EXHIBIT 7(a)
FORM OF CUSTODIAN AGREEMENT
THIS AGREEMENT, dated as of ___________, 2003, between JANUS ADVISER
(the FUND), an open-end management investment company organized under the laws
of the State of Delaware as a statutory trust and registered with the U.S.
Securities and Exchange Commission under the 1940 Act on behalf of each series
thereof listed on Appendix A hereto, as amended from time to time hereafter
(each a SERIES), and XXXXX BROTHERS XXXXXXXX & CO., a limited partnership formed
under the laws of the State of New York (BBH&CO. or the CUSTODIAN). Capitalized
terms used herein shall have the meanings accorded to them in Section 13 of this
Agreement.
W I T N E S S E T H:
WHEREAS, the Fund wishes to employ BBH&Co. to act as custodian for the
Fund and to provide related services, all as provided herein, and BBH&Co. is
willing to accept such employment, subject to the terms and conditions herein
set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the Fund and BBH&Co. hereby agree, as follows:
1. APPOINTMENT OF CUSTODIAN. The Fund hereby appoints BBH&Co. as the
Fund's custodian, and BBH&Co. hereby accepts such appointment. All Investments
of the Fund delivered to the Custodian or its agents or Subcustodians shall be
dealt with as provided in this Agreement. The duties of the Custodian with
respect to the Fund's Investments shall be only as set forth expressly in this
Agreement which duties are generally comprised of safekeeping and various
administrative duties that will be performed in accordance with Instructions and
as reasonably required to effect Instructions.
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2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FUND. The Fund hereby
represents, warrants and covenants each of the following:
2.1 This Agreement has been, and at the time of delivery
of each Instruction such Instruction will have been, duly authorized,
executed and delivered by the Fund. This Agreement does not violate any
Applicable Law or conflict with or constitute a default under the
Fund's prospectus, trust instrument, bylaws or any other agreement,
judgment, order or decree to which the Fund is a party or by which it
is bound.
2.2 The Fund shall safeguard and shall solely be
responsible for the safekeeping of any testkeys, identification codes,
passwords, other security devices or statements of account with which
the Custodian provides it. In furtherance and not limitation of the
foregoing, in the event the Fund utilizes any on-line service offered
by the Custodian, the Fund and the Custodian shall be fully responsible
for the security of each party's connecting terminal, access thereto
and the proper and authorized use thereof and the initiation and
application of continuing effective safeguards in respect thereof.
Additionally, if the Fund uses any on-line or similar communications
service made available by the Custodian, the Fund shall be solely
responsible for ensuring the security of its access to the service and
for the use of the service, and shall only attempt to access the
service and the Custodian's computer systems as directed by the
Custodian. If the Custodian provides any computer software to the Fund
relating to the services described in this Agreement, the Fund will
only use the software for the purposes for which the Custodian provided
the software to the Fund, and will abide by the license agreement
accompanying the software and any other security policies which the
Custodian provides to the Fund.
3. REPRESENTATION AND WARRANTY OF BBH&CO. BBH&Co. hereby represents and
warrants that this Agreement has been duly authorized, executed and delivered by
BBH&Co. and does not and will not violate any Applicable Law or conflict with or
constitute a default under BBH&Co.'s limited partnership agreement or any
agreement, instrument, judgment, order or decree to which BBH&Co. is a party or
by which it is bound.
4. INSTRUCTIONS. Unless otherwise explicitly indicated herein, the
Custodian shall perform its duties pursuant to Instructions. As used herein, the
term INSTRUCTION shall mean a directive initiated by the Fund, acting directly
or through its board of trustees, officers or other Authorized Persons, which
directive shall conform to the requirements of this Section 4.
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4.1 AUTHORIZED PERSONS. For purposes hereof, an AUTHORIZED PERSON
shall be a person or entity authorized to give Instructions for or on behalf of
the Fund by written notices to the Custodian or otherwise in accordance with
procedures delivered to and acknowledged by the Custodian, including without
limitation the Fund's Investment Adviser or Foreign Custody Manager. The
Custodian may treat any Authorized Person as having full authority of the Fund
to issue Instructions hereunder unless the notice of authorization contains
explicit limitations as to said authority. The Custodian shall be entitled to
rely upon the authority of Authorized Persons until it receives appropriate
written notice from the Fund to the contrary.
4.2 FORM OF INSTRUCTION. Each Instruction shall be transmitted by
such secured or authenticated electro-mechanical means as the Custodian shall
make available to the Fund from time to time unless the Fund shall elect to
transmit such Instruction in accordance with Subsections 4.2.1 through 4.2.3 of
this Section.
4.2.1 FUND DESIGNATED SECURED-TRANSMISSION METHOD.
Instructions may be transmitted through a secured or tested
electro-mechanical means identified by the Fund or by an Authorized
Person entitled to give Instruction and acknowledged and accepted by
the Custodian; it being understood that such acknowledgment shall
authorize the Custodian to receive and process such means of delivery
but shall not represent a judgment by the Custodian as to the
reasonableness or security of the method determined by the Authorized
Person.
4.2.2 WRITTEN INSTRUCTIONS. Instructions may be transmitted in
a writing that bears the manual signature of Authorized Persons.
4.2.3 OTHER FORMS OF INSTRUCTION. Instructions may also be
transmitted by another means determined by the Fund or Authorized
Persons and acknowledged and accepted by the Custodian (subject to the
same limits as to acknowledgements as is contained in Subsection 4.2.1,
above) including Instructions given orally or by SWIFT, telex or
telefax (whether tested or untested).
When an Instruction is given by means established under Subsections
4.2.1 through 4.2.3 above, it shall be the responsibility of the Custodian to
use reasonable care to adhere to any security or other procedures established in
writing between the Custodian and the Authorized Person with respect to such
means of Instruction, but such Authorized Person shall be solely responsible for
determining that the particular means chosen is reasonable under the
circumstances. Oral Instructions shall be binding upon the Custodian only if and
when the Custodian takes action with respect thereto. With respect to telefax
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instructions, the parties agree and acknowledge that receipt of legible
instructions cannot be assured, that the Custodian cannot verify that authorized
signatures on telefax instructions are original or properly affixed, and that
the Custodian shall not be liable for losses or expenses incurred through
actions taken in reliance on inaccurately stated, illegible or unauthorized
telefax instructions. The provisions of Section 4A of the Uniform Commercial
Code shall apply to Funds Transfers performed in accordance with Instructions.
The Funds Transfer Services Schedule and the Electronic and Online Services
Schedule to this Agreement shall each comprise a designation of form of a means
of delivering Instructions for purposes of this Section 4.2.
4.3 COMPLETENESS AND CONTENTS OF INSTRUCTIONS. The Authorized
Person shall be responsible for assuring the adequacy and accuracy of
Instructions. Particularly, upon any acquisition or disposition or other dealing
in the Fund's Investments and upon any delivery and transfer of any Investment
or moneys, the person initiating such Instruction shall give the Custodian an
Instruction with appropriate detail, including, without limitation:
4.3.1 The transaction date and the date and location of
settlement;
4.3.2 The specification of the type of transaction;
4.3.3 A description of the Investments or moneys in question,
including, as appropriate, quantity, price per unit, amount of money to
be received or delivered and currency information. Where an Instruction
is communicated by electronic means, or otherwise where an Instruction
contains an identifying number such as a CUSIP, SEDOL or ISIN number,
the Custodian shall be entitled to rely on such number as controlling
notwithstanding any inconsistency contained in such Instruction,
particularly with respect to Investment description; and
4.3.4 The name of the broker or similar entity concerned with
execution of the transaction.
If the Custodian shall determine that an Instruction is either unclear
or incomplete, the Custodian may give prompt notice of such determination to the
Fund, and the Fund shall thereupon amend or otherwise reform such Instruction.
In such event, the Custodian shall have no obligation to take any
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action in response to the Instruction initially delivered until the redelivery
of an amended or reformed Instruction
4.4 TIMELINESS OF INSTRUCTIONS. In giving an Instruction, the Fund
shall take into consideration delays which may occur due to the involvement of a
Subcustodian or agent, differences in time zones, and other factors particular
to a given market, exchange or issuer. When the Custodian and the Fund have
mutually agreed upon specific timing requirements or deadlines with respect to
particular classes of Instruction, or when an Instruction is received by the
Custodian at such a time that it could not reasonably be expected to have acted
on such instruction due to time zone differences or other factors beyond its
reasonable control, the execution of any Instruction received by the Custodian
after such deadline or at such time (including any modification or revocation of
a previous Instruction) shall be at the risk of the Fund.
5. SAFEKEEPING OF FUND ASSETS. The Custodian shall hold Investments
delivered to it or Subcustodians for the Fund in accordance with the provisions
of this Section 5. The Custodian shall not be responsible for (a) the
safekeeping of Investments not delivered or that are not caused to be issued to
it or its Subcustodians; or, (b) pre-existing faults or defects in Investments
that are delivered to the Custodian, or its Subcustodians. The Custodian is
hereby authorized to hold with itself or a Subcustodian, and to record in one or
more accounts, all Investments delivered to and accepted by the Custodian, any
Subcustodian or their respective agents pursuant to an Instruction or in
consequence of any corporate action. The Custodian shall hold Investments for
the account of the Fund and shall segregate Investments from assets belonging to
the Custodian and shall cause its Subcustodians to segregate Investments from
assets belonging to the Subcustodian in an account held for the Fund or in an
account maintained by the Subcustodian generally for non-proprietary assets of
the Custodian.
5.1 USE OF SECURITIES DEPOSITORIES. The Custodian may deposit and
maintain Investments in any
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Securities Depository, either directly or through one or more Subcustodians
appointed by the Custodian. Investments held in a Securities Depository shall be
held (a) subject to the agreement, rules, statement of terms and conditions or
other document or conditions effective between the Securities Depository and the
Custodian or the Subcustodian, as the case may be, and (b) in an account for the
Fund or in bulk segregation in an account maintained for the non-proprietary
assets of the entity holding such Investments in the Securities Depository. If
market practice or the rules and regulations of the Securities Depository
prevent the Custodian, the Subcustodian or (any agent of either) from holding
its client assets in such a separate account, the Custodian, the Subcustodian or
other agent shall as appropriate segregate such Investments for benefit of the
Fund or for benefit of clients of the Custodian generally on its own books.
5.2 CERTIFICATED ASSETS. Investments which are certificated may be
held in registered or bearer form: (a) in the Custodian's vault; (b) in the
vault of a Subcustodian or agent of the Custodian or a Subcustodian; or (c) in
an account maintained by the Custodian, Subcustodian or agent at a Securities
Depository; all in accordance with customary market practice in the jurisdiction
in which any Investments are held.
5.3 REGISTERED ASSETS. Investments which are registered may be
registered in the name of the Custodian, a Subcustodian, or in the name of the
Fund or a nominee for any of the foregoing, and may be held in any manner set
forth in Section 5.2 above with or without any identification of fiduciary
capacity in such registration.
5.4 BOOK ENTRY ASSETS. Investments which are represented by
book-entry may be so held in an account maintained by the Book-entry Agent on
behalf of the Custodian, a Subcustodian or another agent of the Custodian, or a
Securities Depository.
5.5 REPLACEMENT OF LOST INVESTMENTS. In the event of a loss of
Investments for which the Custodian is responsible under the terms of this
Agreement, the Custodian shall replace such Investment, or in the event that
such replacement cannot be effected, the Custodian shall, as soon as practicable
after the Custodian first becomes aware of such loss, credit to the Fund's
account an amount equal to the Market Value of the lost Investments determined
as of (i) the date on which the Custodian first becomes
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aware of such loss, or (ii) such other amount as shall be mutually agreed upon
by the parties as of the date for settlement. For the purposes of this Section
5.5, "Market Value" means the market value of such security (including in the
case of a debt security, the accrued interest on such security), as determined
by the Custodian using an independent and industry recognized source mutually
agreed upon by the Fund and the Custodian.
6. ADMINISTRATIVE DUTIES OF THE CUSTODIAN. The Custodian shall perform the
following administrative duties with respect to Investments of the Fund.
6.1 PURCHASE OF INVESTMENTS. Pursuant to Instruction, Investments
purchased for the account of the Fund shall be paid for (a) against delivery
thereof to the Custodian or a Subcustodian, as the case may be, either directly
or through a Clearing Corporation or a Securities Depository (in accordance with
the rules of such Securities Depository or such Clearing Corporation), or (b)
otherwise in accordance with an Instruction, Applicable Law, generally accepted
trade practices, or the terms of the instrument representing such Investment.
6.2 SALE OF INVESTMENTS. Pursuant to Instruction, Investments sold
for the account of the Fund shall be delivered (a) against payment therefor in
cash, by check or by bank wire transfer, (b) by credit to the account of the
Custodian or the applicable Subcustodian, as the case may be, with a Clearing
Corporation or a Securities Depository (in accordance with the rules of such
Securities Depository or such Clearing Corporation), or (c) otherwise in
accordance with an Instruction, Applicable Law, generally accepted trade
practices, or the terms of the instrument representing such Investment.
6.3 DELIVERY AND RECEIPT IN CONNECTION WITH BORROWINGS OF THE FUND
OR OTHER COLLATERAL AND MARGIN REQUIREMENTS. Pursuant to Instruction, the
Custodian may deliver or receive Investments or cash of the Fund in connection
with borrowings or loans by the Fund and other collateral and margin
requirements.
6.4 FUTURES AND OPTIONS. If, pursuant to an Instruction, the
Custodian shall become a party to an agreement with the Fund and a futures
commission merchant regarding margin (TRI-PARTY
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AGREEMENT), the Custodian shall (a) receive and retain, to the extent the same
are provided to the Custodian, confirmations or other documents evidencing the
purchase or sale by the Fund of exchange-traded futures contracts and commodity
options, (b) when required by such Tri-Party Agreement, deposit and maintain in
an account opened pursuant to such Agreement (MARGIN ACCOUNT), segregated either
physically or by book-entry in a Securities Depository for the benefit of any
futures commission merchant, such Investments as the Fund shall have designated
as initial, maintenance or variation "margin" deposits or other collateral
intended to secure the Fund's performance of its obligations under the terms of
any exchange-traded futures contracts and commodity options; and (c) thereafter
pay, release or transfer Investments into or out of the margin account in
accordance with the provisions of such Agreement. Alternatively, the Custodian
may deliver Investments, in accordance with an Instruction, to a futures
commission merchant for purposes of margin requirements in accordance with Rule
17f-6 of the 1940 Act. The Custodian shall in no event be responsible for the
acts and omissions of any futures commission merchant to whom Investments are
delivered pursuant to this Section; for the sufficiency of Investments held in
any Margin Account; or, for the performance of any terms of any exchange-traded
futures contracts and commodity options.
6.5 CONTRACTUAL OBLIGATIONS AND SIMILAR INVESTMENTS. From time to
time, the Fund's Investments may include Investments that are not ownership
interests as may be represented by certificate (whether registered or bearer),
by entry in a Securities Depository or by book entry agent, registrar or similar
agent for recording ownership interests in the relevant Investment. If the Fund
shall at any time acquire such Investments, including without limitation deposit
obligations, loan participations, repurchase agreements and derivative
arrangements, the Custodian shall (a) receive and retain, to the extent the same
are provided to the Custodian, confirmations or other documents evidencing the
arrangement; and (b) perform on the Fund's account in accordance with the terms
of the applicable arrangement, but only to the extent directed to do so by
Instruction. The Custodian shall have no responsibility for agreements running
to the Fund as to which it is not a party other than to retain, to the extent
the same are provided to the Custodian, documents or copies of documents
evidencing the arrangement and, in accordance with
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Instruction, to include such arrangements in reports made to the Fund.
6.6 EXCHANGE OF SECURITIES. Unless otherwise directed by
Instruction, the Custodian shall: (a) exchange securities held for the account
of the Fund for other securities in connection with any reorganization,
recapitalization, conversion, split-up, change of par value of shares or similar
event, and (b) deposit any such securities in accordance with the terms of any
reorganization or protective plan.
6.7 SURRENDER OF SECURITIES. Unless otherwise directed by
Instruction, the Custodian may surrender securities: (a) in temporary form for
definitive securities; (b) for transfer into the name of an entity allowable
under Section 5.3 above; and (c) for a different number of certificates or
instruments representing the same number of shares or the same principal amount
of indebtedness.
6.8 RIGHTS, WARRANTS, ETC. Pursuant to Instruction, the Custodian
shall (a) deliver warrants, puts, calls, rights or similar securities to the
issuer or trustee thereof, or to any agent of such issuer or trustee, for
purposes of exercising such rights or selling such securities, and (b) deposit
securities in response to any invitation for the tender thereof.
6.9 MANDATORY CORPORATE ACTIONS. Unless otherwise directed by
Instruction, the Custodian shall: (a) comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions or similar rights of
securities ownership affecting securities held on the Fund's account and
promptly notify the Fund of such action; and (b) collect all stock dividends,
rights and other items of like nature with respect to such securities.
6.10 INCOME COLLECTION. Unless otherwise directed by Instruction,
the Custodian shall collect any amount due and payable to the Fund with respect
to Investments and promptly credit the amount collected to a Principal or Agency
Account; provided, however, that the Custodian shall not be responsible for: (a)
the collection of amounts due and payable with respect to Investments that are
in default; or (b) the collection of cash or share entitlements with respect to
Investments that are not registered in the name of the Custodian or its
Subcustodians. The Custodian is hereby authorized to endorse and deliver any
instrument required to be so endorsed and delivered to effect collection of any
amount due and payable to the Fund with respect to Investments.
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6.11 OWNERSHIP CERTIFICATES AND DISCLOSURE OF THE FUND'S INTEREST.
The Custodian is hereby authorized to execute on behalf of the Fund ownership
certificates, affidavits or other disclosure required under Applicable Law or
established market practice in connection with the receipt of income, capital
gains or other payments by the Fund with respect to Investments, or in
connection with the sale, purchase or ownership of Investments.
With respect to securities issued in the United States of
America, the Custodian [ ] may [x] may not release the
identity of the Fund to an issuer which requests such
information pursuant to the Shareholder Communications Act of
1985 for the specific purpose of direct communications
between such issuer and the Fund. IF NO BOX IS CHECKED, THE
CUSTODIAN SHALL RELEASE SUCH INFORMATION UNTIL IT RECEIVES
CONTRARY INSTRUCTIONS FROM THE FUND. With respect to
securities issued outside of the United States of America,
information shall be released in accordance with law or
custom of the particular country in which such security is
located.
6.12 PROXY MATERIALS. The Custodian shall deliver, or cause to be
delivered, to the Fund proxy forms, notices of meeting, and any other notices or
announcements materially affecting or relating to Investments received by the
Custodian or any nominee. Unless authorized to do so by Instructions or proxy,
neither the Custodian nor any Subcustodian shall vote any Investments held for
the Fund pursuant to this Agreement.
6.13. TAXES. The Custodian shall, where applicable, assist the Fund
in the reclamation of taxes withheld on dividends and interest payments received
by the Fund. In the performance of its duties with respect to tax withholding
and reclamation, the Custodian shall be entitled to rely on the advice of
counsel and upon information and advice regarding the Fund's tax status that is
received from or on behalf of the Fund without duty of separate inquiry.
6.14 OTHER DEALINGS. The Custodian shall otherwise act as directed
by Instruction, including without limitation effecting the free payments of
moneys or the free delivery of securities, provided that such Instruction shall
indicate the purpose of such payment or delivery and that the Custodian shall
record the party to whom such payment or delivery is made.
The Custodian shall attend to all nondiscretionary details in
connection with the sale or purchase
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or other administration of Investments, except as otherwise directed by an
Instruction, and may make payments to itself or others for minor expenses of
administering Investments under this Agreement; provided that the Fund shall
have the right to request an accounting with respect to such expenses.
In fulfilling the duties set forth in Sections 6.6 through 6.10 above,
the Custodian shall provide to the Company all material information pertaining
to a corporate action which the Custodian actually receives; provided that the
Custodian shall not be responsible for the completeness or accuracy of such
information. Information relative to any pending corporate action made available
to the Company via any of the services described in the Electronic and Online
Services Schedule shall constitute the delivery of such information by the
Custodian hereunder. Any advance credit of cash or shares expected to be
received as a result of any corporate action shall be subject to actual
collection and may, when the Custodian deems collection unlikely, be reversed by
the Custodian.
The Custodian may at any time or times in its discretion appoint (and
may at any time remove) agents (other than Subcustodians) to carry out some or
all of the administrative provisions of this Agreement (AGENTS), provided,
however, that the appointment of such Agents shall not relieve the Custodian of
its administrative obligations under this Agreement.
7. CASH ACCOUNTS, DEPOSITS AND MONEY MOVEMENTS. Subject to the terms and
conditions set forth in this Section 7, the Fund hereby authorizes the Custodian
to open and maintain, with itself or with Subcustodians, cash accounts in United
States Dollars, in such other currencies as are the currencies of the countries
in which the Fund maintains Investments or in such other currencies as the Fund
shall from time to time request by Instruction.
7.1 TYPES OF CASH ACCOUNTS. Cash accounts opened on the books of
the Custodian (PRINCIPAL ACCOUNTS) shall be opened in the name of the Fund. Such
accounts collectively shall be a deposit
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obligation of the Custodian and shall be subject to the terms of this Section 7
and the general liability provisions contained in Section 9 hereof. Cash
accounts opened on the books of a Subcustodian may be opened in the name of the
Fund or the Custodian or in the name of the Custodian for its customers
generally (AGENCY ACCOUNTS). Such deposits shall be obligations of the
Subcustodian and shall be treated as an Investment of the Fund. Accordingly, the
Custodian shall be responsible for exercising reasonable care in the
administration of such accounts but shall not be liable for their repayment in
the event such Subcustodian, by reason of its bankruptcy, insolvency or
otherwise, fails to make repayment.
7.2 PAYMENTS AND CREDITS WITH RESPECT TO THE CASH ACCOUNTS. The
Custodian shall make payments from or deposits to any of said accounts in the
course of carrying out its administrative duties, including but not limited to
income collection with respect to the Fund's Investments, and otherwise in
accordance with Instructions. The Custodian and its Subcustodians shall be
required to credit amounts to the cash accounts only when moneys are actually
received in cleared funds in accordance with banking practice in the country and
currency of deposit. Any credit made to any Principal or Agency Account before
actual receipt of cleared funds shall be provisional and may be reversed by the
Custodian in the event such payment is not actually collected. Unless otherwise
specifically agreed in writing by the Custodian or any Subcustodian, all
deposits shall be payable only at the branch of the Custodian or Subcustodian
where the deposit is made or carried.
7.3 CURRENCY AND RELATED RISKS. The Fund bears risks of holding or
transacting in any currency. The Custodian shall not be liable for any loss or
damage arising from the applicability of any law or regulation now or hereafter
in effect, or from the occurrence of any event, which may delay or affect the
transferability, convertibility or availability of any currency in the country
(a) in which such Principal or Agency Accounts are maintained or (b) in which
such currency is issued, and in no event shall the Custodian be obligated to
make payment of a deposit denominated in a currency during the period during
which its transferability, convertibility or availability has been affected by
any such law, regulation or event. Without limiting the generality of the
foregoing, neither the Custodian nor any Subcustodian shall be required to repay
any deposit made at a foreign branch of either the Custodian or
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Subcustodian if such branch cannot repay the deposit due to a cause for which
the Custodian would not be responsible in accordance with the terms of Section 9
of this Agreement unless the Custodian or such Subcustodian expressly agrees in
writing to repay the deposit under such circumstances. All currency transactions
in any account opened pursuant to this Agreement are subject to exchange control
regulations of the United States and of the country where such currency is the
lawful currency or where the account is maintained. Any taxes, costs, charges or
fees imposed on the convertibility of a currency held by the Fund shall be for
the account of the Fund.
7.4 FOREIGN EXCHANGE TRANSACTIONS. The Custodian shall, subject to
the terms of this Section, settle foreign exchange transactions (including
contracts, futures, options and options on futures) on behalf and for the
account of the Fund with such currency brokers or banking institutions,
including Subcustodians, as the Fund may direct pursuant to Instructions. The
Custodian may act as principal in any foreign exchange transaction with the Fund
in accordance with Section 7.4.2 of this Agreement. The obligations of the
Custodian in respect of all foreign exchange transactions (whether or not the
Custodian shall act as principal in such transaction) shall be contingent on the
free, unencumbered transferability of the currency transacted on the actual
settlement date of the transaction.
7.4.1 THIRD PARTY FOREIGN EXCHANGE TRANSACTIONS. The Custodian
shall process foreign exchange transactions (including without
limitation contracts, futures, options, and options on futures), where
any third party acts as principal counterparty to the Fund on the same
basis it performs duties as agent for the Fund with respect to any
other of the Fund's Investments. Accordingly the Custodian shall only
be responsible for delivering or receiving currency on behalf of the
Fund in respect of such contracts pursuant to Instructions. The
Custodian shall not be responsible for the failure of any counterparty
(including any Subcustodian) in such agency transaction to perform its
obligations thereunder. The Custodian (a) shall transmit cash and
Instructions to and from the currency broker or banking institution
with which a foreign exchange contract or option has been executed
pursuant hereto, (b) may make free outgoing payments of cash in the
form of U.S. Dollars or foreign currency without receiving confirmation
of a foreign exchange contract or option or confirmation that the
countervalue currency completing the foreign exchange contract has been
delivered or received or that the option has been delivered or
received, and (c) shall hold all confirmations, certificates and other
documents and agreements received by the Custodian and evidencing or
relating to such foreign exchange transactions in safekeeping. The Fund
accepts full responsibility for its use of third-party foreign exchange
dealers and for execution of said foreign exchange contracts and
options and understands that the Fund shall be responsible for any and
all costs and interest charges which may be incurred by the Fund or the
Custodian as a result of the failure or delay of third parties to
deliver foreign exchange.
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7.4.2 FOREIGN EXCHANGE WITH THE CUSTODIAN AS PRINCIPAL. The
Custodian may undertake foreign exchange transactions with the Fund as
principal as the Custodian and the Fund may agree from time to time. In
such event, the foreign exchange transaction will be performed in
accordance with the particular agreement of the parties, or in the
event a principal foreign exchange transaction is initiated by
Instruction in the absence of specific agreement, such transaction will
be performed in accordance with the usual commercial terms of the
Custodian.
7.5 DELAYS. If no event of Force Majeure shall have occurred and
be continuing and in the event that a delay shall have been caused by the
negligence or willful misconduct of the Custodian in carrying out an Instruction
to credit or transfer cash, the Custodian shall be liable to the Fund: (a) with
respect to Principal Accounts, for interest to be calculated at the rate
customarily paid on such deposit and currency by the Custodian on overnight
deposits at the time the delay occurs for the period from the day when the
transfer should have been effected until the day it is in fact effected; and,
(b) with respect to Agency Accounts, for interest to be calculated at the rate
customarily paid on such deposit and currency by the Subcustodian on overnight
deposits at the time the delay occurs for the period from the day when the
transfer should have been effected until the day it is in fact effected. The
Custodian shall not be liable for delays in carrying out such Instructions to
transfer cash which are not due to the Custodian's own negligence or willful
misconduct.
7.6 ADVANCES. If, for any reason in the conduct of its safekeeping
duties pursuant to Section 5 hereof or its administration of the Fund's assets
pursuant to Section 6 hereof, the Custodian or any Subcustodian advances monies
to facilitate settlement or otherwise for benefit of the Fund (whether or not
any Principal or Agency Account shall be overdrawn either during, or at the end
of, any Business Day), the Fund hereby does:
7.6.1 acknowledge that the Fund shall have no right or title
to any Investments purchased with such Advance save a right to receive
such Investments upon: (a) the debit of the Principal or Agency
Account; or, (b) if such debit would produce an overdraft in such
account, other reimbursement of the associated Advance;
7.6.2 grant to the Custodian a security interest in all
Investments; and,
7.6.3 agree that the Custodian may secure the resulting
Advance by perfecting a
14
security interest in all Investments under Applicable Law. With respect
to obligations and liabilities that occur to each Series, such
obligations and liabilities shall apply only to the respective Series
and not to any other Series.
Neither the Custodian nor any Subcustodian shall be obligated to
advance monies to the Fund, and in the event that such Advance occurs, any
transaction giving rise to an Advance shall be for the account and risk of the
Fund and shall not be deemed to be a transaction undertaken by the Custodian for
its own account and risk. If such Advance shall have been made by a Subcustodian
or any other person, the Custodian may assign the security interest and any
other rights granted to the Custodian hereunder to such Subcustodian or other
person. If the Fund shall fail to repay when due the principal balance of an
Advance and accrued and unpaid interest thereon and after five (5) business days
notice to the Fund from the Custodian that such balance is due, the Custodian or
its assignee, as the case may be, shall be entitled to utilize the available
cash balance in any Agency or Principal Account and to dispose of any
Investments to the extent necessary to recover payment of all principal of, and
interest on, such Advance in full. The Custodian may assign any rights it has
hereunder to a Subcustodian or third party. Any security interest in Investments
taken hereunder shall be treated as financial assets credited to securities
accounts under Articles 8 and 9 of the Uniform Commercial Code (1997), as
amended from time to time. Accordingly, the Custodian shall have the rights and
benefits of a secured creditor that is a securities intermediary under such
Articles 8 and 9.
7.7 INTEGRATED ACCOUNT. For purposes hereof, deposits maintained
in all Principal Accounts (whether or not denominated in U.S. Dollars) shall
collectively constitute a single and indivisible current account with respect to
the Fund's obligations to the Custodian, or its assignee, and balances in such
Principal Accounts shall be available for satisfaction of the Fund's obligations
under this Section 7. The Custodian shall further have a right of offset against
the balances in any Agency Account maintained
15
hereunder to the extent that the aggregate of all Principal Accounts is
overdrawn; provided however, any balance offsets under this Section 7.7 shall be
applied so that such balance offsets shall apply only to each respective Series
and not to any other Series. The deposits maintained in all Principal Accounts
and any Agency Account shall belong to each respective Series and not to any
other Series.
8. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Subject to the provisions
hereinafter set forth in this Section 8, the Fund hereby authorizes the
Custodian to utilize Securities Depositories to act on behalf of the Fund and to
appoint from time to time and to utilize Subcustodians. With respect to
securities and funds held by a Subcustodian, either directly or indirectly
(including by a Securities Depository or Clearing Corporation), notwithstanding
any provisions of this Agreement to the contrary, payment for securities
purchased and delivery of securities sold may be made prior to receipt of
securities or payment, respectively, and securities or payment may be received
in a form, in accordance with (a) governmental regulations, (b) rules of
Securities Depositories and clearing agencies, (c) generally accepted trade
practice in the applicable local market, (d) the terms and characteristics of
the particular Investment, or (e) the terms of Instructions.
8.1 DOMESTIC SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The
Custodian may deposit and/or maintain, either directly or through one or more
agents appointed by the Custodian, Investments of the Fund in any Securities
Depository in the United States, including The Depository Trust Company,
provided such Depository meets applicable requirements of the Federal Reserve
Bank or of the Securities and Exchange Commission. The Custodian may, at any
time and from time to time, appoint any bank as defined in Section 2(a)(5) of
the 1940 Act meeting the requirements of a custodian under Section 17(f) of the
1940 Act and the rules and regulations thereunder, to act on behalf of the Fund
as a Subcustodian for purposes of holding Investments of the Fund in the United
States.
8.2 FOREIGN SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Unless
instructed otherwise by the
16
Fund, the Custodian may deposit and/or maintain non-U.S. Investments of the Fund
in any non-U.S. Securities Depository provided such Securities Depository meets
the requirements of an "eligible securities depository" under Rule 17f-7
promulgated under the 1940 Act, or any successor rule or regulation (Rule 17f-7)
or which by order of the Securities and Exchange Commission is exempted
therefrom. Prior to the time that securities are placed with such depository,
but subject to the provisions of Section 8.2.4 below, the Custodian shall have
prepared an assessment of the custody risks associated with maintaining assets
with the Securities Depository and shall have established a system to monitor
such risks on a continuing basis in accordance with subsection 8.2.3 of this
Section. Additionally, the Custodian may, at any time and from time to time,
appoint (a) any bank, trust company or other entity meeting the requirements of
an "eligible foreign custodian" under Rule 17f-5 or which by order of the
Securities and Exchange Commission is exempted therefrom, or (b) any bank as
defined in Section 2(a)(5) of the 1940 Act meeting the requirements of a
custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder, to act on behalf of the Fund as a Subcustodian for purposes of
holding Investments of the Fund outside the United States. Such appointment of
foreign Subcustodians shall be subject to approval of the Fund in accordance
with Subsections 8.2.1 and 8.2.2 hereof, and use of non-U.S. Securities
Depositories shall be subject to the terms of Subsections 8.2.3 and 8.2.4
hereof. An Instruction to open an account in a given country shall comprise
authorization of the Custodian to hold assets in such country in accordance with
the terms of this Agreement. The Custodian shall not be required to make
independent inquiry as to the authorization of the Fund to invest in such
country.
8.2.1 BOARD APPROVAL OF FOREIGN SUBCUSTODIANS. Unless and
except to the extent that the Board has delegated to and the Custodian
has accepted delegation of review of certain matters concerning the
appointment of Subcustodians pursuant to Subsection 8.2.2, the
Custodian shall, prior to the appointment of any Subcustodian for
purposes of holding Investments of the Fund outside the United States,
obtain written confirmation of the approval of the Board of Trustees of
the Fund with respect to (a) the identity of a Subcustodian, and (b)
the Subcustodian agreement which shall govern such appointment, such
approval to be signed by an Authorized Person.
8.2.2 DELEGATION OF BOARD REVIEW OF SUBCUSTODIANS. From time
to time, the Custodian may agree to perform certain reviews of
Subcustodians and of Subcustodian Contracts as delegate of the Fund's
Board. In such event, the Custodian's duties and
17
obligations with respect to this delegated review will be performed in
accordance with the terms of the attached 17f-5 Delegation Schedule to
this Agreement.
8.2.3 MONITORING AND RISK ASSESSMENT OF SECURITIES
DEPOSITORIES. Prior to the placement of any assets of the Fund with a
non-U.S. Securities Depository, the Custodian: (a) shall provide to the
Fund or its authorized representative an assessment of the custody
risks associated with maintaining assets within such Securities
Depository; and (b) shall have established a system to monitor the
custody risks associated with maintaining assets with such Securities
Depository on a continuing basis and to promptly notify the Fund or its
Investment Adviser of any material changes in such risk. In performing
its duties under this subsection, the Custodian shall use reasonable
care and may rely on such reasonable sources of information as may be
available including but not limited to: (i) published ratings; (ii)
information supplied by a Subcustodian that is a participant in such
Securities Depository; (iii) industry surveys or publications; (iv)
information supplied by the depository itself, by its auditors
(internal or external) or by the relevant Foreign Financial Regulatory
Authority. It is acknowledged that information procured through some or
all of these sources may not be independently verifiable by the
Custodian and that direct access to Securities Depositories is limited
under most circumstances. Accordingly, the Custodian shall not be
responsible for errors or omissions in its duties hereunder provided
that it has performed its monitoring and assessment duties with
reasonable care. The risk assessment shall be provided to the Fund or
its Investment Advisor by such means as the Custodian shall reasonably
establish. Advices of material change in such assessment may be
provided by the Custodian in the manner established as customary
between the Fund and the Custodian for transmission of material market
information.
8.3 RESPONSIBILITY FOR SUBCUSTODIANS. Except as provided in the
last sentence of this Section 8.3, the Custodian shall be liable to the Fund for
any loss or damage to the Fund caused by or resulting from the acts or omissions
of any Subcustodian to the extent that such acts or omissions would be deemed to
be negligence, gross negligence or willful misconduct in accordance with the
terms of the relevant subcustodian agreement under the laws, circumstances and
practices prevailing in the place where the act or omission occurred. The
Custodian shall use commercially reasonable efforts to recover from the
Subcustodian any such loss or damage for which the Subcustodian is liable to the
Custodian in accordance with the foregoing sentence. The liability of the
Custodian in respect of the countries and subcustodians so designated by the
Custodian, from time to time, on the Global Custody Network Listing, shall be
subject to the additional condition that the Custodian actually recovers such
loss or damage from the Subcustodian.
8.4 NEW COUNTRIES. The Fund shall be responsible for informing the
Custodian sufficiently in
18
advance of a proposed investment which is to be held in a country in which no
Subcustodian is authorized to act in order that the Custodian shall, if it deems
appropriate to do so, have sufficient time to establish a subcustodial
arrangement in accordance herewith. In the event, however, the Custodian is
unable to establish such arrangements prior to the time such investment is to be
acquired, the Custodian is authorized to designate at its discretion a local
safekeeping agent, and the use of such local safekeeping agent shall be at the
sole risk of the Fund, and accordingly the Custodian shall be responsible to the
Fund for the actions of such agent if and only to the extent the Custodian shall
have recovered from such agent for any damages caused the Fund by such agent.
9. RESPONSIBILITY OF THE CUSTODIAN. In performing its duties and
obligations hereunder, the Custodian shall use reasonable care under the facts
and circumstances prevailing in the market where performance is effected.
Subject to the specific provisions of this Section, the Custodian shall be
liable for any direct damage incurred by the Fund in consequence of the
Custodian's negligence, bad faith or willful misconduct. In no event shall the
Custodian be liable hereunder for any special, indirect, punitive or
consequential damages arising out of, pursuant to or in connection with this
Agreement even if the Custodian has been advised of the possibility of such
damages. It is agreed that the Custodian shall have no duty to assess the risks
inherent in the Fund's Investments or to provide investment advice with respect
to such Investments and that the Fund as principal shall bear any risks
attendant to particular Investments such as failure of counterparty or issuer.
9.1 LIMITATIONS OF PERFORMANCE. The Custodian shall not be
responsible under this Agreement for any failure to perform its duties, and
shall not liable hereunder for any loss or damage in association with such
failure to perform, for or in consequence of the following causes:
9.1.1 FORCE MAJEURE. FORCE MAJEURE shall mean any circumstance
or event which is beyond the reasonable control of the Custodian, a
Subcustodian or any agent of the Custodian or a Subcustodian and which
adversely affects the performance by the
19
Custodian of its obligations hereunder, by the Subcustodian of its
obligations under its Subcustody Agreement or by any other agent of the
Custodian or the Subcustodian, including any event caused by, arising
out of or involving (a) an act of God, (b) accident, fire, water damage
or explosion, (c) any computer, system or other equipment failure or
malfunction caused by any computer virus or the malfunction or failure
of any communications medium, (d) any interruption of the power supply
or other utility service, (e) any strike or other work stoppage,
whether partial or total, (f) any delay or disruption resulting from or
reflecting the occurrence of any Sovereign Risk, (g) any disruption of,
or suspension of trading in, the securities, commodities or foreign
exchange markets, whether or not resulting from or reflecting the
occurrence of any Sovereign Risk, (h) any encumbrance on the
transferability of a currency or a currency position on the actual
settlement date of a foreign exchange transaction, whether or not
resulting from or reflecting the occurrence of any Sovereign Risk, or
(i) any other cause similarly beyond the reasonable control of the
Custodian.
9.1.2 COUNTRY RISK. COUNTRY RISK shall mean, with respect to
the acquisition, ownership, settlement or custody of Investments in a
jurisdiction, all risks relating to, or arising in consequence of,
systemic and markets factors affecting the acquisition, payment for or
ownership of Investments including (a) the prevalence of crime and
corruption, (b) the inaccuracy or unreliability of business and
financial information, (c) the instability or volatility of banking and
financial systems, or the absence or inadequacy of an infrastructure to
support such systems, (d) custody and settlement infrastructure of the
market in which such Investments are transacted and held, (e) the acts,
omissions and operation of any Securities Depository, (f) the risk of
the bankruptcy or insolvency of banking agents, counterparties to cash
and securities transactions, registrars or transfer agents, and (g) the
existence of market conditions which prevent the orderly execution or
settlement of transactions or which affect the value of assets.
9.1.3 SOVEREIGN RISK. SOVEREIGN RISK shall mean, in respect of
any jurisdiction, including the United States of America, where
Investments is acquired or held hereunder or under a Subcustody
Agreement, (a) any act of war, terrorism, riot, insurrection or civil
commotion, (b) the imposition of any investment, repatriation or
exchange control restrictions by any Governmental Authority, (c) the
confiscation, expropriation or nationalization of any Investments by
any Governmental Authority, whether de facto or de jure, (d) any
devaluation or revaluation of the currency, (e) the imposition of
taxes, levies or other charges affecting Investments, (f) any change in
the Applicable Law, or (g) any other economic or political risk
incurred or experienced.
9.2. LIMITATIONS ON LIABILITY. The Custodian shall not be liable
for any loss, claim, damage or other liability arising from the following
causes:
9.2.1 FAILURE OF THIRD PARTIES. The failure of any third party
including: (a) any issuer of Investments or book-entry or other agent
of and issuer; (b) any counterparty with respect to any Investment,
including any issuer of exchange-traded or other futures, option,
derivative or commodities contract; (c) failure of an Investment
Advisor, foreign custody manager (if not the Custodian) or other agent
of the Fund; or (d) failure of other third parties similarly beyond the
control or choice of the Custodian.
9.2.2 INFORMATION SOURCES. The Custodian may rely upon
information received from issuers of Investments or agents of such
issuers, information received from Subcustodians and from other
commercially reasonable sources such as commercial data
20
bases and the like, but shall not be responsible for specific
inaccuracies in such information, provided that the Custodian has
complied with its standard of care under this Agreement and relied upon
such information in good faith, or for the failure of any commercially
reasonable information provider.
9.2.3 RELIANCE ON INSTRUCTION. Action by the Custodian or
the Subcustodian in reasonable reliance upon an Instruction, even when
such action conflicts with, or is contrary to any provision of, the
Fund's trust instrument, bylaws, Applicable Law, or actions by the
trustees or shareholders of the Fund.
9.2.4 RESTRICTED SECURITIES. The limitations inherent in
the rights, transferability or similar investment characteristics of a
given Investment of the Fund.
10. INDEMNIFICATION. The Fund hereby indemnifies the Custodian and each
Subcustodian, and their respective agents, nominees and the partners, employees,
and officers, and agrees to hold each of them harmless from and against all
claims and liabilities, including reasonable counsel fees and taxes, incurred or
assessed against any of them in connection with the performance of this
Agreement and any Instruction, except as may arise from such party's breach of
the standard of care under this Agreement. If a Subcustodian or any other person
indemnified under the preceding sentence, gives written notice of claim to the
Custodian, the Custodian shall promptly give written notice to the Fund.
11. REPORTS AND RECORDS. The Custodian shall:
11.1 create and maintain records relating to the performance
of its obligations under this Agreement and as required by the 1940
Act, the rules and regulations thereunder, and Applicable Law. All such
records shall be the property of the Fund and in the event of the
termination of this Agreement, shall be delivered to any successor
custodian;
11.2 make available to the Fund, its auditors, agents and
employees, during regular business hours of the Custodian, upon
reasonable request, all records maintained by the Custodian pursuant to
Section 11.1 above, subject, however, to all reasonable security
requirements of the Custodian then applicable to the records of its
custody customers generally; and
11.3 make available to the Fund all Electronic Reports; it
being understood that the Custodian shall not be liable hereunder for
the inaccuracy or incompleteness thereof or for errors in any
information included therein, provided that the Custodian has complied
with the standard of care under this Agreement.
21
The Fund shall examine all records, howsoever produced or transmitted,
promptly upon receipt thereof and notify the Custodian promptly of any
discrepancy or error therein. Unless the Fund delivers written notice of any
such discrepancy or error within a reasonable time after its receipt thereof,
such records shall be deemed to be true and accurate. It is understood that the
Custodian now obtains and will in the future obtain information on the value of
assets from outside sources which may be utilized in certain reports made
available to the Fund. The Custodian deems such sources to be reliable but it is
acknowledged and agreed that the Custodian does not verify nor represent nor
warrant as to the accuracy or completeness of such information and accordingly
shall be without liability in selecting and using such sources and furnishing
such information.
12. MISCELLANEOUS.
12.1 PROXIES, ETC. The Fund will promptly execute and deliver, upon
request, such proxies, powers of attorney or other instruments as may be
necessary or desirable for the Custodian to provide, or to cause any
Subcustodian to provide, custody services.
12.2 ENTIRE AGREEMENT. Except as specifically provided herein, this
Agreement constitutes the entire agreement between the Fund and the Custodian
with respect to the subject matter hereof. Accordingly, this Agreement
supersedes any custody agreement or other oral or written agreements heretofore
in effect between the Fund and the Custodian with respect to the custody of the
Fund's Investments.
12.3 WAIVER AND AMENDMENT. No provision of this Agreement may be
waived, amended or modified, and no addendum to this Agreement shall be or
become effective, or be waived, amended or modified, except by an instrument in
writing executed by the party against which enforcement of such
22
waiver, amendment or modification is sought; provided, however, that an
Instruction shall, whether or not such Instruction shall constitute a waiver,
amendment or modification for purposes hereof, shall be deemed to have been
accepted by the Custodian when it commences actions pursuant thereto or in
accordance therewith.
12.4 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS OF, THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW OF SUCH STATE. THE PARTIES
HERETO IRREVOCABLY CONSENT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND THE FEDERAL COURTS LOCATED IN NEW YORK CITY IN THE
BOROUGH OF MANHATTAN. In no event shall this Agreement be subject to the Uniform
Computer Information Transactions Act.
12.5 NOTICES. Notices and other writings contemplated by this
Agreement, other than Instructions, shall be delivered (a) by hand, (b) by first
class registered or certified mail, postage prepaid, return receipt requested,
(c) by a nationally recognized overnight courier, or (d) by facsimile
transmission, provided that any notice or other writing sent by facsimile
transmission shall also be mailed, postage prepaid, to the party to whom such
notice is addressed. All such notices shall be addressed, as follows:
If to the Fund:
Janus Adviser
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000[
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile (000) 000-0000
If to the Custodian:
Xxxxx Brothers Xxxxxxxx & Co.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Manager, Securities Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000,
23
or such other address as the Fund or the Custodian may have designated
in writing to the other.
12.6 HEADINGS. Paragraph headings included herein are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
12.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
the Fund and the Custodian.
12.8 CONFIDENTIALITY. The parties hereto agree that each shall
treat confidentially the terms and conditions of this Agreement and all
information provided by each party to the other regarding its business and
operations. All confidential information provided by a party hereto shall be
used by any other party hereto solely for the purpose of rendering or obtaining
services pursuant to this Agreement and, except as may be required in carrying
out this Agreement, shall not be disclosed to any third party without the prior
consent of such providing party. The foregoing shall not be applicable to any
information that is publicly available when provided or thereafter becomes
publicly available other than through a breach of this Agreement, or that is
required to be disclosed by or to any bank examiner of the Custodian or any
Subcustodian, any Regulatory Authority, any auditor of the parties hereto, or by
judicial or administrative process or otherwise by Applicable Law.
12.9 COUNSEL. In fulfilling its duties hereunder, the Custodian
shall be entitled to receive and act upon the advice of (i) counsel regularly
retained by the Custodian in respect of such matters, (ii) counsel for the Fund
or (iii) such counsel as the Fund and the Custodian may agree upon, with respect
to all matters, and the Custodian shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
12.10 CONFLICT. Nothing contained in this Agreement shall prevent
the Custodian and its associates from (i) dealing as a principal or an
intermediary in the sale, purchase or loan of the Fund's Investments to, or from
the Custodian or its associates; (ii) acting as a custodian, a subcustodian, a
trustee,
24
an agent, securities dealer, an investment manager or in any other capacity for
any other client whose interests may be adverse to the interest of the Fund; or
(iii) buying, holding, lending, and dealing in any way in any assets for the
benefit of its own account, or for the account of any other client whose
interests may be adverse to the Fund notwithstanding that the same or similar
assets may be held or dealt in by, or for the account of the Fund by the
Custodian. The Fund hereby voluntarily consents to, and waives any potential
conflict of interest between the Custodian and/or its associates and the Fund,
and agrees that:
(a) the Custodian's and/or its associates' engagement in
any such transaction shall not disqualify the
Custodian from continuing to perform as the custodian
of the Fund under this Agreement;
(b) the Custodian and/or its associates shall not be
under any duty to disclose any information in
connection with any such transaction to the Fund;
(c) the Custodian and/or its associates shall not be
liable to account to the Fund for any profits or
benefits made or derived by or in connection with any
such transaction; and
(d) the Fund shall use all reasonable efforts to disclose
this provision, among other provisions in this
Agreement, to its shareholders.
13. DEFINITIONS. The following defined terms will have the respective
meanings set forth below.
13.1 ADVANCE(S) shall mean any extension of credit by or through
the Custodian or by or through any Subcustodian and shall include amounts paid
to third parties for account of the Fund or in discharge of any expense, tax or
other item payable by the Fund.
13.2 AGENCY ACCOUNT(S) shall mean any deposit account opened on the
books of a Subcustodian or other banking institution in accordance with Section
7.1 hereof.
13.3 AGENT(S) shall have the meaning set forth in the last sentence
of Section 6 hereof.
13.4 APPLICABLE LAW shall mean with respect to each jurisdiction,
all (a) laws, statutes,
25
treaties, regulations, guidelines (or their equivalents); (b) orders,
interpretations licenses and permits; and (c) judgments, decrees, injunctions
writs, orders and similar actions by a court of competent jurisdiction;
compliance with which is required or customarily observed in such jurisdiction.
13.5 AUTHORIZED PERSON(S) shall mean any person or entity
authorized to give Instructions on behalf of the Fund in accordance with Section
4.1 hereof.
13.6 BOOK-ENTRY AGENT(S) shall mean an entity acting as agent for
the issuer of Investments for purposes of recording ownership or similar
entitlement to Investments, including without limitation a transfer agent or
registrar.
13.7 CLEARING CORPORATION shall mean any entity or system
established for purposes of providing securities settlement and movement and
associated functions for a given market.
13.8 DELEGATION SCHEDULE shall mean any separate schedule entered
into between the Custodian and the Fund or its authorized representative with
respect to certain matters concerning the appointment and administration of
Subcustodians delegated to the Custodian pursuant to Rule 17f-5.
13.9 ELECTRONIC AND ONLINE SERVICES SCHEDULE shall mean any
separate agreement entered into between the Custodian and the Company or its
authorized representative with respect to certain matters concerning certain
electronic and online services as described therein and as may be made available
from time to time by the Custodian to the Company.
13.10 ELECTRONIC REPORTS shall mean any reports prepared by the
Custodian and remitted to the Fund or its authorized representative via the
internet or electronic mail.
13.11 FOREIGN CUSTODY MANAGER shall mean the Fund's foreign custody
manager appointed pursuant to Rule 17f-5 of the 1940 Act.
13.12 FOREIGN FINANCIAL REGULATORY AUTHORITY shall have the meaning
given by Section 2(a)(50) of the 0000 Xxx.
13.13 FUNDS TRANSFER SERVICES SCHEDULE shall mean any separate
schedule entered into between the Custodian and the Fund or its authorized
representative with respect to certain matters concerning the processing of
payment orders from Principal Accounts of the Fund.
26
13.14 GLOBAL CUSTODY NETWORK LISTING shall mean the Countries and
Subcustodians approved for Investments in non-U.S. Markets.
13.15 INSTRUCTION(S) shall have the meaning assigned in Section 4
hereof.
13.16 INVESTMENT ADVISOR shall mean any person or entity who is an
Authorized Person to give Instructions with respect to the investment and
reinvestment of the Fund's Investments.
13.17 INVESTMENT(S) shall mean any investment asset of the Fund,
including without limitation securities, bonds, notes, and debentures as well as
receivables, derivatives, contractual rights or entitlements and other
intangible assets.
13.18 MARGIN ACCOUNT shall have the meaning set forth in Section 6.4
hereof.
13.19 MARKET VALUE shall have the meaning set forth in Section 5.5
hereof.
13.20 PRINCIPAL ACCOUNT(S) shall mean deposit accounts of the Fund
carried on the books of BBH&Co. as principal in accordance with Section 7
hereof.
13.21 SAFEKEEPING ACCOUNT shall mean an account established on the
books of the Custodian or any Subcustodian for purposes of segregating the
interests of the Fund (or clients of the Custodian or Subcustodian) from the
assets of the Custodian or any Subcustodian.
13.22 SECURITIES DEPOSITORY shall mean a central or book entry
system or agency established under Applicable Law, including, but not limited to
Rule 17f-4 under the 1940 Act, for purposes of recording the ownership and/or
entitlement to investment securities for a given market that, if a foreign
Securities Depository, meets the definitional requirements of Rule 17f-7 under
the 1940 Act.
13.23 SUBCUSTODIAN(S) shall mean each foreign bank appointed by the
Custodian pursuant to Section 8 hereof, but shall not include Securities
Depositories.
13.24 TRI-PARTY AGREEMENT shall have the meaning set forth in
Section 6.4 hereof.
13.25 1940 ACT shall mean the Investment Company Act of 1940, as
amended.
13.26 RULE 17f-7 shall have the meaning set forth in Section 8.2
hereof.
27
14. COMPENSATION. The Fund agrees to pay to the Custodian (a) a fee in an
amount set forth in the fee letter between the Fund and the Custodian in effect
on the date hereof or as amended from time to time, and (b) all reasonable
out-of-pocket expenses incurred by the Custodian, including the fees and
expenses of all Subcustodians, and payable from time to time. Amounts payable by
the Fund under and pursuant to this Section 14 shall be payable by wire transfer
to the Custodian at BBH&Co. in New York, New York.
15. TERMINATION. This Agreement may be terminated by either party in
accordance with the provisions of this Section. The provisions of this Agreement
and any other rights or obligations incurred or accrued by any party hereto
prior to termination of this Agreement shall survive any termination of this
Agreement.
15.1 NOTICE AND EFFECT. This Agreement may be terminated by either
party by written notice effective no sooner than seventy-five (75) consecutive
calendar days following the date that notice to such effect shall be delivered
to other party at its address set forth in Section 12.5 hereof.
15.2 SUCCESSOR CUSTODIAN. In the event of the appointment of a
successor custodian, it is agreed that the Investments of the fund held by the
Custodian or any Subcustodian shall be delivered to the successor custodian in
accordance with reasonable Instructions. The Custodian agrees to cooperate with
the Fund in the execution of documents and performance of other actions
necessary or desirable in order to facilitate the succession of the new
custodian. If no successor custodian shall be appointed, the Custodian shall in
like manner transfer the Fund's Investments in accordance with Instructions.
15.3 DELAYED SUCCESSION. If no Instruction has been given as of the
effective date of termination, Custodian may at any time on or after such
termination date and upon ten (10) consecutive calendar days written notice to
the Fund either (a) deliver the Investments of the Fund held hereunder to the
Fund at the
28
address designated for receipt of notices hereunder; or (b) deliver any
investments held hereunder to a bank or trust company having a capitalization of
not less than $25,000,000 USD equivalent and operating under the Applicable law
of the jurisdiction where such Investments are located, such delivery to be at
the risk of the Fund. In the event that Investments or moneys of the Fund remain
in the custody of the Custodian or its Subcustodians after the date of
termination owing to the failure of the Fund to issue Instructions with respect
to their disposition or owing to the fact that such disposition could not be
accomplished in accordance with such Instructions despite diligent efforts of
the Custodian, the Custodian shall be entitled to compensation for its services
as provided in Section 14 hereof with respect to such Investments and moneys
during such period as the Custodian or its Subcustodians retain possession of
such items and the provisions of this Agreement shall remain in full force and
effect until disposition in accordance with this Section 15 is accomplished.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
The undersigned acknowledges that (I/we) have received a copy of this document
XXXXX BROTHERS XXXXXXXX & CO. JANUS ADVISER
By: _________________________ By: ________________________________
Name: Name: Xxxxxx Xxxxxx Xxxxx
Title: Title: Vice President
Date: Date:
29
APPENDIX A
LIST OF SERIES
U.S. Value Fund
International Equity Fund
30
FUNDS TRANSFER SERVICES SCHEDULE TO CUSTODIAN AGREEMENT
1. Execution of Payment Orders. Xxxxx Brothers Xxxxxxxx & Co. (the
CUSTODIAN) is hereby instructed by Janus Adviser (the COMPANY) to execute each
payment order, whether denominated in United States dollars or other applicable
currencies, received by the Custodian in the Company's name as sender and
authorized and confirmed by an Authorized Person as defined in a Custodian
Agreement dated as of August 15, 2003 by and between the Custodian and the
Company, as amended or restated from time thereafter (the AGREEMENT), provided
that the Company has sufficient available funds on deposit in a Principal
Account as defined in the Agreement and provided that the order (i) is received
by the Custodian in the manner specified in this Funds Transfer Services
Schedule or any amendment hereafter; (ii) complies with any written instructions
and restrictions of the Company as set forth in this Funds Transfer Services
Schedule or any amendment hereafter; (iii) is authorized by the Company or is
verified by the Custodian in compliance with a security procedure set forth in
Paragraph 2 below for verifying the authenticity of a funds transfer
communication sent to the Custodian in the name of the Company or for the
detection of errors set forth in any such communication; and (iv) contains
sufficient data to enable the Custodian to process such transfer.
2. Security Procedure. The Company hereby elects to use the procedure
selected below as its security procedure (the SECURITY PROCEDURE). The Security
Procedure will be used by the Custodian to verify the authenticity of a payment
order or a communication amending or canceling a payment order. The Custodian
will act on instructions received provided the instruction is authenticated by
the Security Procedure. The Company agrees and acknowledges in connection with
(i) the size, type and frequency of payment orders normally issued or expected
to be issued by the Company to the Custodian, (ii) all of the security
procedures offered to the Company by the Custodian, and (iii) the usual security
procedures used by customers and receiving banks similarly situated, that
authentication through the Security Procedure shall be deemed commercially
reasonable for the authentication of all payment orders submitted to the
Custodian. The Company hereby elects (PLEASE CHOOSE ONE) the following Security
Procedure as described below:
[ ] BIDS and BIDS Worldview Payment Products. BIDS and BIDS
Worldview Payment Products, are on-line payment order
authorization facilities with built-in authentication
procedures. The Custodian and the Company shall each be
responsible for maintaining the confidentiality of passwords
or other codes to be used by them in connection with BIDS. The
Custodian will act on instructions received through BIDS
without duty of further confirmation unless the Company
notifies the Custodian that its password is not secure.
[ ] SWIFT. The Custodian and the Company shall comply with SWIFT's
authentication procedures. The Custodian will act on
instructions received via SWIFT provided the instruction is
authenticated by the SWIFT system.
[ ] Tested Telex. The Custodian will accept payment orders sent by
tested telex, provided the test key matches the algorithmic
key the Custodian and Company have agreed to use.
[x] Computer Transmission. The Custodian is able to accept
transmissions sent from the Company's computer facilities to
the Custodian's computer facilities provided such
transmissions are encrypted and digitally certified or are
otherwise authenticated in a reasonable manner based on
available technology. Such procedures shall be established in
an operating protocol between the Custodian and the Company.
31
[x] Telefax Instructions. A payment order transmitted to the
Custodian by telefax transmission shall transmitted by the
Company to a telephone number specified from time to time by
the Custodian for such purposes. If it detects no
discrepancies, the Custodian will then either:
1. If the telefax requests a repetitive payment
order, the Custodian may call the Company at
its last known telephone number, request to
speak to the Company or Authorized Person,
and confirm the authorization and the
details of the payment order (a CALLBACK);
or
2. If the telefax requests a non-repetitive
order, the Custodian will perform a
Callback.
All faxes must be accompanied by a fax cover sheet which
indicates the sender's name, company name, telephone number,
fax number, number of pages, and number of transactions or
instructions attached.
[ ] Telephonic. A telephonic payment order shall be called into
the Custodian at the telephone number designated from time to
time by the Custodian for that purpose. The caller shall
identify herself/himself as an Authorized Person. The
Custodian shall obtain the payment order data from the caller.
The Custodian shall then:
1. If a telephonic repetitive payment order,
the Custodian may perform a Callback; or
2. If a telephonic non-repetitive payment
order, the Custodian will perform a
Callback.
In the event the Company chooses a procedure which is not a Security Procedure
as described above, the Company agrees to be bound by any payment order (whether
or not authorized) issued in its name and accepted by the Custodian in
compliance with the procedure selected by the Company.
3. Rejection of Payment Orders. The Custodian shall give the Company
timely notice of the Custodian's rejection of a payment order. Such notice may
be given in writing or orally by telephone, each of which is hereby deemed
commercially reasonable. In the event the Custodian fails to execute a properly
executable payment order and fails to give the Company notice of the Custodian's
non-execution, the Custodian shall be liable only for the Company's actual
damages and only to the extent that such damages are recoverable under UCC 4A
(as defined in Paragraph 7 below). Notwithstanding anything in this Funds
Transfer Services Schedule and the Agreement to the contrary, the Custodian
shall in no event be liable for any consequential or special damages under this
Funds Transfer Services Schedule, whether or not such damages relate to services
covered by UCC 4A, even if the Custodian has been advised of the possibility of
such damages. Whenever compensation in the form of interest is payable by the
Custodian to the Company pursuant to this Funds Transfer Services Schedule, such
compensation will be payable as specified in UCC 4A.
4. Cancellation of Payment Orders. The Company may cancel a payment order
but the Custodian shall have no liability for the Custodian's failure to act on
a cancellation instruction unless the Custodian has received such cancellation
instruction at a time and in a manner affording the Custodian reasonable
opportunity to act prior to the Custodian's execution of the order. Any
cancellation shall be sent and confirmed in the manner set forth in Paragraph 2
above.
32
5. Responsibility for the Detection of Errors and Unauthorized Payment
Orders. Except as may be provided, the Custodian is not responsible for
detecting any Company error contained in any payment order sent by the Company
to the Custodian. In the event that the Company's payment order to the Custodian
either (i) identifies the beneficiary by both a name and an identifying or bank
account number and the name and number identify different persons or entities,
or (ii) identifies any bank by both a name and an identifying number and the
number identifies a person or entity different from the bank identified by name,
execution of the payment order, payment to the beneficiary, cancellation of the
payment order or actions taken by any bank in respect of such payment order may
be made solely on the basis of the number. The Custodian shall not be liable for
interest on the amount of any payment order that was not authorized or was
erroneously executed unless the Company so notifies the Custodian within thirty
(30) business days following the Company's receipt of notice that such payment
order had been processed. If a payment order in the name of the Company and
accepted by the Custodian was not authorized by the Company, the liability of
the parties will be governed by the applicable provisions of UCC 4A.
6. Laws and Regulations. The rights and obligations of the Custodian and
the Company with respect to any payment order executed pursuant to this Funds
Transfer Services Schedule will be governed by any applicable laws, regulations,
circulars and funds transfer system rules, the laws and regulations of the
United States of America and of other relevant countries including exchange
control regulations and limitations on dealings or other sanctions, and
including without limitation those sanctions imposed under the law of the United
States of America by the Office of Foreign Assets Control. Any taxes, fines,
costs, charges or fees imposed by relevant authorities on such transactions
shall be for the account of the Company.
7. Miscellaneous. All accounts opened by the Company or its authorized
agents at the Custodian subsequent to the date hereof shall be governed by this
Funds Transfer Schedule. All terms used in this Funds Transfer Services Schedule
shall have the meaning set forth in Article 4A of the Uniform Commercial Code as
currently in effect in the State of New York (UCC 4A) unless otherwise set forth
herein. The terms and conditions of this Funds Transfer Services Schedule are in
addition to, and do not modify or otherwise affect, the terms and conditions of
the Agreement and any other agreement or arrangement between the parties hereto.
8. Indemnification. The Custodian does not recommend the sending of
instructions by telefax or telephonic means as provided in Paragraph 2. BY
ELECTING TO SEND INSTRUCTIONS BY TELEFAX OR TELEPHONIC MEANS, THE COMPANY AGREES
TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL
LOSSES THEREFROM, EXCEPT TO THE EXTENT THAT THE CUSTODIAN HAS FAILED TO FOLLOW
THE SECURITY PROCEDURES IN CONNECTION THEREWITH AS SET FORTH HEREIN.
OPTIONAL: The Custodian will perform a Callback if
instructions are sent by telefax or telephonic means as provided in
Paragraph 2 above. THE COMPANY MAY, AT ITS OWN RISK AND BY HEREBY
AGREEING TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND
EMPLOYEES FOR ALL LOSSES THEREFROM, ELECT TO WAIVE A CALLBACK BY THE
CUSTODIAN BY INITIALLING HERE:____
33
The undersigned acknowledges that (I/we) have received a copy of this document
Accepted and agreed:
XXXXX BROTHERS XXXXXXXX & CO. JANUS ADVISER
By: _________________________ By: ________________________________
Name: Name: Xxxxxx Xxxxxx Xxxxx
Title: Title: Vice President
Date: Date:
34
ELECTRONIC AND ON-LINE SERVICES
SCHEDULE
This Electronic and On-Line Services Schedule (this SCHEDULE) to a Custodian
Agreement dated as of August 15, 2003 (as amended from time to time hereafter,
the AGREEMENT) by and between Xxxxx Brothers Xxxxxxxx & Co. (WE, US OUR) and
Janus Adviser (YOU, YOUR), provides general provisions governing your use of and
access to the Services (as hereinafter defined) provided to you by us via the
Internet (at xxx.xxxxx.xxx or such other URL as we may instruct you to use to
access our products) and via a direct dial-up connection between your computer
and our computers, as of August 15, 2003 (the EFFECTIVE DATE). Use of the
Services constitutes acceptance of the terms and conditions of this Schedule,
any Appendices hereto, the Terms and Conditions posted on our web site, and any
terms and conditions specifically governing a particular Service or our other
products, which may be set forth in the Agreement or in a separate related
agreement (collectively, the RELATED AGREEMENTS).
1. GENERAL TERMS.
You will be granted access to our suite of online products, which may
include, but shall not be limited to the following services via the
Internet or dial-up connection (each separate service is a SERVICE;
collectively referred to as the SERVICES):
1.1. BIDS(R)and BIDS WorldView, a system for effectuating
securities and fund trade instruction and execution,
processing and handling instructions, and for the input and
retrieval of other information;
1.2. F/X WorldView, a system for executing foreign exchange trades;
1.3. Fund WorldView, a system for receiving fund and prospectus
information;
1.4. BBHCOnnect, a system for placing securities trade instructions
and following the status and detail of trades;
1.5. ActionView(SM), a system for receiving certain corporate
action information;
1.6. Risk View, an interactive portfolio risk analysis tool; and
1.7. Such other services as we shall from time to time offer.
2. SECURITY/PASSWORDS.
2.1. A digital certificate and/or an encryption key may be required
to access certain Services. You may apply for a digital
certificate and/or an encryption key by following the
procedures set forth at xxxx://xxx.xxx.xxx/xxxxx/. You also
will need an identification code (ID) and password(s)
(PASSWORD) to access the Services.
2.2. You agree to safeguard your digital certificate and/or
encryption key, ID, and Password and not to give or make
available, intentionally or otherwise, your digital
certificate, ID, and/or Password to any unauthorized person.
You must immediately notify us in writing if you believe that
your digital certificate and/or encryption key, Password, or
ID has been compromised or if you suspect unauthorized access
to your account by means of the Services or otherwise, or when
a person to whom a digital certificate and/or an encryption
key, Password, or ID has been assigned leaves or is no longer
permitted to access the Services.
35
2.3. We will not be responsible for any breach of security, or for
any unauthorized trading or theft by any third party, caused
by your failure (be it intentional, unintentional, or
negligent) to maintain the confidentiality of your ID and/or
Password and/or the security of your digital certificate
and/or encryption key.
3. INSTRUCTIONS.
3.1. Proper instructions under this Schedule shall be provided as
designated in the Related Agreements (INSTRUCTIONS).
3.2. The following additional provisions apply to Instructions
provided via the Services:
a. Instructions sent by electronic mail will not be
accepted or acted upon.
b. You authorize us to act upon Instructions received
through the Services utilizing your digital
certificate, ID, and/or Password as though they were
duly authorized written instructions, without any
duty of verification or inquiry on our part, and
agree to hold us harmless for any losses you
experience as a result.
c. From time to time, the temporary unavailability of
third party telecommunications or computer systems
required by the Services may result in a delay in
processing Instructions. In such an event, we shall
not be liable to you or any third party for any
liabilities, losses, claims, costs, damages,
penalties, fines, obligations, or expenses of any
kind (including without limitation, reasonable
attorneys', accountants', consultants', or experts'
fees and disbursements) that you experience due to
such a delay.
4. ELECTRONIC DOCUMENTS.
We may make periodic statements, disclosures, notices, and other
documents available to you electronically, and, subject to any delivery
and receipt verification procedures required by law, you agree to
receive such documents electronically and to check the statements for
accuracy. If you believe any such statement contains incorrect
information, you must follow the procedures set forth in the Related
Agreement(s).
5. MALICIOUS CODE.
You understand and agree that you will be responsible for the
introduction (by you, your employees, agents, or representatives) into
the Services, whether intentional or unintentional, of (i) any virus or
other code, program, or sub-program that damages or interferes with the
operation of the computer system containing the code, program or
sub-program, or halts, disables, or interferes with the operation of
the Services themselves; or (ii) any device, method, or token whose
knowing or intended purpose is to permit any person to circumvent the
normal security of the Services or the system containing the software
code for the Services (MALICIOUS CODE). You agree to take all necessary
actions and precautions to prevent the introduction and proliferation
of any Malicious Code into those systems that interact with the
Services.
6. INDEMNIFICATION.
For avoidance of doubt, you hereby agree that the provisions in the
Related Agreement(s) related to your indemnification of us and any
limitations on our liability and responsibilities to you shall be
applicable to this Agreement, and are hereby expressly incorporated
herein. You agree that the Services are comprised of telecommunications
and computer systems, and that it is possible that Instructions,
information, transactions, or account reports might be added to,
changed, or omitted by
36
electronic or programming malfunction, unauthorized access, or other
failure of the systems which comprise the Services, despite the
security features that have been designed into the Services. You agree
that we will not be liable for any action taken or not taken in
complying with the terms of this Schedule, except for our willful
misconduct or negligence. The provisions of this paragraph shall
survive the termination of this Schedule and the Related Agreements.
7. PAYMENT.
You may be charged for services hereunder as set forth in a fee
schedule from time to time agreed by us.
8. TERM/TERMINATION.
8.1. This Schedule is effective as of the date you sign it or first
use the Services, whichever is first, and continues in effect
until such time as either you or we terminate the Schedule in
accordance with this Section 8 and/or until your off-line use
of the Services is terminated.
8.2. We may terminate your access to the Services at any time, for
any reason, with five (5) business days prior notice; provided
that we may terminate your access to the Services with no
prior notice (i) if your account with us is closed, (ii) if
you fail to comply with any of the terms of this Agreement,
(iii) if we believe that your continued access to the Services
poses a security risk, or (iv) if we believe that you are
violating or have violated applicable laws, and we will not be
liable for any loss you may experience as a result of such
termination. You may terminate your access to the Services at
any time by giving us ten (10) business days notice. Upon
termination, we will cancel all your Passwords and IDs and any
in-process or pending Instructions will be carried out or
cancelled, at our sole discretion.
9. REPRESENTATIONS AND WARRANTIES.
We represent and warrant that:
(i) we have the right to license the Services in accordance with this
Schedule;
(ii) the granting of this limited license to you does not violate any
agreements, right or obligations of any person, firm or corporation;
and
(iii) we shall protect and maintain our rights in the Services for the
duration of this Schedule.
Accordingly, we shall indemnify, defend and hold you harmless from any
direct costs, expenses, damages, judgments or settlements incurred
because of an action or claim by third parties alleging that your use
of and access to the Services is an infringement of the intellectual
property rights of a third party in the United States, but only if you
(a) promptly notify us in writing of any claim, (b) cooperate
reasonably with us in the defense or settlement of the claim, and (c)
allow us to control the defense or settlement of the claim. This
indemnity shall not apply to the extent that the infringement claim
results from (a) your unauthorized use of Services or (b) accessing the
Services through unapproved third party products.
10. MISCELLANEOUS.
10.1. NOTICES. All notices, requests, and demands (other than
routine operational communications, such as Instructions)
shall be in such form and effect as provided in the Related
Agreement(s).
37
10.2. INCONSISTENT PROVISIONS. Each Service may be governed by
separate terms and conditions in addition to this Schedule and
the Related Agreement(s). Except where specifically provided
to the contrary in this Schedule, in the event that such
separate terms and conditions conflict with this Schedule and
the Related Agreement(s), the provisions of this Schedule
shall prevail to the extent this Schedule applies to the
transaction in question.
10.3. BINDING EFFECT; ASSIGNMENT; SEVERABILITY. This Schedule shall
be binding on you, your employees, officers and agents. We may
assign or delegate our rights and duties under this Schedule
at any time without notice to you. Your rights under this
Schedule may not be assigned without our prior written
consent. In the event that any provision of this Schedule
conflicts with the law under which this Schedule is to be
construed or if any such provision is held invalid or
unenforceable by a court with jurisdiction over you and us,
such provision shall be deemed to be restated to effectuate as
nearly as possible the purposes of the Schedule in accordance
with applicable law. The remaining provisions of this Schedule
and the application of the challenged provision to persons or
circumstances other than those as to which it is invalid or
unenforceable shall not be affected thereby, and each such
provision shall be valid and enforceable to the full extent
permitted by law.
10.4. CHOICE OF LAW; JURY TRIAL. This Schedule shall be governed by
and construed, and the legal relations between the parties
shall be determined, in accordance with the laws of the State
of New York, without giving effect to the principles of
conflicts of laws. Each party agrees to waive its right to
trial by jury in any action or proceeding based upon or
related to this Agreement. The parties agree that all actions
and proceedings based upon or relating to this Schedule may be
litigated in the federal and state courts located within New
York City, New York. The parties expressly disclaim
application of the Uniform Computer Information Transactions
Act to this Schedule.
The undersigned acknowledges that (I/we) have received a copy of this
document
JANUS ADVISER ("YOU")
BY: ________________________________
NAME: XXXXX XXXXXX XXXXX
TITLE: VICE PRESIDENT
DATE: ______________________________
38
17f-5 DELEGATION SCHEDULE
By its execution of this Delegation Schedule dated as of August 15,
2003, JANUS ADVISER (the FUND), an open-end management investment company
registered with the Securities and Exchange Commission (the COMMISSION) under
the Investment Company Act of 1940, as amended (the 1940 ACT), acting through
its Board of Trustees or its duly appointed representative on behalf of each
series thereof set forth on Appendix A to the Custodian Agreement, hereby
appoints XXXXX BROTHERS XXXXXXXX & CO., a New York limited partnership with an
office in Boston, Massachusetts (the DELEGATE) as its delegate to perform
certain functions with respect to the custody of Fund's Assets outside the
United States.
1. Maintenance of Fund's Assets Abroad. The Fund, acting through its Board
or its duly authorized representative, hereby instructs Delegate pursuant to the
terms of the Custodian Agreement dated as of the date hereof executed by and
between the Fund and the Delegate (the CUSTODIAN AGREEMENT) to place and
maintain the Fund's Assets in countries outside the United States in accordance
with Instructions received from the Fund's Investment Advisor. Such instruction
shall represent an Instruction under the terms of the Custodian Agreement. The
Fund acknowledges that (a) the Delegate shall perform services hereunder only
with respect to the countries where it accepts delegation as Foreign Custody
Manager as indicated on the Delegate's Global Custody Network Listing; (b)
depending on conditions in the particular country, advance notice may be
required before the Delegate shall be able to perform its duties hereunder in or
with respect to such country (such advance notice to be reasonable in light of
the specific facts and circumstances attendant to performance of duties in such
country); and (c) nothing in this Delegation Schedule shall require the Delegate
to provide delegated or custodial services in any country, and there may from
time to time be countries as to which the Delegate determines it will not
provide delegation services.
2. Delegation. Pursuant to the provisions of Rule 17f-5 under the 1940 Act
as amended, the
39
Board hereby delegates to the Delegate, and the Delegate hereby accepts such
delegation and agrees to perform, only those duties set forth in this Delegation
Schedule concerning the safekeeping of the Fund's Assets in each of the
countries as to which it acts as the Board's delegate. The Fund hereby appoints
the Delegate as the Fund's "Foreign Custody Manager" as such term is used in
Rule 17f-5 of the 1940 Act. The Delegate is hereby authorized to take such
actions on behalf of or in the name of the Fund as are reasonably required to
discharge its duties under this Delegation Schedule, including, without
limitation, to cause the Fund's Assets to be placed with a particular Eligible
Foreign Custodian in accordance herewith. The Fund confirms to the Delegate that
the Fund or its investment adviser has considered the Sovereign Risk and
prevailing Country Risk as part of its continuing investment decision process,
including such factors as may be reasonably related to the systemic risk of
maintaining the Fund's Assets in a particular country, including, but not
limited to, financial infrastructure, prevailing custody and settlement systems
and practices (including the use of any Securities Depository in the context of
information provided by the Custodian in the performance of its duties as
required under Rule 17f-7 of the 1940 Act and the terms of the Custodian
Agreement governing such duties), and the laws relating to the safekeeping and
recovery of the Fund's Assets held in custody pursuant to the terms of the
Custodian Agreement.
3. Selection of Eligible Foreign Custodian and Contract Administration.
The Delegate shall perform the following duties with respect to the selection of
Eligible Foreign Custodians and administration of certain contracts governing
the Fund's foreign custodial arrangements:
(a) Selection of Eligible Foreign Custodian. The Delegate shall
place and maintain the Fund's Assets with an Eligible Foreign Custodian;
provided that the Delegate shall have determined that the Fund's Assets will be
subject to reasonable care based on the standards applicable to custodians in
the relevant market after considering all factors relevant to the safekeeping of
such assets including without limitation:
(i) The Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical protections
available for certificated securities (if applicable), the controls and
procedures for dealing with any Securities Depository, the method of
keeping custodial records, and the security and data protection practices;
(ii) Whether the Eligible Foreign Custodian has the requisite
financial strength to provide reasonable care for the Fund's Assets;
40
(iii) The Eligible Foreign Custodian's general reputation and
standing; and
(iv) Whether the Fund will have jurisdiction over and be able to
enforce judgments against the Eligible Foreign Custodian, such as by virtue
of the existence of any offices of such Eligible Foreign Custodian in the
United States or such Eligible Foreign Custodian's appointment of an agent
for service of process in the United States or consent to jurisdiction in
the United States.
The Delegate shall be required to make the foregoing determination in accordance
with the standard of care set forth in Section 8 hereof and belief based only on
information reasonably available to it.
(b) Contract Administration. The Delegate shall cause that the
foreign custody arrangements with an Eligible Foreign Custodian shall be
governed by a written contract that the Delegate has determined will provide
reasonable care for Fund assets based on the standards specified in paragraph
(c)(1) of Rule 17f-5 of the 1940 Act. Each such contract shall, except as set
forth in the last paragraph of this subsection (b), include provisions that
provide:
(i) For indemnification or insurance arrangements (or any
combination of the foregoing) such that the Fund will be adequately
protected against the risk of loss of assets held in accordance with such
contract;
(ii) That the Fund's Assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the
Eligible Foreign Custodian or its creditors except a claim of payment for
their safe custody or administration or, in the case of cash deposits,
liens or rights in favor of creditors of such Custodian arising under
bankruptcy, insolvency or similar laws;
(iii) That beneficial ownership of the Fund's Assets will be freely
transferable without the payment of money or value other than for safe
custody or administration;
(iv) That adequate records will be maintained identifying the
Fund's Assets as belonging to the Fund or as being held by a third party
for the benefit of the Fund;
(v) That the Fund's independent public accountants will be given
access to those records described in (iv) above or confirmation of the
contents of such records; and
(vi) That the Delegate will receive sufficient and timely periodic
reports with respect to the safekeeping of the Fund's Assets, including,
but not limited to, notification of any transfer to or from the Fund's
account or a third party account containing the Fund's Assets.
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Such contract may contain, in lieu of any or all of the provisions
specified in this Section 3(b), such other provisions that the Delegate
determines will provide, in their entirety, the same or a greater level
of care and protection for the Fund's Assets as the specified
provisions, in their entirety.
(c) Limitation to Delegated Selection. Notwithstanding anything in
this Delegation Schedule to the contrary, the duties under this Section 3 shall
apply only to Eligible Foreign Custodians selected by the Delegate and shall not
apply to Securities Depositories or to any Eligible Foreign Custodian that the
Delegate is directed to use pursuant to Section 7 of this Delegation Schedule.
4. Monitoring. The Delegate shall establish a system to monitor at
reasonable intervals (but at least annually) the appropriateness of maintaining
the Fund's Assets with each Eligible Foreign Custodian that has been selected by
the Delegate pursuant to Section 3 of this Delegation Schedule. The Delegate
shall monitor the continuing appropriateness of placement of the Fund's Assets
in accordance with the criteria established under Section 3(a) of this
Delegation Schedule. The Delegate shall monitor the continuing appropriateness
of the contract governing the Fund's arrangements in accordance with the
criteria established under Section 3(b) of this Delegation Schedule.
5. Reporting. At the end of each calendar quarter, the Delegate shall
provide to the Board written reports specifying placement of the Fund's Assets
with each Eligible Foreign Custodian selected by the Delegate pursuant to
Section 3 of this Delegation Schedule and shall promptly report as to any
material changes to such foreign custody arrangements. Delegate will prepare
such a report with respect to any Eligible Foreign Custodian that the Delegate
has been instructed to use pursuant to Section 7 of this Delegation Schedule
only to the extent specifically agreed with respect to the particular situation.
6. Withdrawal of Fund's Assets. If the Delegate determines that an
arrangement with a specific Eligible Foreign Custodian selected by the Delegate
under Section 3 of this Delegation Schedule no longer meets the requirements of
said Section, Delegate shall withdraw the Fund's Assets from the non-complying
arrangement as soon as reasonably practicable; provided, however, that if in the
reasonable judgment of the Delegate, such withdrawal would require liquidation
of any of the Fund's Assets or would materially impair the liquidity, value or
other investment characteristics of the Fund's Assets, it shall be the duty of
the Delegate to provide information regarding the particular circumstances
42
and to act only in accordance with Instructions of the Fund or its Investment
Advisor with respect to such liquidation or other withdrawal.
7. Direction as to Eligible Foreign Custodian. Notwithstanding this
Delegation Schedule, the Fund, acting through its Board, its Investment Advisor
or its other authorized representative, may direct the Delegate to place and
maintain the Fund's Assets with a particular Eligible Foreign Custodian,
including without limitation with respect to investment in countries as to which
the Custodian will not provide delegation services. In such event, the Delegate
shall be entitled to rely on any such instruction as an Instruction under the
terms of the Custodian Agreement and shall have no duties under this Delegation
Schedule with respect to such arrangement save those that it may undertake
specifically in writing with respect to each particular instance.
8. Standard of Care. In carrying out its duties under this Delegation
Schedule, the Delegate agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for safekeeping the Fund's
Assets would exercise.
9. Representations. The Delegate hereby represents and warrants that it is
a U.S. Bank and that this Delegation Schedule has been duly authorized, executed
and delivered by the Delegate and is a legal, valid and binding agreement of the
Delegate.
The Fund hereby represents and warrants that its Board of Trustees has
determined that it is reasonable to rely on the Delegate to perform the
delegated responsibilities provided for herein and that this Delegation Schedule
has been duly authorized, executed and delivered by the Fund and is a legal,
valid and binding agreement of the Fund.
10. Effectiveness; termination. This Delegation Schedule shall be effective
as of the date on which this Delegation Schedule shall have been accepted by the
Delegate, as indicated by the date set forth below the Delegate's signature.
This Delegation Schedule may be terminated at any time, without penalty, by
written notice from the terminating party to the non-terminating party. Such
termination shall be effective on the 30th calendar day following the date on
which the non-terminating party shall receive the foregoing notice. The
foregoing to the contrary notwithstanding, this Delegation Schedule shall be
deemed to have been terminated concurrently with the termination of the
Custodian Agreement.
43
11. Notices. Notices and other communications under this Delegation
Schedule are to be made in accordance with the arrangements designated for such
purpose under the Custodian Agreement unless otherwise indicated in a writing
referencing this Delegation Schedule and executed by both parties.
12. Definitions. Capitalized terms not otherwise defined in this Delegation
Schedule have the following meanings:
a. Country Risk - shall have the meaning set forth in Section
9.1.2 of the Custodian Agreement.
b. Eligible Foreign Custodian - shall have the meaning set forth
in Rule 17f-5(a)(1) of the 1940 Act and shall also include a U.S. Bank.
c. Fund's Assets - shall mean any of the Fund's investments
(including foreign currencies) for which the primary market is outside
the United States, and such cash and cash equivalents as are reasonably
necessary to effect the Fund's transactions in such investments.
d. Instructions - shall have the meaning set forth in the
Custodian Agreement.
e. Securities Depository - shall have the meaning set forth in
Rule 17f-7 of the 1940 Act.
f. Sovereign Risk - shall have the meaning set forth in Section
9.1.3 of the Custodian Agreement.
g. U.S. Bank - shall mean a bank which qualifies to serve as a
custodian of assets of investment companies under Section 17(f) of the
1940 Act.
13. Governing Law and Jurisdiction. This Delegation Schedule shall be
construed in accordance with the laws of the State of New York. The parties
hereby submit to the non-exclusive jurisdiction of the Federal courts sitting in
the State of New York or the Commonwealth of Massachusetts
44
or of the state courts of either such State or such Commonwealth. The parties
expressly disclaim application of the Uniform Computer Information Transactions
Act to this Delegation Schedule.
14. Fees. Delegate shall perform its functions under this Delegation
Schedule for the compensation determined under the Custodian Agreement.
15. Integration. This Delegation Schedule sets forth all of the Delegate's
duties with respect to the selection and monitoring of Eligible Foreign
Custodians, the administration of contracts with Eligible Foreign Custodians,
the withdrawal of assets from Eligible Foreign Custodians and the issuance of
reports in connection with such duties. The terms of the Custodian Agreement
shall apply generally as to matters not expressly covered in this Delegation
Schedule, including dealings with the Eligible Foreign Custodians in the course
of discharge of the Delegate's obligations under the Custodian Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
The undersigned acknowledges that (I/we) have received a copy of this document
XXXXX BROTHERS XXXXXXXX & CO. JANUS ADVISER
By: ___________________________ By: ________________________________
Name: Name: Xxxxxx Xxxxxx Xxxxx
Title: Title: Vice President
Date: Date:
45
