CUSTODIAN AGREEMENT
THIS
AGREEMENT, dated as of
___________________, 2009, between GUINNESS XXXXXXXX
FUNDS, a Delaware statutory trust (the
Trust) on behalf of its series portfolios
listed on Exhibit A hereto (each series portfolio, the Fund), registered with the U.S. Securities and Exchange
Commission under the
Investment Company Act of 0000 (xxx 0000 Xxx), and XXXXX BROTHERS
XXXXXXXX & CO., a
limited partnership formed under the laws of the State of New York (BBH&Co. or the Custodian).
WITNESSETH:
WHEREAS, the Fund wishes to employ BBH&Co.
to act as custodian for the Fund and to provide related services, all as
provided herein, and BBH&Co. is willing to accept such employment, subject
to the terms and conditions herein set forth;
NOW,
THEREFORE, in consideration
of the mutual covenants and agreements herein contained, the Fund and
BBH&Co. hereby agree, as follows:
1. Appointment
of Custodian. The Fund hereby
appoints BBH&Co. as the Fund's Custodian, and BBH&Co. hereby accepts
such appointment. All Investments of the Fund delivered to the
Custodian or its agents or Subcustodians shall be dealt with as provided in this
Agreement. The duties of the Custodian with respect to the
Fund's Investments shall be only as set forth expressly in this Agreement which
duties are generally comprised of safekeeping and various administrative duties
that will be performed in accordance with Instructions and as reasonably
required to effect Instructions.
2. Representations,
Warranties and Covenants of the Fund. The Fund hereby
represents, warrants and covenants each of the following:
2.1 This Agreement has been,
and at the time of delivery of each Instruction such Instruction will have been,
duly authorized, executed and delivered by the Fund. Neither this
Agreement nor any Instruction issued thereunder violates any Applicable Law or
conflicts with or constitutes a default under the Fund's prospectus, articles of
organization or other constitutive document or any agreement, judgment, order or
decree to which the Fund is a party or by which it or its Investments
is bound.
2.2 By providing an
Instruction with respect to the first acquisition of an Investment in a
jurisdiction other than the United States of America, the Fund shall be deemed
to have confirmed to the Custodian that the Fund has (a) assessed and accepted
all material Country or Sovereign Risks and accepted responsibility for their
occurrence, (b) made all determinations required to be made by the Fund under
the 1940 Act, and (iii) appropriately and adequately disclosed to its
shareholders, other investors and all persons who have rights in or to such
Investments, all material investment risks, including those relating to the
custody and settlement infrastructure or the servicing of securities in such
jurisdiction.
2.3 The Fund shall safeguard
and shall solely be responsible for the safekeeping of any testkeys,
identification codes, passwords, other security devices or statements of account
with which the Custodian provides it. If the Fund uses any on-line or similar
communications service made available by the Custodian, the Fund shall be solely
responsible for ensuring the security of its access to the service and for the
use of the service, and shall only attempt to access the service and the
Custodian’s computer systems as directed by the Custodian. If the
Custodian provides any computer software to the Fund relating to the services
described in this Agreement, the Fund will only use the software for the
purposes for which the Custodian provided the software to the Fund, and will
abide by the license agreement accompanying the software and any other security
policies which the Custodian provides to the Fund.
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2.4 By providing
an Instruction in respect of an Investment (which Instruction may relate to
among other things, the execution of trades), the Fund hereby (i) authorizes
BBH&Co. to complete such documentation as may be required or appropriate for
the execution of the Instruction, and agrees to be contractually bound to the
terms of such documentation “as is” without recourse against BBH&Co.; (ii)
represents, warrants and covenants that it has accepted and agreed to comply
with all Applicable Law, terms and conditions to which it and/or its Investment
may be bound, including without limitation, requirements imposed by the
Investment prospectus or offering circular, subscription agreement, any
application or other documentation relating to an Investment (e.g., compliance
with suitability requirements and eligibility restrictions); (iii) acknowledges
and agrees that BBH&Co. will not be responsible for the accuracy of any
information provided to it by or on behalf of the Fund, or for any underlying
commitment or obligation inherent to an Investment; (iv) represents, warrants
and covenants that it will not effect any sale, transfer or disposition of
Investment(s) held in the BBH&Co.’s name by any means other than the
issuance of an Instruction by the Fund to BBH&Co.; (v) acknowledges that
collective investment schemes (and/or their agent(s)) in which the Fund invests
may pay to BBH certain fees (including without limitation, shareholder servicing
and/or trailer fees) in respect of the Fund’s investments in such schemes; (vi)
represents, warrants and covenants that it will provide BBH&Co. with such
information as is necessary or appropriate to enable BBH&Co.’s performance
pursuant to an Instruction or under this Agreement; (vii) represents that
it is not a “Plan” (which term includes (1) employee benefit plans that are
subject to the United States (“US”) Employee Retirement Income Security Act of
1974, as amended (“ERISA”), or plans, individual retirement accounts and other
arrangements that are subject to Section 4975 of the US Internal Revenue Code of
1986, as amended (the “Code”), (2) plans, individual retirement accounts and
other arrangements that are subject to the prohibited transaction provisions of
Section 406 of ERISA or Section 4975 of the Code, and (3) entities the
underlying assets of which are considered to include “plan assets” of such
plans, accounts and arrangements), or an entity purchasing shares on behalf of,
or with the “plan assets” of, a Plan; and (viii) undertakes to inform
BBH&Co. and to keep the same updated as to the status under ERISA or Section
4975 of the Code, each as amended, of the beneficial investor to the Investment,
and as to any tax withholding or benefit to which an Investment may be
subject.
3. Representation
and Warranty of BBH&Co. BBH&Co. hereby
represents and warrants that this Agreement has been duly authorized, executed
and delivered by BBH&Co. and does not and will not violate any Applicable
Law or conflict with or constitute a default under BBH&Co.'s limited
partnership agreement or any agreement, instrument, judgment, order or decree to
which BBH&Co. is a party or by which it is bound.
4. Instructions. Unless otherwise
explicitly indicated herein, the Custodian shall perform its duties pursuant to
Instructions. As used herein, the term Instruction shall mean a directive initiated by the
Fund, acting through its board of directors or trustees or other Authorized
Person, which directive shall conform to the requirements of this Section
4.
4.1 Authorized
Persons.
For purposes hereof, an Authorized
Person shall be a person or
entity authorized to give Instructions to the Custodian by written notices or
otherwise for or on behalf of the Fund in accordance with procedures delivered
to and acknowledged by the Custodian. The Custodian may treat any
Authorized Person as having the full authority of the Fund to issue Instructions
hereunder unless the notice of authorization contains explicit limitations as to
said authority. The Custodian shall be entitled to rely upon
the authority of Authorized Persons until it receives appropriate written notice
from the Fund to the contrary.
4.2
Form of Instruction. Each Instruction shall be
transmitted by such secured or authenticated electro-mechanical means as the
Custodian shall make available to the Fund from time to time unless the Fund
shall elect to transmit such Instruction in accordance with Subsections 4.2.1
through 4.2.3 of this Section.
4.2.1 Fund
Designated Secured-Transmission Method. Instructions may be transmitted through
a secured or tested electro-mechanical means identified by the Fund or by an
Authorized Person entitled to give Instruction and acknowledged and accepted by
the Custodian, it being understood that such acknowledgment shall authorize the
Custodian to accept such means of delivery but shall not represent a judgment by
the Custodian as to the reasonableness or security of the means utilized by the
Authorized Person.
4.2.2
Written Instructions. Instructions may be
transmitted in a writing that bears the manual signature of Authorized
Persons.
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4.2.3
Other Forms of Instruction. Instructions may also
be transmitted by another means determined by the Fund or Authorized Persons and
acknowledged and accepted by the Custodian (subject to the same limits as to
acknowledgements as are contained in Subsection 4.2.1, above) including
Instructions given orally or by SWIFT or telefax (whether tested or
untested).
When an Instruction is given by means
established under Subsections 4.2.1 through 4.2.3, it shall be the
responsibility of the Custodian to use reasonable care to adhere to any security
or other procedures established in writing between the Custodian and the
Authorized Person with respect to such means of Instruction, but the Authorized
Person shall be solely responsible for determining that the particular means
chosen is reasonable under the circumstances. Oral Instructions
shall be binding upon the Custodian only if and when the Custodian takes action
with respect thereto. With respect to telefax instructions, the
parties agree and acknowledge that receipt of legible instructions cannot be
assured, that the Custodian cannot verify that authorized signatures on telefax
instructions are original or properly affixed, and that the Custodian shall not
be liable for losses or expenses incurred through actions taken in reliance
on inaccurately stated, illegible or unauthorized telefax
instructions. The provisions of Section 4A of the Uniform Commercial
Code shall apply to Funds Transfers performed in accordance with Instructions.
The Funds Transfer Services Schedule and the Electronic and Online Services
Schedule to this Agreement shall each comprise a designation of a means of
delivering Instructions for purposes of this Section 4.2.
4.3 Completeness
and Contents of Instructions. The Authorized Person shall be
responsible for assuring the adequacy and accuracy of
Instructions. Particularly, upon any acquisition or disposition or
other dealing in the Fund's Investments and upon any delivery and transfer of
any Investment or moneys, the person initiating the Instruction shall give the
Custodian an Instruction with appropriate detail, including, without
limitation:
4.3.1 The transaction date
and the date and location of settlement;
4.3.2 The specification of
the type of transaction;
4.3.3 A description of the
Investments or moneys in question, including, as appropriate, quantity, price
per unit, amount of money to be received or delivered and currency
information. Where an Instruction is communicated by electronic
means, or otherwise where an Instruction contains an identifying number such as
a CUSIP, SEDOL or ISIN number, the Custodian shall be entitled to rely on such
number as controlling notwithstanding any inconsistency contained in the
Instruction, particularly with respect to Investment description;
and
4.3.4 The name of the broker or
similar entity concerned with execution of the transaction.
If the Custodian determines that an
Instruction is either unclear or incomplete, the Custodian may give prompt
notice of such determination to the Fund, and the Fund shall thereupon amend or
otherwise reform the Instruction. In such event, the Custodian shall
have no obligation to take any action in response to the Instruction initially
delivered until the redelivery of an amended or reformed
Instruction.
4.4 Timeliness
of Instructions. In giving an Instruction,
the Fund shall take into consideration delays which may occur due to the
involvement of a Subcustodian or agent, differences in time zones, and other
factors particular to a given market, exchange or issuer. When the
Custodian has established specific timing requirements or deadlines with respect
to particular classes of Instruction, or when an Instruction is received by the
Custodian at such a time that it could not reasonably be expected to have acted
on such instruction due to time zone differences or other factors beyond its
reasonable control, the execution of any Instruction received by the Custodian
after such deadline or at such time (including any modification or revocation of
a previous Instruction) shall be at the risk of the Fund.
5. Safekeeping
of Fund Assets. The Custodian shall hold Investments
delivered to it or Subcustodians for the Fund in accordance with the provisions
of this Section. The Custodian shall not be responsible for (a)
the safekeeping of Investments not delivered or that are not caused to be issued
to it or its Subcustodians; or, (b) pre-existing faults or defects in
Investments that are delivered to the Custodian or its
Subcustodians. The Custodian is hereby authorized to hold with itself
or a Subcustodian, and to record in one or more accounts, all Investments
delivered to and accepted by the Custodian, any Subcustodian or their respective
agents pursuant to an Instruction or in consequence of any corporate action or
income event. The Custodian shall hold Investments for the account of
the Fund and shall segregate Investments from assets belonging to the Custodian
and shall cause its Subcustodians to segregate Investments from assets belonging
to the Subcustodian in an account held for the Fund or in an account maintained
by the Subcustodian generally for non-proprietary assets of the
Custodian.
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5.1 Use
of Securities Depositories. The Custodian may deposit and maintain
Investments in any Securities Depository, either directly or through one or more
Subcustodians appointed by the Custodian. Investments held in a
Securities Depository shall be held (a) subject to the agreement, rules,
statement of terms and conditions or other document or conditions effective
between the Securities Depository and the Custodian or the Subcustodian, as the
case may be, and (b) in an account for the Fund or in bulk segregation in an
account maintained for the non-proprietary assets of the entity holding such
Investments in the Depository. If market practice or the rules and
regulations of the Securities Depository prevent the Custodian, the Subcustodian
or (any agent of either) from holding its client assets in such a separate
account, the Custodian, the Subcustodian or other agent shall as appropriate
segregate such Investments for benefit of the Fund or for benefit of clients of
the Custodian generally on its own books.
5.2 Certificated
Assets.
Investments which are certificated may be held in registered or bearer form: (a)
in the Custodian's vault; (b) in the vault of a Subcustodian or agent of the
Custodian or a Subcustodian; or (c) in an account maintained by the Custodian,
Subcustodian or agent at a Securities Depository; all in accordance with
customary market practice in the jurisdiction in which any Investments are
held.
5.3 Registered
Assets.
Investments which are registered may be registered in the name of
the Custodian, a Subcustodian, or in the name of the Fund or a nominee for any
of the foregoing, and may be held in any manner set forth in
Section 5.2 above with or without any identification of fiduciary
capacity in such registration.
5.4
Book Entry Assets.
Investments which are represented by book-entry may be so held in an
account maintained by the Book-entry Agent on behalf of the Custodian, a
Subcustodian or another Agent of the Custodian, or a Securities
Depository.
5.5 Replacement
of Lost Investments. In the event of a
loss of Investments for which loss the Custodian is responsible under the terms
of this Agreement, the Custodian shall replace such Investment, or in the event
that such replacement cannot be effected, the Custodian shall pay to the Fund
the fair market value of such Investment based on the last available price as of
the close of business in the relevant market on the date that a claim was first
made to the Custodian with respect to such loss, or such other lesser amount as
shall be agreed by the parties.
6. Administrative
Duties of the Custodian. The Custodian shall perform the
following administrative duties with respect to Investments of the
Fund.
6.1 Purchase
of Investments. Pursuant to Instruction, Investments
purchased for the account of the Fund shall be paid for (a) against delivery
thereof to the Custodian or a Subcustodian, as the case may be, either directly
or through a Clearing Corporation or a Securities Depository (in accordance with
the rules of such Securities Depository or such Clearing Corporation), or (b)
otherwise in accordance with an Instruction, Applicable Law, generally accepted
trade practices, or the terms of the instrument representing
such Investment.
6.2 Sale
of Investments.
Pursuant to Instruction, Investments sold for the account of the Fund shall be
delivered (a) against payment therefor in cash, by check or by bank wire
transfer, (b) by credit to the account of the Custodian or the applicable
Subcustodian, as the case may be, with a Clearing Corporation or a Securities
Depository (in accordance with the rules of such Securities Depository or such
Clearing Corporation), or (c) otherwise in accordance with an Instruction,
Applicable Law, generally accepted trade practices, or the terms of the
instrument representing such Investment.
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6.3 Delivery
and Receipt in Connection with Borrowings of the Fund or other Collateral and
Margin Requirements. Pursuant to Instruction,
the Custodian may deliver or receive Investments or cash of the Fund in
connection with borrowings or loans by the Fund and other collateral and margin
requirements.
6.4 Futures
and Options. If, pursuant to an Instruction, the Custodian
shall become a party to an agreement with the Fund and a futures commission
merchant regarding margin (Tri-Party Agreement), the
Custodian shall (a) receive and retain, to the extent the same are provided to
the Custodian, confirmations or other documents evidencing the purchase or sale
by the Fund of exchange-traded futures contracts and commodity options, (b) when
required by such Tri-Party Agreement, deposit and maintain in an account opened
pursuant to such Agreement (Margin Account), segregated
either physically or by book-entry in a Securities Depository for the benefit of
any futures commission merchant, such Investments as the Fund shall have
designated as initial, maintenance or variation "margin" deposits or other
collateral intended to secure the Fund's performance of its obligations under
the terms of any exchange-traded futures contracts and commodity options; and
(c) thereafter pay, release or transfer Investments into or out of the margin
account in accordance with the provisions of such Agreement. Alternatively, the
Custodian may deliver Investments, in accordance with an Instruction, to a
futures commission merchant for purposes of margin requirements in accordance
with Rule 17f-6 under the 1940 Act. The Custodian shall in no event
be responsible for the acts and omissions of any futures commission merchant to
whom Investments are delivered pursuant to this Section; for the sufficiency of
Investments held in any Margin Account; or, for the performance of any terms of
any exchange-traded futures contracts and commodity options.
6.5 Contractual
Obligations and Similar Investments. From time to time, the
Fund's Investments may include Investments that are not ownership interests as
may be represented by certificate (whether registered or bearer), by entry in a
Securities Depository or by Book-Entry Agent, registrar or similar agent for
recording ownership interests in the relevant Investment. If the Fund
shall at any time acquire such Investments, including without limitation deposit
obligations, loan participations, repurchase agreements and derivative
arrangements, the Custodian shall (a) receive and retain, to the extent the same
are provided to the Custodian, confirmations or other documents evidencing the
arrangement; and (b) perform on the Fund's account in accordance with the terms
of the applicable arrangement, but only to the extent directed to do so by
Instruction. The Custodian shall have no responsibility for
agreements running to the Fund as to which it is not a party other than to
retain, to the extent the same are provided to the Custodian, documents or
copies of documents evidencing the arrangement and, in accordance with
Instruction, to include such arrangements in reports made to the
Fund.
6.6
Exchange of Securities. Unless otherwise
directed by Instruction, the Custodian shall: (a) exchange securities
held for the account of the Fund for other securities in connection with any
reorganization, recapitalization, conversion, stock split, change of par value
of shares or similar event, and (b) deposit any such securities in accordance
with the terms of any reorganization or protective plan.
6.7
Surrender of Securities. Unless otherwise directed
by Instruction, the Custodian may surrender securities: (a) in temporary form
for definitive securities; (b) for transfer into the name of an entity allowable
under Section 5.3; and (c) for a different number of certificates or instruments
representing the same number of shares or the same principal amount of
indebtedness.
6.8
Rights, Warrants, Etc. Pursuant to Instruction, the
Custodian shall (a) deliver warrants, puts, calls, rights or similar securities
to the issuer or trustee thereof, or to any agent of the issuer or trustee, for
purposes of exercising such rights or selling such securities, and (b) deliver
securities in response to any tender offer.
6.9 Mandatory
Corporate Actions. Unless otherwise directed by
Instruction, the Custodian shall: (a) comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions or similar rights of
securities ownership affecting securities held on the Fund’s account and
promptly notify the Fund of such action; and (b) collect all stock dividends,
rights and other items of like nature with respect to such
securities.
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6.10
Income Collection. Unless otherwise
directed by Instruction, the Custodian shall collect any amount due and payable
to the Fund with respect to Investments and promptly credit the amount collected
to a Principal or Agency Account; provided, however, that the Custodian shall
not be responsible for: (a) the collection of amounts due and payable with
respect to Investments that are in default or (b) the collection of cash or
share entitlements with respect to Investments that are
not registered in the name of the Custodian or its
Subcustodians. The Custodian is hereby authorized to endorse and
deliver any instrument required to be so endorsed and delivered to effect
collection of any amount due and payable to the Fund with respect to
Investments.
6.11 Corporate
Action Information. In fulfilling the duties set forth in
Sections 6.6 through 6.10 above, the Custodian shall provide to the Fund such material information pertaining to
a corporate action which the Custodian actually receives; provided that the
Custodian shall not be responsible for the completeness or accuracy of such
information. Information relative to any pending corporate action made available
to the Fund via any of the services described in
the Electronic and Online Services Schedule shall constitute the delivery of
such information by the Custodian. Any advance credit of cash or
shares expected to be received as a result of any corporate action shall be
subject to actual collection and may be reversed by the
Custodian.
6.12
Proxy Materials. The Custodian shall deliver,
or cause to be delivered, to the Fund proxy forms, notices of meeting, and any
other notices or announcements materially affecting or relating to Investments
received by the Custodian. Information relative to any pending corporate action
made available to the Fund via any of the services described in
the Electronic and Online Services Schedule shall constitute the delivery of
such information by the Custodian.
6.13 Ownership
Certificates and Disclosure of the Fund's Interest. The Custodian is hereby
authorized to execute on behalf of the Fund ownership certificates, affidavits
or other disclosure required under Applicable Law or established market practice
in connection with the receipt of income, capital gains or other payments by the
Fund with respect to Investments, or in connection with the sale, purchase or
ownership of Investments.
With respect to securities issued in the
United States of America, the Custodian [ ]
may [ ] may not release the identity of
the Fund to an issuer which requests such information pursuant to the
Shareholder Communications Act of 1985 for the specific purpose of direct
communications between such issuer and the Fund. IF NO BOX IS
CHECKED, THE CUSTODIAN SHALL RELEASE SUCH INFORMATION UNTIL IT RECEIVES CONTRARY
INSTRUCTIONS FROM THE FUND. With respect to securities issued outside
of the United States of America, information shall be released in accordance
with law or custom of the particular country in which such security is
located.
6.14. Taxes.
The Custodian
shall, where applicable, assist the Fund in the reclamation of taxes withheld on
dividends and interest payments received by the Fund. In the
performance of its duties with respect to tax withholding and reclamation, the
Custodian shall be entitled to rely on the advice of counsel and upon
information and advice regarding the Fund’s tax status that is received from or
on behalf of the Fund without duty of separate inquiry.
6.15 Other
Dealings. The Custodian shall
otherwise act as directed by Instruction, including without limitation effecting
the free payments of moneys or the free delivery of securities, provided that
such Instruction shall indicate the purpose of such payment or delivery and that
the Custodian shall record the party to whom the payment or delivery is
made.
6.16 Nondiscretionary
Details and Minor Expenses. The Custodian shall attend to all
nondiscretionary details in connection with the sale or purchase or other
administration of Investments, except as otherwise directed by Instruction, and
may make payments to itself or others for minor expenses of administering
Investments under this Agreement, provided that the Fund shall have the right to
request an accounting with respect to such expenses.
6.17 Use
of Agents. The Custodian may at any time in its
discretion appoint (and may at any time remove) agents (other than
Subcustodians) to carry out some or all of the administrative provisions of this
Agreement (Agents), provided, however, that the
appointment of an Agent shall not relieve the Custodian of its administrative
obligations under this Agreement.
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7. Cash
Accounts, Deposits and Money Movements. Subject to the terms and conditions set
forth in this Section 7, the Fund hereby authorizes the Custodian to open and
maintain, with itself or with Subcustodians, cash accounts in United States
Dollars, in such other currencies as are the currencies of the countries in
which the Fund maintains Investments or in such other currencies as the Fund
shall from time to time request by Instruction. Notwithstanding anything in
this Agreement to the contrary, the Fund shall be liable as principal for any
overdrafts occurring in any cash accounts.
7.1 Types
of Cash Accounts. Cash accounts opened on the
books of the Custodian (Principal
Accounts) shall be opened
in the name of the Fund. Such accounts collectively shall be a
deposit obligation of the Custodian and shall be subject to the terms of this
Section 7 and the general liability provisions contained in Section
9. Cash accounts opened on the books of a Subcustodian may be opened
in the name of the Fund or the Custodian or in the name of the Custodian for its
customers generally (Agency
Accounts). Such deposits
shall be obligations of the Subcustodian and shall be treated as an Investment
of the Fund. Accordingly, the Custodian shall be responsible for
exercising reasonable care in the administration of such accounts, but shall not
be liable for their repayment in the event the Subcustodian, by reason of its
bankruptcy, insolvency or otherwise, fails to make
repayment. In connection with the services provided
hereunder, the Custodian is hereby directed to open cash accounts on its books
and records from time to time for the purposes of receiving subscriptions and/or
processing redemptions on behalf of the Fund, and/or for the purposes
of aggregating, netting and/or clearing transactions (including,
without limitation foreign exchange, repurchase agreements, capital stock
activity, expense payment) or other administrative purposes on behalf
of the Fund or the Fund and affiliated funds (each an
"Account"). Each such Account shall be subject to the terms and
conditions of this Agreement (including, without limitation Section 7.6) and the
Fund shall be liable for the satisfaction of its own obligations in connection
with each Account; provided however, the Fund shall not be liable for the
obligations of any other affiliated fund thereunder.
7.1.1 Administrative
Accounts. In
connection with the services provided hereunder, the Custodian is hereby
directed to open cash accounts on its books and records from time to time for
the purposes of receiving subscriptions and/or processing redemptions on behalf
of the Fund and/or for the purposes of aggregating, netting and/or clearing
transactions (including, without limitation foreign exchange, repurchase
agreements, capital stock activity, expense payment) or other administrative
purposes, each on behalf of the Fund (each an “Account”). Each such
Account shall be subject to the terms and conditions of this Agreement and the
Fund shall be liable for the satisfaction of its obligations in connection with
each Account.
7.2 Payments
and Credits with Respect to the Cash Accounts. The Custodian shall make
payments from or deposits to any of the cash accounts in the course of carrying
out its administrative duties, including but not limited to income collection
with respect to the Fund's Investments, and otherwise in accordance with
Instructions. The Custodian and its Subcustodians shall be required
to credit amounts to the cash accounts only when moneys are actually received in
cleared funds in accordance with banking practice in the country and currency of
deposit. Any credit made to any Principal or Agency Account before
actual receipt of cleared funds shall be provisional and may be reversed by the
Custodian in the event such payment is not actually collected. Unless otherwise
specifically agreed in writing by the Custodian or any Subcustodian, all
deposits shall be payable only at the branch of the Custodian or Subcustodian
where the deposit is made or carried.
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7.3
Currency and Related Risks. The Fund bears the risks of
holding or transacting in any currency, including any xxxx to market exposure
associated with a foreign exchange transaction undertaken with the
Custodian. The Custodian shall not be liable for any loss or
damage arising from the applicability of any law or regulation now or hereafter
in effect, or from the occurrence of any event, which may delay or affect the
transferability, convertibility or availability of any currency in the country
(a) in which such Principal or Agency Accounts are maintained or (b) in which
such currency is issued, and in no event shall the Custodian be obligated to
make payment of a deposit denominated in a currency during the period during
which its transferability, convertibility or availability has been affected by
any such law, regulation or event. Without limiting the generality of
the foregoing, neither the Custodian nor any Subcustodian shall be required to
repay any deposit made at a foreign branch of either the Custodian or
Subcustodian if such branch cannot repay the deposit due to a cause for which
the Custodian would not be responsible in accordance with the terms of Section 9
of this Agreement unless the Custodian or such Subcustodian expressly agrees in
writing to repay the deposit under such circumstances. All currency
transactions in any account opened pursuant to this Agreement are subject to
exchange control regulations of the United States and of the country where such
currency is the lawful currency or where the account is maintained. Any taxes,
costs, charges or fees imposed on the convertibility of a currency held by the
Fund shall be for the account of the Fund.
7.4 Foreign
Exchange Transactions. The Custodian shall,
subject to the terms of this Section, settle foreign exchange transactions
(including contracts, futures, options and options on futures) on behalf and for
the account of the Fund with such currency brokers or banking institutions,
including Subcustodians, as the Fund may direct pursuant to
Instructions. The Custodian may act as principal in any foreign
exchange transaction with the Fund in accordance with Section 7.4.2 of this
Agreement. The obligations of the Custodian in respect of all
foreign exchange transactions (whether or not the Custodian shall act as
principal in such transaction) shall be contingent on the free, unencumbered
transferability of the currency transacted on the actual settlement date of the
transaction.
7.4.1 Third
Party Foreign Exchange Transactions. The Custodian shall process
foreign exchange transactions (including without limitation contracts, futures,
options, and options on futures), where any third party acts as principal
counterparty to the Fund on the same basis it performs duties as agent for the
Fund with respect to any other of the Fund's Investments. Accordingly the
Custodian shall only be responsible for delivering or receiving currency on
behalf of the Fund in respect of such contracts pursuant to Instructions. The
Custodian shall not be responsible for the failure of any counterparty
(including any Subcustodian) in such agency transaction to perform its
obligations thereunder. The Custodian (a) shall transmit cash and Instructions
to and from the currency broker or banking institution with which the Fund has
executed a foreign exchange contract or option, (b) may make free outgoing
payments of cash in the form of Dollars or foreign currency without receiving
confirmation of a foreign exchange contract or option or confirmation that the
countervalue currency completing the foreign exchange contract has been
delivered or received or that the option has been delivered or received,
(c) may, in connection with
cash payments made to third party currency brokers/dealers for settlement of the
Fund’s foreign exchange spot or forward transactions, foreign currency swap
transactions and similar foreign exchange transactions, process settlements
using the facilities of the CLS Bank according to CLS Bank’s standard terms and
conditions, and (d) shall hold in safekeeping all
confirmations, certificates and other documents and agreements received by the
Custodian and evidencing or relating to such foreign exchange
transactions. The Fund accepts full responsibility for its use of
third-party foreign exchange dealers and for execution of the foreign exchange
contracts and options and understands that the Fund shall be responsible for any
and all costs and interest charges which may be incurred by the Fund or the
Custodian as a result of the failure or delay of third parties to deliver
foreign exchange.
7.4.2 Foreign
Exchange with the Custodian as Principal. The Custodian, as principal, may
undertake such foreign exchange transactions with the Fund as the Custodian and
the Fund may agree from time to time. In this event, the foreign
exchange transaction will be performed in accordance with the particular
agreement of the parties, or in the event a principal foreign exchange
transaction is initiated by Instruction in the absence of specific agreement,
the transaction will be performed in accordance with the usual commercial terms
of the Custodian. In the event that the Fund defaults on the
settlement of any such foreign exchange transaction with the Custodian, the Fund
shall be liable for contracted currency of the transaction together with any
xxxx to market exposure associated with the replacement purchase of the
contracted currency undertaken with the Custodian.
8
7.5 Delays. If no event
of Force Majeure shall have occurred and be continuing and in the
event that a delay shall have been caused by the negligence or willful
misconduct of the Custodian in carrying out an Instruction to credit or transfer
cash, the Custodian shall be liable to the Fund: (a) with respect to
Principal Accounts, for interest to be calculated at the rate
customarily paid on such deposit and currency by the Custodian on overnight
deposits at the time the delay occurs for the period from the day when the
transfer should have been effected until the day it is in fact effected; and,
(b) with respect to Agency Accounts, for interest to be calculated at the rate
customarily paid on such deposit and currency by the Subcustodian on overnight
deposits at the time the delay occurs for the period from the day when the
transfer should have been effected until the day it is in fact effected. The
Custodian shall not be liable for delays in carrying out Instructions to
transfer cash which are not due to the Custodian's own negligence or willful
misconduct.
7.6
Advances. If, for any
reason in connection with this Agreement the Custodian or any Subcustodian makes
an Advance to facilitate settlement or otherwise for the benefit of the Fund
(whether or not any Principal or Agency Account shall be overdrawn either
during, or at the end of, any Business Day), the Fund hereby
does:
7.6.1 acknowledge
that the Fund shall have no right, title or interest in or to any Investments
purchased with such Advance or proceeds of such Investments, and that any credit
to an account of Fund shall be provisional, until: (a) the debit of the
Principal or Agency Account by Custodian for an amount equal to Advance Costs;
and/or (b) if such debit produces an overdraft in such account, reimbursement to
the Custodian or Subcustodian for the amount of such
overdraft;
7.6.2 acknowledge that the Custodian has an
automatically perfected statutory security interest in Investments purchased
with any such Advance pursuant to Section 9-206 of the Uniform Commercial
Code as in effect in the State of New York from time to
time;
7.6.3 in
addition, in order to secure the obligations of the Fund to pay or perform any
and all obligations of the Fund pursuant to this Agreement, including without
limitation to repay any Advance made pursuant to this Agreement, grant to the
Custodian a security interest in all Investments and proceeds thereof (as
defined in the Uniform Commercial Code as currently in effect in the State of
New York); and agree to take, and agree that the Custodian may take, in respect
of the security interest referenced above, any further actions that the
Custodian may reasonably require.
7.7 Custodian’s
Rights Neither the Custodian nor any Subcustodian shall be
obligated to make any Advance or to allow an Advance to occur to the Fund, and
in the event that the Custodian or any Subcustodian does make or allow an
Advance, any such Advance and any transaction giving rise to such Advance shall
be for the account and risk of the Fund and shall not be deemed to be a
transaction undertaken by the Custodian for its own account and
risk. If such Advance shall have been made or allowed by a
Subcustodian or any other person, the Custodian may assign all or part of its
security interest referenced above and any other rights granted to the Custodian
hereunder to such Subcustodian or other person. If the Fund shall
fail to repay the Advance Costs when due, the Custodian or its assignee, as the
case may be, shall be entitled to a portion of the available cash balance in any
Agency or Principal Account equal to such Advance Costs, and the Fund authorizes
the Custodian, on behalf of the Fund, to pay an amount equal to such Advance
Costs irrevocably to such Subcustodian or other person, and to dispose of any
property in such Account to the extent necessary to make such
payment. Any Investments credited to accounts subject to this
Agreement created pursuant hereto shall be treated as financial assets credited
to securities accounts under Articles 8 and 9 of the Uniform Commercial Code as
in effect in the State of New York from time to time. Accordingly,
the Custodian and any Subcustodian shall have the rights and benefits of a
secured creditor that is a securities intermediary under such Articles 8 and
9.
7.8 Integrated
Account. For purposes hereof,
deposits maintained in all Principal Accounts (whether or not denominated in
Dollars) shall collectively constitute a single and indivisible current account
with respect to the Fund's obligations to the Custodian or its assignee, and
balances in the Principal Accounts shall be available for satisfaction of the
Fund's obligations under this Section 7. The Custodian shall further
have a right of offset against the balances in any Agency Account maintained
hereunder to the extent that the aggregate of all Principal Accounts is
overdrawn.
9
8. Subcustodians
and Securities Depositories.
Subject to the provisions
hereinafter set forth in this Section 8, the Fund hereby authorizes the
Custodian to utilize Securities Depositories to act on behalf of the Fund and to
appoint from time to time and to utilize Subcustodians. With respect to
securities and funds held by a Subcustodian, either directly or indirectly
(including by a Securities Depository or Clearing Corporation), notwithstanding
any provisions of this Agreement to the contrary, payment for securities
purchased and delivery of securities sold may be made prior to receipt of
securities or payment, respectively, and securities or payment may be received
in a form in accordance with (a) governmental regulations, (b) rules of
Securities Depositories and Clearing Agencies, (c) generally accepted trade
practice in the applicable local market, (d) the terms and characteristics of
the particular Investment, or (e) the terms of Instructions.
8.1 Domestic
Subcustodians and Securities Depositories. The Custodian may deposit
and/or maintain, either directly or through one or more Agents appointed by the
Custodian, Investments of the Fund in any Securities Depository in the United
States, including The Depository Trust Company, provided such Depository meets
applicable requirements of the Federal Reserve Bank or of the Securities and
Exchange Commission. The Custodian may,, from time to time, appoint any bank as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder to act on behalf of the Fund as a Subcustodian for purposes of
holding Investments of the Fund in the United States.
8.2 Foreign
Subcustodians and Securities Depositories. Unless instructed otherwise
by the Fund, the Custodian may deposit and/or maintain non-U.S. Investments of
the Fund in any non-U.S. Securities Depository provided such Securities
Depository meets the requirements of an "eligible securities depository" under
Rule 17f-7 promulgated under the 1940 Act, or any successor rule or regulation
("Rule 17f-7") or which by order of the Securities and Exchange Commission is
exempted therefrom. Prior to the time that securities are
placed with such depository, but subject to the provisions of Section 8.2.4
below, the Custodian shall have prepared an assessment of the custody risks
associated with maintaining assets with the Securities Depository and shall have
established a system to monitor such risks on a continuing basis in accordance
with subsection 8.2.3 of this Section. Additionally, the Custodian
may, from time to time, appoint (a) any bank, trust company or other entity
meeting the requirements of an “eligible foreign custodian” under Rule 17f-5 or which by order of
the Securities and Exchange Commission is exempted therefrom, or (b) any bank as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder, to act on behalf of the Fund as a Subcustodian for purposes of
holding Investments of the Fund outside the United States.
8.3 Delegation
of Board Review of Subcustodians. From time to time, the Custodian
may agree to perform certain reviews of Subcustodians and of Subcustodian
Contracts as the delegate of the Fund's Board. In such event,
the Custodian's duties and obligations with respect to this delegated review
will be performed in accordance with the terms of the attached 17f-5
Delegation Schedule to this Agreement.
8.4 Board
Approval of Foreign Subcustodians. Unless and except to
the extent that the Board has delegated to the Custodian and the Custodian has
accepted delegation of review of certain matters concerning the appointment of
Subcustodians pursuant to Subsection 8.3, the Custodian shall, prior to the
appointment of any Subcustodian for purposes of holding Investments of the Fund
outside the United States, obtain written confirmation of the approval of the
Board of Trustees or Directors of the Fund with respect to (a) the identity of a
Subcustodian, and (b) the Subcustodian agreement which shall govern such
appointment, such approval to be signed by an Authorized Person. An
Instruction to open an account in a given country shall comprise authorization
of the Custodian to hold assets in such country in accordance with the terms of
this Agreement. The Custodian shall not be required to make
independent inquiry as to the authorization of the Fund to invest in such
country.
10
8.5 Monitoring
and Risk Assessment of Securities Depositories. Prior to the placement of any
assets of the Fund with a non-U.S. Securities Depository, the
Custodian: (a) shall provide to the Fund or its authorized
representative an assessment of the custody risks associated with maintaining
assets within such Securities Depository; and (b) shall have established a
system to monitor the custody risks associated with maintaining assets with such
Securities Depository on a continuing basis and to promptly notify the Fund or
its Investment Adviser of any material changes in such risk. In
performing its duties under this subsection, the Custodian shall use reasonable
care and may rely on such reasonable sources of information as may be available
including but not limited to: (i) published ratings; (ii) information
supplied by a Subcustodian that is a participant in such Securities Depository;
(iii) industry surveys or publications; (iv) information supplied by the
depository itself, by its auditors (internal or external) or by the relevant
Foreign Financial Regulatory Authority. It is acknowledged that
information procured through some or all of these sources may not be
independently verifiable by the Custodian and that direct access to Securities
Depositories is limited under most circumstances. Accordingly, the Custodian
shall not be responsible for errors or omissions in its duties hereunder
provided that it has performed its monitoring and assessment duties with
reasonable care. The risk assessment shall be provided to the Fund or
its Investment Advisor by such means as the Custodian shall reasonably
establish. Advices of material change in such assessment may be
provided by the Custodian in the manner established as customary between the
Fund and the Custodian for transmission of material market
information.
8.6 Responsibility
for Subcustodians.
Except as provided in the
last sentence of this Section 8.6, the Custodian shall be liable to the Fund for
any loss or damage to the Fund caused by or resulting from the acts or omissions
of any Subcustodian to the extent that such acts or omissions would be deemed to
be negligence, gross negligence or willful misconduct in accordance with the
terms of the relevant subcustodian agreement under the laws, circumstances and
practices prevailing in the place where the act or omission
occurred. The liability of the Custodian in respect of the countries
and Subcustodians designated by the Custodian, from time to time on the Global
Custody Network Listing shall be subject to the additional condition that the
Custodian actually recovers such loss or damage from the
Subcustodian.
8.7 New
Countries. The
Fund shall be responsible for informing the Custodian sufficiently in advance of
a proposed investment which is to be held in a country in which no Subcustodian
is authorized to act in order that the Custodian shall, if it deems appropriate
to do so, have sufficient time to establish a subcustodial arrangement in
accordance herewith. In the event, the Custodian is unable to establish such
arrangements prior to the time the investment is to be acquired, the Custodian
is authorized to designate at its discretion a local safekeeping agent, and the
use of the local safekeeping agent shall be at the sole risk of the Fund, and
accordingly the Custodian shall be responsible to the Fund for the actions of
such agent if and only to the extent the Custodian shall have recovered from
such agent for any damages caused the Fund by such agent.
9. Responsibility
of the Custodian.
In performing its duties
and obligations hereunder, the Custodian shall use reasonable care under the
facts and circumstances prevailing in the market where performance is
effected. Subject to the specific provisions of this Section, the
Custodian shall be liable for any direct damage incurred by the Fund in
consequence of the Custodian's negligence, bad faith or willful
misconduct. In no event shall the Custodian be liable hereunder for
any special, indirect, punitive or consequential damages arising out of,
pursuant to or in connection with this Agreement even if the Custodian has been
advised of the possibility of such damages. It is agreed that the
Custodian shall have no duty to assess the risks inherent in the Fund's
Investments or to provide investment advice with respect to such Investments and
that the Fund as principal shall bear any risks attendant to particular
Investments such as failure of counterparty or issuer.
9.1 Limitations
of Performance. The Custodian shall
not be responsible under this Agreement for any failure to perform its duties,
and shall not be liable hereunder for any loss or damage in association with
such failure to perform for or in consequence of the following
causes:
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9.1.1 Force
Majeure. Force
Majeure shall mean
any circumstance or event which is beyond the reasonable control of the
Custodian, a Subcustodian or any agent of the Custodian or a Subcustodian
and which adversely affects the performance by the Custodian of its
obligations hereunder, by the Subcustodian of its obligations under its
Subcustody Agreement or by any other Agent of the Custodian or the
Subcustodian, including any event caused by, arising out of or involving
(a) an act of God, (b) accident, fire, water or wind damage or explosion,
(c) any computer, system or other equipment failure or malfunction caused
by any computer virus or the malfunction or failure of any communications
medium, (d) any interruption of the power supply or other utility service,
(e) any strike or other work stoppage, whether partial or total, (f) any
delay or disruption resulting from or reflecting the occurrence of any
Country or Sovereign Risk, (g) any disruption of, or suspension of trading
in, the securities, commodities or foreign exchange markets, whether or
not resulting from or reflecting the occurrence of any Country or
Sovereign Risk, (h) any encumbrance on the transferability of a currency
or a currency position on the actual settlement date of a foreign exchange
transaction, whether or not resulting from or reflecting the occurrence of
any Country or Sovereign Risk, or (i) any other cause similarly beyond the
reasonable control of the
Custodian.
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11
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9.1.2 Country
Risk.
Country
Risk shall mean, with
respect to the acquisition, ownership, settlement or custody of
Investments in a jurisdiction, all risks relating to, or arising in
consequence of, systemic and markets factors affecting the acquisition,
payment for or ownership of Investments including (a) the prevalence of
crime and corruption, (b) the inaccuracy or unreliability of business and
financial information, (c) the instability or volatility of banking and
financial systems, or the absence or inadequacy of an infrastructure to
support such systems, (d) custody and settlement infrastructure of the
market in which such Investments are transacted and held, (e) the acts,
omissions and operation of any Securities Depository, (f) the risk of the
bankruptcy or insolvency of banking agents, counterparties to cash and
securities transactions, registrars or transfer agents, and (g) the
existence of market conditions which prevent the orderly execution or
settlement of transactions or which affect the value of
assets.
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9.1.3 Sovereign
Risk. Sovereign
Risk shall mean, in
respect of any jurisdiction, including the United States of America, where
Investments are acquired or held hereunder or under a Subcustody
Agreement, (a) any act of war, terrorism, riot, insurrection or civil
commotion, (b) the imposition of any investment, repatriation or exchange
control restrictions by any Governmental Authority, (c) the confiscation,
expropriation or nationalization of any Investments by any Governmental
Authority, whether de facto or de jure, (d) any devaluation or revaluation
of the currency, (e) the imposition of taxes, levies or other charges
affecting Investments, (f) any change in the Applicable Law, or (g) any
other economic or political risk incurred or
experienced.
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9.2. Limitations
on Liability. The Custodian
shall not be liable for any loss, claim, damage or other liability arising from
the following causes:
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9.2.1 Failure
of Third Parties. The failure of any
third party including: (a) any issuer of Investments or
Book-Entry Agent or other agent of an issuer; (b) any counterparty with
respect to any Investment, including any issuer of exchange-traded or
other futures, option, derivative or commodities contract; (c) failure of
an Investment Advisor, foreign custody manager or other agent of the Fund;
or (d) failure of other third parties similarly beyond the control or
choice of the Custodian.
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9.2.2
Information Sources. The Custodian may
rely upon information received from issuers of Investments or agents of
such issuers, information received from Subcustodians and from other
commercially reasonable sources such as commercial data bases and the
like, but shall not be responsible for specific inaccuracies in
such information, provided that the Custodian has relied upon
such information in good faith, or for the failure of
any commercially reasonable information
provider.
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9.2.3 Reliance
on Instruction.
Action by the Custodian or
the Subcustodian in accordance with an Instruction, even when such action
conflicts with, or is contrary to any provision of, the Fund's declaration of
trust, certificate of incorporation or by-laws or other constitutive document,
Applicable Law, or actions by the trustees, directors or shareholders of the
Fund.
9.2.4 Restricted
Securities. The limitations
inherent in the rights, transferability or similar investment characteristics of
a given Investment of the Fund.
12
10. Indemnification. The Fund hereby indemnifies
the Custodian and each Subcustodian, and their respective Agents, nominees and
the partners, employees, officers and directors, and agrees to hold each of them
harmless from and against all claims and liabilities, including counsel fees and
taxes, incurred or assessed against any of them in connection with the
performance of this Agreement and any Instruction, except where such claims and
liabilities arise directly from the negligence, willful misconduct or bad faith
of the Custodian, the Subcustodian or their respective Agents in their
performance hereunder. If a Subcustodian or any
other person indemnified under the preceding sentence, gives written notice of
claim to the Custodian, the Custodian shall promptly give written notice to the
Fund. Not more than thirty days following the date of such notice,
unless the Custodian shall be liable under Section 8 hereof in respect of such
claim, the Fund will pay the amount of such claim or reimburse the Custodian for
any payment made by the Custodian in respect thereof.
11.
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Reports
and Records.
The Custodian shall:
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11.1 create and maintain
records relating to the performance of its obligations under this
Agreement;
11.2 make available to the
Fund, its auditors, agents (which may include the Fund’s service
providers) and employees,
upon reasonable request and during normal business hours of the Custodian, all
records maintained by the Custodian pursuant to Section 11.1 above, subject,
however, to all reasonable security requirements of the Custodian then
applicable to the records of its custody customers generally;
and
11.3 make available to the
Fund all Electronic Reports; it being understood that the Custodian shall not be
liable hereunder for the inaccuracy or incompleteness thereof or for errors in
any information included therein.
11.4 The Fund shall examine
all records, however produced or transmitted, promptly upon receipt and notify
the Custodian promptly of any discrepancy or error. Unless the Fund
delivers written notice of any such discrepancy or error within a reasonable
time after its receipt of the records, the records shall be deemed to be true
and accurate.
11.5 The Fund acknowledges
that the Custodian obtains information on the value of assets from outside
sources which may be utilized in certain reports made available to the Fund. The
Custodian deems such sources to be reliable but the Fund acknowledges
and agrees that the Custodian does not verify such information nor make any
representations or warrantees as to its accuracy or completeness and accordingly
shall be without liability in selecting and using such sources and furnishing
such information.
12.
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Miscellaneous.
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12.1 Powers
of Attorney, etc.
The Fund will promptly execute and deliver, upon request, such proxies,
powers of attorney or other instruments as may be necessary or desirable for the
Custodian to provide, or to cause any Subcustodian to provide, custody
services.
12.2 Entire
Agreement; Amendment. This Agreement constitutes the entire
understanding and agreement of the parties hereto and supersedes any other oral
or written agreements heretofore in effect between the Fund and the Custodian with respect to the subject matter
hereof. No provision of this Agreement may be amended or terminated except by a
statement in writing signed by the party against which enforcement of the
amendment or termination is sought, provided, however, that an Instruction
shall, whether or not such Instruction shall constitute a waiver, amendment or
modification for purposes hereof, be deemed to have been accepted by the
Custodian when it commences actions pursuant thereto or in accordance therewith.
In the event of a conflict between the terms of this Agreement and the terms of
a service level agreement or other operating agreement in place between the
parties from time to time, the terms of this Agreement shall
control.
12.3 Binding
Effect; Assignment.
This Agreement shall be
binding upon and shall inure to the benefit of the Custodian/Administrator and
the Fund and their successors and assignees, provided that the Fund may not
assign this Agreement without the prior written consent of the
Custodian. Each party agrees that only the parties to this Agreement
and/or their successors in interest shall have a right to enforce the terms of
this Agreement. Accordingly, no client of the Fund or other third party shall have any
rights under this Agreement and such rights are explicitly disclaimed by the
parties.
13
12.4 GOVERNING
LAW, JURISDICTION AND VENUE. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH
STATE. THE PARTIES HERETO IRREVOCABLY CONSENT TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS
LOCATED IN NEW YORK CITY. THE FUND IRREVOCABLY WAIVES ANY OBJECTION IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING IN
ANY OF THE AFORESAID COURTS AND ANY CLAIM THAT ANY SUCH ACTION OR PROCEEDING HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. FURTHERMORE, EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
12.5 Notices. Notices and other
writings contemplated by this Agreement, other than Instructions, shall be
delivered (a) by hand, (b) by first class registered or certified mail, postage
prepaid, return receipt requested, (c) by a nationally recognized overnight
courier, or (d) by facsimile transmission, provided that any notice or other
writing sent by facsimile transmission shall also be mailed, postage prepaid, to
the party to whom such notice is addressed. All such notices shall be
addressed, as follows:
If to the
Fund:
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c/o Guinness Xxxxxxxx Asset
Management, Inc.
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00000 Xxxxxx Xxxxxx, Xxxxx
000
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||
Xxxxxxxx Xxxxx, XX
00000
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||
Attn: Xxxxx X.
Xxxxxxxx
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||
Telephone:
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(000)
000-0000
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Facsimile
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(000)
000-0000
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If to the
Custodian:
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Xxxxx Brothers Xxxxxxxx &
Co.
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00 Xxxxx
Xxxxxx
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||
Xxxxxx, Xxxxxxxxxxxxx
00000
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||
Attn:
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||
Telephone:
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(000)
000-0000
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Facsimile:
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(617)
772-XXXX,
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or such other address as the Fund or the
Custodian may have designated in writing to the other.
12.6 Headings. Paragraph headings
included herein are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions
hereof.
12. 7 Severability.
In the event any provision
of this Agreement is determined to be void or unenforceable, such determination
shall not affect the remainder of this Agreement, which shall continue to be in
force.
12.8 Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original. This Agreement shall become effective when one or more
counterparts have been signed and delivered by the Fund and the
Custodian. A photocopy or telefax of the Agreement shall be
acceptable evidence of the existence of the Agreement and the Custodian shall be
protected in relying on the photocopy or telefax until the Custodian has
received the original of the Agreement.
12.9 Confidentiality.
The parties hereto agree
that each shall treat confidentially the terms and conditions of this Agreement
and all information provided by each party to the other regarding its business
and operations. All confidential information provided by a party
hereto shall be used by any other party hereto solely for the purpose of
rendering or obtaining services pursuant to this Agreement and, except as may be
required in carrying out this Agreement, shall not be disclosed to any third
party without the prior consent of such providing party. The
foregoing shall not be applicable to any information that is publicly available
when provided or thereafter becomes publicly available other than through a
breach of this Agreement, or that is required to be disclosed by or to any bank
examiner of the Custodian or any Subcustodian, any Regulatory Authority, any
auditor of the parties hereto, or by judicial or administrative process or
otherwise by Applicable Law.
14
12.10 Tape-recording. The Fund on behalf of itself and its
Customers authorizes the Custodian to tape record any and all telephonic or
other oral instructions given to the Custodian by or on behalf of the Fund,
including from any Authorized Person. This authorization will remain
in effect until and unless revoked by the Fund in writing. The Fund
further agrees to solicit valid written or other consent from any of its
employees with respect to telephone communications to the extent such consent is
required by applicable law.
12.11 Counsel/
Certified Public Accountant.
In fulfilling its duties
hereunder, the Custodian shall be entitled to receive and act upon the advice of
(i) counsel and/or a certified public accountant regularly retained
by the Custodian in respect of such matters, (ii) counsel and/or a certified
public accountant for the Fund or (iii) such counsel or certified public
accountant as the Fund and the Custodian may agree upon, with respect to all
matters, and the Custodian shall be without liability for any action reasonably
taken or omitted pursuant to such advice.
12.12 Conflict.
Nothing contained in this Agreement shall prevent the
Custodian and its associates from (i) dealing as a principal or an intermediary
in the sale, purchase or loan of the Fund’s Investments to, or from the
Custodian or its associates; (ii) acting as a custodian, a subcustodian, a
trustee, an agent, securities dealer, an investment manager or in any other
capacity for any other client whose interests may be adverse to the interest of
the Fund; or (iii) buying, holding, lending, and dealing in any way in any
assets for the benefit of its own account, or for the account of any other
client whose interests may be adverse to the Fund notwithstanding that the same
or similar assets may be held or dealt in by, or for the account of the Fund by
the Custodian. The Fund hereby voluntarily consents to, and waives
any potential conflict of interest between the Custodian and/or its associates
and the Fund, and agrees that:
(a) the
Custodian’s and/or its associates’ engagement in any such transaction shall not
disqualify the Custodian from continuing to perform as the custodian of the Fund
under this Agreement;
(b) the
Custodian and/or its associates shall not be under any duty to disclose any
information in connection with any such transaction to the Fund;
(c) the
Custodian and/or its associates shall not be liable to account to the Fund for
any profits or benefits made or derived by or in connection with any such
transaction; and
(d) the
Fund shall use all reasonable efforts to disclose this provision, among other
provisions in this Agreement, to its shareholders.
12.13 Fund Obligations.
Obligations of each Fund of the Trust pursuant to this
Agreement shall be several and not joint, and no Fund shall have any liability
hereunder for the obligations of another series portfolio of the
Trust.
13. Definitions. The following defined
terms will have the respective meanings set forth below.
13.1 Advance(s) shall mean any extension of credit by
or through the Custodian or by or through any Subcustodian and shall include,
without limitation, amounts due to the Custodian as the principal counterparty
to any foreign exchange transaction with the Fund as described in Section 7.4.2
hereof, or paid to third parties for account of the Fund or in discharge of any
expense, tax or other item payable by the Fund.
13.2 Advance
Costs shall mean any
Advance, interest on the Advance and any related expenses, including without
limitation any xxxx to market loss of the Custodian or Subcustodian on any
Investment to which Section 7.6.1 applies.
13.3 Agency
Account(s) shall mean any
deposit account opened on the books of a Subcustodian or other banking
institution in accordance with Section 7.1 hereof.
13.4 Agent(s) shall have the meaning set forth in the
last sentence of Section 6 hereof.
15
13.5 Applicable
Law shall mean with respect
to each jurisdiction, all (a) laws, statutes, treaties, regulations, guidelines
(or their equivalents); (b) orders, interpretations, licenses and permits; and
(c) judgments, decrees, injunctions, writs, orders and similar actions by a
court of competent jurisdiction; compliance with which is required or
customarily observed in such jurisdiction.
13.6 Authorized
Person(s) shall mean any
person or entity authorized to give Instructions on behalf of the Fund in
accordance with Section 4.1 hereof.
13.7 Book-entry
Agent(s) shall mean an
entity acting as agent for the issuer of Investments for purposes of recording
ownership or similar entitlement to Investments, including without limitation a
transfer agent or registrar.
13.8 Clearing
Corporation shall mean any
entity or system established for purposes of providing securities settlement and
movement and associated functions for a given market(s).
13.9 Delegation
Schedule shall mean any
separate schedule entered into between the Custodian and the Fund or its
authorized representative with respect to certain matters concerning the
appointment and administration of Subcustodians delegated to the Custodian
pursuant to Rule 17f-5 under the 1940 Act.
13.10 Electronic
and Online Services Schedule shall mean any separate agreement
entered into between the Custodian and the Fund or its authorized representative
with respect to certain matters concerning certain electronic and online
services as described therein and as may be made available from time to time by
the Custodian to the Fund.
13.11
Electronic Reports shall mean any reports prepared by the Custodian and
remitted to the Fund or its authorized representative via the internet or
electronic mail.
13.12 Foreign
Custody Manager shall mean
the Fund’s foreign custody manager appointed pursuant to Rule 17f-5 of the 1940
Act.
13.13 Foreign
Financial Regulatory Authority shall have the meaning given by Section
2(a)(50) of the 0000 Xxx.
13.14 Funds
Transfer Services Schedule
shall mean any separate schedule entered into between the Custodian and the Fund
or its authorized representative with respect to certain matters concerning the
processing of payment orders from Principal Accounts of the
Fund.
13.15 Global
Custody Network Listing
shall mean the Countries and Subcustodians approved for Investments in non-U.S.
Markets.
13.16 Instruction(s) shall have the meaning assigned in
Section 4 hereof.
13.17 Investment
Advisor shall mean any
person or entity who is an Authorized Person to give Instructions with respect
to the investment and reinvestment of the Fund's
Investments.
13.18 Investment(s) shall mean any investment asset of the
Fund, including without limitation securities, bonds, notes, and debentures as
well as receivables, derivatives, contractual rights or entitlements and other
intangible assets, but shall not include any Principal
Account.
13.19 Margin
Account shall have the
meaning set forth in Section 6.4 hereof.
13.20 Principal
Account(s) shall
mean deposit accounts of the Fund carried on the books of BBH&Co. as
principal in accordance with Section 7 hereof.
16
13.21 Safekeeping
Account shall mean an
account established on the books of the Custodian or any Subcustodian for
purposes of segregating the interests of the Fund (or clients of the Custodian
or Subcustodian) from the assets of the Custodian or any
Subcustodian.
13.22 Securities
Depository shall mean a
central or book entry system or agency established under Applicable Law for
purposes of recording the ownership and/or entitlement to investment securities
for a given market that, if a foreign Securities Depository, meets the
definitional requirements of Rule 17f-7 under the 1940 Act.
13.23 Subcustodian(s) shall mean each foreign bank appointed
by the Custodian pursuant to Section 8 hereof, but shall not include Securities
Depositories.
13.24 Tri-Party
Agreement shall have the
meaning set forth in Section 6.4 hereof.
13.25 1940
Act shall mean the
Investment Company Act of 1940.
14.
Compensation. The Fund agrees to pay to
the Custodian (a) a fee in an amount set forth in the fee letter between the
Fund and the Custodian in effect on the date hereof or as amended from time to
time, and (b) all out-of-pocket expenses incurred by the Custodian, including
the fees and expenses of all Subcustodians and other amounts paid by the
Custodian to a third party for account or benefit of the Fund, and payable from
time to time. Amounts payable by the Fund under and pursuant to this
Section 14 shall be payable by wire transfer to the Custodian at BBH&Co. in
New York, New York.
15. Termination. This Agreement may be terminated by
either party in accordance with the provisions of this Section. The
provisions of this Agreement and any other rights or obligations incurred or
accrued by any party hereto prior to termination of this Agreement shall survive
any termination of this Agreement.
15.1 Term,
Notice and Effect. This Agreement shall
continue in full force and
effect until either party terminates this Agreement
by written notice effective no sooner than ninety (90) days following the date
that notice to such effect shall be delivered to the other party at its address
set forth in Section 12.5 hereof. In addition, either party may terminate this
Agreement at any time (a) for cause, which is a material breach of the Agreement
not cured within 60 days, in which case termination shall be
effective upon written receipt of notice by the non-terminating party, or (b)
upon thirty (30) days written notice to the other party in the event that either
party is adjudged bankrupt or insolvent, or there shall be commenced against
such party a case under any applicable bankruptcy, insolvency, or other similar
law now or hereafter in effect.
15.2 Notice
and Succession. In the event a termination notice is
given by a party hereto, all reasonable costs and expenses associated with any
required systems, facilities, procedures, personnel, and other resourced
modifications as well as the movement of records and materials and the
conversion thereof shall be paid by the Fund for which Services shall cease to be
performed hereunder. Furthermore, to the extent that it appears
impracticable given the circumstances to effect an orderly delivery of the
necessary and appropriate records of BBH to a successor within the time
specified in the notice of termination as aforesaid, BBH and the Fund agree that this Agreement shall remain
in full force and effect for such reasonable period as may be required to
complete necessary arrangements with a successor.
15.3 Successor
Custodian.
In the event of the
appointment of a successor custodian, it is agreed that the Investments of the
Fund held by the Custodian or any Subcustodian shall be delivered to the
successor custodian in accordance with reasonable Instructions. The
Custodian agrees to cooperate with the Fund in the execution of documents and
performance of other actions necessary or desirable in order to facilitate the
succession of the new custodian. If no successor custodian shall be
appointed, the Custodian shall in like manner transfer the Fund's Investments in
accordance with Instructions.
17
15.4 Delayed
Succession. If no Instruction has
been given as of the effective date of termination, Custodian may at any time on
or after such termination date and upon ten (10) consecutive calendar days
written notice to the Fund either (a) deliver the Investments of the Fund held
hereunder to the Fund at the address designated for receipt of notices
hereunder; or (b) deliver any investments held hereunder to a bank or trust
company having a capitalization of $2,000,000 USD equivalent and operating under
the Applicable Law of the jurisdiction where such Investments are located, such
delivery to be at the risk of the Fund. In the event that Investments
or moneys of the Fund remain in the custody of the Custodian or its
Subcustodians after the date of termination owing to the failure of the Fund to
issue Instructions with respect to their disposition or owing to the fact that
such disposition could not be accomplished in accordance with such Instructions
despite diligent efforts of the Custodian, the Custodian shall be entitled to
compensation for its services with respect to such Investments and moneys during
such period as the Custodian or its Subcustodians retain possession of such
items and the provisions of this Agreement shall remain in full force
and effect until disposition in accordance with this Section is
accomplished.
16. Compliance
Policies and Procedures. To assist the Fund in
complying with Rule 38a-1 of the 1940 Act, BBH&Co. represents that it has
adopted written policies and procedures reasonably designed to prevent violation
of the federal securities laws in fulfilling its obligations under the Agreement
and that it has in place a compliance program to monitor its compliance with
those policies and procedures. BBH&Co will upon request provide the
Fund with information about our compliance program as mutually
agreed.
IN WITNESS
WHEREOF, each of the
parties hereto has caused this Agreement to be duly executed as of the date
first above written.
The undersigned acknowledges that (I/we)
have received a copy of this document.
XXXXX BROTHERS XXXXXXXX & CO.
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GUINNESS XXXXXXXX FUNDS
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ON BEHALF OF THE SERIES PORTFOLIOS LISTED
ON EXHIBIT A HERETO
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Date:
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Date:
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Xxxxx Brothers Xxxxxxxx & Co.
(“BBH&Co.”) is a limited partnership organized under the laws of the United
States of America (“US”) and is subject to the US Treasury Regulations set forth
under 00 XXX 000, et seq. BBH&Co. may not establish any
relationship with any Prohibited Person or Entity as such term is defined under
the regulations. No customer of BBH&Co. may be owned or
controlled by an entity or person: (i) that is listed in the Annex to, or is
otherwise subject to the provisions of Executive Order 13224, issued on
September 24, 2001 (“EO13224”) <xxx.xxxxxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxxxxxxx/xxxxxx/xxxxxx.xxx>; (ii) whose name appears on the
United States Treasury Department’s Office of Foreign Assets Control (“OFAC”)
most current list of “Specifically Designated National and Blocked Persons”
(which list may be published from time to time in various mediums including, but
not limited to, the OFAC website; (iii) who commits, threatens to commit or
supports “terrorism”, as such term is defined in EO13224; or (iv) who is
otherwise affiliated with any entity or person listed above (any and all parties
or persons described in clauses (i) through (iv) above are herein referred to as
a “Prohibited Person”).
18
EXHIBIT A TO CUSTODIAN
AGREEMENT
Guinness Xxxxxxxx Alternative Energy
Fund (GAAEX)
Guinness Xxxxxxxx Asia Focus Fund
(IASMX)
Guinness Xxxxxxxx Asia Pacific Dividend
Fund (GAADX)
Guinness Xxxxxxxx China and Hong Kong
Fund (ICHKX)
Guinness Xxxxxxxx Global Energy Fund
(GAGEX)
Guinness Xxxxxxxx Global Innovators Fund
(IWIRX)
19
FUNDS
TRANSFER SERVICES SCHEDULE TO CUSTODIAN AGREEMENT
1. Execution of Payment
Orders. Xxxxx Brothers Xxxxxxxx & Co. (the Custodian) is hereby
instructed by Guinness Xxxxxxxx Funds on behalf of the series portfolios listed
on Exhibit A to the Agreement (as defined below) (the Fund) to execute each payment
order, whether denominated in United States dollars or other applicable
currencies, received by the Custodian in the Fund’s name as sender and
authorized and confirmed by an Authorized Person as defined in a Custodian
Agreement dated as of ______________, 2009 by and between the
Custodian and the Fund, as amended or restated from time thereafter (the Agreement), provided that the
Fund has sufficient available funds on deposit in a Principal Account as defined
in the Agreement and provided that the order (i) is received by the Custodian in
the manner specified in this Funds Transfer Services Schedule or any amendment
hereafter; (ii) complies with any written instructions and restrictions of the
Fund as set forth in this Funds Transfer Services Schedule or any amendment
hereafter; (iii) is authorized by the Fund or is verified by the Custodian in
compliance with a security procedure set forth in Paragraph 2 below for
verifying the authenticity of a funds transfer communication sent to the
Custodian in the name of the Fund or for the detection of errors set forth in
any such communication; and (iv) contains sufficient data to enable the
Custodian to process such transfer.
2. Security
Procedure. The Fund hereby elects to use the procedure
selected below as its security procedure (the Security Procedure). The
Security Procedure will be used by the Custodian to verify the authenticity of a
payment order or a communication amending or canceling a payment order. The
Custodian will act on instructions received provided the instruction is
authenticated by the Security Procedure. The Fund agrees and acknowledges in
connection with (i) the size, type and frequency of payment orders normally
issued or expected to be issued by the Fund to the Custodian, (ii) all of the
security procedures offered to the Fund by the Custodian, and (iii) the usual
security procedures used by customers and receiving banks similarly situated,
that authentication through the Security Procedure shall be deemed commercially
reasonable for the authentication of all payment orders submitted to the
Custodian. The Fund hereby elects (please choose one) the
following Security Procedure as described below:
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[ ]
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BBH WorldView® Payment
Products. BIDS and BIDS Worldview Payment
Products, are on-line payment order authorization facilities with built-in
authentication procedures. The Custodian and the Fund shall each be
responsible for maintaining the confidentiality of passwords or other
codes to be used by them in connection with BIDS. The Custodian will act
on instructions received through BIDS without duty of further confirmation
unless the Fund notifies the Custodian that its password is not
secure.
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[ ]
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SWIFT.
The Custodian and the Fund shall comply with SWIFT’s authentication
procedures.
The Custodian
will act on instructions received via SWIFT provided the instruction is
authenticated by the SWIFT
system.
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[ ]
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Computer
Transmission. The Custodian is
able to accept transmissions sent from the Fund’s computer facilities to
the Custodian’s computer facilities provided such transmissions are
encrypted and digitally certified or are otherwise authenticated in a
reasonable manner based on available technology. Such
procedures shall be established in an operating protocol between the
Custodian and the Fund.
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[ ]
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Telefax
Instructions. A payment order transmitted to the
Custodian by telefax transmission shall transmitted by the Fund to a
telephone number specified from time to time by the Custodian for such
purposes. If it detects no discrepancies, the Custodian will
follow one of the procedures below.
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1.
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If
the telefax requests a repetitive payment order, the Custodian may call
the Fund at its last known telephone number, request to speak to the Fund
or Authorized Person, and confirm the authorization and the details of the
payment order (a Callback);
or
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2.
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If
the telefax requests a non-repetitive order, the Custodian will perform a
Callback.
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All faxes
must be accompanied by a fax cover sheet which indicates the sender’s name,
company name, telephone number, fax number, number of pages, and number of
transactions or instructions attached.
20
[ ]
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Telephonic.
A telephonic payment order shall be called into the Custodian at the
telephone number designated from time to time by the Custodian for that
purpose. The caller shall identify herself/himself as an Authorized
Person. The Custodian shall obtain the payment order data from
the caller. The Custodian shall
then:
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1.
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If
a telephonic repetitive payment order, the Custodian may perform a
Callback; or
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2.
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If
a telephonic non-repetitive payment order, the Custodian will perform a
Callback.
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In the
event the Fund chooses a procedure which is not a Security Procedure as
described above, the Fund agrees to be bound by any payment order (whether or
not authorized) issued in its name and accepted by the Custodian in compliance
with the procedure selected by the Fund.
3. Rejection of Payment
Orders. The Custodian shall give the Fund timely
notice of the Custodian’s rejection of a payment order. Such notice may be given
in writing or orally by telephone, each of which is hereby deemed commercially
reasonable. In the event the Custodian fails to execute a properly
executable payment order and fails to give the Fund notice of the Custodian’s
non-execution, the Custodian shall be liable only for the Fund’s actual damages
and only to the extent that such damages are recoverable under UCC 4A (as
defined in Paragraph 7 below). Notwithstanding anything in this Funds
Transfer Services Schedule and the Agreement to the contrary, the Custodian
shall in no event be liable for any consequential or special damages under this
Funds Transfer Services Schedule, whether or not such damages relate to services
covered by UCC 4A, even if the Custodian has been advised of the possibility of
such damages. Whenever compensation in the form of interest is payable by the
Custodian to the Fund pursuant to this Funds Transfer Services Schedule, such
compensation will be payable as specified in UCC 4A.
4. Cancellation of Payment
Orders. The Fund may cancel a payment order but the
Custodian shall have no liability for the Custodian’s failure to act on a
cancellation instruction unless the Custodian has received such cancellation
instruction at a time and in a manner affording the Custodian reasonable
opportunity to act prior to the Custodian’s execution of the
order. Any cancellation shall be sent and confirmed in the manner set
forth in Paragraph 2 above.
5. Responsibility for the
Detection of Errors and Unauthorized Payment
Orders. Except as may be provided, the Custodian is not
responsible for detecting any Fund error contained in any payment order sent by
the Fund to the Custodian. In the event that the Fund’s payment order to the
Custodian either (i) identifies the beneficiary by both a name and an
identifying or bank account number and the name and number identify different
persons or entities, or (ii) identifies any bank by both a name and an
identifying number and the number identifies a person or entity different from
the bank identified by name, execution of the payment order, payment to the
beneficiary, cancellation of the payment order or actions taken by any bank in
respect of such payment order may be made solely on the basis of the number. The
Custodian shall not be liable for interest on the amount of any payment order
that was not authorized or was erroneously executed unless the Fund so notifies
the Custodian within thirty (30) business days following the Fund’s receipt of
notice that such payment order had been processed. If a payment order
in the name of the Fund and accepted by the Custodian was not authorized by the
Fund, the liability of the parties will be governed by the applicable provisions
of UCC 4A.
6. Laws and
Regulations. The rights and obligations of the Custodian
and the Fund with respect to any payment order executed pursuant to this Funds
Transfer Services Schedule will be governed by any applicable laws, regulations,
circulars and funds transfer system rules, the laws and regulations of the
United States of America and of other relevant countries including exchange
control regulations and limitations on dealings or other sanctions, and
including without limitation those sanctions imposed under the law of the United
States of America by the Office of Foreign Assets Control. Any taxes,
fines, costs, charges or fees imposed by relevant authorities on such
transactions shall be for the account of the Fund.
7. Miscellaneous. All accounts opened
by the Fund or its authorized agents at the Custodian subsequent to the date
hereof shall be governed by this Funds Transfer Schedule. All terms
used in this Funds Transfer Services Schedule shall have the meaning set forth
in Article 4A of the Uniform Commercial Code as currently in effect in the State
of New York (UCC 4A) unless otherwise set forth herein. The terms and conditions
of this Funds Transfer Services Schedule are in addition to, and do not modify
or otherwise affect, the terms and conditions of the Agreement and any other
agreement or arrangement between the parties hereto.
21
8. Indemnification. The
Custodian does not recommend the sending of instructions by telefax or
telephonic means as provided in Paragraph 2. BY ELECTING TO SEND INSTRUCTIONS BY
TELEFAX OR TELEPHONIC MEANS, THE FUND AGREES TO INDEMNIFY THE CUSTODIAN AND ITS
PARTNERS, OFFICERS AND EMPLOYEES FOR ALL LOSSES THEREFROM.
_____________________________________________
OPTIONAL: The
Custodian will perform a Callback if instructions are sent by telefax or
telephonic means as provided in Paragraph 2 above. THE FUND MAY, AT ITS OWN RISK AND BY
HEREBY AGREEING TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND
EMPLOYEES FOR ALL LOSSES THEREFROM, ELECT TO WAIVE A CALLBACK BY THE
CUSTODIAN BY INITIALLING HERE:____
_____________________________________________
The undersigned acknowledges that (I/we)
have received a copy of this document.
Accepted
and
agreed:
XXXXX
BROTHERS XXXXXXXX & CO.
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GUINNESS
XXXXXXXX FUNDS
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ON
BEHALF OF THE SERIES PORTFOLIOS LISTED
ON
EXHIBIT A TO THE CUSTODIAN AGREEMENT
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Date:
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Date:
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22
ELECTRONIC
AND ON-LINE SERVICES SCHEDULE
This
Electronic and On-Line Services Schedule (this Schedule) to a Custodian
Agreement dated as of _____________________(as amended from time to time
hereafter, the Agreement) by and between
Xxxxx Brothers Xxxxxxxx & Co. (we, us our) and Guinness
Xxxxxxxx Funds on behalf of the series portfolios listed on Exhibit A to the
Agreement (you, your),
provides general provisions governing your use of and access to the Services (as
hereinafter defined) provided to you by us via the Internet (at xxx.xxxxx.xxx
or such
other URL as we may instruct you to use to access our products) and via a
direct dial-up connection between your computer and our computers, as of
________________, _____, 2009 (the Effective Date). Use of the
Services constitutes acceptance of the terms and conditions of this Schedule,
any Appendices hereto, the Terms and Conditions posted on our web site, and any
terms and conditions specifically governing a particular Service or our other
products, which may be set forth in the Agreement or in a separate related
agreement (collectively, the Related
Agreements).
1.
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General
Terms.
|
You will
be granted access to our suite of online products, which may include, but shall
not be limited to the following services via the Internet or dial-up connection
(each separate service is a Service; collectively referred
to as the Services):
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1.1.
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BBH WorldView®, a system
for effectuating securities and fund trade instruction and execution,
processing and handling instructions, and for the input and retrieval of
other information;
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1.2.
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F/X
WorldView, a system for executing foreign exchange
trades;
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1.3.
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Fund
WorldView, a system for receiving fund and prospectus
information;
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1.4.
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BBHCOnnect,
a system for placing securities trade instructions and following the
status and detail of trades;
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1.5.
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ActionViewSM,
a system for receiving certain corporate action
information;
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1.6.
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Risk
View, an interactive portfolio risk analysis tool;
and
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1.7.
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Such
other services as we shall from time to time
offer.
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2.
|
Security /
Passwords.
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2.1.
|
A
digital certificate and/or an encryption key may be required to access
certain Services. You may apply for a digital certificate
and/or an encryption key by following the procedures set forth at xxxx://xxx.xxx.xxx/xxxxx/. You also will need
an identification code (ID) and password(s)
(Password) to
access the Services.
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2.2.
|
You
agree to safeguard your digital certificate and/or encryption key, ID, and
Password and not to give or make available, intentionally or otherwise,
your digital certificate, ID, and/or Password to any unauthorized
person. You must immediately notify us in writing if you
believe that your digital certificate and/or encryption key, Password, or
ID has been compromised or if you suspect unauthorized access to your
account by means of the Services or otherwise, or when a person to whom a
digital certificate and/or an encryption key, Password, or ID has been
assigned leaves or is no longer permitted to access the
Services.
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2.3.
|
We
will not be responsible for any breach of security, or for any
unauthorized trading or theft by any third party, caused by your failure
(be it intentional, unintentional, or negligent) to maintain the
confidentiality of your ID and/or Password and/or the security of your
digital certificate and/or encryption
key.
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3.
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Instructions.
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3.1.
|
Proper
instructions under this Schedule shall be provided as designated in the
Related Agreements (Instructions).
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3.2.
|
The
following additional provisions apply to Instructions provided via the
Services:
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a.
|
Instructions
sent by electronic mail will not be accepted or acted
upon.
|
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b.
|
You
authorize us to act upon Instructions received through the Services
utilizing your digital certificate, ID, and/or Password as though they
were duly authorized written instructions, without any duty of
verification or inquiry on our part, and agree to hold us harmless for any
losses you experience as a result.
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c.
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From
time to time, the temporary unavailability of third party
telecommunications or computer systems required by the Services may result
in a delay in processing Instructions. In such an event, we
shall not be liable to you or any third party for any liabilities, losses,
claims, costs, damages, penalties, fines, obligations, or expenses of any
kind (including without limitation, reasonable attorneys', accountants',
consultants', or experts' fees and disbursements) that you experience due
to such a delay.
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23
4.
|
Electronic
Documents.
|
We may
make periodic statements, disclosures, notices, and other documents available to
you electronically, and, subject to any delivery and receipt verification
procedures required by law, you agree to receive such documents electronically
and to check the statements for accuracy. If you believe any such
statement contains incorrect information, you must follow the procedures set
forth in the Related Agreement(s).
5.
|
Malicious
Code.
|
You
understand and agree that you will be responsible for the introduction (by you,
your employees, agents, or representatives) into the Services, whether
intentional or unintentional, of (i) any virus or other code, program, or
sub-program that damages or interferes with the operation of the computer system
containing the code, program or sub-program, or halts, disables, or interferes
with the operation of the Services themselves; or (ii) any device, method, or
token whose knowing or intended purpose is to permit any person to circumvent
the normal security of the Services or the system containing the software code
for the Services (Malicious
Code). You agree to take all necessary actions and precautions
to prevent the introduction and proliferation of any Malicious Code into those
systems that interact with the Services.
6.
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Indemnification.
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For
avoidance of doubt, you hereby agree that the provisions in the Related
Agreement(s) related to your indemnification of us and any limitations on our
liability and responsibilities to you shall be applicable to this Agreement, and
are hereby expressly incorporated herein. You agree that the Services are
comprised of telecommunications and computer systems, and that it is possible
that Instructions, information, transactions, or account reports might be added
to, changed, or omitted by electronic or programming malfunction, unauthorized
access, or other failure of the systems which comprise the Services, despite the
security features that have been designed into the Services. You agree that we
will not be liable for any action taken or not taken in complying with the terms
of this Schedule, except for our willful misconduct or gross
negligence. The provisions of this paragraph shall survive the
termination of this Schedule and the Related Agreements.
7.
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Payment.
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You may
be charged for services hereunder as set forth in a fee schedule from time to
time agreed by us.
8.
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Term/Termination.
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8.1.
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This
Schedule is effective as of the date you sign it or first use the
Services, whichever is first, and continues in effect until such time as
either you or we terminate the Schedule in accordance with this Section 8
and/or until your off-line use of the Services is
terminated.
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8.2.
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We
may terminate your access to the Services at any time, for any reason,
with five (5) business days prior notice; provided that we may terminate
your access to the Services with no prior notice (i) if your account with
us is closed, (ii) if you fail to comply with any of the terms of this
Agreement, (iii) if we believe that your continued access to the Services
poses a security risk, or (iv) if we believe that you are violating or
have violated applicable laws, and we will not be liable for any loss you
may experience as a result of such termination. You may
terminate your access to the Services at any time by giving us ten (10)
business days notice. Upon termination, we will cancel all your
Passwords and IDs and any in-process or pending Instructions will be
carried out or cancelled, at our sole
discretion.
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9.
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Miscellaneous.
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9.1.
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Notices. All
notices, requests, and demands (other than routine operational
communications, such as Instructions) shall be in such form and effect as
provided in the Related
Agreement(s).
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9.2.
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Inconsistent
Provisions. Each Service may be governed by separate
terms and conditions in addition to this Schedule and the Related
Agreement(s). Except where specifically provided to the
contrary in this Schedule, in the event that such separate terms and
conditions conflict with this Schedule and the Related Agreement(s), the
provisions of this Schedule shall prevail to the extent this Schedule
applies to the transaction in
question.
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9.3.
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Binding Effect; Assignment;
Severability. This Schedule shall be binding on you,
your employees, officers and agents. We may assign or delegate
our rights and duties under this Schedule at any time without notice to
you. Your rights under this Schedule may not be assigned
without our prior written consent. In the event that any provision of this
Schedule conflicts with the law under which this Schedule is to be
construed or if any such provision is held invalid or unenforceable by a
court with jurisdiction over you and us, such provision shall be deemed to
be restated to effectuate as nearly as possible the purposes of the
Schedule in accordance with applicable law. The remaining
provisions of this Schedule and the application of the challenged
provision to persons or circumstances other than those as to which it is
invalid or unenforceable shall not be affected thereby, and each such
provision shall be valid and enforceable to the full extent permitted by
law.
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9.4.
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Choice of Law; Jury
Trial. This Schedule shall be governed by and construed, and the
legal relations between the parties shall be determined, in accordance
with the laws of the State of New York, without giving effect to the
principles of conflicts of laws. Each party agrees to waive its right to
trial by jury in any action or proceeding based upon or related to this
Agreement. The parties agree that all actions and proceedings
based upon or relating to this Schedule shall be litigated exclusively in
the federal and state courts located within New York City, New
York.
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The undersigned acknowledges that (I/we)
have received a copy of this document.
GUINNESS
XXXXXXXX FUNDS
ON
BEHALF OF THE SERIES PORTFOLIOS LISTED ON EXHIBIT A
TO
THE CUSTODIAN AGREEMENT ("you")
By:
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Title:
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Date:
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17f-5
DELEGATION SCHEDULE
By its execution of this Delegation
Schedule dated as of _____________, 2009, between GUINNESS XXXXXXXX
FUNDS, a Delaware statutory trust (the
Trust) on behalf of its series portfolios
listed on Exhibit A hereto (each series portfolio, the Fund), registered with the Securities and
Exchange Commission (the Commission) under the Investment Company Act of
1940, as amended (the 1940 Act), acting through its Board of
Directors/Trustees or its duly appointed representative, hereby appoints
XXXXX
BROTHERS XXXXXXXX & CO., a New York limited partnership with an
office in Boston, Massachusetts (the Delegate) as its delegate to perform certain
functions with respect to the custody of Fund's Assets outside the
United States.
1. Maintenance
of Fund's Assets Abroad. The Fund, acting
through its Board or its duly authorized representative, hereby instructs the
Delegate pursuant to the terms of the Custodian Agreement dated as of the date
hereof executed by and between the Fund and the Delegate (the Custodian
Agreement) to place and
maintain the Fund's Assets in countries outside the United States in accordance
with Instructions received from the Fund’s Investment Advisor. Such
instruction shall constitute an Instruction under the terms of the Custodian
Agreement. The Fund acknowledges that (a) the Delegate shall perform services
hereunder only with respect to the countries where it accepts delegation as Foreign
Custody Manager as indicated on the Delegate’s Global Custody Network
Listing; (b) depending on
conditions in the particular country, advance notice may be required before the
Delegate shall be able to perform its duties hereunder in or with respect to
such country (such advance notice to be reasonable in light of the specific
facts and circumstances attendant to performance of duties in such country); and
(c) nothing in this Delegation Schedule shall require the Delegate to provide
delegated or custodial services in any country, and there may from time to time
be countries as to which the Delegate determines it will not provide delegation
services.
2. Delegation. Pursuant to the provisions of Rule 17f-5
under the 1940 Act as amended, the Board hereby delegates to the Delegate, and
the Delegate hereby accepts such delegation and agrees to perform only those
duties set forth in this Delegation Schedule concerning the safekeeping of the
Fund's Assets in each of the countries as to which it acts as the Board’s
delegate. The Delegate is hereby authorized to take such actions on behalf of or
in the name of the Fund as are reasonably required to discharge its duties under
this Delegation Schedule, including, without limitation, to cause the Fund's
Assets to be placed with a particular Eligible Foreign Custodian in accordance
herewith. The Fund confirms to the Delegate that the Fund or its Investment
Adviser has considered the Sovereign Risk and prevailing Country Risk as part of
its continuing investment decision process, including such factors as may be
reasonably related to the systemic risk of maintaining the Fund's Assets in a
particular country, including, but not limited to, financial infrastructure,
prevailing custody and settlement systems and practices (including the use of
any Securities Depository in the context of information provided by the
Custodian in the performance of its duties as required under Rule 17f-7 and the
terms of the Custodian Agreement governing such duties), and the laws relating
to the safekeeping and recovery of the Fund's Assets held in custody pursuant to
the terms of the Custodian Agreement.
3. Selection of
Eligible Foreign Custodian and Contract Administration. The Delegate shall perform the following
duties with respect to the selection of Eligible Foreign Custodians and
administration of certain contracts governing the Fund's foreign custodial
arrangements:
(a) Selection of
Eligible Foreign Custodian.
The Delegate shall place and maintain the Fund's Assets with an Eligible Foreign
Custodian, provided that the Delegate shall have determined that the Fund's
Assets will be subject to reasonable care based on the standards applicable to
custodians in the relevant market after considering factors relevant to the
safekeeping of such assets including without limitation:
(i) The Eligible Foreign Custodian's
practices, procedures, and internal controls, including, but not limited to, the
physical protections available for certificated securities (if applicable), the
controls and procedures for dealing with any Securities Depository, the method
of keeping custodial records, and the security and data protection
practices;
(ii) Whether the Eligible Foreign Custodian
has the requisite financial strength to provide reasonable care for the Fund's
Assets;
(iii) The Eligible Foreign Custodian's general
reputation and standing; and
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(iv) Whether the Fund will have jurisdiction
over and be able to enforce judgments against the Eligible Foreign Custodian,
such as by virtue of the existence of any offices of such Eligible Foreign
Custodian in the United States or such Eligible Foreign Custodian's appointment
of an agent for service of process in the United States or consent to
jurisdiction in the United States.
The Delegate shall be required to make
the foregoing determination to the best of its knowledge and belief based only
on information reasonably available to it.
(b) Contract
Administration. The Delegate shall cause
that the foreign custody arrangements with an Eligible Foreign Custodian shall
be governed by a written contract that the Delegate has determined will provide
reasonable care for Fund assets based on the standards applicable to custodians
in the relevant market. Each such contract shall, except as set forth
in the last paragraph of this subsection (b), include provisions that
provide:
(i)
For indemnification or
insurance arrangements (or any combination of the foregoing) such that the Fund
will be adequately protected against the risk of loss of assets held in
accordance with such contract;
(ii)
That the Fund's Assets will
not be subject to any right, charge, security interest, lien or claim of any
kind in favor of the Eligible Foreign Custodian or its creditors except a claim
of payment for their safe custody or administration or, in the case of cash
deposits, liens or rights in favor of creditors of such Custodian arising under
bankruptcy, insolvency or similar laws;
(iii) That beneficial ownership of the Fund's
Assets will be freely transferable without the payment of money or value other
than for safe custody or administration;
(iv) That adequate records will be maintained
identifying the Fund's Assets as belonging to the Fund or as being held by a
third party for the benefit of the Fund;
(v) That the Fund's independent public
accountants will be given access to those records described in (iv) above or
confirmation of the contents of such records; and
(vi) That the Delegate will receive
sufficient and timely periodic reports with respect to the safekeeping of the
Fund's Assets, including, but not limited to, notification of any transfer to or
from the Fund's account or a third party account containing the Fund's
Assets.
Such contract may contain, in lieu of
any or all of the provisions specified in this Section 3(b), such other
provisions that the Delegate determines will provide, in their entirety, the
same or a greater level of care and protection for the Fund's Assets as the
specified provisions, in their entirety.
(c) Limitation
to Delegated Selection. Notwithstanding
anything in this Delegation Schedule to the contrary, the duties under this
Section 3 shall apply only to Eligible Foreign Custodians selected by the
Delegate and shall not apply to Securities Depositories or to any Eligible
Foreign Custodian that the Delegate is directed to use pursuant to Section 7 of
this Delegation Schedule.
4. Monitoring. The Delegate shall establish a system to
monitor at reasonable intervals (but at least annually) the appropriateness of
maintaining the Fund's Assets with each Eligible Foreign Custodian that has been
selected by the Delegate pursuant to Section 3 of this Delegation
Schedule. The Delegate shall monitor the continuing appropriateness
of placement of the Fund's Assets in accordance with the criteria established
under Section 3(a) of this Delegation Schedule. The Delegate shall
monitor the continuing appropriateness of the contract governing the Fund's
arrangements in accordance with the criteria established under Section 3(b) of
this Delegation Schedule.
5. Reporting. At least annually and more frequently as
mutually agreed between the parties, the Delegate shall provide to the Board
written reports specifying placement of the Fund's Assets with each Eligible
Foreign Custodian selected by the Delegate pursuant to Section 3 of this
Delegation Schedule and shall promptly report on any material changes to such
foreign custody arrangements. Delegate will prepare such a report
with respect to any Eligible Foreign Custodian that the Delegate has been
instructed to use pursuant to Section 7 of this Delegation Schedule only to the
extent specifically agreed with respect to the particular
situation.
6. Withdrawal
of Fund's Assets. If the Delegate determines that an
arrangement with a specific Eligible Foreign Custodian selected by the Delegate
under Section 3 of this Delegation Schedule no longer meets the requirements of
said Section, Delegate shall withdraw the Fund's Assets from the non-complying
arrangement as soon as reasonably practicable; provided, however, that if in the
reasonable judgment of the Delegate, such withdrawal would require liquidation
of any of the Fund's Assets or would materially impair the liquidity, value or
other investment characteristics of the Fund's Assets, it shall be the duty of
the Delegate to provide information regarding the particular circumstances and
to act only in accordance with Instructions of the Fund or its Investment
Advisor with respect to such liquidation or other
withdrawal.
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7. Direction as
to Eligible Foreign Custodian. Notwithstanding this
Delegation Schedule, the Fund, acting through its Board, its Investment Advisor
or its other Authorized Representative, may direct the Delegate to place and
maintain the Fund's Assets with a particular Eligible Foreign Custodian,
including without limitation with respect to investment in countries as to which
the Custodian will not provide delegation services. In such event,
the Delegate shall be entitled to rely on any such instruction as an Instruction
under the terms of the Custodian Agreement and shall have no duties under this
Delegation Schedule with respect to such arrangement save those that it may
undertake specifically in writing with respect to each particular
instance.
8. Standard of
Care. In carrying out its duties under this
Delegation Schedule, the Delegate agrees to exercise reasonable care, prudence
and diligence such as a person having responsibility for safekeeping the Fund's
Assets would exercise.
9. Representations. The Delegate hereby represents and
warrants that it is a U.S. Bank and that this Delegation Schedule has been duly
authorized, executed and delivered by the Delegate and is a legal, valid and
binding agreement of the Delegate.
The Fund hereby represents and warrants
that its Board of Directors has determined that it is reasonable to rely on the
Delegate to perform the delegated responsibilities provided for herein and that
this Delegation Schedule has been duly authorized, executed and delivered by the
Fund and is a legal, valid and binding agreement of the
Fund.
10. Effectiveness;
termination. This Delegation Schedule shall be
effective as of the date on which this Delegation Schedule shall have been
accepted by the Delegate, as indicated by the date set forth below the
Delegate's signature. This Delegation Schedule may be
terminated at any time, without penalty, by written notice from the terminating
party to the non-terminating party. Such termination shall be
effective on the 30th calendar day following the date on which the
non-terminating party shall receive the foregoing notice. The
foregoing to the contrary notwithstanding, this Delegation Schedule shall be
deemed to have been terminated concurrently with the termination of the
Custodian Agreement.
11. Notices.
Notices and other communications
under this Delegation Schedule are to be made in accordance with the
arrangements designated for such purpose under the Custodian Agreement unless
otherwise indicated in a writing referencing this Delegation Schedule and
executed by both parties.
12. Definitions.
Capitalized terms not otherwise
defined in this Delegation Schedule have the following
meanings:
a. Country
Risk – shall have the
meaning set forth in Section 9.1.2 of the Custodian
Agreement.
b. Eligible
Foreign Custodian - shall
have the meaning set forth in Rule 17f-5(a)(1) of the 1940 Act and shall also
include a U.S. Bank.
c. Fund's
Assets - shall mean any of
the Fund's investments (including foreign currencies) for which the primary
market is outside the United States, and such cash and cash equivalents as are
reasonably necessary to effect the Fund's transactions in such
investments.
d. Instructions - shall have the meaning set forth in
the Custodian Agreement.
e. Securities
Depository - shall have the
meaning set forth in Rule 17f-7 of the 1940 Act.
f. Sovereign
Risk - shall have the
meaning set forth in Section 9.1.3 of the Custodian
Agreement.
g. U.S.
Bank - shall mean a bank
which qualifies to serve as a custodian of assets of investment companies under
Section 17(f) of the 1940 Act.
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13. Governing
Law and Jurisdiction. This Delegation Schedule shall be
construed in accordance with the laws of the State of New York. The
parties hereby submit to the exclusive jurisdiction of the Federal courts
sitting in the State of New York or the Commonwealth of Massachusetts or of the
state courts of either such State or such Commonwealth.
14. Fees. Delegate shall perform its functions
under this Delegation Schedule for the compensation determined under the
Custodian Agreement.
15. Integration. This Delegation Schedule sets forth all
of the Delegate's duties with respect to the selection and monitoring of
Eligible Foreign Custodians, the administration of contracts with Eligible
Foreign Custodians, the withdrawal of assets from Eligible Foreign Custodians
and the issuance of reports in connection with such duties. The terms
of the Custodian Agreement shall apply generally as to matters not expressly
covered in this Delegation Schedule, including dealings with the Eligible
Foreign Custodians in the course of discharge of the Delegate's obligations
under the Custodian Agreement.
IN WITNESS
WHEREOF, each of the
parties hereto has caused this Agreement to be duly executed as of the date
first above written.
The undersigned acknowledges that (I/we)
have received a copy of this document.
XXXXX
BROTHERS XXXXXXXX & CO.
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GUINNESS
XXXXXXXX FUNDS
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ON
BEHALF OF THE SERIES PORTFOLIOS
LISTED
ON EXHIBIT A TO THE CUSTODIAN
AGREEMENT
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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