Exhibit (g)(1)
CUSTODY AGREEMENT
AGREEMENT, dated as of July 24, 2007 between TDAX Funds, Inc., a
Corporation organized and existing under the laws of Maryland having its
principal office and place of business at 000 Xxxxxxxxx Xxx, Xxxxx 0000, Xxx
Xxxx, XX 00000 (the "Fund") and The Bank of New York, a New York corporation
authorized to do a banking business having its principal office and place of
business at Xxx Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Custodian").
W I T N E S S E T H:
that for and in consideration of the mutual promises hereinafter set forth the
Fund and Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words shall have the
meanings set forth below:
1. "Authorized Person" shall be any person, whether or not an officer
or employee of the Fund, duly authorized by the Fund's board to execute any
Certificate or to give any Oral Instruction with respect to one or more
Accounts, such persons to be designated in a Certificate annexed hereto as
Schedule I hereto or such other Certificate as may be received by Custodian from
time to time.
2. "Custodian Affiliate" shall mean any office, branch or subsidiary of
The Bank of New York Company, Inc.
3. "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for receiving and delivering securities, its successors and
nominees.
4. "Business Day" shall mean any day on which Custodian and relevant
Depositories are open for business.
5. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
Custodian, which is actually received by Custodian by letter or facsimile
transmission and signed on behalf of the Fund by an Authorized Person or a
person reasonably believed by Custodian to be an Authorized Person.
6. "Composite Currency Unit" shall mean the Euro or any other composite
currency unit consisting of the aggregate of specified amounts of specified
currencies, as such unit may be constituted from time to time.
7. "Depository" shall include (a) the Book-Entry System, (b) the
Depository Trust Company, (c) any other clearing agency or securities depository
registered with the Securities and
Exchange Commission identified to the Fund from time to time, and (d) the
respective successors and nominees of the foregoing.
8. "Foreign Depository" shall mean (a) Euroclear, (b) Clearstream
Banking, societe anonyme, (c) each Eligible Securities Depository as defined in
Rule 17f-7 under the Investment Company Act of 1940, as amended, identified to
the Fund from time to time, and (d) the respective successors and nominees of
the foregoing.
9. "Instructions" shall mean communications actually received by
Custodian by S.W.I.F.T., tested telex, letter, facsimile transmission, or other
method or system specified by Custodian as available for use in connection with
the services hereunder.
10. "Oral Instructions" shall mean verbal instructions received by
Custodian from an Authorized Person or from a person reasonably believed by
Custodian to be an Authorized Person.
11. "Series" shall mean the various portfolios, if any, of the Fund
listed on Schedule II hereto, and if none are listed references to Series shall
be references to the Fund.
12. "Securities" shall include, without limitation, any common stock
and other equity securities, bonds, debentures and other debt securities, notes,
mortgages or other obligations, and any instruments representing rights to
receive, purchase, or subscribe for the same, or representing any other rights
or interests therein (whether represented by a certificate or held in a
Depository or by a Subcustodian).
13. "Subcustodian" shall mean a bank (including any branch thereof) or
other financial institution (other than a Foreign Depository) located outside
the U.S. which is utilized by Custodian in connection with the purchase, sale or
custody of Securities hereunder and identified to the Fund from time to time,
and their respective successors and nominees.
ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, WARRANTIES, AND COVENANTS
1. (a) The Fund hereby appoints Custodian as custodian of all
Securities and cash at any time delivered to Custodian during the term of this
Agreement, and authorizes Custodian to hold Securities in registered form in its
name or the name of its nominees. Custodian hereby accepts such appointment and
agrees to establish and maintain one or more securities accounts and cash
accounts for each Series in which Custodian will hold Securities and cash as
provided herein. Custodian shall maintain books and records segregating the
assets of each Series from the assets of any other Series. Such accounts (each,
an "Account"; collectively, the "Accounts") shall be in the name of the Fund.
(b) Custodian may from time to time establish on its books and
records such sub-accounts within each Account as the Fund and Custodian may
agree upon (each a "Special
-2-
Account"), and Custodian shall reflect therein such assets as the Fund may
specify in a Certificate or Instructions.
(c) Custodian may from time to time establish pursuant to a written
agreement with and for the benefit of a broker, dealer, future commission
merchant or other third party identified in a Certificate or Instructions such
accounts on such terms and conditions as the Fund and Custodian shall agree, and
Custodian shall transfer to such account such Securities and money as the Fund
may specify in a Certificate or Instructions.
2. The Fund hereby represents and warrants, which representations and
warranties shall be continuing and shall be deemed to be reaffirmed upon each
delivery of a Certificate or each giving of Oral Instructions or Instructions by
the Fund, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement, and to perform its obligations
hereunder;
(b) This Agreement has been duly authorized, executed and delivered
by the Fund, approved by a resolution of its board, constitutes a valid and
legally binding obligation of the Fund, enforceable in accordance with its
terms, and there is no statute, regulation, rule, order or judgment binding on
it, and no provision of its charter or by-laws, nor of any mortgage, indenture,
credit agreement or other contract binding on it or affecting its property,
which would prohibit its execution or performance of this Agreement;
(c) It is conducting its business in substantial compliance with
all applicable laws and requirements, both state and federal, and has obtained
all regulatory licenses, approvals and consents necessary to carry on its
business as now conducted;
(d) It will not knowingly use the services provided by Custodian
hereunder in any manner that is, or will result in, a violation of any law, rule
or regulation applicable to the Fund;
(e) Its board or its foreign custody manager, as defined in Rule
17f-5 under the Investment Company Act of 1940, as amended (the "`40 Act"), has
determined that use of each Subcustodian (including any Replacement Custodian)
which Custodian is authorized to utilize in accordance with Section 1(a) of
Article III hereof satisfies the applicable requirements of the `40 Act and Rule
17f-5 thereunder;
(f) The Fund or its investment adviser has determined that the
custody arrangements of each Foreign Depository provide reasonable safeguards
against the custody risks associated with maintaining assets with such Foreign
Depository within the meaning of Rule 17f-7 under the `40 Act;
(g) It is fully informed of the protections and risks associated
with various methods of transmitting Instructions and Oral Instructions and
delivering Certificates to Custodian, shall, and shall cause each Authorized
Person, to safeguard and treat with extreme care any user and authorization
codes, passwords and/or authentication keys, understands that
-3-
there may be more secure methods of transmitting or delivering the same than the
methods selected by it, agrees that the security procedures (if any) to be
followed in connection therewith provide a commercially reasonable degree of
protection in light of its particular needs and circumstances, and acknowledges
and agrees that Instructions need not be reviewed by Custodian, may conclusively
be presumed by Custodian to have been given by person(s) duly authorized, and
may be acted upon as given;
(h) It shall manage its borrowings, including, without limitation,
any advance or overdraft (including any day-light overdraft) in the Accounts, so
that the aggregate of its total borrowings for each Series does not exceed the
amount such Series is permitted to borrow under the `40 Act;
(i) Its transmission or giving of, and Custodian acting upon and in
reliance on, Certificates, Instructions, or Oral Instructions pursuant to this
Agreement shall at all times comply with the `40 Act;
(j) It shall impose and maintain restrictions on the destinations
to which cash may be disbursed by Instructions to ensure that each disbursement
is for a proper purpose; and
(k) It has the right to make the pledge and grant the security
interest and security entitlement to Custodian contained in Section 1 of Article
V hereof, free of any right of redemption or prior claim of any other person or
entity, such pledge and such grants shall have a first priority subject to no
setoffs, counterclaims, or other liens or grants prior to or on a parity
therewith, and it shall take such additional steps as Custodian may require to
assure such priority.
3. The Fund hereby covenants that it shall from time to time complete
and execute and deliver to Custodian upon Custodian's request a Form FR U-1 (or
successor form) whenever the Fund borrows from Custodian any money to be used
for the purchase or carrying of margin stock as defined in Federal Reserve
Regulation U.
ARTICLE III
CUSTODY AND RELATED SERVICES
1. (a) Subject to the terms hereof, the Fund hereby authorizes
Custodian to hold any Securities received by it from time to time for the Fund's
account. Custodian shall be entitled to utilize, subject to subsection (c) of
this Section 1, Depositories, Subcustodians, and, subject to subsection (d) of
this Section 1, Foreign Depositories, to the extent possible in connection with
its performance hereunder. Securities and cash held in a Depository or Foreign
Depository will be held subject to the rules, terms and conditions of such
entity. Securities and cash held through Subcustodians shall be held subject to
the terms and conditions of Custodian's agreements with such Subcustodians.
Subcustodians may be authorized to hold Securities in Foreign Depositories in
which such Subcustodians participate. Unless otherwise required by local law or
practice or a particular subcustodian agreement, Securities deposited with a
Subcustodian, a Depositary or a Foreign Depository will be held in a commingled
account, in the name of Custodian, holding only Securities held by Custodian as
custodian for its customers. Custodian shall identify on its
-4-
books and records the Securities and cash belonging to the Fund, whether held
directly or indirectly through Depositories, Foreign Depositories, or
Subcustodians. Custodian shall, directly or indirectly through Subcustodians,
Depositories, or Foreign Depositories, endeavor, to the extent feasible, to hold
Securities in the country or other jurisdiction in which the principal trading
market for such Securities is located, where such Securities are to be presented
for cancellation and/or payment and/or registration, or where such Securities
are acquired. Custodian at any time may cease utilizing any Subcustodian and/or
may replace a Subcustodian with a different Subcustodian (the "Replacement
Subcustodian"). In the event Custodian selects a Replacement Subcustodian,
Custodian shall not utilize such Replacement Subcustodian until after the Fund's
board or foreign custody manager has determined that utilization of such
Replacement Subcustodian satisfies the requirements of the `40 Act and Rule
17f-5 thereunder.
(b) Unless Custodian has received a Certificate or Instructions to
the contrary, Custodian shall hold Securities indirectly through a Subcustodian
only if (i) the Securities are not subject to any right, charge, security
interest, lien or claim of any kind in favor of such Subcustodian or its
creditors or operators, including a receiver or trustee in bankruptcy or similar
authority, except for a claim of payment for the safe custody or administration
of Securities on behalf of the Fund by such Subcustodian, and (ii) beneficial
ownership of the Securities is freely transferable without the payment of money
or value other than for safe custody or administration.
(c) With respect to each Depository, Custodian (i) shall exercise
due care in accordance with reasonable commercial standards in discharging its
duties as a securities intermediary to obtain and thereafter maintain Securities
or financial assets deposited or held in such Depository, and (ii) will provide,
promptly upon request by the Fund, such reports as are available concerning the
internal accounting controls and financial strength of Custodian.
(d) With respect to each Foreign Depository, Custodian shall
exercise reasonable care, prudence, and diligence (i) to provide the Fund with
an analysis of the custody risks associated with maintaining assets with the
Foreign Depository, and (ii) to monitor such custody risks on a continuing basis
and promptly notify the Fund of any material change in such risks. The Fund
acknowledges and agrees that such analysis and monitoring shall be made on the
basis of, and limited by, information gathered from Subcustodians or through
publicly available information otherwise obtained by Custodian, and shall not
include any evaluation of Country Risks. As used herein the term "Country Risks"
shall mean with respect to any Foreign Depository: (a) the financial
infrastructure of the country in which it is organized, (b) such country's
prevailing custody and settlement practices, (c) nationalization, expropriation
or other governmental actions, (d) such country's regulation of the banking or
securities industry, (e) currency controls, restrictions, devaluations or
fluctuations, and (f) market conditions which affect the order execution of
securities transactions or affect the value of securities.
2. Custodian shall furnish the Fund with an advice of daily
transactions (including a confirmation of each transfer of Securities) and a
monthly summary of all transfers to or from the Accounts.
-5-
3. With respect to all Securities held hereunder, Custodian shall,
unless otherwise instructed to the contrary:
(a) Receive all income and other payments and advise the Fund as
promptly as practicable of any such amounts due but not paid;
(b) Present for payment and receive the amount paid upon all
Securities which may mature and advise the Fund as promptly as practicable of
any such amounts due but not paid;
(c) Forward to the Fund copies of all information or documents that
it may actually receive from an issuer of Securities which, in the opinion of
Custodian, are intended for the beneficial owner of Securities;
(d) Execute, as custodian, any certificates of ownership,
affidavits, declarations or other certificates under any tax laws now or
hereafter in effect in connection with the collection of bond and note coupons;
(e) Hold directly or through a Depository, a Foreign Depository, or
a Subcustodian all rights and similar Securities issued with respect to any
Securities credited to an Account hereunder; and
(f) Endorse for collection checks, drafts or other negotiable
instruments.
4. (a) Custodian shall notify the Fund of rights or discretionary
actions with respect to Securities held hereunder, and of the date or dates by
when such rights must be exercised or such action must be taken, provided that
Custodian has actually received, from the issuer or the relevant Depository
(with respect to Securities issued in the United States) or from the relevant
Subcustodian, Foreign Depository, or a nationally or internationally recognized
bond or corporate action service to which Custodian subscribes, timely notice of
such rights or discretionary corporate action or of the date or dates such
rights must be exercised or such action must be taken. Absent actual receipt of
such notice, Custodian shall have no liability for failing to so notify the
Fund.
(b) Whenever Securities (including, but not limited to, warrants,
options, tenders, options to tender or non-mandatory puts or calls) confer
discretionary rights on the Fund or provide for discretionary action or
alternative courses of action by the Fund, the Fund shall be responsible for
making any decisions relating thereto and for directing Custodian to act. In
order for Custodian to act, it must receive the Fund's Certificate or
Instructions at Custodian's offices, addressed as Custodian may from time to
time request, not later than noon (New York time) at least two (2) Business Days
prior to the last scheduled date to act with respect to such Securities(or such
earlier date or time as Custodian may reasonably specify to the Fund). Absent
Custodian's timely receipt of such Certificate or Instructions, Custodian shall
not be liable for failure to take any action relating to or to exercise any
rights conferred by such Securities.
-6-
5. All voting rights with respect to Securities, however registered,
shall be exercised by the Fund or its designee. Custodian will make available to
the Fund proxy voting services upon the request of, and for the jurisdictions
selected by, the Fund in accordance with terms and conditions to be mutually
agreed upon by Custodian and the Fund.
6. Custodian shall promptly advise the Fund upon Custodian's actual
receipt of notification of the partial redemption, partial payment or other
action affecting less than all Securities of the relevant class. If Custodian,
any Subcustodian, any Depository, or any Foreign Depository holds any Securities
in which the Fund has an interest as part of a fungible mass, Custodian, such
Subcustodian, Depository, or Foreign Depository may select the Securities to
participate in such partial redemption, partial payment or other action in any
non-discriminatory manner that it customarily uses to make such selection.
7. Custodian shall not under any circumstances accept bearer interest
coupons which have been stripped from United States federal, state or local
government or agency securities unless explicitly agreed to by Custodian in
writing.
8. The Fund shall be liable for all taxes, assessments, duties and
other governmental charges, including any interest or penalty with respect
thereto ("Taxes"), with respect to any cash or Securities held on behalf of the
Fund or any transaction related thereto. The Fund shall indemnify Custodian and
each Subcustodian for the amount of any Tax that Custodian, any such
Subcustodian or any other withholding agent is required under applicable laws
(whether by assessment or otherwise) to pay on behalf of, or in respect of
income earned by or payments or distributions made to or for the account of the
Fund (including any payment of Tax required by reason of an earlier failure to
withhold); provided however that such indemnification shall not extend to
penalties or interest resulting solely from Custodian's negligence or willful
misconduct. Custodian shall, or shall instruct the applicable Subcustodian or
other withholding agent to, withhold the amount of any Tax which is required to
be withheld under applicable law upon collection of any dividend, interest or
other distribution made with respect to any Security and any proceeds or income
from the sale, loan or other transfer of any Security. In the event that
Custodian or any Subcustodian is required under applicable law to pay any Tax on
behalf of the Fund, Custodian is hereby authorized to withdraw cash from any
cash account in the amount required to pay such Tax and to use such cash, or to
remit such cash to the appropriate Subcustodian or other withholding agent, for
the timely payment of such Tax in the manner required by applicable law. If the
aggregate amount of cash in all cash accounts is not sufficient to pay such Tax,
Custodian shall promptly notify the Fund of the additional amount of cash (in
the appropriate currency) required, and the Fund shall directly deposit such
additional amount in the appropriate cash account promptly after receipt of such
notice, for use by Custodian as specified herein. In the event that Custodian
reasonably believes that Fund is eligible, pursuant to applicable law or to the
provisions of any tax treaty, for a reduced rate of, or exemption from, any Tax
which is otherwise required to be withheld or paid on behalf of the Fund under
any applicable law, Custodian shall, or shall instruct the applicable
Subcustodian or withholding agent to, either withhold or pay such Tax at such
reduced rate or refrain from withholding or paying such Tax, as appropriate;
provided that Custodian shall have received from the Fund all documentary
evidence of residence or other qualification for such reduced rate or exemption
-7-
required to be received under such applicable law or treaty. In the event that
Custodian reasonably believes that a reduced rate of, or exemption from, any Tax
is obtainable only by means of an application for refund, Custodian and the
applicable Subcustodian shall have no responsibility for the accuracy or
validity of any forms or documentation provided by the Fund to Custodian
hereunder. The Fund hereby agrees to indemnify and hold harmless Custodian and
each Subcustodian in respect of any liability arising from any underwithholding
or underpayment of any Tax which results from the inaccuracy or invalidity of
any such forms or other documentation, and such obligation to indemnify shall be
a continuing obligation of the Fund, its successors and assigns notwithstanding
the termination of this Agreement.
9. (a) For the purpose of settling Securities and foreign exchange
transactions, the Fund shall provide Custodian with sufficient immediately
available funds for all transactions by such time and date as conditions in the
relevant market dictate. As used herein, "sufficient immediately available
funds" shall mean either (i) sufficient cash denominated in U.S. dollars to
purchase the necessary foreign currency, or (ii) sufficient applicable foreign
currency, to settle the transaction. Custodian shall provide the Fund with
immediately available funds each day which result from the actual settlement of
all sale transactions, based upon advices received by Custodian from
Subcustodians, Depositories, and Foreign Depositories. Such funds shall be in
U.S. dollars or such other currency as the Fund may specify to Custodian.
(b) Any foreign exchange transaction effected by Custodian in
connection with this Agreement may be entered with Custodian or a Custodian
Affiliate acting as principal or otherwise through customary banking channels.
The Fund may issue a standing Certificate or Instructions with respect to
foreign exchange transactions, but Custodian may establish rules or limitations
concerning any foreign exchange facility made available to the Fund. The Fund
shall bear all risks of investing in Securities or holding cash denominated in a
foreign currency.
(c) To the extent that Custodian has agreed to provide pricing or
other information services in connection with this Agreement, Custodian is
authorized to utilize any vendor (including brokers and dealers of Securities)
reasonably believed by Custodian to be reliable to provide such information. The
Fund understands that certain pricing information with respect to complex
financial instruments (e.g., derivatives) may be based on calculated amounts
rather than actual market transactions and may not reflect actual market values,
and that the variance between such calculated amounts and actual market values
may or may not be material. Where vendors do not provide information for
particular Securities or other property, an Authorized Person may advise
Custodian in a Certificate regarding the fair market value of, or provide other
information with respect to, such Securities or property as determined by it in
good faith. Custodian shall not be liable for any loss, damage or expense
incurred as a result of errors or omissions with respect to any pricing or other
information utilized by Custodian hereunder.
10. Until such time as Custodian receives a certificate to the contrary
with respect to a particular Security, Custodian may release the identity of the
Fund to an issuer which requests such information pursuant to the Shareholder
Communications Act of 1985 for the specific purpose of direct communications
between such issuer and shareholder.
-8-
ARTICLE IV
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT
1. Promptly after each purchase or sale of Securities by the Fund, the
Fund shall deliver to Custodian a Certificate or Instructions, or with respect
to a purchase or sale of a Security generally required to be settled on the same
day the purchase or sale is made, Oral Instructions specifying all information
Custodian may reasonably request to settle such purchase or sale. Custodian
shall account for all purchases and sales of Securities on the actual settlement
date unless otherwise agreed by Custodian.
2. The Fund understands that when Custodian is instructed to deliver
Securities against payment, delivery of such Securities and receipt of payment
therefor may not be completed simultaneously. Notwithstanding any provision in
this Agreement to the contrary, settlements, payments and deliveries of
Securities may be effected by Custodian or any Subcustodian in accordance with
the customary or established securities trading or securities processing
practices and procedures in the jurisdiction in which the transaction occurs,
including, without limitation, delivery to a purchaser or dealer therefor (or
agent) against receipt with the expectation of receiving later payment for such
Securities. The Fund assumes full responsibility for all risks, including,
without limitation, credit risks, involved in connection with such deliveries of
Securities.
3. Custodian may, as a matter of bookkeeping convenience or by separate
agreement with the Fund, credit the Account with the proceeds from the sale,
redemption or other disposition of Securities or interest, dividends or other
distributions payable on Securities prior to its actual receipt of final payment
therefor. All such credits shall be conditional until Custodian's actual receipt
of final payment and may be reversed by Custodian to the extent that final
payment is not received. Payment with respect to a transaction will not be
"final" until Custodian shall have received immediately available funds which
under applicable local law, rule and/or practice are irreversible and not
subject to any security interest, levy or other encumbrance, and which are
specifically applicable to such transaction.
ARTICLE V
OVERDRAFTS OR INDEBTEDNESS
1. If Custodian should in its sole discretion advance funds on behalf
of any Series which results in an overdraft (including, without limitation, any
day-light overdraft) because the money held by Custodian in an Account for such
Series shall be insufficient to pay the total amount payable upon a purchase of
Securities specifically allocated to such Series, as set forth in a Certificate,
Instructions or Oral Instructions, or if an overdraft arises in the separate
account of a Series for some other reason, including, without limitation,
because of a reversal of a conditional credit or the purchase of any currency,
or if the Fund is for any other reason indebted to Custodian with respect to a
Series, including any indebtedness to The Bank of New York under the Fund's Cash
Management and Related Services Agreement (except a borrowing for investment or
for temporary or emergency purposes using Securities as collateral pursuant to a
-9-
separate agreement and subject to the provisions of Section 2 of this Article),
such overdraft or indebtedness shall be deemed to be a loan made by Custodian to
the Fund for such Series payable on demand and shall bear interest from the date
incurred at a rate per annum ordinarily charged by Custodian to its
institutional customers, as such rate may be adjusted from time to time. In
addition, the Fund hereby agrees that Custodian shall to the maximum extent
permitted by law have a continuing lien, security interest, and security
entitlement in and to any property, including, without limitation, any
investment property or any financial asset, of such Series at any time held by
Custodian for the benefit of such Series or in which such Series may have an
interest which is then in Custodian's possession or control or in possession or
control of any third party acting in Custodian's behalf. The Fund authorizes
Custodian, in its sole discretion, at any time to charge any such overdraft or
indebtedness together with interest due thereon against any balance of account
standing to such Series' credit on Custodian's books.
2. If the Fund borrows money from any bank (including Custodian if the
borrowing is pursuant to a separate agreement) for investment or for temporary
or emergency purposes using Securities held by Custodian hereunder as collateral
for such borrowings, the Fund shall deliver to Custodian a Certificate
specifying with respect to each such borrowing: (a) the Series to which such
borrowing relates; (b) the name of the bank, (c) the amount of the borrowing,
(d) the time and date, if known, on which the loan is to be entered into, (e)
the total amount payable to the Fund on the borrowing date, (f) the Securities
to be delivered as collateral for such loan, including the name of the issuer,
the title and the number of shares or the principal amount of any particular
Securities, and (g) a statement specifying whether such loan is for investment
purposes or for temporary or emergency purposes and that such loan is in
conformance with the `40 Act and the Fund's prospectus. Custodian shall deliver
on the borrowing date specified in a Certificate the specified collateral
against payment by the lending bank of the total amount of the loan payable,
provided that the same conforms to the total amount payable as set forth in the
Certificate. Custodian may, at the option of the lending bank, keep such
collateral in its possession, but such collateral shall be subject to all rights
therein given the lending bank by virtue of any promissory note or loan
agreement. Custodian shall deliver such Securities as additional collateral as
may be specified in a Certificate to collateralize further any transaction
described in this Section. The Fund shall cause all Securities released from
collateral status to be returned directly to Custodian, and Custodian shall
receive from time to time such return of collateral as may be tendered to it. In
the event that the Fund fails to specify in a Certificate the Series, the name
of the issuer, the title and number of shares or the principal amount of any
particular Securities to be delivered as collateral by Custodian, Custodian
shall not be under any obligation to deliver any Securities.
ARTICLE VI
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any shares issued by the Fund
("Shares") it shall deliver to Custodian a Certificate or Instructions
specifying the amount of money and/or Securities to be received by Custodian for
the sale of such Shares and specifically allocated to an Account for such
Series.
-10-
2. Upon receipt of such money, Custodian shall credit such money to an
Account in the name of the Series for which such money was received.
3. Except as provided hereinafter, whenever the Fund desires Custodian
to make payment out of the money held by Custodian hereunder in connection with
a redemption of any Shares, it shall furnish to Custodian a Certificate or
Instructions specifying the total amount to be paid for such Shares. Custodian
shall make payment of such total amount to the transfer agent specified in such
Certificate or Instructions out of the money held in an Account of the
appropriate Series.
4. Notwithstanding the above provisions regarding the redemption of any
Shares, whenever any Shares are redeemed pursuant to any check redemption
privilege which may from time to time be offered by the Fund, Custodian, unless
otherwise instructed by a Certificate or Instructions, shall, upon presentment
of such check, charge the amount thereof against the money held in the Account
of the Series of the Shares being redeemed, provided, that if the Fund or its
agent timely advises Custodian that such check is not to be honored, Custodian
shall return such check unpaid.
ARTICLE VII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. Whenever the Fund shall determine to pay a dividend or distribution
on Shares it shall furnish to Custodian Instructions or a Certificate setting
forth with respect to the Series specified therein the date of the declaration
of such dividend or distribution, the total amount payable, and the payment
date.
2. Upon the payment date specified in such Instructions or Certificate,
Custodian shall pay out of the money held for the account of such Series the
total amount payable to the dividend agent of the Fund specified therein.
ARTICLE VIII
CONCERNING CUSTODIAN
1. (a) Except as otherwise expressly provided herein, Custodian shall
not be liable for any costs, expenses, damages, liabilities or claims, including
attorneys' and accountants' fees (collectively, "Losses"), incurred by or
asserted against the Fund, except those Losses arising out of Custodian's own
negligence or willful misconduct. Custodian shall have no liability whatsoever
for the action or inaction of any Depositories or of any Foreign Depositories,
except in each case to the extent such action or inaction is a direct result of
the Custodian's failure to fulfill its duties hereunder. With respect to any
Losses incurred by the Fund as a result of the acts or any failures to act by
any Subcustodian (other than a Custodian Affiliate), Custodian shall take
appropriate action to recover such Losses from such Subcustodian; and
Custodian's sole responsibility and liability to the Fund shall be limited to
amounts so received from such Subcustodian (exclusive of costs and expenses
incurred by Custodian). In no event shall Custodian be liable to the Fund or any
third party for special, indirect or consequential damages,
-11-
or lost profits or loss of business, arising in connection with this Agreement,
nor shall Custodian or any Subcustodian be liable: (i) for acting in accordance
with any Certificate or Oral Instructions actually received by Custodian and
reasonably believed by Custodian to be given by an Authorized Person; (ii) for
acting in accordance with Instructions without reviewing the same; (iii) for
conclusively presuming that all Instructions are given only by person(s) duly
authorized; (iv) for conclusively presuming that all disbursements of cash
directed by the Fund, whether by a Certificate, an Oral Instruction, or an
Instruction, are in accordance with Section 2(i) of Article II hereof; (v) for
holding property in any particular country, including, but not limited to,
Losses resulting from nationalization, expropriation or other governmental
actions; regulation of the banking or securities industry; exchange or currency
controls or restrictions, devaluations or fluctuations; availability of cash or
Securities or market conditions which prevent the transfer of property or
execution of Securities transactions or affect the value of property; (vi) for
any Losses due to forces beyond the control of Custodian, including without
limitation strikes, work stoppages, acts of war or terrorism, insurrection,
revolution, nuclear or natural catastrophes or acts of God, or interruptions,
loss or malfunctions of utilities, communications or computer (software and
hardware) services; (vii) for the insolvency of any Subcustodian (other than a
Custodian Affiliate), any Depository, or, except to the extent such action or
inaction is a direct result of the Custodian's failure to fulfill its duties
hereunder, any Foreign Depository; or (viii) for any Losses arising from the
applicability of any law or regulation now or hereafter in effect, or from the
occurrence of any event, including, without limitation, implementation or
adoption of any rules or procedures of a Foreign Depository, which may affect,
limit, prevent or impose costs or burdens on, the transferability,
convertibility, or availability of any currency or Composite Currency Unit in
any country or on the transfer of any Securities, and in no event shall
Custodian be obligated to substitute another currency for a currency (including
a currency that is a component of a Composite Currency Unit) whose
transferability, convertibility or availability has been affected, limited, or
prevented by such law, regulation or event, and to the extent that any such law,
regulation or event imposes a cost or charge upon Custodian in relation to the
transferability, convertibility, or availability of any cash currency or
Composite Currency Unit, such cost or charge shall be for the account of the
Fund, and Custodian may treat any account denominated in an affected currency as
a group of separate accounts denominated in the relevant component currencies.
(b) Custodian may enter into subcontracts, agreements and
understandings with any Custodian Affiliate, whenever and on such terms and
conditions as it deems necessary or appropriate to perform its services
hereunder. No such subcontract, agreement or understanding shall discharge
Custodian from its obligations hereunder.
(c) The Fund agrees to indemnify Custodian and hold Custodian
harmless from and against any and all Losses sustained or incurred by or
asserted against Custodian by reason of or as a result of any action or
inaction, or arising out of Custodian's performance hereunder, including
reasonable fees and expenses of counsel incurred by Custodian in a successful
defense of claims by the Fund; provided however, that the Fund shall not
indemnify Custodian for those Losses arising out of Custodian's own negligence
or willful misconduct. This indemnity shall be a continuing obligation of the
Fund, its successors and assigns, notwithstanding the termination of this
Agreement.
-12-
2. Without limiting the generality of the foregoing, Custodian shall be
under no obligation to inquire into, and shall not be liable for:
(a) Any Losses incurred by the Fund or any other person as a result
of the receipt or acceptance of fraudulent, forged or invalid Securities, or
Securities which are otherwise not freely transferable or deliverable without
encumbrance in any relevant market;
(b) The validity of the issue of any Securities purchased, sold, or
written by or for the Fund, the legality of the purchase, sale or writing
thereof, or the propriety of the amount paid or received therefor;
(c) The legality of the sale or redemption of any Shares, or the
propriety of the amount to be received or paid therefor;
(d) The legality of the declaration or payment of any dividend or
distribution by the Fund;
(e) The legality of any borrowing by the Fund;
(f) The legality of any loan of portfolio Securities, nor shall
Custodian be under any duty or obligation to see to it that any cash or
collateral delivered to it by a broker, dealer or financial institution or held
by it at any time as a result of such loan of portfolio Securities is adequate
security for the Fund against any loss it might sustain as a result of such
loan, which duty or obligation shall be the sole responsibility of the Fund. In
addition, Custodian shall be under no duty or obligation to see that any broker,
dealer or financial institution to which portfolio Securities of the Fund are
lent makes payment to it of any dividends or interest which are payable to or
for the account of the Fund during the period of such loan or at the termination
of such loan, provided, however that Custodian shall promptly notify the Fund in
the event that such dividends or interest are not paid and received when due;
(g) The sufficiency or value of any amounts of money and/or
Securities held in any Special Account in connection with transactions by the
Fund; whether any broker, dealer, futures commission merchant or clearing member
makes payment to the Fund of any variation margin payment or similar payment
which the Fund may be entitled to receive from such broker, dealer, futures
commission merchant or clearing member, or whether any payment received by
Custodian from any broker, dealer, futures commission merchant or clearing
member is the amount the Fund is entitled to receive, or to notify the Fund of
Custodian's receipt or non-receipt of any such payment; or
(h) Whether any Securities at any time delivered to, or held by it
or by any Subcustodian, for the account of the Fund and specifically allocated
to a Series are such as properly may be held by the Fund or such Series under
the provisions of its then current prospectus and statement of additional
information, or to ascertain whether any transactions by the Fund, whether or
not involving Custodian, are such transactions as may properly be engaged in by
the Fund.
-13-
3. Custodian may, with respect to questions of law specifically
regarding an Account, obtain the advice of counsel and shall be fully protected
with respect to anything done or omitted by it in good faith in conformity with
such advice.
4. Custodian shall be under no obligation to take action to collect any
amount payable on Securities in default, or if payment is refused after due
demand and presentment. Custodian shall as promptly as is reasonable under the
circumstances inform the Fund of such default.
5. Custodian shall have no duty or responsibility to inquire into, make
recommendations, supervise, or determine the suitability of any transactions
affecting any Account.
6. The Fund shall pay to Custodian the fees and charges as may be
specifically agreed upon from time to time and such other fees and charges at
Custodian's standard rates for such services as may be applicable. The Fund
shall reimburse Custodian for all costs associated with the conversion of the
Fund's Securities hereunder and the transfer of Securities and records kept in
connection with this Agreement. The Fund shall also reimburse Custodian for
out-of-pocket expenses which are a normal incident of the services provided
hereunder. The Custodian understands and agrees that XShares Advisors LLC, the
investment adviser to the Fund (the "Advisor") may pay the fees and expenses
under this Agreement directly to the Custodian as a result of its contractual
arrangements with the Fund and any such payment by the Advisor will discharge
the Fund of its obligations hereunder. Notwithstanding any such arrangements,
nothing herein shall be deemed to relieve the Fund of its obligations to pay
such fees and expenses if such payment is not made by the Advisor.
7. Custodian has the right to debit any cash account for any amount
payable by the Fund in connection with any and all obligations of the Fund to
Custodian. In addition to the rights of Custodian under applicable law and other
agreements, at any time when the Fund shall not have honored any of its
obligations to Custodian, Custodian shall have the right without notice to the
Fund to retain or set-off, against such obligations of the Fund, any Securities
or cash Custodian or a Custodian Affiliate may directly or indirectly hold for
the account of the Fund, and any obligations (whether matured or unmatured) that
Custodian or a Custodian Affiliate may have to the Fund in any currency or
Composite Currency Unit. Any such asset of, or obligation to, the Fund may be
transferred to Custodian and any Custodian Affiliate in order to effect the
above rights.
8. The Fund agrees to forward to Custodian a Certificate or
Instructions confirming Oral Instructions by the close of business of the same
day that such Oral Instructions are given to Custodian. The Fund agrees that the
fact that such confirming Certificate or Instructions are not received or that a
contrary Certificate or contrary Instructions are received by Custodian shall in
no way affect the validity or enforceability of transactions authorized by such
Oral Instructions and effected by Custodian. If the Fund elects to transmit
Instructions through an on-line communications system offered by Custodian, the
Fund's use thereof shall be subject to the Terms and Conditions attached as
Appendix I hereto. If Custodian receives Instructions which appear on their face
to have been transmitted by an Authorized Person via (i) computer facsimile,
-14-
email, the Internet or other insecure electronic method, or (ii) secure
electronic transmission containing applicable authorization codes, passwords
and/or authentication keys, the Fund understands and agrees that Custodian
cannot determine the identity of the actual sender of such Instructions and that
Custodian shall conclusively presume that such Written Instructions have been
sent by an Authorized Person, and the Fund shall be responsible for ensuring
that only Authorized Persons transmit such Instructions to Custodian. If the
Fund elects (with Custodian's prior consent) to transmit Instructions through an
on-line communications service owned or operated by a third party, the Fund
agrees that Custodian shall not be responsible or liable for the reliability or
availability of any such service.
9. The books and records pertaining to the Fund which are in possession
of Custodian shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the `40 Act and the rules thereunder. The
Fund, or its authorized representatives, shall have access to such books and
records during Custodian's normal business hours. Upon the reasonable request of
the Fund, copies of any such books and records shall be provided by Custodian to
the Fund or its authorized representative. Upon the reasonable request of the
Fund, Custodian shall provide in hard copy or on computer disc any records
included in any such delivery which are maintained by Custodian on a computer
disc, or are similarly maintained.
10. It is understood that Custodian is authorized to supply any
information regarding the Accounts which is required by any law, regulation or
rule now or hereafter in effect. The Custodian shall provide the Fund with any
report obtained by the Custodian on the system of internal accounting control of
a Depository, and with such reports on its own system of internal accounting
control as the Fund may reasonably request from time to time.
11. Custodian shall have no duties or responsibilities whatsoever
except such duties and responsibilities as are specifically set forth in this
Agreement, and no covenant or obligation shall be implied against Custodian in
connection with this Agreement.
ARTICLE IX
TERMINATION
1. Either of the parties hereto may terminate this Agreement by giving
to the other party a notice in writing specifying the date of such termination,
which shall be not less than ninety (90) days after the date of giving of such
notice. In the event such notice is given by the Fund, it shall be accompanied
by a copy of a resolution of the board of the Fund, certified by the Secretary
or any Assistant Secretary, electing to terminate this Agreement and designating
a successor custodian or custodians, each of which shall be a bank or trust
company having not less than $2,000,000 aggregate capital, surplus and undivided
profits. In the event such notice is given by Custodian, the Fund shall, on or
before the termination date, deliver to Custodian a copy of a resolution of the
board of the Fund, certified by the Secretary or any Assistant Secretary,
designating a successor custodian or custodians. In the absence of such
designation by the Fund, Custodian may designate a successor custodian which
shall be a bank or trust company having not less than $2,000,000 aggregate
capital, surplus and undivided profits. Upon the date set forth in such notice
this Agreement shall terminate, and Custodian shall upon receipt of a notice of
-15-
acceptance by the successor custodian on that date deliver directly to the
successor custodian all Securities and money then owned by the Fund and held by
it as Custodian, after deducting all fees, expenses and other amounts for the
payment or reimbursement of which it shall then be entitled.
2. If a successor custodian is not designated by the Fund or Custodian
in accordance with the preceding Section, the Fund shall upon the date specified
in the notice of termination of this Agreement and upon the delivery by
Custodian of all Securities (other than Securities which cannot be delivered to
the Fund) and money then owned by the Fund be deemed to be its own custodian and
Custodian shall thereby be relieved of all duties and responsibilities pursuant
to this Agreement, other than the duty with respect to Securities which cannot
be delivered to the Fund to hold such Securities hereunder in accordance with
this Agreement.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees to furnish to Custodian a new Certificate of
Authorized Persons in the event of any change in the then present Authorized
Persons. Until such new Certificate is received, Custodian shall be fully
protected in acting upon Certificates or Oral Instructions of such present
Authorized Persons.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to Custodian, shall be sufficiently given if
addressed to Custodian and received by it at its offices at Xxx Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other place as Custodian may from time to time
designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and received by it at its offices at ***, or at such other place as
the Fund may from time to time designate in writing.
4. Each and every right granted to either party hereunder or under any
other document delivered hereunder or in connection herewith, or allowed it by
law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of either party to exercise, and no delay in exercising, any
right will operate as a waiver thereof, nor will any single or partial exercise
by either party of any right preclude any other or future exercise thereof or
the exercise of any other right.
5. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any exclusive jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected thereby. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties, except that any
amendment to the Schedule I hereto need be signed only by the Fund and any
amendment to Appendix I hereto need be signed only by Custodian. This Agreement
shall extend to and shall be binding upon the parties hereto, and their
respective successors and
-16-
assigns; provided, however, that this Agreement shall not be assignable by
either party without the written consent of the other.
6. This Agreement shall be construed in accordance with the substantive
laws of the State of New York, without regard to conflicts of laws principles
thereof. The Fund and Custodian hereby consent to the jurisdiction of a state or
federal court situated in New York City, New York in connection with any dispute
arising hereunder. The Fund hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to
the laying of venue of any such proceeding brought in such a court and any claim
that such proceeding brought in such a court has been brought in an inconvenient
forum. The Fund and Custodian each hereby irrevocably waives any and all rights
to trial by jury in any legal proceeding arising out of or relating to this
Agreement.
7. The Fund hereby acknowledges that Custodian is subject to federal
laws, including the Customer Identification Program (CIP) requirements under the
USA PATRIOT Act and its implementing regulations, pursuant to which Custodian
must obtain, verify and record information that allows Custodian to identify the
Fund. Accordingly, prior to opening an Account hereunder Custodian will ask the
Fund to provide certain information including, but not limited to, the Fund's
name, physical address, tax identification number and other information that
will help Custodian to identify and verify the Fund's identity such as
organizational documents, certificate of good standing, license to do business,
or other pertinent identifying information. The Fund agrees that Custodian
cannot open an Account hereunder unless and until Custodian verifies the Fund's
identity in accordance with its CIP.
8. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
-17-
IN WITNESS WHEREOF, the Fund and Custodian have caused this Agreement
to be executed by their respective officers, thereunto duly authorized, as of
the day and year first above written.
TDAX FUNDS, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Title: CFO and Secretary
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. XxXxxx
----------------------------------------
Title: Managing Director
-18-
SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS
(The Fund - Oral and Written Instructions)
The undersigned hereby certifies that he is the duly elected and acting
Secretary of TDAX Funds, Inc. (the "Fund"), and further certifies that the
following persons, whether or not an officer or employee of the Fund, have been
duly authorized in conformity with the Fund's Articles of Incorporation and
By-Laws to deliver Certificates and Oral Instructions, in accordance with the
resolutions of the Fund's Board to The Bank of New York ("Custodian") pursuant
to the Custody Agreement between the Fund and Custodian dated July 24, 2007, and
that the signatures for such persons not affiliated with the Custodian appearing
opposite their names are true and correct:
Xxxxxxx X. Xxxxxxxxx Chief Operating Officer
--------------------- ---------------------------- ----------------------
Name Title Signature
Xxxxx X. Xxxxxx Secretary and Treasurer
--------------------- ---------------------------- ----------------------
Name Title Signature
Xxxxx X. XxXxxxxxx N/A
--------------------- ---------------------------- ----------------------
Name Title Signature
Xxxxxxx Xxxxxx N/A
--------------------- ---------------------------- ----------------------
Name Title Signature
Xxx Xxxxxx N/A
--------------------- ---------------------------- ----------------------
Name Title Signature
This certificate supersedes any certificate of Authorized Persons you
may currently have on file.
[seal] By:
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Secretary and Treasurer
Date: July 24, 2007
SCHEDULE II
SERIES
TDAX Independence 2010 Exchange-Traded Fund
TDAX Independence 2020 Exchange-Traded Fund
TDAX Independence 2030 Exchange-Traded Fund
TDAX Independence 2040 Exchange-Traded Fund
TDAX Independence In-Target Exchange-Traded Fund
APPENDIX I
ELECTRONIC SERVICES TERMS AND CONDITIONS
1. License; Use. (a) This Appendix I shall govern the Fund's use of
electronic communications, information delivery, portfolio management and
banking services, that The Bank of New York and its affiliates ("Custodian") may
provide to the Fund, such as The Bank of New York Inform (TM) and The Bank of
New York CA$H-Register Plus(R), and any computer software, proprietary data and
documentation provided by Custodian to the Fund in connection therewith
(collectively, the "Electronic Services"). In the event of any conflict between
the terms of this Appendix I and the main body of this Agreement with respect to
the Fund's use of the Electronic Services, the terms of this Appendix I shall
control.
(b) Custodian grants to the Fund a personal, nontransferable and
nonexclusive license to use the Electronic Services to which the Fund subscribes
solely for the purpose of transmitting instructions and information ("Written
Instructions"), obtaining reports, analyses and statements and other information
and data, making inquiries and otherwise communicating with Custodian in
connection with the Fund's relationship with Custodian. The Fund shall use the
Electronic Services solely for its own internal and proper business purposes and
not in the operation of a service bureau. Except as set forth herein, no license
or right of any kind is granted to with respect to the Electronic Services. The
Fund acknowledges that Custodian and its suppliers retain and have title and
exclusive proprietary rights to the Electronic Services, including any trade
secrets or other ideas, concepts, know-how, methodologies, and information
incorporated therein and the exclusive rights to any copyrights, trade dress,
look and feel, trademarks and patents (including registrations and applications
for registration of either), and other legal protections available in respect
thereof. The Fund further acknowledges that all or a part of the Electronic
Services may be copyrighted or trademarked (or a registration or claim made
therefor) by Custodian or its suppliers. The Fund shall not take any action with
respect to the Electronic Services inconsistent with the foregoing
acknowledgments, nor shall the Fund attempt to decompile, reverse engineer or
modify the Electronic Services. The Fund may not copy, distribute, sell, lease
or provide, directly or indirectly, the Electronic Services or any portion
thereof to any other person or entity without Custodian's prior written consent.
The Fund may not remove any statutory copyright notice or other notice included
in the Electronic Services. The Fund shall reproduce any such notice on any
reproduction of any portion of the Electronic Services and shall add any
statutory copyright notice or other notice upon Custodian's request.
(c) Portions of the Electronic Services may contain, deliver or rely on
data supplied by third parties ("Third Party Data"), such as pricing data and
indicative data, and services supplied by third parties ("Third Party Services")
such as analytic and accounting services. Third Party Data and Third Party
Services supplied hereunder are
obtained from sources that Custodian believes to be reliable but are provided
without any independent investigation by Custodian. Custodian and its suppliers
do not represent or warrant that the Third Party Data or Third Party Services
are correct, complete or current. Third Party Data and Third Party Services are
proprietary to their suppliers, are provided solely for the Fund's internal use,
and may not be reused, disseminated or redistributed in any form. The Fund shall
not use any Third Party Data in any manner that would act as a substitute for
obtaining a license for the data directly from the supplier. Third Party Data
and Third Party Services should not be used in making any investment decision.
CUSTODIAN AND ITS SUPPLIERS ARE NOT RESPONSIBLE FOR ANY RESULTS OBTAINED FROM
THE USE OF OR RELIANCE UPON THIRD PARTY DATA OR THIRD PARTY SERVICES.
Custodian's suppliers of Third Party Data and Services are intended third party
beneficiaries of this Section 1(c) and Section 5 below.
(d) The Fund understands and agrees that any links in the Electronic
Services to Internet sites may be to sites sponsored and maintained by third
parties. Custodian make no guarantees, representations or warranties concerning
the information contained in any third party site (including without limitation
that such information is correct, current, complete or free of viruses or other
contamination), or any products or services sold through third party sites. All
such links to third party Internet sites are provided solely as a convenience to
the Fund and the Fund accesses and uses such sites at its own risk. A link in
the Electronic Services to a third party site does not constitute Custodian's
endorsement, authorisation or sponsorship of such site or any products and
services available from such site.
2. Equipment. The Fund shall obtain and maintain at its own cost and
expense all equipment and services, including but not limited to communications
services, necessary for it to utilize and obtain access to the Electronic
Services, and Custodian shall not be responsible for the reliability or
availability of any such equipment or services.
3. Proprietary Information. The Electronic Services, and any
proprietary data (including Third Party Data), processes, software, information
and documentation made available to the Fund (other than which are or become
part of the public domain or are legally required to be made available to the
public) (collectively, the "Information"), are the exclusive and confidential
property of Custodian or its suppliers. However, for the avoidance of doubt,
reports generated by the Fund containing information relating to its account(s)
(except for Third Party Data contained therein) are not deemed to be within the
meaning of the term "Information." the Fund shall keep the Information
confidential by using the same care and discretion that the Fund uses with
respect to its own confidential property and trade secrets, but not less than
reasonable care. Upon termination of the Agreement or the licenses granted
herein for any reason, the Fund shall return to Custodian any and all copies of
the Information which are in its possession or under its control (except that
the Fund may retain reports containing Third Party Data, provided
that such Third Party Data remains subject to the provisions of this Appendix).
The provisions of this Section 3 shall not affect the copyright status of any of
the Information which may be copyrighted and shall apply to all information
whether or not copyrighted.
4. Modifications. Custodian reserves the right to modify the Electronic
Services from time to time. The Fund agrees not to modify or attempt to modify
the Electronic Services without Custodian's prior written consent. The Fund
acknowledges that any modifications to the Electronic Services, whether by the
Fund or Custodian and whether with or without Custodian's consent, shall become
the property of Custodian.
5. NO REPRESENTATIONS OR WARRANTIES; LIMITATION OF LIABILITY. CUSTODIAN
AND ITS MANUFACTURERS AND SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH
RESPECT TO THE ELECTRONIC SERVICES OR ANY THIRD PARTY DATA OR THIRD PARTY
SERVICES, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR
PURPOSE. THE FUND ACKNOWLEDGES THAT THE ELECTRONIC SERVICES, THIRD PARTY DATA
AND THIRD PARTY SERVICES ARE PROVIDED "AS IS." TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ANY
DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL, WHICH CUSTOMER MAY
INCUR IN CONNECTION WITH THE ELECTRONIC SERVICES, THIRD PARTY DATA OR THIRD
PARTY SERVICES, EVEN IF CUSTODIAN OR SUCH SUPPLIER KNEW OF THE POSSIBILITY OF
SUCH DAMAGES. IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF
GOD, MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION
OF COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR
DISSIMILAR CAUSE BEYOND THEIR REASONABLE CONTROL.
6. Security; Reliance; Unauthorized Use; Funds Transfers. Custodian
will establish security procedures to be followed in connection with the use of
the Electronic Services, and the Fund agrees to comply with the security
procedures. The Fund understands and agrees that the security procedures are
intended to determine whether instructions received by Custodian through the
Electronic Services are authorized but are not (unless otherwise specified in
writing) intended to detect any errors contained in such instructions. The Fund
will cause all persons utilizing the Electronic Services to treat any user and
authorization codes, passwords, authentication keys and other security devices
with the highest degree of care and confidentiality. Upon termination of the
Fund's use of the Electronic Services, the Fund shall return to Custodian any
security devices (e.g., token cards) provided by Custodian. Custodian is hereby
irrevocably authorized to comply with and rely upon on Written Instructions and
other communications, whether or not authorized, received by it through the
Electronic Services. The Fund acknowledges
that it has sole responsibility for ensuring that only Authorized Persons use
the Electronic Services and that to the fullest extent permitted by applicable
law Custodian shall not be responsible nor liable for any unauthorized use
thereof or for any losses sustained by the Fund arising from or in connection
with the use of the Electronic Services or Custodian's reliance upon and
compliance with Written Instructions and other communications received through
the Electronic Services. With respect to instructions for a transfer of funds
issued through the Electronic Services, when instructed to credit or pay a party
by both name and a unique numeric or alpha-numeric identifier (e.g. ABA number
or account number), the Custodian, its affiliates, and any other bank
participating in the funds transfer, may rely solely on the unique identifier,
even if it identifies a party different than the party named. Such reliance on a
unique identifier shall apply to beneficiaries named in such instructions as
well as any financial institution which is designated in such instructions to
act as an intermediary in a funds transfer. It is understood and agreed that
unless otherwise specifically provided herein, and to the extent permitted by
applicable law, the parties hereto shall be bound by the rules of any funds
transfer system utilized to effect a funds transfer hereunder.
7. Acknowledgments. Custodian shall acknowledge through the Electronic
Services its receipt of each Written Instruction communicated through the
Electronic Services, and in the absence of such acknowledgment Custodian shall
not be liable for any failure to act in accordance with such Written Instruction
and the Fund may not claim that such Written Instruction was received by
Custodian. Custodian may in its discretion decline to act upon any instructions
or communications that are insufficient or incomplete or are not received by
Custodian in sufficient time for Custodian to act upon, or in accordance with
such instructions or communications.
8. Viruses. The Fund agrees to use reasonable efforts to prevent the
transmission through the Electronic Services of any software or file which
contains any viruses, worms, harmful component or corrupted data and agrees not
to use any device, software, or routine to interfere or attempt to interfere
with the proper working of the Electronic Services.
9. Encryption. The Fund acknowledges and agrees that encryption may not
be available for every communication through the Electronic Services, or for all
data. The Fund agrees that Custodian may deactivate any encryption features at
any time, without notice or liability to the Fund, for the purpose of
maintaining, repairing or troubleshooting its systems.
10. On-Line Inquiry and Modification of Records. In connection with the
Fund's use of the Electronic Services, Custodian may, at the Fund's request,
permit the Fund to enter data directly into a Custodian database for the purpose
of modifying certain information maintained by Custodian's systems, including,
but not limited to, change of address information. To the extent that the Fund
is granted such access, the Fund agrees
to indemnify and hold Custodian harmless from all loss, liability, cost, damage
and expense (including attorney's fees and expenses) to which Custodian may be
subjected or which may be incurred in connection with any claim which may arise
out of or as a result of changes to Custodian database records initiated by the
Fund.
11. Agents. the Fund may, on advance written notice to the Custodian,
permit its agents and contractors ("Agents") to access and use the Electronic
Services on the Fund's behalf, except that the Custodian reserves the right to
prohibit the Fund's use of any particular Agent for any reason. The Fund shall
require its Agent(s) to agree in writing to be bound by the terms of the
Agreement, and the Fund shall be liable and responsible for any act or omission
of such Agent in the same manner, and to the same extent, as though such act or
omission were that of the Fund. Each submission of a Written Instruction or
other communication by the Agent through the Electronic Services shall
constitute a representation and warranty by the Fund that the Agent continues to
be duly authorized by the Fund to so act on its behalf and the Custodian may
rely on the representations and warranties made herein in complying with such
Written Instruction or communication. Any Written Instruction or other
communication through the Electronic Services by an Agent shall be deemed that
of the Fund, and the Fund shall be bound thereby whether or not authorized. The
Fund may, subject to the terms of this Agreement and upon advance written notice
to the Bank, provide a copy of the Electronic Service user manuals to its Agent
if the Agent requires such copies to use the Electronic Services on the Fund's
behalf. Upon cessation of any such Agent's services, the Fund shall promptly
terminate such Agent's access to the Electronic Services, retrieve from the
Agent any copies of the manuals and destroy them, and retrieve from the Agent
any token cards or other security devices provided by Custodian and return them
to Custodian.
