EXHIBIT (G) (I) UNDER FORM N-1A
EXHIBIT (10) UNDER ITEM 601/REG. S-K
CUSTODIAN AGREEMENT
THIS AGREEMENT, dated as of February , 2007, between BBH TRUST a
Delaware statutory trust (the "Fund") on behalf of each of its series (each a
"Fund" and collectively the "Funds"), and XXXXX BROTHERS XXXXXXXX & CO., a
limited partnership formed under the laws of the State of New York (BBH&Co. or
the Custodian),
W I T N E S S E T H:
WHEREAS, the 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. This Agreement
does not violate any Applicable Law or conflict with or constitute a
default under the Fund's prospectus or other organic document, 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, 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. In furtherance and not limitation of the foregoing, in the
event the Fund utilizes any on-line service offered by the Custodian, the
Fund and the Custodian shall be fully responsible for the security of
each party's connecting terminal, access thereto and the proper and
authorized use thereof and the initiation and application of continuing
effective safeguards in respect thereof. Additionally, 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.
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
directly or through its board of trustees, officers or other Authorized Persons,
which directive shall conform to the requirements of this Section 4.
4.1 AUTHORIZED PERSONS. For purposes hereof, an AUTHORIZED PERSON
shall be a person or entity authorized to give Instructions for or on
behalf of the Fund by written notices to the Custodian or otherwise in
accordance with procedures delivered to and acknowledged by the
Custodian, including without limitation the Fund's Investment Adviser or
Foreign Custody Manager. The Custodian may treat any Authorized Person
as having 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 receive and process such means of delivery but shall
not represent a judgment by the Custodian as to the reasonableness
or security of the method determined by the Authorized Person.
4.2.2 WRITTEN INSTRUCTIONS. Instructions may be transmitted in a
writing that bears the manual signature of Authorized Persons.
4.2.3 OTHER FORMS OF INSTRUCTION. Instructions may also be
transmitted by another means determined by the Fund or Authorized
Persons and acknowledged and accepted by the Custodian (subject to
the same limits as to acknowledgements as is contained in
Subsection 4.2.1, above) including Instructions given orally or by
SWIFT, telex 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 such 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.
In the event that a Funds Transfer Services Agreement is executed between the
Fund or and Authorized Person and the Custodian, such an agreement shall
comprise a designation of form of a means of delivering Instructions for
purposes of this Section 4.2.
4.3 COMPLETENESS AND CONTENTS OF INSTRUCTIONS. The Authorized Person
shall be responsible for assuring the adequacy and accuracy of
Instructions. Particularly, upon any acquisition or disposition or
other dealing in the Fund's Investments and upon any delivery and
transfer of any Investment or moneys, the person initiating such
Instruction shall give the Custodian an Instruction with appropriate
detail, including, without limitation:
4.3.1 The transaction date and the date and location of
settlement;
4.3.2 The specification of the type of transaction;
4.3.4 A description of the Investments or moneys in question,
including, as appropriate, quantity, price per unit, amount of
money to be received or delivered and currency information. Where
an Instruction is communicated by electronic means, or otherwise
where an Instruction contains an identifying number such as a
CUSIP, SEDOL or ISIN number, the Custodian shall be entitled to
rely on such number as controlling notwithstanding any
inconsistency contained in such Instruction, particularly with
respect to Investment description;
4.3.5 The name of the broker or similar entity concerned with
execution of the transaction.
If the Custodian shall determine that an Instruction is either unclear or
incomplete, the Custodian may give prompt notice of such determination to the
Fund, and the Fund shall thereupon amend or otherwise reform such Instruction.
In such event, the Custodian shall have no obligation to take any action in
response to the Instruction initially delivered until the redelivery of an
amended or reformed Instruction
4.4 TIMELINESS OF INSTRUCTIONS. In giving an Instruction, the Fund
shall take into consideration delays which may occur due to the
involvement of a Subcustodian or agent, differences in time zones, and
other factors particular to a given market, exchange or issuer. When the
Custodian has established specific timing requirements or deadlines with
respect to particular classes of Instruction, or when an Instruction is
received by the Custodian at such a time that it could not reasonably be
expected to have acted on such instruction due to time zone differences
or other factors beyond its reasonable control, the execution of any
Instruction received by the Custodian after such deadline or at such time
(including any modification or revocation of a previous Instruction)
shall be at the risk of the 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. 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.
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 paragraph 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 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, if less, such other amount as shall be agreed by the parties
as the date for settlement.
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 Trust or a Securities Depository
(in accordance with the rules of such Securities Depository or such
Clearing Trust), 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 Trust or a Securities Depository (in accordance with the rules
of such Securities Depository or such Clearing Trust), or (c) otherwise
in accordance with an Instruction, Applicable Law, generally accepted
trade practices, or the terms of the instrument representing such
Investment.
6.3 DELIVERY IN CONNECTION WITH BORROWINGS OF THE FUND OR OTHER
COLLATERAL AND MARGIN REQUIREMENTS. Pursuant to Instruction, the
Custodian may deliver Investments or cash of the Fund in connection with
borrowings 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 the 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. 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, split-up, change of par value of shares or
similar event, and (b) deposit any such securities in accordance with the
terms of any reorganization or protective plan.
6.7 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 such issuer or trustee, for
purposes of exercising such rights or selling such securities, and (b)
deposit securities in response to any invitation for the tender thereof.
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.
6.10 INCOME COLLECTION. Unless otherwise directed by Instruction, the
Custodian shall collect any amount due and payable to the Fund with
respect to Investments and promptly credit the amount collected to a
Principal or Agency Account; provided, however, that the Custodian shall
not be responsible for: (a) the collection of amounts due and payable
with respect to Investments that are in default, or (b) the collection of
cash or share entitlements with respect to Investments that are not
registered in the name of the Custodian or its Subcustodians. The
Custodian is hereby authorized to endorse and deliver any instrument
required to be so endorsed and delivered to effect collection of any
amount due and payable to the Fund with respect to Investments.
6.11 OWNERSHIP CERTIFICATES AND DISCLOSURE OF THE FUND'S INTEREST. The
Custodian is hereby authorized to execute on behalf of the Fund ownership
certificates, affidavits or other disclosure required under Applicable
Law or established market practice in connection with the receipt of
income, capital gains or other payments by the Fund with respect to
Investments, or in connection with the sale, purchase or ownership of
Investments.
6.12 PROXY MATERIALS. The Custodian shall deliver, or cause to be
delivered, to the Fund proxy forms, notices of meeting, and any other
notices or announcements materially affecting or relating to Investments
received by the Custodian or any nominee.
6.13 TAXES. The Custodian shall, where applicable, assist the Fund in
the reclamation of taxes withheld on dividends and interest payments
received by the Fund. In the performance of its duties with respect to
tax withholding and reclamation, the Custodian shall be entitled to rely
on the advice of counsel and upon information and advice regarding the
Fund's tax status that is received from or on behalf of the Fund without
duty of separate inquiry.
6.14 OTHER DEALINGS. The Custodian shall otherwise act as directed by
Instruction, including without limitation effecting the free payments of
moneys or the free delivery of securities, provided that such Instruction
shall indicate the purpose of such payment or delivery and that the
Custodian shall record the party to whom such payment or delivery is
made.
The Custodian shall attend to all nondiscretionary details in connection
with the sale or purchase or other administration of Investments, except as
otherwise directed by an Instruction, and may make payments to itself or others
for minor expenses of administering Investments under this Agreement; provided
that the Fund shall have the right to request an accounting with respect to such
expenses.
In fulfilling the duties set forth in Sections 6.6 through 6.10 above,
the Custodian shall provide to the Fund all material information pertaining to a
corporate action which the Custodian actually receives; provided that the
Custodian shall not be responsible for the completeness or accuracy of such
information. Any advance credit of cash or shares expected to be received as a
result of any corporate action shall be subject to actual collection and may,
when the Custodian deems collection unlikely, be reversed by the Custodian.
The Custodian may at any time or times in its discretion appoint (and may
at any time remove) agents (other than Subcustodians) to carry out some or all
of the administrative provisions of this Agreement (AGENTS), provided, however,
that the appointment of such agent shall not relieve the Custodian of its
administrative obligations under this Agreement.
7. CASH ACCOUNTS, DEPOSITS AND MONEY MOVEMENTS. Subject to the terms and
conditions set forth in this Section 7, 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.
7.1 TYPES OF CASH ACCOUNTS. Cash accounts opened on the books of the
Custodian (PRINCIPAL ACCOUNTS) shall be opened in the name of the Fund.
Such accounts collectively shall be a deposit obligation of the Custodian
and shall be subject to the terms of this Section 7 and the general
liability provisions contained in Section 9. Cash accounts opened on the
books of a Subcustodian may be opened in the name of the Fund or the
Custodian or in the name of the Custodian for its customers generally
(AGENCY ACCOUNTS). Such deposits shall be obligations of the Subcustodian
and shall be treated as an Investment of the Fund. Accordingly, the
Custodian shall be responsible for exercising reasonable care in the
administration of such accounts but shall not be liable for their
repayment in the event such Subcustodian, by reason of its bankruptcy,
insolvency or otherwise, fails to make repayment.
7.2 PAYMENTS AND CREDITS WITH RESPECT TO THE CASH ACCOUNTS. The
Custodian shall make payments from or deposits to any of said accounts in
the course of carrying out its administrative duties, including but not
limited to income collection with respect to the Fund's Investments, and
otherwise in accordance with Instructions. The Custodian and its
Subcustodians shall be required to credit amounts to the cash accounts
only when moneys are actually received in cleared funds in accordance
with banking practice in the country and currency of deposit. Any credit
made to any Principal or Agency Account before actual receipt of cleared
funds shall be provisional and may be reversed by the Custodian in the
event such payment is not actually collected. Unless otherwise
specifically agreed in writing by the Custodian or any Subcustodian, all
deposits shall be payable only at the branch of the Custodian or
Subcustodian where the deposit is made or carried.
7.3 CURRENCY AND RELATED RISKS. The Fund bears risks of holding or
transacting in any currency. The Custodian shall not be liable for any
loss or damage arising from the applicability of any law or regulation
now or hereafter in effect, or from the occurrence of any event, which
may delay or affect the transferability, convertibility or availability
of any currency in the country (a) in which such Principal or Agency
Accounts are maintained or (b) in which such currency is issued, and in
no event shall the Custodian be obligated to make payment of a deposit
denominated in a currency during the period during which its
transferability, convertibility or availability has been affected by any
such law, regulation or event. Without limiting the generality of the
foregoing, neither the Custodian nor any Subcustodian shall be required
to repay any deposit made at a foreign branch of either the Custodian or
Subcustodian if such branch cannot repay the deposit due to a cause for
which the Custodian would not be responsible in accordance with the terms
of Section 9 of this Agreement unless the Custodian or such Subcustodian
expressly agrees in writing to repay the deposit under such
circumstances. All currency transactions in any account opened pursuant
to this Agreement are subject to exchange control regulations of the
United States 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 a foreign
exchange contract or option has been executed pursuant hereto, (b)
may make free outgoing payments of cash in the form of Dollars or
foreign currency without receiving confirmation of a foreign
exchange contract or option or confirmation that the countervalue
currency completing the foreign exchange contract has been
delivered or received or that the option has been delivered or
received, and (c) shall hold all confirmations, certificates and
other documents and agreements received by the Custodian and
evidencing or relating to such foreign exchange transactions in
safekeeping. The Fund accepts full responsibility for its use of
third-party foreign exchange dealers and for execution of said
foreign exchange contracts and options and understands that the
Fund shall be responsible for any and all costs and interest
charges which may be incurred by the Fund or the Custodian as a
result of the failure or delay of third parties to deliver foreign
exchange.
7.4.2 FOREIGN EXCHANGE WITH THE CUSTODIAN AS PRINCIPAL. The
Custodian may undertake foreign exchange transactions with the Fund
as principal as the Custodian and the Fund may agree from time to
time. In such event, the foreign exchange transaction will be
performed in accordance with the particular agreement of the
parties, or in the event a principal foreign exchange transaction
is initiated by Instruction in the absence of specific agreement,
such transaction will be performed in accordance with the usual
commercial terms of the Custodian.
7.5 DELAYS. 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 such 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 the conduct of its safekeeping
duties pursuant to Section 5 hereof or its administration of the Fund's
assets pursuant to Section 6 hereof, the Custodian or any Subcustodian
advances monies to facilitate settlement or otherwise for benefit of the
Fund (whether or not any Principal or Agency Account shall be overdrawn
either during, or at the end of, any Business Day), the Fund hereby does:
7.6.1 acknowledge that the Fund shall have no right or title to
any Investments purchased with such Advance save a right to receive
such Investments upon: (a) the debit of the Principal or Agency
Account; or, (b) if such debit would produce an overdraft in such
account, other reimbursement of the associated Advance;
7.6.2 grant to the Custodian a security interest in all
Investments; and,
7.6.3 agree that the Custodian may secure the resulting Advance by
perfecting a security interest in all Investments under Applicable
Law.
Neither the Custodian nor any Subcustodian shall be obligated to advance monies
to the Fund, and in the event that such Advance occurs, any transaction giving
rise to an Advance shall be for the account and risk of the Fund and shall not
be deemed to be a transaction undertaken by the Custodian for its own account
and risk. If such Advance shall have been made by a Subcustodian or any other
person, the Custodian may assign the security interest and any other rights
granted to the Custodian hereunder to such Subcustodian or other person. If the
Fund shall fail to repay when due the principal balance of an Advance and
accrued and unpaid interest thereon, the Custodian or its assignee, as the case
may be, shall be entitled to utilize the available cash balance in any Agency or
Principal Account and to dispose of any Investments to the extent necessary to
recover payment of all principal of, and interest on, such Advance in full. The
Custodian may assign any rights it has hereunder to a Subcustodian or third
party. Any security interest in Investments taken hereunder shall be treated as
financial assets credited to securities accounts under Articles 8 and 9 of the
Uniform Commercial Code (1997). Accordingly, the Custodian shall have the
rights and benefits of a secured creditor that is a securities intermediary
under such Articles 8 and 9.
7.7 INTEGRATED ACCOUNT. For purposes hereof, deposits maintained in
all Principal Accounts (whether or not denominated in Dollars) shall
collectively constitute a single and indivisible current account with
respect to the Fund's obligations to the Custodian, or its assignee, and
balances in such Principal Accounts shall be available for satisfaction
of the Fund's obligations under this Section 7. The Custodian shall
further have a right of offset against the balances in any Agency Account
maintained hereunder to the extent that the aggregate of all Principal
Accounts is overdrawn.
8. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Subject to the provisions
hereinafter set forth in this Section 8, the 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 Trust), 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, at any time and from time
to time, appoint any bank as defined in Section 2(a)(5) of the 1940 Act meeting
the requirements of a custodian under Section 17(f) of the 1940 Act and the
rules and regulations thereunder, to act on behalf of the Fund as a Subcustodian
for purposes of holding Investments of the Fund in the United States.
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 each 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 8.2.3
below, the Custodian shall have prepared an analysis 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 8.2.2 of this Section Additionally, the Custodian may, at any
time and from time to time, appoint (a) any bank, trust company or other entity
meeting the requirements of an "eligible foreign custodian" under Rule 17f-5 or
which by order of the Securities and Exchange Commission is exempted therefrom,
or (b) any bank as defined in Section 2(a)(5) of the 1940 Act meeting the
requirements of a custodian under Section 17(f) of the 1940 Act and the rules
and regulations thereunder, to act on behalf of the Fund as a Subcustodian for
purposes of holding Investments of the Fund outside the United States. Such
appointment of foreign Subcustodians shall be subject to the provisions of the
attached 17F-5 DELEGATION SCHEDULE. The use of non-U.S. Securities Depositories
shall be subject to the terms of Subsections 8.2.2 and 8.2.3 hereof. 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.
8.2.1 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 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 17f-5 Delegation Schedule to
this Agreement.
8.2.2 MONITORING AND RISK ASSESSMENT OF SECURITIES DEPOSITORIES.
Prior to the placement of any assets of a Fund with a Securities
Depository, the Custodian: (a) shall provide to the Fund's
Investment Advisor 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; and/or (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's
Investment Advisor by such means as the Custodian shall reasonably
establish Advice of material changes in such assessments may be
provided by the Custodian in the manner established as customary
between the Fund's Investment Adviser and the Custodian for the
transmission of material market information.
8.3 RESPONSIBILITY FOR SUBCUSTODIANS. With respect to securities and
funds held by a Subcustodian, either directly or indirectly (including by
a Foreign Depository, Securities System or foreign clearing agency),
including demand deposit and interest bearing deposits, currencies or
other deposits and foreign exchange contracts as referred to herein, the
Custodian shall be liable to the Fund if and only to the extent that such
Subcustodian is liable to the Custodian and the Custodian recovers under
the applicable subcustodian agreement.
8.4 NEW COUNTRIES. The Fund shall be responsible for informing the
Custodian sufficiently in advance of a proposed investment which is to be
held in a country in which no Subcustodian is authorized to act in order
that the Custodian shall, if it deems appropriate to do so, have
sufficient time to establish a subcustodial arrangement in accordance
herewith. In the event, however, the Custodian is unable to establish
such arrangements prior to the time such investment is to be acquired,
the Custodian is authorized to designate at its discretion a local
safekeeping agent, and the use of such local safekeeping agent shall be
at the sole risk of the Fund, and accordingly the Custodian shall be
responsible to the Fund for the actions of such agent if and only to the
extent the Custodian shall have recovered from such agent for any damages
caused the Fund by such agent.
9. RESPONSIBILITY OF THE CUSTODIAN. In performing its duties and
obligations hereunder, the Custodian shall use reasonable care under the facts
and circumstances prevailing in the market where performance is effected.
Subject to the specific provisions of this Section, the Custodian shall be
liable for any direct damage incurred by the Fund in consequence of the
Custodian's negligence, bad faith or willful misconduct. In no event shall the
Custodian be liable hereunder for any special, indirect, punitive or
consequential damages arising out of, pursuant to or in connection with this
Agreement even if the Custodian has been advised of the possibility of such
damages. It is agreed that the Custodian shall have no duty to assess the risks
inherent in 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
liable hereunder for any loss or damage in association with such failure
to perform, for or in consequence of the following causes:
9.1.1 FORCE MAJEURE. FORCE MAJEURE shall mean any circumstance
or event which is beyond the reasonable control of the Custodian, a
Subcustodian or any agent of the Custodian or a Subcustodian and
which adversely affects the performance by the Custodian of its
obligations hereunder, by the Subcustodian of its obligations under
its Subcustody Agreement or by any other agent of the Custodian or
the Subcustodian, including any event caused by, arising out of or
involving (a) an act of God, (b) accident, fire, water damage or
explosion, (c) any computer, system or other equipment failure or
malfunction caused by any computer virus or the malfunction or
failure of any communications medium, (d) any interruption of the
power supply or other utility service, (e) any strike or other work
stoppage, whether partial or total, (f) any delay or disruption
resulting from or reflecting the occurrence of any Sovereign Risk,
(g) any disruption of, or suspension of trading in, the securities,
commodities or foreign exchange markets, whether or not resulting
from or reflecting the occurrence of any Sovereign Risk, (h) any
encumbrance on the transferability of a currency or a currency
position on the actual settlement date of a foreign exchange
transaction, whether or not resulting from or reflecting the
occurrence of any Sovereign Risk, or (i) any other cause similarly
beyond the reasonable control of the Custodian.
9.1. COUNTRY RISK. COUNTRY RISK shall mean, with respect to the
acquisition, ownership, settlement or custody of Investments in a
jurisdiction, all risks relating to, or arising in consequence of,
systemic and markets factors affecting the acquisition, payment for
or ownership of Investments including (a) the prevalence of crime
and corruption, (b) the inaccuracy or unreliability of business and
financial information, (c) the instability or volatility of banking
and financial systems, or the absence or inadequacy of an
infrastructure to support such systems, (d) custody and settlement
infrastructure of the market in which such Investments are
transacted and held, (e) the acts, omissions and operation of any
Securities Depository, (f) the risk of the bankruptcy or insolvency
of banking agents, counterparties to cash and securities
transactions, registrars or transfer agents, and (g) the existence
of market conditions which prevent the orderly execution or
settlement of transactions or which affect the value of assets.
9.1.3 SOVEREIGN RISK. SOVEREIGN RISK shall mean, in respect of
any jurisdiction, including the United States of America, where
Investments is acquired or held hereunder or under a Subcustody
Agreement, (a) any act of war, terrorism, riot, insurrection or
civil commotion, (b) the imposition of any investment, repatriation
or exchange control restrictions by any Governmental Authority, (c)
the confiscation, expropriation or nationalization of any
Investments by any Governmental Authority, whether de facto or de
jure, (iv) any devaluation or revaluation of the currency, (d) the
imposition of taxes, levies or other charges affecting Investments,
(vi) any change in the Applicable Law, or (e) any other economic or
political risk incurred or experienced.
9.2. LIMITATIONS ON LIABILITY. The Custodian shall not be liable for
any loss, claim, damage or other liability arising from the following
causes:
9.2.1 FAILURE OF THIRD PARTIES. The failure of any third party
including: (a) any issuer of Investments or book-entry or other
agent of and issuer; (b) any counterparty with respect to any
Investment, including any issuer of exchange-traded or other
futures, option, derivative or commodities contract; (c) failure of
an Investment 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.
9.2..2 INFORMATION SOURCES. The Custodian may rely upon
information received from issuers of Investments or agents of such
issuers, information received from Subcustodians and from other
commercially reasonable sources such as commercial data bases and
the like, but shall not be responsible for specific inaccuracies in
such information, provided that the Custodian has relied upon such
information in good faith, or for the failure of any commercially
reasonable information provider.
9.2.3 RELIANCE ON INSTRUCTION. Action by the Custodian or the
Subcustodian in accordance with an Instruction, even when such
action conflicts with, or is contrary to any provision of, the
Fund's declaration of Fund or by-laws, Applicable Law, or actions
by the trustees, 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.
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. 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. REPORTS AND RECORDS. The Custodian shall:
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 and employees,
during regular business hours of the Custodian, upon reasonable request
and during normal business hours of the Custodian, all records maintained
by the Custodian pursuant to paragraph (a) 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.
The Fund shall examine all records, howsoever produced or transmitted,
promptly upon receipt thereof and notify the Custodian promptly of any
discrepancy or error therein. Unless the Fund delivers written notice of any
such discrepancy or error within a reasonable time after its receipt thereof,
such records shall be deemed to be true and accurate. It is understood that
the Custodian now obtains and will in the future obtain 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 it is
acknowledged and agreed that the Custodian does not verify nor represent nor
warrant as to the accuracy or completeness of such information and accordingly
shall be without liability in selecting and using such sources and furnishing
such information.
12. MISCELLANEOUS.
12.1 PROXIES, 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. Except as specifically provided herein, this
Agreement constitutes the entire agreement between the Fund and the
Custodian with respect to the subject matter hereof. Accordingly, this
Agreement supersedes any custody agreement or other oral or written
agreements heretofore in effect between the Fund and the Custodian with
respect to the custody of the Fund's Investments.
12.3 WAIVER AND AMENDMENT. No provision of this Agreement may be
waived, amended or modified, and no addendum to this Agreement shall be
or become effective, or be waived, amended or modified, except by an
instrument in writing executed by the party against which enforcement of
such waiver, amendment or modification is sought; provided, however, that
an Instruction shall, whether or not such Instruction shall constitute a
waiver, amendment or modification for purposes hereof, shall be deemed to
have been accepted by the Custodian when it commences actions pursuant
thereto or in accordance therewith.
12.4 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS OF, THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW 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 IN THE BOROUGH OF MANHATTAN.
12.5 NOTICES. Notices and other writings contemplated by this
Agreement, other than Instructions, shall be delivered (a) by hand, (b)
by first class registered or certified mail, postage prepaid, return
receipt requested, (c) by a nationally recognized overnight courier or
(d) by facsimile transmission, provided that any notice or other writing
sent by facsimile transmission shall also be mailed, postage prepaid, to
the party to whom such notice is addressed. All such notices shall be
addressed, as follows:
If to the Fund:
BBH Trust
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attn.: President
Telephone: ___________
Facsimile: ___________
If to the Custodian:
Xxxxx Brothers Xxxxxxxx & Co.
c/o BBH Mutual Fund Services Group
000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Chief Financial Officer
Telephone:
Facsimile: ,
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 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.
1.8 CONFIDENTIALITY. The parties hereto agree that each shall
treat confidentially the terms and conditions of this
Agreement and all information provided by each party to the
other regarding its business and operations. All
confidential information provided by a party hereto shall be
used by any other party hereto solely for the purpose of
rendering or obtaining services pursuant to this Agreement
and, except as may be required in carrying out this
Agreement, shall not be disclosed to any third party without
the prior consent of such providing party. The foregoing
shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly
available other than through a breach of this Agreement, or
that is required to be disclosed by or to any bank examiner
of the Custodian or any Subcustodian, any Regulatory
Authority, any auditor of the parties hereto, or by judicial
or administrative process or otherwise by Applicable Law.
1.9 COUNSEL. In fulfilling its duties hereunder, the Custodian
shall be entitled to receive and act upon the advice of (i)
counsel regularly retained by the Custodian in respect of
such matters, (ii) counsel for the Fund or (iii) such
counsel 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.
13. DEFINITIONS. The following defined terms will have the respective
meanings set forth below.
13.1 ADVANCE shall mean any extension of credit by or through the
Custodian or by or through any Subcustodian and shall include amounts
paid to third parties for account of the Fund or in discharge of any
expense, tax or other item payable by the Fund.
13.2 AGENCY ACCOUNT shall mean any deposit account opened on the books
of a Subcustodian or other banking institution in accordance with Section
7.1.
13.3 AGENT shall have the meaning set forth in the last system of
Section 6.
13.4 APPLICABLE LAW shall mean with respect to each jurisdiction, all
(a) laws, statutes, treaties, regulations, guidelines (or their
equivalents); (b) orders, interpretations licenses and permits; and (c)
judgments, decrees, injunctions writs, orders and similar actions by a
court of competent jurisdiction; compliance with which is required or
customarily observed in such jurisdiction.
13.5 AUTHORIZED PERSON shall mean any person or entity authorized to
give Instructions on behalf of the Fund in accordance with Section 4.1.
13.6 BOOK-ENTRY AGENT shall mean an entity acting as agent for the
issuer of Investments for purposes of recording ownership or similar
entitlement to Investments, including without limitation a transfer agent
or registrar.
13.7 CLEARING TRUST shall mean any entity or system established for
purposes of providing securities settlement and movement and associated
functions for a given market.
13.8 DELEGATION AGREEMENT shall mean any separate agreement entered into
between the Custodian and the Fund or its authorized representative with respect
to certain matters concerning the appointment and administration of
Subcustodians delegated to the Custodian pursuant to Rule 17f-5.
13.9 FOREIGN CUSTODY MANAGER shall mean the Fund's foreign custody
manager.
13.10 FOREIGN FINANCIAL REGULATORY AUTHORITY shall have the meaning given
by Section 2(a)(50) of the 0000 Xxx.
13.11 FUNDS TRANSFER SERVICES AGREEMENT shall mean any separate agreement
entered into between the Custodian and the Fund or its authorized representative
with respect to certain matters concerning the processing of payment orders from
Principal Accounts of the Fund.
13.12 INSTRUCTION(S) shall have the meaning assigned in Section 4.
13.13 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.
13.14 INVESTMENTS 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.
13.15 MARGIN ACCOUNT shall have the meaning set forth in Section 6.4
hereof.
13.16 PRINCIPAL ACCOUNT shall mean deposit accounts of the Fund carried
on the books of BBH&Co. as principal in accordance with Section 7.
13.17 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.
13.18 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, if a foreign
Securities Depository, meets the definitional requirements of Rule 17f-7 under
the 1940 Act.
13.19 SUBCUSTODIAN shall mean each foreign bank appointed by the
Custodian pursuant to Section 8, but shall not include Securities Depositories.
13.20 TRI-PARTY AGREEMENT shall have the meaning set forth in Section 6.4
hereof.
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 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 NOTICE AND EFFECT. This Agreement may be terminated by either
party by written notice effective no sooner than seventy-five days
following the date that notice to such effect shall be delivered to other
party at its address set forth in paragraph 12.5 hereof.
15.2 SUCCESSOR CUSTODIAN. In the event of the appointment of a
successor custodian, it is agreed that the Investments of the Fund held
by the Custodian or any Subcustodian shall be delivered to the successor
custodian in accordance with reasonable Instructions. The Custodian
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.
15.3 DELAYED SUCCESSION. If no Instruction has been given as of the
effective date of termination, Custodian may at any time on or after such
termination date and upon ten days written notice to the 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 $2M USD equivalent and operating under the Applicable
law of the jurisdiction where such Investments are located, such delivery
to be at the risk of the 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.
0.4 SEVERAL LIABILITY. The parties agree that the assets and
liabilities of each Fund are separate and distinct from the assets
and liabilities of each other Fund and that no Fund shall be liable
or shall be charged for any debt, obligation or liability of any
other Fund, whether arising under this Agreement or otherwise.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
BBH TRUST
By:
Name: Xxxxxx X. Xxxxxx
Title: Vice President
XXXXX BROTHERS XXXXXXXX & CO.
By:
Name:
Title:
1
17F-5 DELEGATION SCHEDULE
By its execution of this Delegation Schedule, BBH TRUST, a Delaware
statutory trust, acting through and under the direction of its Board of Trustees
(the "Trust"), 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 outside the
United States of the Assets of each series of the Trust (each a "Fund" and
collectively the "Funds").
1. Maintenance of Fund Assets Abroad. The Trust hereby instructs Delegate
pursuant to the terms of the Custodian Agreement to place and maintain each
Fund's Assets in countries outside the United States in accordance with
Instructions received from the Fund's investment advisor. Such instruction
shall represent a Proper Instruction under the terms of the Custodian Agreement.
The Trust acknowledges that - (a) the Delegate shall perform services hereunder
only with respect to the countries where it provides custodial services to the
Funds under the Custodian Agreement; (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. 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
each Fund's foreign custodian arrangement:
(a) Selection of Eligible Foreign Custodian. The Delegate shall place
and maintain each Fund's Assets with an Eligible Foreign Custodian; provided
that the Delegate shall have determined that each Fund's Assets will be subject
to reasonable care based on the standards applicable to custodians in the
relevant markets after considering all 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 Funds' Assets;
(iii) The Eligible Foreign Custodian's general reputation and
standing; and
(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 or process in the United States or consent to
jurisdiction in the United States.
(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 specified in Section (c)(1) of Rule 17f-
5. 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 Funds' 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 each Funds' 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 each
Funds' Assets as belonging to the Fund or as being held by a third party
for the benefit of the Fund;
(v) That each 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 tot he safekeeping of the Funds' Assets,
including, but not limited to, notification of any transfer to or from
each Fund's account or a third party account containing he Fund's
Assets.
(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.
(d) Most Favored Client. If at any time prior to termination of this
Agreement, the Delegate, as a matter of standard business practice, accepts
delegation as Foreign Custody Manager for its U.S. mutual fund clients on terms
of materially greater benefit to the Funds than set forth in this Agreement, the
Delegate hereby agrees to negotiate with the Trust in good faith with respect
thereto.
4. Monitoring. The Delegate shall establish a system to monitor at
reasonable intervals (but at least annually) the appropriateness of maintaining
the Funds' 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 Funds' Assets
in accordance with the criteria established under Section 3(a) if this
Delegation Schedule. The Delegate shall monitor the continuing appropriateness
of the contract governing the Funds' 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 Trust's Board written
reports specifying placement of the Funds' Assets with each Eligible Foreign
Custodian selected by the Delegate pursuant to Section 3 of this Delegation
Schedule and shall promptly report as to any material changes to such foreign
custody arrangements. Delegate will prepare such report with respect to any
Eligible Foreign Custodian that the Delegate has been instructed to use pursuant
to Section 7 only to the extent specifically agreed with respect to the
particular situation.
6. Withdrawal of Fund 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 Funds' Assets from the non-complying
arrangement as soon as reasonably practicable, and shall place the Funds' Assets
with another Eligible Foreign Custodian selected by the Delegate, if possible;
provided, however, that if in the reasonable judgment of the Delegate such
withdrawal would require liquidation of any Fund Assets or would materially
impair the liquidity, value or other investment characteristics of the Funds'
Assets, it shall be the duty of the Delegate to provide information regarding
the particular circumstances and to act only in accordance with Proper
Instructions of the Fund or its Investment Advisor with respect to such
liquidation or other withdrawal.
7. Direction as to Eligible Foreign Custodian. Notwithstanding this
Delegation Schedule, the Trust acting through its Board, its Investment Advisor
or its other authorized representative, may direct the Delegate to place and
maintain the Funds' 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 a Proper Instruction under
the terms of the Custodian Agreement and shall have no duties under this
Delegation Schedule with respect to such arrangements 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 Funds'
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 Trust hereby represents and warrants that this Delegation Schedule
has been duly authorized, executed and delivered by the Trust and is a legal,
valid and binding agreement of the Trust.
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, and
shall supercede in its entirety any Foreign Custody Manager Delegation Agreement
previously executed by the parties. 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 90th 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 in this Delegation Schedule have the
following meanings:
a. Eligible Foreign Custodian - shall have the meaning set forth in
Rule 17f-5(a)(1) and shall also include a U.S. Bank.
b. Fund Assets - shall mean any of the Funds' 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
Funds' transactions in such investments.
c. Proper Instructions - shall have the meaning set forth in the
Custodian Agreement.
d. Securities Depository - shall have the meaning set forth in Rule
17f-7.
e. Sovereign Risk - shall have the meaning set forth in Section 9.1.3
of the Custodian Agreement.
f. 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 Act.
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 function 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.
The Delegate agrees that any claims by it against the Trust under this
Delegation Schedule may be satisfied only from the assets of the affected
Fund(s); that the person executing this Delegation Schedule has executed it on
behalf of the Trust and not individually, and that the obligations of the Trust
arising out of this Delegation Schedule are not binding upon such person or the
Funds' shareholders individually but are binding only upon the assets and
property of the Funds; and that no shareholders, trustees or officers of the
Trust may be held personally liable or responsible for any obligations of the
Trust arising out of this Delegation Schedule.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed as of the date first above written.
BBH TRUST
By:
Name: Xxxxxx X. Xxxxxx
Title: Vice President
XXXXX BROTHERS XXXXXXXX & CO.
By:
Name:
Title:
