EXHIBIT (g)(3)
GLOBAL CUSTODY AGREEMENT
AGREEMENT dated as of September__, 2004 by and between JPMorgan Chase
Bank ("JPMorgan Bank") and Security Capital Real Estate Mutual Funds
Incorporated ("Company"), on behalf of its single series, Security Capital U.S.
Real Estate Shares ("Fund"). THIS AGREEMENT SHALL BE EFFECTIVE JANUARY 22, 2005.
WHEREAS, the Fund is an open-end, management investment company
registered with the Securities and Exchange Commission ("SEC") under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Fund desires to retain JPMorgan Bank, and JPMorgan Bank is
willing to furnish custody and fund accounting services to the Fund; and
WHEREAS, on September 8, 2004, the Board of Directors of the Company
approved the reorganization and redomiciliation of the Fund with and into a
series of One Group Mutual Funds ("OGMF"), subject to the approval of the Fund's
shareholders at a shareholder meeting to be held on or about January 20, 2005
("Reorganization"); and
WHEREAS, the Reorganization, if approved by shareholders, is expected
to be completed on or about February 18, 2005, at which time the Fund will
become a party to the Global Custody Agreement (including the fund accounting
agreement rider) among JPMorgan Bank, OGMF and One Group Investment Trust ("One
Group Agreement"), a form of which is attached hereto; and
WHEREAS, in anticipation of the Reorganization, the Board of Directors
has approved the termination of the Fund's current custodian on or about January
22, 2005;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth, the parties agree as follows:
Effective January 22, 2005, the Fund shall become subject to the terms
of the One Group Agreement and all schedules thereto shall be modified as
appropriate to include the Fund. Without limiting the generality of the
foregoing, for purposes of the fee schedules thereto, the Fund shall be
considered a Domestic Equity fund.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
SECURITY CAPITAL REAL ESTATE JPMORGAN CHASE BANK
MUTUAL FUNDS INCORPORATED
By: _________________________________ By: ______________________________
Title: ______________________________ Title: ___________________________
[LOGO OF CHASE]
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective March 1, 2003, and is between JPMORGAN
CHASE BANK ("Bank") and the entities listed on Annex A hereto (each a "Customer"
or "Fund").
1. Customer Accounts.
Bank, acting as "Securities Intermediary" (as defined in Section 15(g)
hereof) shall establish and maintain the following accounts ("Accounts"):
(a) a Custody Account (as defined in Section 15(b) hereof) in the
name of Customer for Financial Assets, which shall, except as modified by
Section 15(d) hereof, mean stocks, shares, bonds, debentures, notes, mortgages
or other obligations for the payment of money, bullion, coin and any
certificates, receipts, warrants or other instruments representing rights to
receive, purchase or subscribe for the same or evidencing or representing any
other rights or interests therein and other similar property whether
certificated or uncertificated as may be received by Bank or its Subcustodian
(as defined in Section 3 hereof) for the account of Customer, including as an
"Entitlement Holder" as defined in Section 15(c) hereof); and
(b) an account in the name of Customer ("Deposit Account") for any
and all cash in any currency received by Bank or its Subcustodian for the
account of Customer, which cash shall not be subject to withdrawal by draft or
check.
Customer warrants its authority to: 1) deposit the cash and Financial
Assets (collectively "Assets") received in the Accounts and 2) give Instructions
(as defined in Section 11 hereof) concerning the Accounts. Bank may deliver
Financial Assets of the same class in place of those deposited in the Custody
Account.
Upon written agreement between Bank and Customer, additional Accounts
may be established and separately accounted for as additional Accounts
hereunder.
2. Maintenance of Financial Assets and Cash at Bank and Subcustodian
Locations.
Unless Instructions specifically require another location acceptable to
Bank:
(a) Financial Assets shall be held in the country or other
jurisdiction in which the principal trading market for such Financial Assets is
located, where such Financial Assets are to be presented for payment or where
such Financial Assets are acquired; and
(b) Cash shall be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
To the extent Instructions are issued and Bank can comply with such
Instructions, Bank is authorized to maintain cash balances on deposit for
Customer with itself or one of its
"Affiliates" at such reasonable rates of interest as may from time to time be
paid on such accounts, or in non-interest bearing accounts as Customer may
direct, if acceptable to Bank. For purposes hereof, the term "Affiliate" shall
mean an entity controlling, controlled by, or under common control with, Bank.
If Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by Bank and Customer.
3. Subcustodians and Securities Depositories.
Bank may act hereunder through the subcustodians listed in Schedule A
hereof with which Bank has entered into subcustodial agreements
("Subcustodians"). Customer authorizes Bank to hold Assets in the Accounts in
accounts which Bank has established with one or more of its branches or
Subcustodians. Bank and Subcustodians are authorized to hold any of the
Financial Assets in their account with any securities depository in which they
participate.
Bank reserves the right to add new, replace or remove Subcustodians.
Customer shall be given reasonable notice by Bank of any amendment to Schedule
A, but in no case will such amendment be effective prior to Customer's actual
receipt of such notice . Upon request by Customer, Bank shall identify the name,
address and principal place of business of any Subcustodian of Customer's Assets
and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
4. Use of Subcustodian.
(a) Bank shall identify the Assets on its books as belonging to
Customer.
(b) A Subcustodian shall hold such Assets together with assets
belonging to other customers of Bank in accounts identified on such
Subcustodian's books as custody accounts for the exclusive benefit of customers
of Bank.
(c) Any Financial Assets in the Accounts held by a Subcustodian
shall be subject only to the instructions of Bank or its agent. Any Financial
Assets held in a securities depository for the account of a Subcustodian shall
be subject only to the instructions of such Subcustodian.
(d) Any agreement Bank enters into with a Subcustodian for holding
Bank's customers' assets shall provide (i) for indemnification or insurance
arrangements (or any combination) that will adequately protect the Customer
against the risk of loss of Assets held in accordance with the Agreement; (ii)
that such assets shall not be subject to any right, charge, security interest,
lien or claim of any kind in favor of such Subcustodian or its creditors except
a claim of payment for their safe custody or administration or, in the case of
cash deposits, except for liens or rights in favor of creditors of the
Subcustodian arising under bankruptcy, insolvency or similar laws; (iii) that
the beneficial ownership of such assets shall 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 such Assets as belonging to
the Customer or as being held by Bank for the benefit of its customers; (v) that
the Customer's independent public accountants will be given access to those
records or confirmation of the contents of those records; and (vi) that the
Customer will receive periodic reports with respect to the safekeeping of
Customer's Assets, including notification of any transfer to or from Customer's
account or a third party account containing assets held for the benefit of the
Customer. Where Securities are deposited by a Subcustodian with a securities
depository, Bank shall cause the Subcustodian to identify on its books as
belonging to Bank, as agent, the Securities shown on the Subcustodian's account
on the books of such securities depository. The foregoing shall not apply to the
extent of any special agreement or arrangement made by Customer with any
particular Subcustodian.
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5. Deposit Account Transactions.
(a) Bank or its Subcustodians shall make payments from the Deposit
Account upon receipt of Instructions which include all information required by
Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, Bank, in its discretion, may
advance Customer such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by Bank on similar
loans.
(c) If Bank credits the Deposit Account on a payable date, or at
any time prior to actual collection and reconciliation to the Deposit Account,
with interest, dividends, redemptions or any other amount due, Customer shall
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If Customer does not promptly return any
amount upon such notification, Bank shall be entitled, upon oral or written
notification to Customer, to reverse such credit by debiting the Deposit Account
for the amount previously credited. Bank or its Subcustodian shall have no duty
or obligation to institute legal proceedings, file a claim or a proof of claim
in any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for Customer upon Instructions after
consultation with Customer.
6. Custody Account Transactions; Accounting Services.
(a) Financial Assets shall be transferred, exchanged or delivered
by Bank or its Subcustodian upon receipt by Bank of Instructions which include
all information required by Bank. Settlement and payment for Financial Assets
received for, and delivery of Financial Assets out of, the Custody Account may
be made in accordance with the customary or established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivery of
Financial Assets to a purchaser, dealer or their agents against a receipt with
the expectation of receiving later payment and free delivery. Delivery of
Financial Assets out of the Custody Account may also be made in any manner
specifically required by Instructions acceptable to Bank.
(b) In accordance with applicable law, Bank will effect book
entries on a "contractual settlement date accounting" basis as described below
with respect to the settlement of trades in those markets where Bank generally
offers contractual settlement date accounting and will notify Customer of those
markets from time to time. Otherwise, such transactions shall be credited or
debited to the Accounts on the date cash or Financial Assets are actually
received by the Bank and reconciled to the Account.
(i) On the settlement date for a sale, Bank will credit
the Deposit Account with the proceeds of the sale and transfer the
relevant Financial Assets to an account at Bank pending settlement of
the trade where not already delivered.
(ii) On the settlement date for the purchase (or earlier,
if market practice requires delivery of the purchase price before
settlement date), Bank will debit the Deposit Account for the
settlement amount and credit a separate account at Bank. Bank will then
post the Custody Account as awaiting receipt of expected Financial
Assets. Customer will not be entitled to the Financial Assets that are
awaiting receipt until Bank or a Subcustodian actually receives them.
(iii) Bank reserves the right to restrict in good faith the
availability of contractual settlement date accounting for credit or
operational reasons.
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(iv) Bank may (in its absolute discretion) upon oral or
written notification to Customer reverse any debit or credit made
pursuant to this Section 6 prior to a transaction's actual settlement,
and Customer will be responsible for any costs or liabilities resulting
from such reversal. Customer acknowledges that the procedures described
in these sub-sections are of an administrative nature, and Bank does
not undertake to make loans and/or Financial Assets available to
Customer other than as provided for in Section 5 or otherwise in this
Agreement.
(c) Bank shall perform fund accounting services as specified on
attached Schedule D.
7. Actions of Bank.
Bank shall follow Instructions received regarding Assets held in the
Accounts. However, until it receives Instructions to the contrary, Bank shall:
(a) Present for payment any Financial Assets which are called,
redeemed or retired or otherwise become payable and all coupons and other income
items which call for payment upon presentation, to the extent that Bank or
Subcustodian is aware of such opportunities. Bank is deemed to be aware for
purposes of this Agreement upon publication of notice of such opportunities in a
publication identified on Exhibit 1, as such Exhibit may be amended from time to
time by mutual agreement.
(b) Execute in the name of Customer such ownership and other
certificates as may be required to obtain payments in respect of Financial
Assets.
(c) Exchange interim receipts or temporary Financial Assets for
definitive Financial Assets.
(d) Appoint brokers and agents for any transaction involving the
Financial Assets, including, without limitation, Affiliates of Bank or any
Subcustodian.
(e) Advise Customer and its investment adviser daily of the amount
of any funds advanced to Customer by Bank under Section 5(b) hereof
("overdrafts") and the circumstances giving rise to each such overdraft.
(f) Issue statements to Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
Bank shall send Customer an advice or notification of any transfers of
Assets to or from the Accounts. Such statements, advices or notifications shall
indicate the identity of the entity having custody of the Assets. Unless
Customer sends Bank a written exception or objection to any Bank statement
within sixty (60) days of receipt, Customer shall be deemed to have approved
such statement. In such event, or where Customer has otherwise approved any such
statement, Bank shall, to the extent permitted by law, be released, relieved and
discharged with respect to all matters set forth in such statement or reasonably
implied therefrom as though it had been settled by the decree of a court of
competent jurisdiction in an action where Customer and all persons having or
claiming an interest in Customer or Customer's Accounts were parties.
All collections of funds or other property paid or distributed in
respect of Financial Assets in the Custody Account shall be made at the risk of
Customer. Bank shall have no liability for any loss occasioned by delay in the
actual receipt of notice by Bank or by its Subcustodians of any payment,
redemption or other transaction regarding Financial Assets in the Custody
Account in respect of which Bank has agreed to take any action hereunder.
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Except as specifically stated otherwise in this Agreement, in any and
every case where payment for purchases of domestic securities for the account of
Customer is made by Bank in advance of receipt of the securities purchased in
the absence of specific written instructions from Customer to pay in advance,
Bank shall be absolutely liable to Customer for any and all Losses (as defined
hereinafter) resulting therefrom. Notwithstanding the foregoing, settlement and
payment for securities received for the account of Customer and delivery of
securities maintained for the account of Customer may be effected in accordance
with the best customary established securities trading or securities processing
practices and procedures in the market in which the transaction occurs,
including delivering securities to the purchaser thereof or to a dealer therefor
(or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such securities from such purchaser
or dealer.
8. Corporate Actions; Proxies; Tax Reclaims.
(a) Corporate Actions. Whenever Bank receives information
concerning the Financial Assets which requires discretionary action by the
beneficial owner of the Financial Assets (other than a proxy), such as
subscription rights, bonus issues, stock repurchase plans and rights offerings,
or legal notices or other material intended to be transmitted to securities
holders ("Corporate Actions"), Bank shall give Customer notice of such Corporate
Actions to the extent that Bank's central corporate actions department has
actual knowledge of a Corporate Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, Bank shall endeavor to obtain
Instructions from Customer or its Authorized Person (as defined in Section 10
hereof), but if Instructions are not received in time for Bank to take timely
action, or actual notice of such Corporate Action was received too late to seek
Instructions, Bank is authorized to sell such rights entitlement or fractional
interest and to credit the Deposit Account with the proceeds or take any other
action it deems, in good faith, to be appropriate in which case it shall be held
harmless for any such action.
(b) Proxy Voting. Bank shall provide proxy voting services for
securities held outside the United States, if elected by Customer, in accordance
with the terms of the proxy voting services rider hereto. Proxy voting services
may be provided by Bank or, in whole or in part, by one or more third parties
appointed by Bank (which may be Affiliates of Bank). The Bank shall, with
respect to domestic securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities are registered
otherwise than in the name of Customer or one of its series, or a nominee of
such, all proxies it receives, without indication of the manner in which such
proxies are to be voted, and shall promptly deliver to the Customer such
proxies, all proxy soliciting materials and all notices relating to such
securities as it has received.
(c) Tax Reclaims.
(i) Subject to the provisions hereof, Bank shall apply
for a reduction of withholding tax and any refund of any tax paid or
tax credits which apply in each applicable market in respect of income
payments on Financial Assets for Customer's benefit which Bank believes
may be available to Customer.
(ii) The provision of tax reclaim services by Bank is
conditional upon Bank's receiving from Customer or, to the extent the
Financial Assets are beneficially owned by others, from each beneficial
owner, A) a declaration of the beneficial owner's identity and place of
residence and (B) certain other documentation (pro forma copies of
which are available from Bank). Customer acknowledges that, if Bank
does not receive such declarations, documentation and information, Bank
shall be unable to provide tax reclaim services.
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(iii) Bank shall not be liable to Customer or any third
party for any taxes, fines or penalties payable by Bank or Customer,
and shall be indemnified accordingly, whether these result from the
inaccurate completion of documents by Customer or any third party, or
as a result of the provision to Bank or any third party of inaccurate
or misleading information or the withholding of material information by
Customer or any other third party, or as a result of any delay of any
revenue authority or any other matter beyond Bank's control.
(iv) Bank shall perform tax reclaim services only with
respect to taxation levied by the revenue authorities of the countries
notified to Customer from time to time and Bank may, by notification in
writing, at Bank's absolute discretion, supplement or amend the markets
in which tax reclaim services are offered. Other than as expressly
provided in this sub-clause, Bank shall have no responsibility with
regard to Customer's tax position or status in any jurisdiction.
(v) Customer confirms that Bank is authorized to disclose
any information requested by any revenue authority or any governmental
body in relation to Customer or the securities and/or cash held for
Customer.
(vi) Tax reclaim services may be provided by Bank or, in
whole or in part, by one or more third parties appointed by Bank (which
may be Bank's affiliates); provided that Bank shall be liable for the
performance of any such third party to the same extent as Bank would
have been if Bank had performed such services.
(d) Tax Obligations.
(i) Customer confirms that Bank is authorized to deduct
from any cash received or credited to the Deposit Account any taxes or
levies required by any revenue or governmental authority for whatever
reason in respect of the Custody Account.
(ii) If Bank does not receive appropriate declarations,
documentation and information then additional United Kingdom taxation
shall be deducted from all income received in respect of the Financial
Assets issued outside the United Kingdom and any applicable United
States withholding tax shall be deducted from income received from the
Financial Assets. Customer shall provide to Bank such documentation and
information as Bank may require in connection with taxation, and
warrants that, when given, this information shall be true and correct
in every respect, not misleading in any way, and contain all material
information. Customer undertakes to notify Bank immediately if any such
information requires updating or amendment.
(iii) Customer shall be responsible for the payment of all
taxes relating to the Financial Assets in the Custody Account, and
Customer agrees to pay, indemnify and hold Bank harmless from and
against any and all liabilities, penalties, interest or additions to
tax with respect to or resulting from any delay in, or failure by, Bank
(1) to pay, withhold or report any U.S. federal, state or local taxes
or foreign taxes imposed on, or (2) to report interest, dividend or
other income paid or credited to the Deposit Account, whether such
failure or delay by Bank to pay, withhold or report tax or income is
the result of (x) Customer's failure to comply with the terms of this
paragraph, or (y) Bank's own acts or omissions; provided however,
Customer shall not be liable to Bank for any penalty or additions to
tax due as a result of Bank's failure to pay, withhold or report tax or
to report interest, dividend or other income paid or credited to the
Deposit Account solely as a result of Bank's negligent acts or
omissions.
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9. Nominees.
Financial Assets which are ordinarily held in registered form may be
registered in a nominee name of Bank, Subcustodian or securities depository, as
the case may be. Bank may without notice to Customer cause any such Financial
Assets to cease to be registered in the name of any such nominee and to be
registered in the name of Customer. In the event that any Financial Assets
registered in a nominee name are called for partial redemption by the issuer,
Bank may allot the called portion to the respective beneficial holders of such
class of security in any manner Bank deems to be fair and equitable. Customer
shall hold Bank, Subcustodians, and their respective nominees harmless from any
liability arising directly or indirectly from their status as a mere record
holder of Financial Assets in the Custody Account.
10. Authorized Persons.
As used herein, the term "Authorized Person" means employees or agents
including investment managers as have been designated by written notice from
Customer or its designated agent to act on behalf of Customer hereunder. Such
persons shall continue to be Authorized Persons until such time as Bank receives
Instructions from Customer or its designated agent that any such employee or
agent is no longer an Authorized Person.
11. Instructions.
The term "Instructions" means instructions of any Authorized Person
received by Bank, via telephone, telex, facsimile transmission, bank wire or
other teleprocess or electronic instruction or trade information system
acceptable to Bank which Bank believes in good faith to have been given by
Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which Bank may specify. Unless
otherwise expressly provided, all Instructions shall continue in full force and
effect until canceled or superseded. The term "Instructions" includes, without
limitation, instructions to sell, assign, transfer, deliver, purchase or receive
for the Custody Account, any and all stocks, bonds and other Financial Assets or
to transfer funds in the Deposit Account.
Any Instructions delivered to Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but Customer shall hold Bank
harmless for the failure of an Authorized Person to send such confirmation in
writing, the failure of such confirmation to conform to the telephone
instructions received or Bank's failure to produce such confirmation at any
subsequent time. Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which Bank shall make available
to Customer or its Authorized Persons.
12. Standard of Care; Liabilities.
(a) Bank shall be responsible for the performance of only such
duties as are set forth herein or expressly contained in Instructions which are
consistent with the provisions hereof as follows:
(i) Bank shall exercise reasonable care, prudence and
diligence in carrying out all its duties and obligations under this
Agreement, and shall be liable to each Fund for any and all claims,
liabilities losses, damages fines, penalties and expenses ("Losses")
suffered or incurred by such Fund resulting from the failure of Bank to
exercise such reasonable care, prudence and diligence or resulting from
Bank's negligence or willful misconduct. In addition, Bank shall be
liable to each applicable Fund for all Losses representing reasonable
costs and expenses incurred by such Fund in connection with any claim
by such Fund against Bank arising from the obligations of Bank
hereunder, including, without
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limitation, all reasonable attorneys' fees and expenses incurred by
such Fund in connection with any investigations, lawsuits or
proceedings relating to such claim; provided that such Fund has
recovered from Bank for such claim. Bank shall be liable for the
actions or omissions of any domestic Subcustodian or any Foreign
Subcustodian to the same extent as if such act or omission was
performed by the Bank itself. In the event of any Losses suffered or
incurred by a Fund caused by or resulting from the actions or omissions
of any Domestic Subcustodian or Foreign Subcustodian for which the Bank
would otherwise be liable, the Bank shall promptly reimburse such Fund
in the amount of any such Losses. Bank shall have no liability
whatsoever for any consequential, special, indirect or speculative loss
or damages (including, but not limited to, lost profits) suffered by
Customer in connection with the transactions and services contemplated
hereby and the relationship established hereby even if Bank has been
advised as to the possibility of the same and regardless of the form of
the action.
(ii) Bank shall not be responsible for the insolvency of
any Subcustodian which is not a branch or Affiliate of Bank. Bank shall
not be responsible for any act, omission, default or the solvency of
any broker or agent which it or a Subcustodian appoints unless such
appointment was made negligently or in bad faith.
(iii) Each Fund severally and not jointly shall indemnify
Bank against, and hold harmless Bank from, any Losses suffered,
incurred or sustained by Bank or to which Bank becomes subject,
resulting from, arising out of or relating to: (A) Instructions or
other directions upon which Bank is authorized to rely pursuant to the
terms of this Agreement; and (B) Bank's performance under this
Agreement, provided Bank has acted with reasonable care and prudence,
and has not been negligent or engaged in willful misconduct. (C) In
performing its obligations hereunder, Bank may rely on the genuineness
of any document which it believes in good faith to have been validly
executed. Customer shall have no liability whatsoever for any
consequential, special, indirect or speculative loss or damages
(including, but not limited to, lost profits) suffered by Bank in
connection with the transactions and services contemplated hereby and
the relationship established hereby even if Customer has been advised
as to the possibility of the same and regardless of the form of action.
(iv) Customer shall pay for and hold Bank harmless from
any liability or loss resulting from the imposition or assessment of
any taxes or other governmental charges, and any related expenses, with
respect to income from or Assets in the Accounts.
(v) Bank shall be entitled to rely, and may act, upon the
advice of counsel reasonably acceptable to the Customer on all matters
and shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
(vi) Bank need not maintain any insurance for the benefit
of Customer.
(vii) Without limiting the foregoing, Bank shall not be
liable for any loss which results from: 1) the general risk of
investing, or 2) investing or holding Assets in a particular country
including, but not limited to, losses resulting from malfunction,
interruption of or error in the transmission of information caused by
any machines or system or interruption of communication facilities,
abnormal operating conditions, nationalization, expropriation or other
governmental actions; regulation of the banking or securities industry;
currency restrictions, devaluations or fluctuations; and market
conditions which prevent the orderly execution of securities
transactions or affect the value of Assets.
(viii) Neither party shall be liable to the other for any
loss due to forces beyond their control including, but not limited to
strikes or work stoppages, acts of war (whether declared or undeclared)
or terrorism, insurrection, revolution, nuclear fusion, fission or
radiation, or acts of God.
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(b) Consistent with and without limiting the first paragraph of
this Section 12, it is specifically acknowledged that Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to
Customer or an Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to
investments or the retention of Financial Assets;
(iii) advise Customer or an Authorized Person regarding any
default in the payment of principal or income of any security other
than as provided in Section 5(c) hereof;
(iv) evaluate or report to Customer or an Authorized
Person regarding the financial condition of any broker, agent or other
party to which Financial Assets are delivered or payments are made
pursuant hereto; and
(v) review or reconcile trade confirmations received from
brokers. Customer or its Authorized Persons issuing Instructions shall
bear any responsibility to review such confirmations against
Instructions issued to and statements issued by Bank.
(c) Customer authorizes Bank to act hereunder notwithstanding that
Bank or any of its divisions or Affiliates may have a material interest in a
transaction, or circumstances are such that Bank may have a potential conflict
of duty or interest including the fact that Bank or any of its Affiliates may
provide brokerage services to other customers, act as financial advisor to the
issuer of Financial Assets, act as a lender to the issuer of Financial Assets,
act in the same transaction as agent for more than one customer, have a material
interest in the issue of Financial Assets, or earn profits from any of the
activities listed herein.
The provisions of this Section 12 shall survive any termination of this
Agreement.
13. Fees and Expenses.
Customer shall pay Bank for its services hereunder the fees set forth
in Schedule B hereto or such other amounts as may be agreed upon in writing,
together with Bank's reasonable out-of-pocket or incidental expenses, including,
but not limited to, legal fees. Bank shall have a lien on and is authorized to
charge any Accounts of Customer for any amount owing to Bank under any provision
hereof.
14. Miscellaneous.
(a) Certification of Residency, etc. Customer certifies that it is
a resident of the United States and shall notify Bank of any changes in
residency. Bank may rely upon this certification or the certification of such
other facts as may be required to administer Bank's obligations hereunder.
Customer shall indemnify Bank against all losses, liability, claims or demands
arising directly or indirectly from any such certifications.
(b) Access to Records. Bank shall allow Customer's independent
public accountant reasonable access to the records of Bank relating to Financial
Assets as is required in connection with their examination of books and records
pertaining to Customer's affairs. Subject to restrictions under applicable law,
Bank shall also obtain an undertaking to permit Customer's independent public
accountants reasonable access to the records of any Subcustodian which has
physical possession of any Financial Assets as may be required in connection
with the examination of Customer's books and records.
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(c) Governing Law; Successors and Assigns; Immunity; Captions.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK and shall not be assignable
by either party, but shall bind the successors in interest of Customer and Bank.
To the extent that in any jurisdiction Customer may now or hereafter be entitled
to claim, for itself or its assets, immunity from suit, execution, attachment
(before or after judgment) or other legal process, Customer irrevocably shall
not claim, and it hereby waives, such immunity. The captions given to the
sections and subsections of this Agreement are for convenience of reference only
and are not to be used to interpret this Agreement.
(d) Entire Agreement; Applicable Riders. Customer represents that
the Assets deposited in the Accounts are (Check one):
[X] Investment Company assets subject to certain U.S. Securities and
Exchange Commission rules and regulations;
[ ] Other (specify)
This Agreement consists exclusively of this document together with
Schedules A and B, Exhibits I - _______ and the following Rider(s)
[Check applicable rider(s)]:
[X] INVESTMENT COMPANY
[X] PROXY VOTING
[X] SPECIAL TERMS AND CONDITIONS
There are no other provisions hereof and this Agreement supersedes any
other agreements, whether written or oral, between the parties. Any amendment
hereto must be in writing, executed by both parties.
(e) Severability. In the event that one or more provisions hereof
are held invalid, illegal or unenforceable in any respect on the basis of any
particular circumstances or in any jurisdiction, the validity, legality and
enforceability of such provision or provisions under other circumstances or in
other jurisdictions and of the remaining provisions shall not in any way be
affected or impaired.
(f) Waiver. Except as otherwise provided herein, no failure or
delay on the part of either party in exercising any power or right hereunder
operates as a waiver, nor does any single or partial exercise of any power or
right preclude any other or further exercise, or the exercise of any other power
or right. No waiver by a party of any provision hereof, or waiver of any breach
or default, is effective unless in writing and signed by the party against whom
the waiver is to be enforced.
(g) Representations and Warranties. (i) Customer hereby represents
and warrants to Bank that: (A) it has full authority and power to deposit and
control the Financial Assets and cash deposited in the Accounts; (B) it has all
necessary authority to use Bank as its custodian; (C) this Agreement constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms; (D) it shall have full authority and power to borrow moneys and enter
into foreign exchange transactions; and (E) it has not relied on any oral or
written representation made by Bank or any person on its behalf, and
acknowledges that this Agreement sets out to the fullest extent the duties of
Bank. (ii) Bank hereby represents and warrants to Customer that: (A) it has the
full power and authority to perform its obligations hereunder, (B) this
Agreement constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; and (C) that it has taken all necessary action to
authorize the execution and delivery hereof.
10
(h) Notices. All notices hereunder shall be effective when
actually received. Any notices or other communications which may be required
hereunder are to be sent to the parties at the following addresses or such other
addresses as may subsequently be given to the other party in writing: (a) Bank:
The Chase Manhattan Bank, 4 Chase MetroTech Center, Brooklyn, N.Y. 11245,
Attention: Global Investor Services, Investment Management Group; and (b)
Customer: X.X. Xxxxxx Institutional Funds, c/o Chase Global Asset Management and
Mutual Funds, 0 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. XxXxx.
(i) Termination. This Agreement may be terminated by Customer or
Bank by giving sixty (60) days' written notice to the other, provided that such
notice to Bank shall specify the names of the persons to whom Bank shall deliver
the Assets in the Accounts. If notice of termination is given by Bank, Customer
shall, within sixty (60) days following receipt of the notice, deliver to Bank
Instructions specifying the names of the persons to whom Bank shall deliver the
Assets. In either case Bank shall deliver the Assets to the persons so
specified, after deducting any amounts which Bank determines in good faith to be
owed to it under Section 13. If within sixty (60) days following receipt of a
notice of termination by Bank, Bank does not receive Instructions from Customer
specifying the names of the persons to whom Bank shall deliver the Assets, Bank,
at its election, may deliver the Assets to a bank or trust company doing
business in the State of New York to be held and disposed of pursuant to the
provisions hereof, or to Authorized Persons, or may continue to hold the Assets
until Instructions are provided to Bank.
(j) Money Laundering. Customer warrants and undertakes to Bank for
itself and its agents that all Customer's customers are properly identified in
accordance with U.S. Money Laundering Regulations as in effect from time to
time.
(k) Imputation of certain information. Bank shall not be held
responsible for and shall not be required to have regard to information held by
any person by imputation or information of which Bank is not aware by virtue of
a "Chinese Wall" arrangement. If Bank becomes aware of confidential information
which in good faith it feels inhibits it from effecting a transaction hereunder
Bank may refrain from effecting it.
15. Definitions.
As used herein, the following terms shall have the meaning hereinafter
stated:
a) "Certificated Security" shall mean a security that is represented by a
certificate.
b) "Custody Account" shall mean each Securities custody account on Bank's
records to which Financial Assets are or may be credited pursuant hereto.
c) "Entitlement Holder" shall mean the person on the records of a
Securities Intermediary as the person having a Securities Entitlement
against the Securities Intermediary.
d) "Financial Asset" shall mean, as the context requires, either the asset
itself or the means by which a person's claim to it is evidenced, including
a Certificated Security or Uncertificated Security, a security certificate,
or a Securities Entitlement. Financial Assets shall not include cash.
e) "Securities" shall mean stocks, bonds, rights, warrants and other
negotiable and non-negotiable paper whether issued as Certificated
Securities or Uncertificated Securities and commonly traded or dealt in on
securities exchanges or financial markets, and other obligations of an
issuer, or shares, participations and interests in an issuer recognized in
an area in which it is issued or dealt in as a medium for investment and
any other property as shall be acceptable to Bank for the Custody Account.
11
f) "Securities Entitlement" shall mean the rights and property interest of
an Entitlement Holder with respect to a Financial Asset as set forth in
Part 5 of the Uniform Commercial Code.
g) "Securities Intermediary" shall mean Bank, a Subcustodian, a securities
depository, and any other financial institution which in the ordinary
course of business maintains custody accounts for others and acts in that
capacity.
h) "Uncertificated Security" shall mean a security that is not represented
by a certificate.
i) "Uniform Commercial Code" shall mean Article 8 of the Uniform
Commercial Code of the State of New York, as the same may be amended from
time to time.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first-above
12
written.
[Name of Customer]
By:
--------------------------------
Title:
Date: March , 2003
JPMORGAN CHASE BANK
By:
--------------------------------
Title:
Date:
00
XXXXX XX XXX XXXX )
: ss.
COUNTY OF NEW YORK )
On this ___ day of March, 2003, before me personally came
____________________, to me known, who being by me duly sworn, did depose and
say that he resides in ______________________________________, that he is
President of the entity described in and which executed the foregoing
instrument; that he knows the seal of said entity, that the seal affixed to said
instrument is such seal, that it was so affixed by order of said entity, and
that he/she signed his/her name thereto by like order.
----------
Sworn to before me this day
of March, 2003.
-------------------------
Notary
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this day of March, 2003, before me personally came
, to me known, who being by me duly sworn, did depose and say that
he/she resides in at ; that he/she is a Vice President of JPMORGAN
CHASE , the corporation described in and which executed the foregoing
instrument; that he/she knows the seal of said corporation, that the seal
affixed to said instrument is such corporate seal, that it was so affixed by
order of the Board of Directors of said corporation, and that he/she signed
his/her name thereto by like order.
Sworn to before me this
day of March, 2003.
-------------------------
Notary
Investment Company Rider to Global Custody Agreement
Between JPMorgan Chase and
[Customer]
effective March , 2003
The following modifications are made to the Agreement:
A. Add a new Section 16 to the Agreement as follows:
"16. Compliance with SEC rule 17f-5.
(a) Customer's board of directors (or equivalent body) (hereinafter
`Board') hereby delegates to Bank, and Bank hereby accepts the delegation to it,
of the obligation to perform as Customer's `Foreign Custody Manager' (as that
term is defined in Securities and Exchange Commission ("SEC") rule 17f-5(a)(2)
as promulgated under the Investment Company Act of 1940, as amended ("1940
Act")), for the purposes of (i) selecting Eligible Foreign Custodians (as that
term is defined in SEC rule 17f-5(a)(1), and as the same may be amended from
time to time, or that have otherwise been made exempt pursuant to an SEC
exemptive order) to hold Financial Assets and Cash and (ii) evaluating the
contractual arrangements with such Eligible Foreign Custodians (as set forth in
SEC rule 17f-5(c)(2)). Anything in this Agreement to the contrary
notwithstanding, the Bank shall in no event be deemed to have selected any
Eligible Securities Depository (as defined in SEC rule 17f-7), the use of which
is mandatory by law or regulation.. (Eligible Securities Depositories used by
Bank as of the date hereof are set forth in Appendix 1-A hereto, and as the same
may be amended on notice to Customer from time to time.)
(b) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Customer's Board of the placement
of Financial Assets and Cash with particular Eligible Foreign
Custodians and of any material change in the arrangements with such
Eligible Foreign Custodians, with such reports to be provided to
Customer's Board at such times as the Board deems reasonable and
appropriate based on the circumstances of Customer's foreign custody
arrangements (and until further notice from Customer such reports shall
be provided not less than quarterly with respect to the placement of
Financial Assets and Cash with particular Eligible Foreign Custodians
and with reasonable promptness upon the occurrence of any material
change in the arrangements with such Eligible Foreign Custodians);
(ii) exercise such reasonable care, prudence and diligence in
performing as Customer's Foreign Custody Manager as a person having
responsibility for the safekeeping of Financial Assets and Cash would
exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined
that Financial Assets and Cash placed and maintained in the safekeeping
of such Eligible Foreign Custodian shall be subject to reasonable care,
based on the standards applicable to custodians in the relevant market,
after having considered all factors relevant to the safekeeping of such
Financial Assets and Cash, including, without limitation, those factors
set forth in SEC rule 17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible Foreign
Custodian requires that the Eligible Foreign Custodian will provide
reasonable care for Financial Assets and Cash based on the standards
applicable to custodians in the relevant market.
(v) have established a system to monitor the continued appropriateness
of maintaining Financial Assets and Cash with particular Eligible
Foreign Custodians and of the governing contractual arrangements; it
being understood, however, that in the event that Bank shall have
determined that the existing Eligible Foreign Custodian in a given
country would no longer afford Financial Assets and Cash reasonable
care and that no other Eligible Foreign Custodian in that country would
afford reasonable care, Bank shall promptly so advise Customer and
shall then act in accordance with the Instructions of Customer with
respect to the disposition of the affected Financial Assets and Cash.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
Financial Assets and Cash on behalf of Customer with Eligible Foreign Custodians
pursuant to a written contract deemed appropriate by Bank.
(c) Bank represents to Customer that it is a U.S. Bank as defined in
Rule 17f-5(a)(7). Customer represents to Bank that: (1) the Financial Assets and
Cash being placed and maintained in Bank's custody are subject to the 1940 Act,
as the same may be amended from time to time; (2) its Board: (i) has determined
that it is reasonable to rely on Bank to perform as Customer's Foreign Custody
Manager (ii) or its investment adviser shall have determined that Customer may
maintain Financial Assets and Cash in each country in which Customer's Financial
Assets and Cash shall be held hereunder and determined to accept the risks
arising therefrom (including, but not limited to, a country's financial
infrastructure), prevailing custody and settlement practices, laws applicable to
the safekeeping and recovery of Financial Assets and Cash held in custody, and
the likelihood of nationalization, currency controls and the like) (collectively
("Country Risk")). Nothing contained herein shall require Bank to make any
selection or to engage in any monitoring on behalf of Customer that would entail
consideration of Country Risk.
(d) Bank shall provide to Customer an analysis of the risks associated
with maintaining assets with Eligible Securities Depositories. Bank shall
monitor the custody risks associated with maintaining assets with the Eligible
Securities Depositories on a continuing basis, and promptly notify the Customer
of any material change in these risks. Customer hereby acknowledges that: (i)
such information is solely designed to inform Customer of market conditions and
procedures and is not intended as a recommendation to invest or not invest in
particular markets; and (ii) Bank has gathered the information from sources it
considers reliable, but that Bank shall have no responsibility for inaccuracies
or incomplete information unless the Bank knows such information is inaccurate
or incomplete.
B. Add the following after the first sentence of Section 3 of the
Agreement: "At the request of Customer, Bank may, but need not, add to Schedule
A an Eligible Foreign Custodian where Bank has not acted as Foreign Custody
Manager with respect to the selection thereof. Bank shall notify Customer in the
event that it elects to add any such entity."
C. Add the following language to the end of Section 3 of the
Agreement:
"The term Subcustodian as used herein shall mean the following:
(a) a `U.S. Bank,' which shall mean a U.S. bank as defined in SEC rule
17f-5(a)(7);
(b) an `Eligible Foreign Custodian,' which shall mean (i) a banking
institution or trust company, incorporated or organized under the laws
of a country other than the United States, that is regulated as such by
that country's government or an agency thereof, (ii) a majority-owned
direct or indirect subsidiary of a U.S. bank or bank holding company
which subsidiary is incorporated or organized under the laws of a
country other than the United States; and (iii) any other entity (other
than an Eligible Securi-
2
ties Depository) that shall have been so qualified by exemptive order,
rule or other appropriate action of the SEC.
For purposes of clarity, it is agreed that as used in Section 12(a)(i), the term
Subcustodian shall not include any Eligible Foreign Custodian as to which Bank
has not acted as Foreign Custody Manager or any Eligible Securities Depository."
3
Appendix 1-A
ELIGIBLE SECURITIES DEPOSITORIES
Appendix 1-B
Information Regarding Country Risk
1. To aid Customer in its determinations regarding Country Risk, Bank
shall furnish annually and upon the initial placing of Financial Assets and Cash
into a country the following information (check items applicable):
A Opinions of local counsel concerning:
___ i. Whether applicable foreign law would restrict the access
afforded Customer's independent public accountants to books
and records kept by an eligible foreign custodian located in
that country.
___ ii. Whether applicable foreign law would restrict the Customer's
ability to recover its Financial Assets and Cash in the event
of the bankruptcy of an Eligible Foreign Custodian located in
that country.
___ iii. Whether applicable foreign law would restrict the Customer's
ability to recover Financial Assets that are lost while under
the control of an Eligible Foreign Custodian located in the
country.
B. Written information concerning:
___ i. The foreseeability of expropriation, nationalization, freezes,
or confiscation of Customer's Financial Assets and Cash.
___ ii. Whether difficulties in converting Customer's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.]
C. A market report with respect to the following topics:
(i) securities regulatory environment, (ii) foreign ownership
restrictions, (iii) foreign exchange, (iv) securities settlement and
registration, (v) taxation, and (vi) depositories (including depository
evaluation), if any.
2. To aid Customer in monitoring Country Risk, Bank shall furnish board
the following additional information:
Market flashes, including with respect to changes in the information in
market reports.
GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
JPMORGAN CHASE BANK
AND
[CUSTOMER]
Dated March , 2003
1. Global Proxy Services ("Proxy Services") shall be provided for the
countries listed in the procedures and guidelines ("Procedures")
furnished to Customer, as the same may be amended by Bank from time to
time on prior notice to Customer. The Procedures are incorporated by
reference herein and form a part of this Rider.
2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by
Bank to Customer of the dates of pending shareholder meetings,
resolutions to be voted upon and the return dates as may be received by
Bank or provided to Bank by its Subcustodians or third parties, and (b)
voting by Bank of proxies based on Customer Instructions. Original
proxy materials or copies thereof shall not be provided. Notifications
shall generally be in English and, where necessary, shall be summarized
and translated from such non-English materials as have been made
available to Bank or its Subcustodian. In this respect Bank's only
obligation is to provide information from sources it believes to be
reliable and/or to provide materials summarized and/or translated in
good faith. Bank reserves the right to provide Notifications, or parts
thereof, in the language received. Upon reasonable advance request by
Customer, backup information relative to Notifications, such as annual
reports, explanatory material concerning resolutions, management
recommendations or other material relevant to the exercise of proxy
voting rights shall be provided as available, but without translation.
3. While Bank shall attempt to provide accurate and complete
Notifications, whether or not translated, Bank shall not be liable for
any losses or other consequences that may result from reliance by
Customer upon Notifications where Bank prepared the same in good faith.
4. Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Proxy Services Bank shall be acting solely as
the agent of Customer, and shall not exercise any discretion with
regard to such Proxy Services.
5. Proxy voting may be precluded or restricted in a variety of
circumstances, including, without limitation, where the relevant
Financial Assets are: (i) on loan; (ii) at registrar for registration
or reregistration; (iii) the subject of a conversion or other corporate
action; (iv) not held in a name subject to the control of Bank or its
Subcustodian or are otherwise held in a manner which precludes voting;
(v) not capable of being voted on account of local market regulations
or practices or restrictions by the issuer; or (vi) held in a margin or
collateral account.
6. Customer acknowledges that in certain countries Bank may be unable to
vote individual proxies but shall only be able to vote proxies on a net
basis (e.g., a net yes or no vote given the voting instructions
received from all customers).
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered hereby, and shall
in no event sell, license, give or otherwise make the information
provided hereunder available, to any third party, and shall not
directly or indirectly compete with Bank or diminish the market for
Proxy Services by provision of such information, in whole or in part,
for compensation or otherwise, to any third party.
8. The names of Authorized Persons for Proxy Services shall be furnished
to Bank in accordance with Section 10 of the Agreement. Proxy Services
fees shall be as set forth in Section 13 of the Agreement or as
separately agreed.
2
SPECIAL TERMS AND CONDITIONS RIDER
GLOBAL CUSTODY AGREEMENT
WITH [CUSTOMER]
DATE March , 2003
DOMESTIC ONLY
SPECIAL TERMS AND CONDITIONS RIDER
Domestic Corporate Actions and Proxies
With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the provisions of
Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of Bank's
nominee or the nominee of a central depository) and communications with
respect to Financial Assets in the Custody Account as call for voting
or relate to legal proceedings within a reasonable time after
sufficient copies are received by Bank for forwarding to its customers.
In addition, Bank shall follow coupon payments, redemptions, exchanges
or similar matters with respect to Financial Assets in the Custody
Account and advise Customer or the Authorized Person for such Account
of rights issued, tender offers or any other discretionary rights with
respect to such Financial Assets, in each case, of which Bank has
received notice from the issuer of the Financial Assets, or as to which
notice is published in publications routinely utilized by Bank for this
purpose.
Fees
The fees referenced in Section 13 hereof cover only domestic and euro-dollar
holdings. There shall be no Schedule A hereto, as there are no foreign assets in
the Accounts.
DOMESTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
Domestic Corporate Actions and Proxies
With respect to domestic U.S. and Canadian Financial Assets (the latter if held
in DTC), the following provisions shall apply rather than the pertinent
provisions of Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of Bank's
nominee or the nominee of a central depository) and communications with
respect to Financial Assets in the Custody Account as call for voting
or relate to legal proceedings within a reasonable time after
sufficient copies are received by Bank for forwarding to its customers.
In addition, Bank shall follow coupon payments, redemptions, exchanges
or similar matters with respect to Financial Assets in the Custody
Account and advise Customer or the Authorized Person for such Account
of rights issued, tender offers or any other discretionary rights with
respect to such Financial Assets, in each case, of which Bank has
received notice from the issuer of the Financial Assets, or as to which
notice is published in publications routinely utilized by Bank for this
purpose.
JPMorgan Chase Bank
Global Investor Services
Addendum to Fee Schedule for
[Customer]
Effective March , 2003
Fund Accounting Fee
{To be Completed]
Signed, for and on behalf of Signed, for and on behalf of
JPMorgan Chase Bank [Customer]
______________________________ _____________________________
Date: _______________________ Date: ___________________
Fee Schedule for [Customer]
, continued
page 2
Domestic Custody Fees Domestic Transaction Fees
Fund Accounting Fees
Base Fund Accounting:
Multiclass Accounting Fee: Price Quotes Fee:
New markets added, or additional services required that are not included in this
schedule will be negotiated separately and added to this schedule as the need
arises.
Agreed to on the day of
March, 2003
[Customer] JPMorgan Chase Bank
------------------------- -------------------------
By:
President Name:
Title:
Schedule D
FUND ACCOUNTING
Bank agrees to perform the following duties in accordance with the
requirements of Customer's Registration Statement, the 1940 Act, applicable
Internal Revenue Service ("IRS") regulations, and procedures as may be agreed
upon from time to time, including without limitation, those set forth in the
service level agreement pertaining to the Fund to which the Bank is a party. In
all instances, Bank agrees to perform such services in accordance with industry
standards and best practices, which may include those enumerated in the Audits
of Investment Companies Audit and Accounting Guide, as in effect from time to
time. Where appropriate, Bank agrees to keep all records on a class-by-class
basis for each of Customer's series (a "Fund"). Bank agrees to:
(a) keep and maintain the books and records of each Fund pursuant to Rule
3la-1 under the 1940 Act, which are applicable to fund accounting and
the services to be performed pursuant to this Schedule D, including the
following:
(i) journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and
disbursements of cash and all other debits and credits, as
required by subsection (b)(1) of said Rule;
(ii) general and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including
interest accrued and interest received, as required by
subsection (b)(2)(i) of said Rule;
(iii) separate ledger accounts required by subsections (b)(2)(ii)
and (iii) of said Rule; and
(iv) a monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of said
Rule.
(b) perform the following accounting services daily for each Fund:
(i) calculate the net asset value per share;
(ii) obtain security prices from independent pricing services, or
if such quotes are unavailable, obtain such prices from each
Fund's investment adviser or its designee (the "Investment
Adviser"), as approved by Customer's Board;
(iii) provide exception, stale and halted price reporting to the
Investment Adviser;
(iv) verify and reconcile with Bank's custody records all daily
trade activity;
(v) compute, as appropriate, each Fund's net income and capital
gains, dividend payables, dividend factors, 7-day yields,
7-day effective yields, 30-day yields, weighted average
portfolio maturity and such other agreed-upon rates and
yields;
(vi) review daily the net asset value calculation and dividend
factor (if any) for each Fund, check and confirm the net asset
values and dividend factors for reasonableness and deviations
against agreed-upon benchmarks and tolerance levels:
(vii) distribute net asset values and yields to NASDAQ, Customer's
transfer agent (the "Transfer Agent"), Customer's
administrator (the "Administrator") and such other third
parties as are agreed upon;
(viii) report to Customer, at least weekly, about the daily market
pricing of securities in any money market Funds, with the
comparison to the amortized cost basis;
(ix) determine unrealized appreciation and depreciation on
securities held in variable net asset value Funds;
(x) record all Corporate Actions affecting securities held by each
Fund, including dividends, stock splits and recapitalizations;
(xi) amortize premiums and accrete discounts on securities
purchased at a price other than face value, if requested by
Customer;
(xii) record and reconcile with the Transfer Agent all capital stock
activity;
(xiii) update Customer accounting system to reflect rate changes on
variable interest rate instruments;
(xiv) post Fund transactions to appropriate categories;
(xv) accrue expenses of each Fund according to instructions
received from the Administrator;
(xvi) calculate book capital account balances;
(xvii) maintain books and records;
(xviii) determine the outstanding receivables and payables for all (1)
security trades, (2) Fund share transactions and (3) income
and expense accounts;
(xix) provide accounting reports in connection with Customer's
regular annual audit and other audits and examinations by
regulatory agencies; and
(xx) provide such periodic reports as Customer shall reasonably
request.
In connection with the provision of these services, Bank agrees:
(a) to maintain, in a format acceptable to Customer, documents in
accordance with the applicable provisions of Rule 31a-2 of the 1940 Act
and with requirements of other applicable domestic regulators, such as
the IRS, or Applicable Foreign Regulators (as hereinafter defined).
Bank agrees to make such documents available upon reasonable request
for inspection by officers, employees and auditors of Customer during
Bank's normal business hours. For purposes of this subclause (a),
Applicable Foreign Regulator shall mean a foreign regulator designated
as such by the Fund by Proper Instructions and a foreign regulator
actually known to the Bank to have authority over the Fund or its
operations. Promptly after the identification of an Applicable Foreign
Regulator, appropriate representatives of the Bank and the Fund shall
meet and determine the requirements to which the Applicable Foreign
Regulator would subject the Fund. If the Bank and the Fund determine,
in the exercise of their reasonable judgment, that complying with such
requirements would impose a substantial additional burden on the Bank,
the Fund and the Bank agree to negotiate in good faith, taking into
account all relevant circumstances, an appropriate change in the fees
payable hereunder;
(b) that all records maintained and preserved by Bank pursuant to this
Agreement which Customer is required to maintain and preserve shall be
and remain the property of Customer and shall be surrendered to
Customer promptly upon request in the form in which such records have
been maintained and preserved. Upon reasonable request of Customer,
Bank shall provide, in the form reasonably requested by Customer, any
records included in any such delivery, and Customer shall reimburse
Bank for its expenses of providing such records in such form;
(c) to make reasonable efforts to determine (i) the taxable nature of any
distribution or amount received by or deemed received by, or payable
to, the Fund; (ii) the taxable nature or effect on the Fund or its
shareholders of any Corporate Actions, class actions, tax reclaims or
similar events; and (iii) taxable amount of any distribution or
dividend paid, payable, or deemed paid by the Portfolio to its
shareholders; subject to the following (w) with respect to
determinations contemplated by this clause (c) that a prudent fund
accountant would reasonably consider to be, and that the Bank considers
to be, non-routine in nature, the Bank may seek in writing the approval
or authorization of the Fund or a designee of the Fund and shall not be
required to act in respect of any such determination (as to which a
written request for approval or authorization shall have been made)
without such approval or authorization; (x) the Bank need not make any
such accrual, unless and until such accrual has been approved and
authorized by the Fund or
2
its designee; (y) the Fund shall, or shall cause its designee, to
provide such approval and authorization, or approval and authorization
of different determinations(s), promptly; and (z) provided the Bank has
made the reasonable efforts described in this clause (c) and thereafter
has acted in accordance with the approvals and authorizations of the
Fund or its designee, the Bank shall have no liability for any such
accrual if it otherwise, in performing its services hereunder, is not
in breach of this Agreement. The Bank shall accrue for these actions
appropriately; and
(d) to provide such records and assistance, including office space within
Bank's premises, to Customer's independent accountants in connection
with the services such accountants provide to Customer, as such
accountants shall reasonably request.
The parties further agree as follows with respect to the provision of services
pursuant to this Schedule D:
(a) Bank may rely on Customer's then currently effective Prospectus, and
Customer shall promptly advise Bank of any amendments thereto and
provide copies of such amendments to Bank.
(b) Both Bank and Customer or its designee shall use reasonable efforts to
identify any changes in domestic and foreign laws and regulations
applicable to Bank's providing of services under this Schedule D, and
each shall promptly advise the other of any changes it identifies and
upon any such identification Bank and Customer shall agree on any
reasonable alteration to the services to be provided to Bank under this
Schedule D.
(c) Customer or its designee shall (i) furnish promptly to Bank (and Bank
may rely upon) the amounts of, or written formulas or methodologies to
be used by Bank to calculate the amounts of, Customer liabilities and
(ii) specify the timing for accruals of such liabilities. Bank shall
request such additional information as it deems reasonably necessary
for it to perform its services under this Schedule D.
(d) Bank shall not be required to include as Customer liabilities and
expenses, nor use in its calculations hereunder, including, without
limitation, as a reduction of net asset value, any accrual for any U.S.
federal or state income taxes, unless and until Customer or its
designee shall have specified to Bank the precise amount of the same to
be included in liabilities and expenses or used to reduce net asset
value. Bank agrees to include as a Customer liability proper accruals
for foreign taxes, unless, after being advised of the amount and the
basis for the accrual, Customer by Instructions directs Bank not to do
so.
(e) Customer or its designee shall furnish to Bank, and Bank may rely upon,
the following types of information (and explanations thereof): (i)
Customer's tax basis in debt obligations acquired by Customer before
Bank's becoming Bank hereunder, the dates of such acquisitions, and the
amount of premium previously amortized and the discount previously
included in income, (ii) the amounts credited to any capital accounts,
(iii) the amount of any reserves, and (iv) similar information which is
required by Bank for performing the services and is neither possessed
by Bank as Bank nor available from a third party.
(f) The Bank shall not be responsible for, and shall not incur any loss or
liability with respect to: any errors or omissions in information
supplied by the Fund or its designee that the Bank has reviewed and has
concluded to be within reasonable tolerance limits, as agreed between
the parties; any improper use by the Fund, its designees, agents,
distributor or investment adviser of any valuations or computations
supplied by the Bank under this Agreement; any valuations of securities
supplied by the Fund or an independent pricing service approved by the
Fund's Board, provided that, with respect to such valuations, the
3
Bank has otherwise complied with this Schedule C, has reviewed the valuations
and has concluded they are within reasonable tolerance limits agreed to by the
parties; any tax determination authorized and approved by the Fund or its
designee that the Bank has reviewed and has concluded is within reasonable
tolerance limits as agreed to by the parties; or any changes in U.S. law or
regulations applicable to the Bank's performance not identified by the Bank's
use of reasonable efforts which are not identified to the Bank by the Fund.
4
Annex A
X.X. Xxxxxx Mutual Fund Series
JPMorgan Intrepid Growth Fund
JPMorgan Intrepid Value Fund
JPMorgan Intrepid America Fund
JPMorgan Intrepid Investor Fund
X.X. Xxxxxx Xxxxxxx Series Trust
JPMorgan Multi-Manager Small Cap Growth Fund
JPMorgan Multi-Manager Small Cap Value Fund
X.X. Xxxxxx Funds
JPMorgan Xxxxxxx Emerging Markets Debt Fund
JPMorgan U.S. Small Company Opportunities Fund
X.X. Xxxxxx Institutional Funds
JPMorgan Short Term Bond Fund
JPMorgan Bond Fund
JPMorgan U.S. Equity Fund
JPMorgan U.S. Small Company Fund
JPMorgan Xxxxxxx International Value Fund
JPMorgan Xxxxxxx Emerging Markets Equity Fund
JPMorgan Diversified Fund
JPMorgan Disciplined Equity Fund
JPMorgan Xxxxxxx International Opportunities Fund
JPMorgan Global Strategic Income Fund
JPMorgan Tax Aware Short-Intermediate Income Fund
X.X. Xxxxxx Series Trust
JPMorgan Enhanced Income Fund
JPMorgan Global 50 Fund
JPMorgan Global Healthcare Fund
JPMorgan Tax Aware U.S. Equity Fund
JPMorgan Tax Aware Disciplined Equity Fund
JPMorgan California Bond Fund
JPMorgan Market Neutral Fund
JPMorgan Tax Aware Enhanced Income Fund
X.X. Xxxxxx Series Trust II
X.X. Xxxxxx Bond Portfolio
X.X. Xxxxxx U.S. Large Cap Core Equity Portfolio
X.X. Xxxxxx Small Company Portfolio
X.X. Xxxxxx International Equity Portfolio
X.X. Xxxxxx Mid Cap Value Portfolio
X.X. Xxxxxx Mutual Fund Group
JPMorgan Capital Growth Fund
JPMorgan Xxxxxxx Intrepid European Fund
JPMorgan Growth and Income Fund
JPMorgan Xxxxxxx International Growth Fund
JPMorgan Xxxxxxx Japan Fund
JPMorgan Short Term Bond Fund II
JPMorgan Dynamic Small Cap Fund
JPMorgan Strategic Income Fund
JPMorgan U.S. Treasury Income Fund
JPMorgan Small Cap Equity Fund
JPMorgan Xxxxxxx Tax Aware International Opportunities Fund
JPMorgan Xxxxxxx Asia Equity Fund
JPMorgan Xxxxxxx International Small Cap Equity Fund
JPMorgan Select Growth & Income Fund
X.X. Xxxxxx Xxxxxxx Mutual Fund Group
JPMorgan Mid Cap Value Fund
JPMorgan Small Cap Growth Fund
X.X. Xxxxxx Mutual Fund Trust
JPMorgan California Tax Free Money Market Fund
JPMorgan Federal Money Market Fund
JPMorgan Tax Free Money Market Fund
JPMorgan New York Tax Free Money Market Fund
JPMorgan 100% U.S. Treasury Securities Money Market Fund
JPMorgan Liquid Assets Money Market Fund
JPMorgan Prime Money Market Fund
JPMorgan Treasury Plus Money Market Fund
JPMorgan U.S. Government Money Market Fund
X.X. Xxxxxx Mutual Fund Select Group
JPMorgan Bond Fund II
JPMorgan Tax Aware Large Cap Growth Fund
JPMorgan Tax Aware Large Cap Value Fund
JPMorgan Mid Cap Equity Fund
JPMorgan Trust Small Cap Equity Fund
JPMorgan Xxxxxxx International Equity Fund
X.X. Xxxxxx Mutual Fund Select Trust
JPMorgan Intermediate Tax Free Income Fund
JPMorgan New York Intermediate Tax Free Income Fund
JPMorgan New Jersey Tax Free Income Fund
JPMorgan Tax Free Income Fund
X.X. Xxxxxx Mutual Fund Investment Trust
JPMorgan Equity Growth Fund
JPMorgan Equity Income Fund
JPMorgan Mid Cap Growth Fund
Undiscovered Managers Funds
Undiscovered Managers Behavioral Growth
Undiscovered Managers Behavioral Value Fund
Undiscovered Managers REIT Fund
Undiscovered Managers Small Cap Growth Fund
UM Investment Trust
UM Multi-Strategy Fund
UM Investment Trust II
Undiscovered Managers Spinnaker Fund
