and
administered under the laws of the United States or State of New
York, as applicable, without regard to New York's principles
regarding conflict of laws. The United States District Court for
the Southern District of New York will have the sole and
exclusive jurisdiction over any lawsuit or other judicial
proceeding relating to or arising from this Agreement. If that
court lacks federal subject matter jurisdiction, the Supreme
Court of the State of New York, New York County will have sole
and exclusive jurisdiction. Either of these courts will have
proper venue for any such lawsuit or judicial proceeding, and the
parties waive any objection to venue or their convenience as a
forum. The parties agree to submit to the jurisdiction of any of
the courts specified and to accept service of process to vest
personal jurisdiction over them in any of these courts. The
parties further hereby knowingly, voluntarily and intentionally
waive, to the fullest extent permitted by Applicable Law, any
right to a trial by jury with respect to any such lawsuit or
judicial proceeding arising or relating to this Agreement or the
transactions contemplated hereby. To the extent that in any
jurisdiction Customer may now or hereafter be entitled to claim,
for itself or its assets, immunity from suit, execution,
attachment (before or after judgment) or other legal process,
Customer shall not claim, and it hereby irrevocably waives, such
immunity.
10.8 SEVERABILITY; WAIVER; AND SURVIVAL.
----------------------------------
(a) If one or more provisions of this Agreement are held
invalid, illegal or unenforceable in any respect on the basis of
any particular circumstances or in any jurisdiction, the
validity, legality and enforceability of such provision or
provisions under other circumstances or in other jurisdictions
and of the remaining provisions will not in any way be affected
or impaired.
(b) Except as otherwise provided herein, no failure or
delay on the part of either party in exercising any power or
right hereunder operates as a waiver, nor does any single or
partial exercise of any power or right preclude any other or
further exercise, or the exercise of any other power or right. No
waiver by a party of any provision of this Agreement, or waiver
of any breach or default, is effective unless it is in writing
and signed by the party against whom the waiver is to be
enforced.
(c) Bank's rights, protections, and remedies under this
Agreement shall survive its termination.
10.9 COUNTERPARTS.
------------
This Agreement may be executed in several counterparts
each of which will be deemed to be an original and together will
constitute one and the same agreement.
10.10 NO THIRD PARTY BENEFICIARIES.
----------------------------
A person who is not a party to this Agreement shall have
no right to enforce any term of this Agreement.
CUSTOMER
By:_________________________________
Title:
Date:
JPMORGAN CHASE BANK
By:_________________________________
Title:
Date:
Investment Company Rider to Global Custody Agreement
Between JPMorgan Chase Bank and
___________________________________________
effective __________________
The following modifications are made to the Agreement:
"2.16. Compliance with Securities and Exchange
Commission ("SEC") rule 17f-5 ("rule 17f-5").
(a) Customer's board of directors (or equivalent body)
(hereinafter `Board') hereby delegates to Bank, and, except as to
the country or countries as to which Bank may, from time to time,
advise Customer that it does not accept such delegation, Bank
hereby accepts the delegation to it, of the obligation to perform
as Customer's `Foreign Custody Manager' (as that term is defined
in rule 17f-5(a)(3) as promulgated under the Investment Company
Act of 1940, as amended ("1940 Act")), including for the purposes
of: (i) selecting Eligible Foreign Custodians (as that term is
defined in rule 17f-5(a)(1), and as the same may be amended from
time to time, or that have otherwise been exempted pursuant to an
SEC exemptive order) to hold foreign Financial Assets and Cash,
(ii) evaluating the contractual arrangements with such Eligible
Foreign Custodians (as set forth in rule 17f-5(c)(2)), (iii)
monitoring such foreign custody arrangements (as set forth in
rule 17f-5(c)(3)).
(b) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Customer's Board
of the placement of Financial Assets and Cash with
particular Eligible Foreign Custodians and of any
material change in the arrangements with such Eligible
Foreign Custodians, with such reports to be provided to
Customer's Board at such times as the Board deems
reasonable and appropriate based on the circumstances of
Customer's foreign custody arrangements (and until
further notice from Customer such reports shall be
provided not less than quarterly with respect to the
placement of Financial Assets and Cash with particular
Eligible Foreign Custodians and with reasonable
promptness upon the occurrence of any material change in
the arrangements with such Eligible Foreign Custodians);
(ii) exercise such reasonable care, prudence and
diligence in performing as Customer's Foreign Custody
Manager as a person having responsibility for the
safekeeping of foreign Financial Assets and cash would
exercise;
(iii) in selecting an Eligible Foreign Custodian, first
have determined that foreign Financial Assets and cash
placed and maintained in the safekeeping of such
Eligible Foreign Custodian shall be subject to
reasonable care, based on the standards applicable to
custodians in the relevant market, after having
considered all factors relevant to the safekeeping of
such foreign Financial Assets and cash, including,
without limitation, those factors set forth in rule
17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with an
Eligible Foreign Custodian requires that the Eligible
Foreign Custodian shall provide reasonable care for
foreign Financial Assets and Cash based on the standards
applicable to custodians in the relevant market.
(v) have established a system to monitor the continued
appropriateness of maintaining foreign Financial Assets
and cash with particular Eligible Foreign Custodians and
of the governing contractual arrangements; it being
understood, however, that in the event that Bank shall
have determined that the existing Eligible Foreign
Custodian in a given country would no longer afford
foreign Financial Assets and cash reasonable care and
that no other Eligible Foreign Custodian in that country
would afford reasonable care, Bank shall promptly so
advise Customer and shall then act in accordance with
the Instructions of Customer with respect to the
disposition of the affected foreign Financial Assets and
cash.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place
and maintain foreign Financial Assets and cash on behalf of
Customer with Eligible Foreign Custodians pursuant to a written
contract deemed appropriate by Bank.
(c) Except as expressly provided herein, Customer shall
be solely responsible to assure that the maintenance of foreign
Financial Assets and cash hereunder complies with the rules,
regulations, interpretations and exemptive orders as promulgated
by or under the authority of the SEC.
(d) Bank represents to Customer that it is a U.S. Bank
as defined in Rule 17f-5(a)(7). Customer represents to Bank that:
(1) the foreign Financial Assets and cash being placed and
maintained in Bank's custody are subject to the 1940 Act, as the
same may be amended from time to time; (2) its Board: (i) has
determined that it is reasonable to rely on Bank to perform as
Customer's Foreign Custody Manager (ii) or its investment adviser
shall have determined that Customer may maintain foreign
Financial Assets and cash in each country in which Customer's
Financial Assets and cash shall be held hereunder and determined
to accept Country Risk. Nothing contained herein shall require
Bank to make any selection or to engage in any monitoring on
behalf of Customer that would entail consideration of Country
Risk.
(e) Bank shall provide to Customer such information
relating to Country Risk as is specified in Appendix 1 hereto.
Customer hereby acknowledges that: (i) such information is solely
designed to inform Customer of market conditions and procedures
and is not intended as a recommendation to invest or not invest
in particular markets; and (ii) Bank has gathered the information
from sources it considers reliable, but that Bank shall have no
responsibility for inaccuracies or incomplete information.
B. Add a new Section 2.17 to the Agreement as follows:
2.17. COMPLIANCE WITH SEC RULE 17F-7 ("RULE 17F-7").
---------------------------------------------
(a) Bank shall, for consideration by Customer, provide
an analysis of the custody risks associated with maintaining
Customer's Foreign Assets with each Eligible Securities
Depository used by Bank as of the date hereof (or, in the case of
an Eligible Securities Depository not used by Bank as of the date
hereof, prior to the initial placement of Customer's foreign
Assets at such Depository) and at which any foreign Assets of
Customer are held or are expected to be held. The foregoing
analysis will be provided to Customer at Bank's Website. In
connection with the foregoing, Customer shall notify Bank of any
Eligible Securities Depositories at which it does not choose to
have its Foreign Assets held. Bank shall monitor the custody
risks associated with maintaining Customer's foreign Assets at
each such Eligible Securities Depository on a continuing basis
and shall promptly notify Customer or its adviser of any material
changes in such risks.
(b) Bank shall exercise reasonable care, prudence and
diligence in performing the requirements set forth in Section
2.17(a) above.
(c) Based on the information available to it in the
exercise of diligence, Bank shall determine the eligibility under
rule 17f-7 of each depository before including it on Schedule 3
hereto and shall promptly advise Customer if any Eligible
Securities Depository ceases to be eligible. (Eligible Securities
Depositories used by Bank as of the date hereof are set forth in
Schedule 3 hereto, and as the same may be amended on notice to
Customer from time to time.)
D. Add the following after the first sentence of Section
5.1(a) of the Agreement: "At the request of Customer, Bank may,
but need not, add to Schedule 1 an Eligible Foreign Custodian
where Bank has not acted as Foreign Custody Manager with respect
to the selection thereof. Bank shall notify Customer in the event
that it elects to add any such entity."
E. Add the following language as Sections 5.1(d) and (e)
of the Agreement:
" (d) The term Subcustodian as used herein shall mean
the following:
(i) a `U.S. Bank,' which shall mean a U.S. bank
as defined in rule 17f5(a)(7);
(ii) an `Eligible Foreign Custodian,' which
shall mean: (i) a banking institution or trust
company, incorporated or organized under the
laws of a country other than the United States,
that is regulated as such by that country's
government or an agency thereof, and (ii) a
majority-owned direct or indirect subsidiary of
a U.S. bank or bank holding company which
subsidiary is incorporated or organized under
the laws of a country other than the United
States. In addition, an Eligible Foreign
Custodian shall also mean any other entity that
shall have been so qualified by exemptive
order, rule or other appropriate action of the
SEC.
(iii) For purposes of clarity, it is agreed
that as used in Section 5.2(a), the term
Subcustodian shall not include any Eligible
Foreign Custodian as to which Bank has not
acted as Foreign Custody Manager.
(e) The term `securities depository' as used herein when
referring to a securities depository located outside the U.S.
shall mean:
an "Eligible Securities Depository" which, in
turn, shall have the same meaning as in rule
17f-7(b)(1)(i)-(vi) as the same may be amended
from time to time, or that has otherwise been
made exempt pursuant to an SEC exemptive order;
provided that, prior to the compliance date
with rule 17f-7 for a particular securities
depository the term "securities depositories"
shall be as defined in (a)(1)(ii)-(iii) of the
1997 amendments to rule 17f-5.
(f) The term "securities depository" as used herein when
referring to a securities depository located in the U.S. shall
mean a "securities depository" as defined in rule 17f-4(a).
Appendix 1-A
INFORMATION REGARDING COUNTRY RISK
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1. To aid Customer in its determinations regarding
Country Risk, Bank shall furnish annually and upon the initial
placing of Financial Assets and cash into a country the following
information (check items applicable):
A Opinions of local counsel concerning:
___ i. Whether applicable foreign law would
restrict the access afforded Customer's
independent public accountants to books and
records kept by an eligible foreign custodian
located in that country.
___ ii. Whether applicable foreign law would
restrict Customer's ability to recover its
Financial Assets and cash in the event of the
bankruptcy of an Eligible Foreign Custodian
located in that country.
___ iii. Whether applicable foreign law would
restrict Customer's ability to recover
Financial Assets that are lost while under the
control of an Eligible Foreign Custodian
located in the country.
B. Written information concerning:
___ i. The foreseeability of expropriation,
nationalization, freezes, or confiscation of
Customer's Financial Assets.
___ ii. Whether difficulties in converting
Customer's cash and cash equivalents to U.S.
dollars are reasonably foreseeable.]
C. A market report with respect to the following
topics:
(i) securities regulatory environment, (ii) foreign
ownership restrictions, (iii) foreign exchange, (iv)
securities settlement and registration, (v) taxation,
and (vi) depositories (including depository evaluation),
if any.
2. To aid Customer in monitoring Country Risk, Bank
shall furnish board the following additional information:
Market flashes, including with respect to changes in the
information in market reports.
SCHEDULE 2
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ELIGIBLE SECURITIES DEPOSITORIES
04088.0001 #332328