Exhibit g
CUSTODIAN AGREEMENT
This Agreement between THE GLOBAL CHINA GROWTH FUND, a business trust
organized and existing under the laws of Massachusetts (the "FUND"), and STATE
STREET BANK and TRUST COMPANY, a Massachusetts trust company (the "CUSTODIAN"),
WITNESSETH: that in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of its assets, including
securities which the Fund desires to be held in places within the United States
("DOMESTIC SECURITIES") and securities it desires to be held outside the United
States ("FOREIGN SECURITIES"). The Fund agrees to deliver to the Custodian all
securities and cash owned by it, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by it from time to time, and the cash consideration received by it for
such new or treasury shares of beneficial interest of the Fund ("SHARES") as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of the Fund held or received by the Fund and not delivered to the
Custodian.
Upon receipt of "PROPER INSTRUCTIONS" (as such term is defined in Section 6
hereof), the Custodian shall from time to time employ one or more sub-custodians
located in the United States, but only in accordance with an applicable vote by
the Board of Trustees of the Fund (the "BOARD"). The Custodian may employ as
sub-custodian for the Fund's foreign securities the foreign banking institutions
and foreign securities depositories designated in Schedules A and B hereto, but
only in accordance with the applicable provisions of Sections 3 and 4. The
Custodian shall have no more or less responsibility or liability to the Fund on
account of any actions or omissions of any sub-custodian so employed than any
such sub-custodian has to the Custodian.
SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY
THE CUSTODIAN IN THE UNITED STATES
SECTION 2.1 HOLDING SECURITIES. The Custodian shall hold and physically
segregate for the account of the Fund all non-cash property, to be held by it in
the United States, including all domestic securities owned by the Fund other
than securities which are maintained pursuant to Section 2.8 in a clearing
agency which acts as a securities depository or in a book-entry system
authorized by the U.S. Department of the Treasury (each, a "U.S. SECURITIES
SYSTEM").
SECTION 2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
domestic securities owned by the Fund held by the Custodian or in a U.S.
Securities System account of the Custodian, only upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and receipt
of payment therefor;
1
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a U.S. Securities System, in
accordance with the provisions of Section 2.8 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Fund;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of the
Fund or into the name of any nominee or nominees of the Custodian or
into the name or nominee name of any agent appointed pursuant to
Section 2.7 or into the name or nominee name of any sub-custodian
appointed pursuant to Section 1; or for exchange for a different
number of bonds, certificates or other evidence representing the same
aggregate face amount or number of units; PROVIDED that, in any such
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund, to the
broker or its clearing agent, against a receipt, for examination in
accordance with "street delivery" custom; provided that in any such
case, the Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to receiving
payment for such securities except as may arise from the Custodian's
own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions
for conversion contained in such securities, or pursuant to any
deposit agreement; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities
or the surrender of interim receipts or temporary securities for
definitive securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by the
Fund, BUT ONLY against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Fund, which may be in the
form of cash or obligations issued by the United States government,
its agencies or instrumentalities, except that in connection with any
loans for which collateral is to be credited to the Custodian's
account in the book-entry system authorized by the U.S. Department of
the Treasury, the Custodian will not be held liable or responsible for
the delivery of securities owned by the Fund prior to the receipt of
such collateral;
2
11) For delivery in connection with any loans of securities made by the
Fund to a third party lending agent, or the lending agent's custodian,
in accordance with Proper Instructions (which may not provide for the
receipt by the Custodian of collateral therefor) agreed upon from time
to time by the Custodian and the Fund;
12) For the payment of initial or variation margin in connection with
trading in futures and options on futures contracts;
13) For delivery as security in connection with any borrowing by the Fund
requiring a pledge of assets by the Fund, BUT ONLY against receipt of
amounts borrowed;
14) For delivery in accordance with the provisions of any agreement among
the Fund, the Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "EXCHANGE ACT") and a member of
The National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange, or of
any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund;
15) For delivery in accordance with the provisions of any agreement among
the Fund, the Custodian, and a futures commission merchant registered
under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission ("CFTC") and/or any
contract market, or any similar organization or organizations,
regarding account deposits in connection with transactions by the
Fund;
16) Upon receipt of instructions from the transfer agent for the Fund (the
"TRANSFER AGENT") for delivery to such Transfer Agent or to the
holders of Shares in connection with distributions in kind, as may be
described from time to time in the Fund's currently effective
prospectus and statement of additional information (the "PROSPECTUS"),
in satisfaction of requests by holders of Shares for repurchase or
redemption;
17) For delivery to one or more co-custodians, if any (each, a "REPO
CUSTODIAN") appointed by the Fund and communicated to the Custodian by
Proper Instructions, including Schedule D (as may be amended from time
to time) attached to this Agreement, duly executed by an authorized
officer of the Fund, for the purpose of engaging in repurchase
agreement transactions, which delivery may be made without
contemporaneous receipt by the Custodian of assets in exchange
therefor, and upon which delivery to such Repo Custodian in accordance
with Proper Instructions from the Fund, the Custodian shall have no
further responsibility or obligation to the Fund as a custodian for
the Fund with respect to the securities so delivered (each such
delivery, a "FREE TRADE"), provided that, in preparing reports of
monies received or paid out of the Fund or of assets comprising the
Fund, the Custodian shall be entitled to rely upon information
received from time to time from the Repo Custodian and shall not be
responsible for the accuracy or completeness of such information
included in the Custodian's reports until such assets are received by
the Custodian; and
3
18) For any other purpose, BUT ONLY upon receipt of Proper Instructions
specifying the securities of the Fund to be delivered and naming the
person or persons to whom delivery of such securities shall be made.
SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of the
Fund or in the name of any nominee of the Fund or of any nominee of the
Custodian which nominee shall be assigned exclusively to the Fund, UNLESS the
Fund has authorized in writing the appointment of a nominee to be used in common
with other registered investment companies having the same investment advisor as
the Fund, or in the name or nominee name of any agent appointed pursuant to
Section 2.7 or in the name or nominee name of any sub-custodian appointed
pursuant to Section 1. All securities accepted by the Custodian on behalf of the
Fund under the terms of this Agreement shall be in "street name" or other good
delivery form. If, however, the Fund directs the Custodian to maintain
securities in "street name", the Custodian shall utilize its best efforts only
to timely collect income due the Fund on such securities and to notify the Fund
on a best efforts basis only of relevant corporate actions including, without
limitation, pendency of calls, maturities, tender or exchange offers.
SECTION 2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate
bank account or accounts in the United States in the name of the Fund, subject
only to draft or order by the Custodian acting pursuant to the terms of this
Agreement, and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the Fund, other than
cash maintained by the Fund in a bank account established and used in accordance
with Rule 17f-3 under the Investment Company Act of 1940, as amended (the "1940
ACT"). Monies held by the Custodian for the Fund may be deposited by it to its
credit as Custodian in the banking department of the Custodian or in such other
banks or trust companies as it may in its discretion deem necessary or
desirable; PROVIDED, however, that every such bank or trust company shall be
qualified to act as a custodian under the 1940 Act and that each such bank or
trust company and the monies to be deposited with each such bank or trust
company shall be approved by vote of a majority of the Board. Such monies shall
be deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
SECTION 2.5 COLLECTION OF INCOME. Subject to the provisions of Section 2.3,
the Custodian shall collect on a timely basis all income and other payments with
respect to registered domestic securities held hereunder to which the Fund shall
be entitled either by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments with respect to
bearer domestic securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent thereof and shall credit such
income, as collected, to the Fund's custodian account. Without limiting the
generality of the foregoing, the Custodian shall detach and present for payment
all coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on securities held hereunder.
Income due the Fund on securities loaned pursuant to the provisions of Section
2.2 (10) shall be the responsibility of the Fund. The Custodian will have no
duty or responsibility in connection therewith, other than to provide the Fund
with such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to which the
Fund is properly entitled.
4
SECTION 2.6 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of domestic securities, options, futures contracts
or options on futures contracts for the account of the Fund but only
(a) against the delivery of such securities or evidence of title to
such options, futures contracts or options on futures contracts to the
Custodian (or any bank, banking firm or trust company doing business
in the United States or abroad which is qualified under the 1940 Act
to act as a custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the Fund or in the
name of a nominee of the Custodian referred to in Section 2.3 hereof
or in proper form for transfer; (b) in the case of a purchase effected
through a U.S. Securities System, in accordance with the conditions
set forth in Section 2.8 hereof; (c) in the case of repurchase
agreements entered into between the Fund and the Custodian, or another
bank, or a broker-dealer which is a member of NASD, (i) against
delivery of the securities either in certificate form or through an
entry crediting the Custodian's account at the Federal Reserve Bank
with such securities or (ii) against delivery of the receipt
evidencing purchase by the Fund of securities owned by the Custodian
along with written evidence of the agreement by the Custodian to
repurchase such securities from the Fund; or (d) for transfer to a
time deposit account of the Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant to
Proper Instructions from the Fund as defined herein;
2) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 2.2 hereof;
3) For the repurchase of Shares issued as set forth in Section 5 hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of
the Fund: interest, taxes, management, accounting, transfer agent and
legal fees, and operating expenses of the Fund whether or not such
expenses are to be in whole or part capitalized or treated as deferred
expenses;
5) For the payment of any dividends on Shares declared pursuant to the
governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For the payment of initial or variation margin in connection with
trading in futures and options on futures contracts;
8) For payment of cash to one or more Repo Custodians, if any, appointed
by the Fund and communicated to the Custodian by Proper Instructions,
including Schedule D (as may be amended from time to time) attached to
this Agreement, duly executed by an authorized officer of the Fund,
for the purpose of engaging in repurchase
5
agreement transactions, which payment may be made without
contemporaneous receipt by the Custodian of assets in exchange
therefor, and upon which delivery to such Repo Custodian in accordance
with Proper Instructions from the Fund, the Custodian shall have no
further responsibility or obligation to the Fund as a custodian for
the Fund with respect to the securities so delivered in a Free Trade,
provided that, in preparing reports of monies received or paid out of
the Fund or of assets comprising the Fund, the Custodian shall be
entitled to rely upon information received from time to time from the
Repo Custodian and shall not be responsible for the accuracy or
completeness of such information included in the Custodian's reports
until such assets are received by the Custodian; and
9) For any other purpose, BUT ONLY upon receipt of Proper Instructions
specifying the amount of such payment and naming the person or persons
to whom such payment is to be made.
SECTION 2.7 APPOINTMENT OF AGENTS. The Custodian may at any time or times
in its discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a custodian, as
its agent to carry out such of the provisions of this Section 2 as the Custodian
may from time to time direct; PROVIDED, however, that the appointment of any
agent shall not relieve the Custodian of its responsibilities or liabilities
hereunder.
SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The
Custodian may deposit and/or maintain securities owned by the Fund in a U.S.
Securities System in compliance with the conditions of Rule 17f-4 of the 1940
Act, as amended from time to time.
SECTION 2.9 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for and on
behalf of the Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.8 hereof, (i) in accordance with the provisions
of any agreement among the Fund, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange (or the CFTC or any registered contract market), or
of any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii) for purposes of
segregating cash, U.S. government securities or other securities in connection
with swaps arrangements entered into by the Fund, options purchased, sold or
written by the Fund, or commodity futures contracts or options thereon purchased
or sold by the Fund, (iii) for the purposes of compliance by the Fund with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release of the U.S. Securities and Exchange Commission (the "SEC"),
or interpretative opinion of the staff of the SEC, relating to the maintenance
of segregated accounts by registered investment companies, and (iv) for any
other purpose upon receipt of Proper Instructions.
SECTION 2.10 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other payments with
respect to domestic securities of the Fund held by it and in connection with
transfers of securities.
6
SECTION 2.11 PROXIES. The Custodian shall, with respect to the 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 the Fund or a nominee of the Fund, all proxies, without indication
of the manner in which such proxies are to be voted, and shall promptly deliver
to the Fund such proxies, all proxy soliciting materials and all notices
relating to such securities.
SECTION 2.12 COMMUNICATIONS RELATING TO FUND SECURITIES. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the Fund all
written information (including, without limitation, pendency of calls and
maturities of domestic securities and expirations of rights in connection
therewith and notices of exercise of call and put options written by the Fund
and the maturity of futures contracts purchased or sold by the Fund) received by
the Custodian from issuers of the securities being held for the Fund. With
respect to tender or exchange offers, the Custodian shall transmit promptly to
the Fund all written information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the party (or its agents)
making the tender or exchange offer. If the Fund desires to take action with
respect to any tender offer, exchange offer or any other similar transaction,
the Fund shall notify the Custodian at least three business days prior to the
date on which the Custodian is to take such action.
SECTION 3. PROVISIONS RELATING TO RULES 17f-5 AND 17f-7
SECTION 3.1. DEFINITIONS. As used throughout this Agreement, the following
capitalized terms shall have the indicated meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment, economic and financial infrastructure
(including any Eligible Securities Depository operating in the country),
prevailing or developing custody and settlement practices, and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned direct or indirect subsidiary of a U.S. Bank
(as defined in Rule 17f-5), a bank holding company meeting the requirements of
an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other
appropriate action of the SEC), or a foreign branch of a Bank (as defined in
Section 2(a)(5) of the 0000 Xxx) meeting the requirements of a custodian under
Section 17(f) of the 1940 Act; the term does not include any Eligible Securities
Depository.
"Eligible Securities Depository" has the meaning set forth in section (b)(1) of
Rule 17f-7.
"Foreign Assets" means any of the Fund's investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Fund's
transactions in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(3) of Rule
17f-5.
"Rule 17f-5" means Rule 17f-5 promulgated under the 1940 Act.
"Rule 17f-7" means Rule 17f-7 promulgated under the 1940 Act.
7
SECTION 3.2. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
3.2.1 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. The
Fund, by resolution adopted by its Board, hereby delegates to the Custodian,
subject to Section (b) of Rule 17f-5, the responsibilities set forth in this
Section 3.2 with respect to Foreign Assets held outside the United States, and
the Custodian hereby accepts such delegation as Foreign Custody Manager of the
Fund.
3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the countries and custody arrangements for each such country
listed on Schedule A to this Contract, which list of countries may be amended
from time to time by the Fund with the agreement of the Foreign Custody Manager.
The Foreign Custody Manager shall list on Schedule A the Eligible Foreign
Custodians selected by the Foreign Custody Manager to maintain the Fund's
assets, which list of Eligible Foreign Custodians may be amended from time to
time in the sole discretion of the Foreign Custody Manager. The Foreign Custody
Manager will provide amended versions of Schedule A in accordance with Section
3.2.5 hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by the Fund of the applicable account opening
requirements for such country, the Foreign Custody Manager shall be deemed to
have been delegated by the Board responsibility as Foreign Custody Manager with
respect to that country and to have accepted such delegation. Execution of this
Agreement by the Fund shall be deemed to be a Proper Instruction to open an
account, or to place or maintain Foreign Assets, in each country listed on
Schedule A in which the Custodian has previously placed or currently maintains
Foreign Assets pursuant to the terms of the Contract. Following the receipt of
Proper Instructions directing the Foreign Custody Manager to close the account
of the Fund with the Eligible Foreign Custodian selected by the Foreign Custody
Manager in a designated country, the delegation by the Board to the Custodian as
Foreign Custody Manager for that country shall be deemed to have been withdrawn,
the Custodian shall immediately cease to be the Foreign Custody Manager of the
Fund with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period to which the parties agree in writing)
after receipt of any such notice by the Fund, the Custodian shall have no
further responsibility in its capacity as Foreign Custody Manager to the Fund
with respect to the country as to which the Custodian's acceptance of delegation
is withdrawn.
8
3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the provisions of
this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign
Assets in the care of the Eligible Foreign Custodian selected by the Foreign
Custody Manager in each country listed on Schedule A, as amended from time to
time. In performing its delegated responsibilities as Foreign Custody Manager to
place or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign
Custody Manager shall determine that the Foreign Assets will be subject to
reasonable care, based on the standards applicable to custodians in the country
in which the Foreign Assets will be held by that Eligible Foreign Custodian,
after considering all factors relevant to the safekeeping of such assets,
including, without limitation the factors specified in Rule 17f-5(c)(1), as
amended from time to time.
(b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign Custody Manager
shall determine that the contract governing the foreign custody arrangements
with each Eligible Foreign Custodian selected by the Foreign Custody Manager
will satisfy the requirements of Rule 17f-5(c)(2).
(c) MONITORING. In each case in which the Foreign Custody Manager maintains
Foreign Assets with an Eligible Foreign Custodian selected by the Foreign
Custody Manager, the Foreign Custody Manager shall establish a system to
monitor: (i) the appropriateness of maintaining the Foreign Assets with such
Eligible Foreign Custodian and (ii) performance of the contract governing the
custody arrangements established by the Foreign Custody Manager with the
Eligible Foreign Custodian. In the event the Foreign Custody Manager determines
that the custody arrangements with an Eligible Foreign Custodian it has selected
are no longer appropriate, the Foreign Custody Manager shall notify the Board in
accordance with Section 3.2.5 hereunder.
3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes
of this Section 3.2, the Board, or at its delegation, the Fund's investment
advisor, shall be deemed to have considered and determined to accept such
Country Risk as is incurred by placing and maintaining the Foreign Assets in
each country for which the Custodian is serving as Foreign Custody Manager of
the Fund.
3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager shall report
the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and the
placement of such Foreign Assets with another Eligible Foreign Custodian by
providing to the Board an amended Schedule A at the end of the calendar quarter
in which an amendment to such Schedule has occurred. The Foreign Custody Manager
shall make written reports notifying the Board of any other material change in
the foreign custody arrangements of the Fund described in this Section 3.2 after
the occurrence of the material change.
3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF THE FUND. In
performing the responsibilities delegated to it hereunder, the Foreign Custody
Manager agrees to exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of foreign assets of management
investment companies registered under the 1940 Act would exercise.
9
3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17f-5. The Foreign Custody
Manager represents to the Fund that it is a U.S. Bank as defined in section
(a)(7) of Rule 17f-5. The Fund represents to the Custodian that the Board has
determined that it is reasonable for the Board to rely on the Custodian to
perform the responsibilities delegated pursuant to this Contract to the
Custodian as the Foreign Custody Manager of the Fund.
3.2.8 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN
CUSTODY MANAGER. The Board's delegation to the Custodian as Foreign Custody
Manager of the Fund shall be effective as of the date hereof and shall remain in
effect until terminated at any time, without penalty, by written notice from the
terminating party to the non-terminating party. Termination will become
effective thirty (30) days after receipt by the non-terminating party of such
notice. The provisions of Section 3.2.2 hereof shall govern the delegation to
and termination of the Custodian as Foreign Custody Manager of the Fund with
respect to designated countries.
SECTION 3.3 ELIGIBLE SECURITIES DEPOSITORIES.
3.3.1 ANALYSIS AND MONITORING. The Custodian shall (a) provide the
Fund (or its duly-authorized investment manager or investment advisor) with an
analysis of the custody risks associated with maintaining assets with the
Eligible Securities Depositories set forth on Schedule B hereto, in accordance
with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a
continuing basis, and promptly notify the Fund (or its duly-authorized
investment manager or investment advisor) of any material change in such risks,
in accordance with section (a)(1)(i)(B) of Rule 17f-7.
3.3.2 STANDARD OF CARE. The Custodian agrees to exercise reasonable
care, prudence and diligence in performing the duties set forth in Section
3.3.1.
SECTION 3.4 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon reasonable
request of the Fund, the Custodian will use reasonable efforts to arrange for
the independent accountants for the Fund to be afforded access to the books and
records of any foreign banking institution employed as a Foreign Sub-Custodian
insofar as such books and records relate to the performance of such foreign
banking institution under its agreement with the Custodian as the Foreign
Custody Manager of the Fund.
SECTION 4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD
OUTSIDE THE UNITED STATES
SECTION 4.1 DEFINITIONS. As used throughout this Agreement, the following
capitalized terms shall have the indicated meanings:
"Foreign Securities System" means an Eligible Securities Depository listed on
Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
SECTION 4.2. HOLDING SECURITIES. The Custodian shall identify on its books
as belonging to the Fund the foreign securities held by each Foreign
Sub-Custodian or Foreign
10
Securities System. The Custodian may hold foreign securities for all of its
customers, including the Fund, with any Foreign Sub-Custodian in an account that
is identified as belonging to the Custodian for the benefit of its customers,
provided however, that (i) the records of the Custodian with respect to foreign
securities of the Fund which are maintained in such account shall identify those
securities as belonging to the Fund and (ii), to the extent permitted and
customary in the market in which the account is maintained, the Custodian shall
require that securities so held by the Foreign Sub-Custodian be held separately
from any assets of such Foreign Sub-Custodian or of other customers of such
Foreign Sub-Custodian.
SECTION 4.3. FOREIGN SECURITIES SYSTEMS. Foreign securities shall be
maintained in a Foreign Securities System in a designated country through
arrangements implemented by the Custodian or a Foreign Sub-Custodian, as
applicable, in such country.
SECTION 4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. DELIVERY OF FOREIGN SECURITIES. The Custodian or a Foreign Sub-
Custodian shall release and deliver foreign securities of the Fund held by the
Custodian or such Foreign Sub-Custodian, or in a Foreign Securities System
account, only upon receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and only in the following
cases:
(i) upon the sale of such foreign securities for the Fund in accordance
with commercially reasonable market practice in the country where such
foreign securities are held or traded, including, without limitation:
(A) delivery against expectation of receiving later payment; or (B) in
the case of a sale effected through a Foreign Securities System, in
accordance with the rules governing the operation of the Foreign
Securities System;
(ii) for delivery to one or more Repo Custodians appointed by a Fund and
communicated to the Custodian by Proper Instructions, including
Schedule D (as may be amended from time to time) attached to this
Agreement, duly executed by an authorized officer of such Fund, for
the purpose of engaging in repurchase agreement transactions, which
payment may be made without contemporaneous receipt by the Custodian
of assets in exchange therefor, and upon which delivery to such Repo
Custodian in accordance with Proper Instructions from the Fund, the
Custodian shall have no further responsibility or obligation to the
Fund as a custodian for the Fund with respect to the securities so
delivered in a Free Trade, provided that, in preparing reports of
monies received or paid out of the Fund or of assets comprising the
Fund, the Custodian shall be entitled to rely upon information
received from time to time from the Repo Custodian and shall not be
responsible for the accuracy or completeness of such information
included in the Custodian's reports until such assets are received by
the Custodian;
(iii) to the depository agent in connection with tender or other similar
offers for foreign securities of the Fund;
(iv) to the issuer thereof or its agent when such foreign securities are
called, redeemed, retired or otherwise become payable;
11
(v) to the issuer thereof, or its agent, for transfer into the name of the
Custodian (or the name of the respective Foreign Sub-Custodian or of
any nominee of the Custodian or such Foreign Sub-Custodian) or for
exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of
units;
(vi) to brokers, clearing banks or other clearing agents for examination or
trade execution in accordance with market custom; provided that in any
such case the Foreign Sub-Custodian shall have no responsibility or
liability for any loss arising from the delivery of such securities
prior to receiving payment for such securities except as may arise
from the Foreign Sub-Custodian's own negligence or willful misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions
for conversion contained in such securities, or pursuant to any
deposit agreement;
(viii) in the case of warrants, rights or similar foreign securities, the
surrender thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary
securities for definitive securities;
(ix) for delivery as security in connection with any borrowing by the Fund
requiring a pledge of assets by the Fund;
(x) in connection with trading in options and futures contracts, including
delivery as original margin and variation margin;
(xi) For delivery in connection with any loans of foreign securities made
by the Fund, BUT ONLY against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Fund, which may be in
the form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be credited to
the Custodian's account in the book-entry system authorized by the
U.S. Department of the Treasury, the Custodian will not be held liable
or responsible for the delivery of securities owned by the Fund prior
to the receipt of such collateral;
(xii) For delivery in connection with any loans of foreign securities made
by the Fund to a third party lending agent, or the lending agent's
custodian, in accordance with Proper Instructions (which may not
provide for the receipt by the Custodian of collateral therefor)
agreed upon from time to time by the Custodian and the Fund;
(xiii) For payment of cash to one or more Repo Custodians, if any,
appointed by a Fund and communicated to the Custodian by Proper
Instructions, including Schedule D (as may be amended from time to
time) attached to this Agreement, duly executed by an authorized
officer of such Fund, for the purpose of engaging in repurchase
agreement transactions, which payment may be made without
contemporaneous receipt by the Custodian of assets in exchange
therefor, and upon which delivery to such Repo Custodian in accordance
with Proper Instructions from the Fund, the
12
Custodian shall have no further responsibility or obligation to the
Fund as a custodian for the Fund with respect to the securities so
delivered in a Free Trade, provided that, in preparing reports of
monies received or paid out of the Fund or of assets comprising the
Fund, the Custodian shall be entitled to rely upon information
received from time to time from the Repo Custodian and shall not be
responsible for the accuracy or completeness of such information
included in the Custodian's reports until such assets are received by
the Custodian; and
(ix) for any other purpose, but only upon receipt of Proper Instructions
specifying the foreign securities to be delivered and naming the
person or persons to whom delivery of such securities shall be made.
4.4.2. PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out, or direct the respective Foreign Sub-Custodian or the
respective Foreign Securities System to pay out, monies of the Fund in the
following cases only:
(i) upon the purchase of foreign securities for the Fund, unless otherwise
directed by Proper Instructions, by (A) delivering money to the seller
thereof or to a dealer therefor (or an agent for such seller or
dealer) against expectation of receiving later delivery of such
foreign securities; or (B) in the case of a purchase effected through
a Foreign Securities System, in accordance with the rules governing
the operation of such Foreign Securities System;
(ii) in connection with the conversion, exchange or surrender of foreign
securities of the Fund;
(iii) for the payment of any expense or liability of the Fund, including
but not limited to the following payments: interest, taxes, investment
advisory fees, transfer agency fees, fees under this Contract, legal
fees, accounting fees, and other operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign exchange
contracts for the Fund, including transactions executed with or
through the Custodian or its Foreign Sub-Custodians;
(v) in connection with trading in options and futures contracts, including
delivery as original margin and variation margin;
(vi) for payment of part or all of the dividends received in respect of
securities sold short;
(vii) For delivery in connection with any loans of foreign securities made
by the Fund, BUT ONLY against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Fund, which may be in
the form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be credited to
the Custodian's account in the book-entry system authorized by the
U.S. Department
13
of the Treasury, the Custodian will not be held liable or responsible
for the delivery of securities owned by the Fund prior to the receipt
of such collateral;
(viii) For delivery in connection with any loans of foreign securities made
by the Fund to a third party lending agent, or the lending agent's
custodian, in accordance with Proper Instructions (which may not
provide for the receipt by the Custodian of collateral therefor)
agreed upon from time to time by the Custodian and the Fund;
(ix) for payment of cash to one or more Repo Custodians, if any, appointed
by the Fund and communicated to the Custodian by Proper Instructions,
including Schedule D (as may be amended from time to time) attached to
this Agreement, duly executed by an authorized officer of the Fund,
for the purpose of engaging in repurchase and agreement transactions,
which payment may be made without contemporaneous receipt by the
Custodian of assets in exchange therefor, and upon which delivery to
such Repo Custodian in accordance with Proper Instructions from the
Fund, the Custodian shall have no further responsibility or obligation
to the Fund as a custodian for the Fund with respect to the securities
so delivered in a Free Trade, provided that, in preparing reports of
monies received or paid out of the Fund or of assets comprising the
Fund, the Custodian shall be entitled to rely upon information
received from time to time from the Repo Custodian and shall not be
responsible for the accuracy or completeness of such information
included in the Custodian's reports until such assets are received by
the Custodian; and
(x) for any other purpose, but only upon receipt of Proper Instructions
specifying the amount of such payment and naming the person or persons
to whom such payment is to be made.
4.4.3. MARKET CONDITIONS. Notwithstanding any provision of this
Contract to the contrary, settlement and payment for Foreign Assets received for
the account of the Fund and delivery of Foreign Assets maintained for the
account of the Fund may be effected in accordance with the customary established
securities trading or processing practices and procedures in the country or
market in which the transaction occurs, including, without limitation,
delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or
an agent for such purchaser or dealer) with the expectation of receiving later
payment for such Foreign Assets from such purchaser or dealer.
The Custodian shall provide to the Board the information with respect to custody
and settlement practices in countries in which the Custodian employs a Foreign
Sub-Custodian described on Schedule C hereto at the time or times set forth on
such Schedule. The Custodian may revise Schedule C from time to time, provided
that no such revision shall result in the Board or its duly-authorized designee
being provided with substantively less information than had been previously
provided hereunder.
SECTION 4.5. REGISTRATION OF FOREIGN SECURITIES. The foreign securities
maintained in the custody of a Foreign Sub-Custodian (other than bearer
securities) shall be registered in the name of the Fund or in the name of the
Custodian or in the name of any Foreign Sub-Custodian or in the name of any
nominee of the foregoing, and, the Fund agrees to hold any such nominee harmless
from any liability as a holder of record of such foreign securities. The
Custodian or a Foreign Sub-Custodian shall not be obligated to accept securities
on behalf of the Fund under the
14
terms of this Contract unless the form of such securities and the manner in
which they are delivered are in accordance with reasonable market practice.
SECTION 4.6 BANK ACCOUNTS. The Custodian shall identify on its books as
belonging to the Fund cash (including cash denominated in foreign currencies)
deposited with the Custodian. Where the Custodian is unable to maintain, or
market practice does not facilitate the maintenance of, cash on the books of the
Custodian, a bank account or bank accounts shall be opened and maintained
outside the United States on behalf of the Fund with a Foreign Sub-Custodian in
accordance with the provisions of this Agreement. All accounts referred to in
this Section shall be subject only to draft or order by the Custodian (or, if
applicable, such Foreign Sub-Custodian) acting pursuant to the terms of this
Agreement to hold cash received by or from or for the account of the Fund. Cash
maintained on the books of the Custodian (including its branches, subsidiaries
and affiliates), regardless of currency denomination, is maintained in bank
accounts established under, and subject to the laws of, The Commonwealth of
Massachusetts.
SECTION 4.7. COLLECTION OF INCOME. The Custodian shall use reasonable
commercial efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Fund shall be entitled and shall
credit such income, as collected, to the Fund. In the event that extraordinary
measures are required to collect such income, the Fund and the Custodian shall
consult as to such measures and as to the compensation and expenses of the
Custodian relating to such measures.
SECTION 4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities held
pursuant to this Section 4, the Custodian will use reasonable commercial efforts
to facilitate the exercise of voting and other shareholder rights, subject
always to the laws, regulations and practical constraints that may exist in the
country where such securities are issued. The Fund acknowledges that local
conditions, including lack of regulation, onerous procedural obligations, lack
of notice and other factors may have the effect of severely limiting the ability
of the Fund to exercise shareholder rights.
SECTION 4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The Custodian
shall transmit promptly to the Fund written information with respect to
materials received by the Custodian via the Foreign Sub-Custodians from issuers
of the foreign securities being held for the account of the Fund (including,
without limitation, pendency of calls and maturities of foreign securities and
expirations of rights in connection therewith). With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Fund written
information with respect to materials so received by the Custodian from issuers
of the foreign securities whose tender or exchange is sought or from the party
(or its agents) making the tender or exchange offer. The Custodian shall not be
liable for any untimely exercise of any tender, exchange or other right or power
in connection with foreign securities or other property of the Fund at any time
held by it unless (i) the Custodian or the respective Foreign Sub-Custodian is
in actual possession or control of such foreign securities or property and (ii)
the Custodian receives Proper Instructions with regard to the exercise of any
such right or power, and both (i) and (ii) occur at least three business days
prior to the date on which the Custodian is to take action to exercise such
right or power.
SECTION 4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant
to which the Custodian employs a Foreign Sub-Custodian shall require the Foreign
Sub-Custodian to exercise reasonable care in the performance of its duties, and,
to the extent possible, to
15
indemnify and hold harmless the Custodian from and against any loss, damage,
cost, expense, liability or claim arising out of or in connection with the
Foreign Sub-Custodian's performance of such obligations. At the Fund's election,
it shall be entitled to be subrogated to the rights of the Custodian with
respect to any claims against a Foreign Sub-Custodian as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the extent that
the Fund has not been made whole for any such loss, damage, cost, expense,
liability or claim.
SECTION 4.11. TAX LAW. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund or the
Custodian as custodian of the Fund by the tax law of the United States or of any
state or political subdivision thereof. It shall be the responsibility of the
Fund to notify the Custodian of the obligations imposed on the Fund or the
Custodian as custodian of the Fund by the tax law of countries other than those
mentioned in the above sentence, including responsibility for withholding and
other taxes, assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Custodian with regard to
such tax law shall be to use reasonable efforts to assist the Fund with respect
to any claim for exemption or refund under the tax law of countries for which
the Fund has provided such information.
SECTION 4.12. LIABILITY OF CUSTODIAN. The Custodian shall be liable for the
acts or omissions of a Foreign Sub-Custodian to the same extent as set forth
with respect to sub-custodians generally in the Contract and, regardless of
whether assets are maintained in the custody of a Foreign Sub-Custodian or a
Foreign Securities System, the Custodian shall not be liable for any loss,
damage, cost, expense, liability or claim resulting from nationalization,
expropriation, currency restrictions, or acts of war or terrorism, or any other
loss where the Sub-Custodian has otherwise acted with reasonable care.
SECTION 5. PAYMENTS FOR SALES OR REPURCHASES OF SHARES
The Custodian shall receive from the distributor for the Shares or from the
Transfer Agent and deposit into the account of the Fund such payments as are
received for Shares thereof issued or sold from time to time by the Fund. The
Custodian will provide timely notification to the Fund and the Transfer Agent of
any receipt by it of payments for Shares of the Fund.
From such funds as may be available for the purpose, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for repurchase of their Shares. In connection with the repurchase of Shares, the
Custodian is authorized upon receipt of instructions from the Transfer Agent to
wire funds to or through a commercial bank designated by the repurchasing
shareholders. In connection with the repurchase of Shares, the Custodian is
authorized upon receipt of instructions from the Transfer Agent to wire funds to
or through a commercial bank designated by the repurchasing shareholders.
SECTION 6. PROPER INSTRUCTIONS
"PROPER INSTRUCTIONS", which may also be standing instructions, as used
throughout this Agreement shall mean instructions received by the Custodian from
the Fund, the Fund's investment manager, or a person or entity duly authorized
by either of them. Such instructions may be in
16
writing signed by the authorized person or persons or may be in a tested
communication or in a communication utilizing access codes effected between
electro-mechanical or electronic devices or may be by such other means and
utilizing such intermediary systems and utilities as may be agreed to from time
to time by the Custodian and the person or entity giving such instructions,
provided that the Fund has followed any security procedures agreed to from time
to time by the Fund and the Custodian, including, but not limited to, the
security procedures selected by the Fund in the Funds Transfer Addendum to this
Agreement. Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Fund shall
cause all oral instructions to be confirmed in writing. For purposes of this
Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any multi-party agreement which requires a segregated
asset account in accordance with Section 2.9 of this Agreement. The Fund or the
Fund's investment manager shall cause its duly authorized officer to certify to
the Custodian in writing the names and specimen signatures of persons authorized
to give Proper Instructions. The Custodian shall be entitled to rely upon the
identity and authority of such persons until it receives notice from the Fund to
the contrary.
SECTION 7. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Agreement, PROVIDED that all such payments shall be accounted for to
the Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Fund except as
otherwise directed by the Board.
SECTION 8. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a copy of a resolution of the Board, certified
by the Secretary or an Assistant Secretary of the Fund ("CERTIFIED RESOLUTION"),
as conclusive evidence (a) of the authority of any person to act in accordance
with such resolution or (b) of any determination or of any action by the Board
as described in such resolution, and such resolution may be considered as in
full force and effect until receipt by the Custodian of written notice to the
contrary.
SECTION 9. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME
17
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board to keep the books of account of the
Fund and/or compute the net asset value per Share of the outstanding Shares or,
if directed in writing to do so by the Fund, shall itself keep such books of
account and/or compute such net asset value per Share. If so directed, the
Custodian shall also calculate daily the net income of the Fund as described in
the Prospectus and shall advise the Fund and the Transfer Agent daily of the
total amounts of such net income and, if instructed in writing by an officer of
the Fund to do so, shall advise the Transfer Agent periodically of the division
of such net income among its various components. The calculations of the net
asset value per Share and the daily income of the Fund shall be made at the time
or times described from time to time in the Prospectus.
SECTION 10. RECORDS
The Custodian shall create and maintain all records relating to its activities
and obligations under this Agreement in such manner as will meet the obligations
of the Fund under the 1940 Act, with particular attention to Section 31 thereof
and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of
the Fund and shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the SEC. The Custodian shall, at
the Fund's request, supply the Fund with a tabulation of securities owned by the
Fund and held by the Custodian and shall, when requested to do so by the Fund
and for such compensation as shall be agreed upon between the Fund and the
Custodian, include certificate numbers in such tabulations.
SECTION 11. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund may from time to
time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Form N-1A2 and Form N-SAR or other annual
reports to the SEC and with respect to any other requirements thereof.
SECTION 12. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Fund, at such times as the Fund may reasonably
require, with reports by independent public accountants on the accounting
system, internal accounting control and procedures for safeguarding securities,
futures contracts and options on futures contracts, including securities
deposited and/or maintained in a U.S. Securities System or a Foreign Securities
System (either system, a "SECURITIES SYSTEM") relating to the services provided
by the Custodian under this Agreement; such reports, shall be of sufficient
scope and in sufficient detail, as may reasonably be required by the Fund to
provide reasonable assurance that any material inadequacies would be disclosed
by such examination, and, if there are no such inadequacies, the reports shall
so state.
18
SECTION 13. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its services and
expenses as Custodian, as agreed upon from time to time between the Fund.
SECTION 14. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered by it pursuant
to this Agreement and shall be held harmless in acting upon any notice, request,
consent, certificate or other instrument reasonably believed by it to be genuine
and to be signed by the proper party or parties, including any futures
commission merchant acting pursuant to the terms of a three-party futures or
options agreement. The Custodian shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement, but shall be kept
indemnified by and shall be without liability to the Fund for any action taken
or omitted by it in good faith without negligence, including, without
limitation, acting in accordance with any Proper Instruction. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice. The Custodian shall be
without liability to the Fund for any loss, liability, claim or expense
resulting from or caused by anything which is part of Country Risk (as defined
in Section 3 hereof), including without limitation nationalization,
expropriation, currency restrictions, or acts of war, revolution, riots or
terrorism.
Except as may arise from the Custodian's own negligence, willful misconduct, or
the negligence or willful misconduct of a sub-custodian or agent, the Custodian
shall be without liability to the Fund for any loss, liability, claim or expense
resulting from or caused by: (i) events or circumstances beyond the reasonable
control of the Custodian or any sub-custodian or Securities System or any agent
or nominee of any of the foregoing, including, without limitation, the
interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or
interruptions, computer viruses or communications disruptions, work stoppages,
natural disasters, or other similar events or acts; (ii) errors by the Fund or
its duly-authorized investment manager or investment advisor in their
instructions to the Custodian provided such instructions, have been in
accordance with this Agreement; (iii) the insolvency of or acts or omissions by
a Securities System; (iv) any delay or failure of any broker, agent or
intermediary, central bank or other commercially prevalent payment or clearing
system to deliver to the Custodian's sub-custodian or agent securities purchased
or in the remittance or payment made in connection with securities sold; (v) any
delay or failure of any company, corporation, or other body in charge of
registering or transferring securities in the name of the Custodian, the Fund,
the Custodian's sub-custodians, nominees or agents or any consequential losses
arising out of such delay or failure to transfer such securities including
non-receipt of bonus, dividends and rights and other accretions or benefits;
(vi) delays or inability to perform its duties due to any disorder in market
infrastructure with respect to any particular security or Securities System; and
(vii) any provision of any present or future law or regulation or order of the
United States of America, or any state thereof, or any other country, or
political subdivision thereof or of any court of competent jurisdiction.
19
The Custodian shall be liable for the acts or omissions of a Foreign
Sub-Custodian (as defined in Section 4 hereof) to the same extent as set forth
with respect to sub-custodians generally in this Agreement.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or agents, to
advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or in
the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the Custodian
shall be entitled to utilize available cash and to dispose of the Fund's assets
to the extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or consequential
damages.
SECTION 15. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Agreement shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing; PROVIDED, however, that the Fund
shall not amend or terminate this Agreement in contravention of any applicable
federal or state regulations, or any provision of the Fund's Declaration of
Trust, and further provided, that the Fund may at any time by action of its
Board (i) substitute another bank or trust company for the Custodian by giving
notice as described above to the Custodian, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Comptroller of the Currency or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Agreement, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
20
SECTION 16. SUCCESSOR CUSTODIAN
If a successor custodian for the Fund shall be appointed by the Board, the
Custodian shall, upon termination, deliver to such successor custodian at the
office of the Custodian, duly endorsed and in the form for transfer, all
securities of the Fund then held by it hereunder and shall transfer to an
account of the successor custodian all of the securities of the Fund held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in like
manner, upon receipt of a Certified Resolution, deliver at the office of the
Custodian and transfer such securities, funds and other properties in accordance
with such resolution.
In the event that no written order designating a successor custodian or
Certified Resolution shall have been delivered to the Custodian on or before the
date when such termination shall become effective, then the Custodian shall have
the right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian hereunder and all
instruments held by the Custodian relative thereto and all other property held
by it under this Agreement on behalf of the Fund, and to transfer to an account
of such successor custodian all of the Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Agreement.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the Certified Resolution to appoint a successor
custodian, the Custodian shall be entitled to fair compensation for its services
during such period as the Custodian retains possession of such securities, funds
and other properties and the provisions of this Agreement relating to the duties
and obligations of the Custodian shall remain in full force and effect.
SECTION 17. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and the Fund
may from time to time agree on such provisions interpretive of or in addition to
the provisions of this Agreement as may in their joint opinion be consistent
with the general tenor of this Agreement. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be annexed
hereto, PROVIDED that no such interpretive or additional provisions shall
contravene any applicable federal or state regulations or any provision of the
Fund's Declaration of Trust. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment of this
Agreement.
SECTION 18. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted under
and in accordance with laws of The Commonwealth of Massachusetts.
21
SECTION 19. PRIOR AGREEMENTS
This Agreement supersedes and terminates, as of the date hereof, all prior
Agreements between the Fund and the Custodian relating to the custody of the
Fund's assets.
SECTION 20. NOTICES.
Any notice, instruction or other instrument required to be given hereunder may
be delivered in person to the offices of the parties as set forth herein during
normal business hours or delivered prepaid registered mail or by telex, cable or
telecopy to the parties at the following addresses or such other addresses as
may be notified by any party from time to time.
To the Fund: THE GLOBAL CHINA GROWTH FUND
Xxxx Xxxxx Management Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx
Telephone: *
Telecopy: *
To the Custodian: STATE STREET BANK AND TRUST COMPANY
Lafayette Corporate Center
0 Xxxxxx xx Xxxxxxxxx - XXX/0
Xxxxxxxxx: Xxxxxxx Xxxxx
Telephone: 000-000-0000
Telecopy:
Such notice, instruction or other instrument shall be deemed to have been served
in the case of a registered letter at the expiration of five business days after
posting, in the case of cable twenty-four hours after dispatch and, in the case
of telex, immediately on dispatch and if delivered outside normal business hours
it shall be deemed to have been received at the next time after delivery when
normal business hours commence and in the case of cable, telex or telecopy on
the business day after the receipt thereof. Evidence that the notice was
properly addressed, stamped and put into the post shall be conclusive evidence
of posting.
SECTION 21. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, addenda, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
22
SECTION 22. REMOTE ACCESS SERVICES ADDENDUM
The Custodian and the Fund agree to be bound by the terms of the Remote Access
Services Addendum attached hereto.
SECTION 23. COUNTERPARTS
This Agreement may be signed in counterparts, all of which shall constitute but
one and the same instrument.
SECTION 24. SEVERABILITY
Whenever possible, each provision of this Agreement shall be interpreted in such
a manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be deemed prohibited or invalid under such applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, and such prohibition or invalidity shall not invalidate the
remainder of such provision or the other provisions of this Agreement.
SECTION 25. SHAREHOLDER COMMUNICATIONS ELECTION
SEC Rule 14b-2 requires banks which hold securities for the account of customers
to respond to requests by issuers of securities for the names, addresses and
holdings of beneficial owners of securities of that issuer held by the bank
unless the beneficial owner has expressly objected to disclosure of this
information. In order to comply with the rule, the Custodian needs the Fund to
indicate whether it authorizes the Custodian to provide the Fund's name,
address, and share position to requesting companies whose securities the Fund
owns. If the Fund tells the Custodian "no", the Custodian will not provide this
information to requesting companies. If the Fund tells the Custodian "yes" or
does not check either "yes" or "no" below, the Custodian is required by the rule
to treat the Fund as consenting to disclosure of this information for all
securities owned by the Fund or any funds or accounts established by the Fund.
For the Fund's protection, the Rule prohibits the requesting company from using
the Fund's name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of
the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name, address, and
share positions.
NO [X] The Custodian is not authorized to release the Fund's name, address,
and share positions.
23
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of *[date].
THE GLOBAL CHINA GROWTH FUND SIGNATURE ATTESTED TO BY:
By: By:
------------------------------ --------------------------------
Name: Name:
------------------------------ --------------------------------
Title: Title:
------------------------------ --------------------------------
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: By:
------------------------------ --------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx X. Xxxx
------------------------------ --------------------------------
Title: Executive Vice President Title: Counsel
------------------------------ --------------------------------
24
SCHEDULE D
Dated: ___________, 2002
to
Amendment dated __________, 2002, to Custodian Contract
Of _______, ____, between
State Street Bank and Trust Company and
The Global China Growth
TRI-PARTY REPO CUSTODIAN BANKS ACCOUNT NUMBERS
Authorized Signatures:
By: By:
------------------------------ --------------------------------
Title: Title:
------------------------------ --------------------------------
Date: Date:
------------------------------ --------------------------------
25
