Global Custody Agreement
Agreement dated as of , 1997, between The
Bank of New York (the "Custodian"), acting through its office at 00
xxxxxx xxx Xxxx, Xxxxxxxx, Xxxxxxx, and Orchard Series Fund (the
"Client").
Whereas, the Client desires to arrange for the custody of certain
assets and the provision of related services by the Custodian;
Now, Therefore, in consideration of the mutual agreements contained
herein, the Custodian and the Client agree as follows:
1. Definitions. The following terms, as used herein, shall have
the following meanings:
"Authorized Instruction" means (i) a written, oral or electronic
communication accepted by the Custodian in good faith that has been
transmitted subject to the Security Procedures agreed upon in
writing by the Custodian and the Client or (ii) any other written,
oral or electronic communication given by a Client that the
Custodian believes in good faith to have been given by an
Authorized Person.
"Authorized Persons" means those individuals who have been
designated by or duly authorized by a Client pursuant to necessary
corporate or other action (which shall be evidenced by appropriate
documentation delivered to the Custodian) to act on behalf of the
Client in connection with this Agreement. Such persons shall
continue to be Authorized Persons until such time as the Client has
delivered to the Custodian appropriate documents revoking the
authority of such persons.
"Cash" has the meaning set forth in Section 5.
"Cash Account" means a current account (which may be divided into
a number of subaccounts, denominated in U.S. dollars, Belgian
francs or any other currency or Composite Currency Unit acceptable
to the Custodian) opened by the Custodian on its books in the name
of a Client.
"Communication Products" has the meaning set forth in Section 28.
"Composite Currency Units" means the European Currency Unit
("ECU"), the Special Drawing Right ("SDR") or another composite
unit consisting of the aggregate of specified amounts of specified
currencies, as such ECU, SDR or other unit may be constituted from
time to time.
"BNY Affiliate" means any office or branch of The Bank of New York
("BNY") and any other entity that directly, or indirectly through
one or more intermediaries, controls BNY or that is controlled by
or is under common control with BNY.
"Securities Account" means any securities account opened by the
Custodian on its books in the name of a Client.
"Securities Depository" means any securities depository, book-entry
system or clearing system used by the Custodian from time to time
in accordance with Section 4(e) hereof.
"Security" means any share, stock, bond, debenture, note,
certificate of indebtedness, warrant or other security or financial
instrument acceptable to the Custodian (whether represented by a
certificate or by a book-entry on the records of the issuer or
other entity responsible for recording such book-entries) that is
from time to time held for the account of a Client directly, or
indirectly through a Subcustodian or Securities Depository, by the
Custodian pursuant to this Agreement.
"Security Procedure" means, for any specified method of
communication, a procedure agreed upon in writing by the Custodian
and the Client for the purpose of verifying that an Authorized
Instruction given pursuant to such method of communication is that
of the Client or detecting error in the transmission or the content
of such Authorized Instruction. A Security Procedure may require
the use of algorithms or other codes, identifying words or numbers,
encryption, callback procedures, or similar security devices.
"Subcustodian" means any bank or other institution (other than a
Securities Depository) used by the Custodian to hold Securities
from time to time in accordance with Section 4(e) hereof.
"Unencumbered Securities Account" has the meaning set forth in
Section 14.
2. Representations, Warranties and Covenants of the Client. The
Client represents and warrants that the execution and delivery by
the Client of its Client Designation Agreement and the performance
by the Client of this Agreement (i) are within the Client's
corporate, trust or other constitutive powers; (ii) have been duly
authorized by all necessary corporate, trust or other appropriate
action under its organizational documents; (iii) require no action
by or in respect of, or filing with, any governmental body, agency
or official (including without limitation any exchange control
approvals); and (iv) do not contravene, or constitute a default
under, any provision of applicable law or regulation or of the
organizational documents of such Client or of any agreement,
judgment, injunction, order, decree or other instrument binding
upon such Client. The Client represents, warrants and covenants
that the Custodian shall be entitled to transfer all of the
Client's Securities free of any proprietary or equitable interest
of any person or entity (other than interests of the Client and
interests of the Custodian, Subcustodians and Securities
Depositories that are created by this Agreement). The Client
agrees to inform the Custodian immediately if any statement set
forth in this Section 2 or in Appendix B ceases to be true and
correct as of any date after the date hereof.
3. Securities Accounts. The Client will establish with the
Custodian one or more Securities Accounts, which shall contain, in
the manner and on the terms specified herein, the Client's
Securities.
4. Terms of Custody.
Authority to Hold Securities. Subject to the terms and
conditions of this Agreement, the Client hereby authorizes the
Custodian to hold any Securities received from time to time for the
account of such Client. The Custodian may, at its sole discretion,
hold the Securities directly or indirectly through one or more
Subcustodians or Securities Depositories. Securities held
indirectly through any Subcustodian shall be held subject to the
terms and conditions of the Custodian's agreement with such
Subcustodian. Securities held indirectly through any Securities
Depository shall be held subject to the Custodian or Subcustodian's
Agreement and such Securities Depository and to the rules and terms
and conditions of such Securities Depository.
(b) Fungibility. The Client agrees that all Securities held by
the Custodian directly, or indirectly through any Subcustodian or
Securities Depository, shall be subject to the provisions of the
Belgian Royal Decree No. 62 of November 10, 1967, as amended. In
accordance with the Royal Decree, all Securities of any issue shall
be treated as fungible with all other securities of the same issue
held by the Custodian directly, or indirectly through any
Subcustodian or Securities Depository. Therefore, the Client shall
have no right to any specific securities of an issue but shall
instead be entitled, subject to applicable laws and regulations and
to the terms of this Agreement, to transfer, deliver or repossess
from the Custodian an amount of securities of such issue that is
equivalent to the amount of such securities credited to a
Securities Account, without regard to the certificate numbers (or
other identifying information) of the securities originally
deposited, and the Custodian's obligation to the Client with
respect to such Securities shall be limited to effecting such
transfer, delivery or repossession.
(c) Identification of Client's Interests. The Custodian shall
cause the Client's interest in any Securities held by the Custodian
directly, to be evidenced by a credit to a Securities Account on
the books of the Custodian. The Custodian shall cause the Client's
interest in any Securities held indirectly by the Custodian through
a Subcustodian or Securities Depository to be evidenced by (i) a
credit to a Securities Account on the books of the Custodian, (ii)
by a credit to the account of the Custodian on the books of the
Subcustodian and (iii) by a credit to the account of the Custodian
or Subcustodian on the books of the Securities Depository.
Securities may be registered in the name of the Custodian's
nominee, or as to any Securities held by an entity other than the
Custodian, in the name of such entity's nominee. The Client agrees
to held any such nominee harmless from any liability as a holder of
record of such Securities..
(d) Liens of Subcustodians and Securities Depositories. Unless
otherwise authorized by the Client in writing, the Custodian shall
hold Securities indirectly through a Subcustodian or Securities
Depository only if (i) the Securities are not subject to any right,
charge, security interest, lien or claim of any kind in favor of
such Subcustodian or Securities Depository or the creditors or
operators of any of them, including a receiver or trustee in
bankruptcy or similar authority, except for a claim of payment for
the safe custody or administration of the Securities or for funds
advanced on behalf of the applicable Client by such Subcustodian or
Securities Depository and (ii) beneficial ownership of the
Securities is freely transferable without the payment of money or
value other than for safe custody or administration.
5. Cash Account.
(a) The Client will establish and maintain with the Custodian a
Cash Account to be used in connection with transactions relating to
the Client's Securities. The collected balance from time to time
in the Client's Cash Account shall constitute "Cash". Any credit
made to a Cash Account shall be provisional and may be reversed if
such payment is not actually collected or received.
(b) Except as otherwise provided by law, the Cash Account
(including subdivisions maintained in different currencies,
including Composite Currency Units) shall constitute one single and
indivisible current account. Consequently, the Custodian has the
right, among others, of transferring the balance of any subaccount
of a Cash Account to any other subaccount at any time and without
prior notice.
(c) The Custodian may in accordance with customary practice hold
any currency (other than Belgian Francs) or Composite Currency Unit
in which any subdivision of a Cash Account is denominated on
deposit in, and effect transactions relating thereto through, an
account (a "Foreign Account") with a BNY Affiliate or another bank
in the country where such currency is the lawful currency or in
other countries where such currency or Composite Currency Unit may
be lawfully held on deposit.
(d) The Custodian shall have no liability 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
affect the transferability, convertibility, or availability of any
currency (other than Belgian Francs) or Composite Currency Unit in
the countries where such Foreign Accounts are maintained and in no
event shall the Custodian be obligated to substitute another
currency for a currency (including a currency that is a component
of a Composite Currency Unit) whose transferability, convertibility
or availability has been affected by such law, regulation or event.
To the extent that any such law, regulation or event imposes a cost
or charge upon the Custodian in relation to the transferability,
convertibility, or availability of any such currency or Composite
Currency Unit, such cost or charge shall be for the account of the
applicable Client. If pursuant to any such law or regulation, or
as a result of any such event, the Custodian cannot deal in any
component currency of a Composite Currency Unit or effect a
particular transaction in a Composite Currency Unit on behalf of a
Client, the Custodian may thereafter treat any account denominated
in an affected Composite Currency Unit as a group of separate
accounts denominated in the relevant component currencies.
(e) Transactions in a currency or Composite Currency Unit shall be
subject to the regulations laid down by the exchange control
authorities of Belgium and of the country where such currency (or
component currency) is the lawful currency or where such currency
or Composite Currency Unit is held on deposit.
6. Instructions by the Client.
(a) Generally. The Client shall give Authorized Instructions with
respect to its Cash and Securities only to the Custodian or to the
Custodian's designee. The Client agrees to be bound by all
Authorized Instructions whether or not such instructions were duly
authorized in accordance with the Client's own procedures. The
Custodian shall not be required to follow any Authorized
Instruction that would violate any applicable law, decree,
regulation or order of any government or governmental body
(including any court or tribunal) or that would be contrary to any
provision of this Agreement.
(b) Payments. Payments shall be made by the Custodian, or a
Subcustodian only to the extent that sufficient Cash in the
applicable currency is available in a Cash Account or otherwise
available therefor and only (i) as specified by an Authorized
Instruction, (ii) as permitted by Sections 14 and 15 or (iii) upon
the termination of this Agreement as set forth in Section 17
hereof. The Custodian may make payments, or direct a Subcustodian
to make payments, from time to time on behalf of a Client when
sufficient Cash in the applicable currency is not available in the
Cash Account or otherwise available therefor, but neither the
Custodian nor any Subcustodian shall have any obligation to make
such payments. If any payments are made that result in an
overdraft in a particular currency, then such overdraft shall be
payable on demand by the Custodian and shall bear interest for the
day outstanding at the rate customarily charged by the Custodian
for overdrafts in such currency.
(c) Delivery of Securities. Any Securities held by a Subcustodian
shall be subject only to the instructions of the Custodian and any
Securities held by a Securities Depository shall be subject only to
the instructions of the Custodian or the Subcustodian for which
such Securities Depository is acting. A Client's Securities shall
be transferred, exchanged, or delivered by the Custodian, or a
Subcustodian at the direction of the Custodian, only to the extent
that sufficient Securities are actually in a Securities Account and
available for delivery and only:
(i) as specified by an Authorized Instruction;
(ii) in exchange for or upon conversion into other Securities or
Cash pursuant to a plan of merger, consolidation, reorganization,
recapitalization or readjustment;
(iii) upon the conversion of Securities pursuant to their terms
into other Securities;
(iv) as permitted by Sections 14 and 15; or
(v) upon the termination of this Agreement with respect to such
Client as set forth in Section 17 hereof.
7. Corporate Actions.
Until the Custodian receives an Authorized Instruction to the
contrary, the Custodian shall, or shall instruct the appropriate
Subcustodian to:
(i) collect dividends, interest and other payments made and stock
dividends, rights and similary distributions made or issued with
respect to Securities, in each case net of any applicable taxes or
other charges withheld by the payor of such payment or
distribution;
(ii) promptly after the Custodian becomes aware thereof, notify the
Client of any rights offering by any issuer of Securities held in
a Securities Account and, to the extent permitted by law applicable
to the relevant Subcustodian and the Custodian, sell such rights in
the principal market for such rights and deposit the proceeds of
such sale in the Cash Account if the Client does not instruct the
Custodian whether to purchase securities under such rights offering
by the deadline for such purchase;
(iii) promptly after receipt thereof, forward to the Client
those communications relating to any Securities which call for
voting or the exercise of rights or other specific action
(including materials relating to legal proceedings intended to be
transmitted to holders of such Securities);
(iv) present for payment maturing Securities and those called for
redemption;
(v) execute in the name of the Client such ownership and other
certificates as may be required to obtain payment or exercise any
rights in respect of any Securities;
(vi) accept and open all mail directed to the Client in care of the
Custodian or Subcustodian;
(vii) disclose the Client's name, address and Securities
position and any other information to the issuers of Securities
when requested to do so by them; and
(viii) dispose of fractional interests received by the Custodian
or Subcustodian as a result of stock dividends by selling any
fractional interest received in accordance with local law and
practice.
With respect to corporate actions not listed above, the Custodian
shall (in the absence of an Authorized Instruction from the Client
within any prescribed deadline) take any action that it considers
appropriate in the circumstances; provided that the Custodian shall
not be liable for the consequences of any such action. If the
Custodian or any Subcustodian or Securities Depository holds any
Securities in which the Client has an interest as part of a
fungible mass, the Custodian or such Subcustodian or Securities
Depository shall select the securities to participate in partial
redemptions, partial payments or other actions affecting less than
all securities of the relevant class in any non-discriminatory
manner that it customarily uses to make such selection. If any
Securities become subject to a partial redemption, partial payment
or other action, the Client agrees that any manner used by the
Securities Depository to select the securities to participate in
such partial redemption, partial payment or other action shall be
acceptable.
8. Reporting.
(a) Statements. The Custodian shall mail, or cause to be mailed,
or transmit electronically to the Client (or, with prior written
consent of the Client, make available electronically) monthly
statements of the Securities Accounts and Cash Account. Such
statements shall list all of the Securities and Cash and specify
(i) whether the Securities are held directly by the Custodian or
indirectly through a Subcustodian or Securities Depository and (ii)
the amount of Cash held on deposit in each currency. The Client
agrees that the such statement shall be binding on the Client 30
days after (a) in the case of any statement sent by mail, it has
been mailed by first class mail, postage prepaid or (b) in the case
of any statement transmitted or made available electronically, it
has been transmitted or made available electronically to the
Client, unless the Client has theretofore notified the Custodian in
writing of any inaccuracy in such statement.
(b) Access to Records. The Custodian shall allow the Client and
its independent public accountants reasonable access to the records
of the Custodian relating to the Client's Securities and Cash as is
required by the Client or its accountants in connection with their
examination of the books and records pertaining to the affairs of
the Client and shall require the Subcustodian and Securities
Depository to grant such access to the Client and its independent
public accountants to the extent consistent with applicable law and
regulations. The Custodian has no obligation to maintain any
records for a period of more than 10 years. The Custodian shall
have no obligation to require any Subcustodian or Securities
Depository to maintain records for any specified period of time.
(c) Other Information. From time to time the Custodian may
provide additional reporting information to a Client on terms and
conditions agreed upon by the Custodian and such Client in writing.
The additional information may include data obtained from third
parties, such as pricing valuation information relating to the
Client's Securities. The Client agrees that it shall not
redistribute or resell data obtained by the Custodian from third
parties, except that, to the extent the Client is acting on behalf
of another party, it may provide such data to the beneficial owners
of the Client's Securities as recorded on the Client's books and
records.
9. Taxes.
The respective responsibilities of the Client and the Custodian
with respect to tax matters are set forth in Appendix C hereto and
incorporated by reference herein.
10. Responsibilities; Indemnification by the Custodian.
(a) Standard of Care. The Custodian shall use reasonable care in
the performance of its duties hereunder and shall exercise the same
degree of care with respect to the Securities as it would with
respect to its own securities and property. The Custodian shall
require the Subcustodian to use reasonable care in the performance
of its duties and to exercise the same degree of care with respect
to the Securities as it would with respect to its own securities
and property and those of its other Customers. The Custodian shall
be responsible to ensure that each Subcustodian that is a BNY
Affiliate performs in accordance with the foregoing standard. The
Custodian's responsibility with respect to any Securities held by
a Subcustodian (other than a BNY Affiliate) or any carrier of
Securities acting for the Custodian or any Subcustodian is limited
to the failure on the part of the Custodian (or a Subcustodian that
is a BNY Affiliate) to exercise reasonable care in the selection or
retention of such Subcustodian or carrier; it being understood that
the Client shall be deemed to have approved the selection of the
Subcustodians listed on Appendix A (as amended from time to time in
accordance with Section 19) or otherwise approved or selected by
the Client.
(b) Insurance. The Custodian shall, and shall require each
Subcustodian to, maintain insurance coverage with respect to the
Securities covering such risks and in such amounts as the Custodian
or such Subcustodian maintains with respect to securities which the
Custodian or such Subcustodian holds for its own account and for
the account of other customers.
(c) Indemnification by the Custodian and Subcustodians. The
Custodian shall indemnify the Client against, and hold the Client
harmless from, any loss or liability (including, without
limitation, the reasonable fees and disbursements of counsel and
other legal advisors, but excluding all losses and liabilities of
the types described in Section 11 hereof) incurred by the Client by
reason of the negligence (whether through action or inaction),
fraud or willful misconduct of the Custodian or any Subcustodian
that is a BNY Affiliate in connection with the services provided
pursuant to this Agreement or the applicable subcustodian
agreement. The Custodian shall require the Subcustodian that is
not a BNY Affiliate to indemnify the Custodian and the Client
against, and hold the Custodian and the Client harmless from, any
loss or liability (including, without limitation, the reasonable
fees and disbursements of counsel, but excluding all losses and
liabilities of the types specified in Section 11) incurred by the
Custodian or the Client by reason of the negligence (whether
through action or inaction), fraud or willful misconduct of such
Subcustodian in connection with the services provided by such
Subcustodian pursuant to this Agreement and the applicable
subcustodian agreement.
11. Limitations on Responsibilities and Liabilities.
(a) Generally. The Custodian shall be responsible for the
performance of only those duties as are set forth herein or
contained in an Authorized Instruction that is not contrary to the
provisions of this Agreement.
(b) Consequential Damages. Under no circumstances shall the
Custodian, any Subcustodian or any Securities Depositories be
liable to the Client or any other person for indirect, special or
consequential damages, even if the Custodian or such Subcustodian
or Securities Depository is apprised of the likelihood of such
damages.
(c) Corporate Actions. The Custodian shall not be liable for any
loss occasioned by the failure of the Custodian to notify any
Client of any payment of dividends or interest or any redemption,
rights offering or other distribution made with respect to any
Security or any other corporate action taken or to be taken with
respect to any Security if the Custodian or a Subcustodian has not
received notice of such transaction directly from the issuer of
such Security or if such distribution or action was not included in
the reports of an internationally-recognized investment data
service selected by the Custodian.
(d) Authorized Instructions. Neither the Custodian nor any
Subcustodian shall be liable for any action taken in good faith
upon an Authorized Instruction.
(e) Payment and Delivery Instructions. In some securities
markets, securities deliveries and payments therefor may not be or
are not customarily made simultaneously. Accordingly, the Client
agrees that, notwithstanding the Client's instruction to deliver
Securities against payment or to pay for Securities against
delivery, the Custodian or a Subcustodian may make or accept
payment for or delivery of Securities in such form and manner as
shall be in accordance with relevant local law and practice or with
the customs prevailing in the relevant market among securities
dealers. The Client shall bear the risk that (i) the recipient of
Securities may fail to make payment, return such Securities or hold
such Securities or the proceeds of their sale in trust for the
Client and (ii) the recipient of payment for Securities may fail to
deliver the Securities (such failure to include, without
limitation, delivery of forged or stolen Securities) or to return
such payment, in the case whether such failure is total or partial
or merely a failure to perform on a timely basis. Neither the
Custodian nor any Subcustodian shall be liable to any Client for
any loss resulting from any of the foregoing events.
(f) Reversals. In some securities markets and cash clearing
systems, deliveries of securities and cash may be reversed under
certain circumstances. Accordingly, credits of securities to a
Securities Account and cash to a Cash Account are provisional and
subject to reversal if, in accordance with relevant local law and
practice, the delivery of the security or cash giving rise to the
credit is reversed.
(g) Foreign Currency Risks. The Client shall bear all risks of
investing in Securities or holding Cash denominated in a currency
other than that of the Client's home jurisdiction. Without
limiting the foregoing, the Client shall bear the risks that rules
or procedures imposed by Securities Depositories, exchange
controls, asset freezes or other laws or regulations shall prohibit
or impose burdens or costs on the transfer to, by or for the
account of the Client of Securities or Cash held outside the
Client's jurisdiction or denominated in a currency other than the
currency of the Client's home jurisdiction or the conversion of
Cash from one currency into another currency. The Custodian shall
not be obligated to substitute another currency for a currency
(including a currency that is a component of a Composite Currency
Unit) whose transferability, convertibility or availability has
been affected by such law, regulation, rule or procedure. Neither
the Custodian nor any Subcustodian shall be liable to any Client
for any loss resulting from any of the foregoing events.
(h) Force Majeure. Notwithstanding any other provision contained
herein, neither the Custodian nor any Subcustodian shall be liable
for any action taken, or any failure to take any action required to
be taken, hereunder or otherwise to fulfill its obligations
hereunder (including without limitation the failure to receive or
deliver securities or the failure to receive or make any payment)
in the event and to the extent that the taking of such action or
such failure arises out of or is caused by war, insurrection, riot,
civil commotion, act of God, accident, fire, water damage,
explosion, mechanical breakdown, computer or system failure or
other failure of equipment, or malfunction or failures caused by
computer virus, failure or malfunctioning of any communications
media for whatever reason, interruption (whether partial or total)
of power supplies or other utility of service, strike or other
stoppage (whether partial or total) of labor, any law, decree,
regulation or order of any government or governmental body
(including any court or tribunal), or any other cause (whether
similar or dissimilar to any of the foregoing) whatsoever beyond
its reasonable control or the reasonable control of any
Subcustodain.
(i) Delays. Except in the case of a failure by the Custodian or
a BNY Affiliate to exercise the standard of care required by
Section 10(a), the Custodian shall not be liable for delays in
carrying out payment instructions given by the Client. In the
event that a delay in the carrying out of a payment instruction is
caused by such a failure of the Custodian or a BNY Affiliate, the
liability of the Custodian shall not exceed an interest equivalent
for the period from the day when the payment would have been
carried out, but for the negligence, fraud or wilful misconduct of
the Custodian or such BNY Affiliate, until the day when it is
actually carried out (excluding any portion of such period during
which the Custodian cannot carry out such instructions as a result
of any event referred to in Section 11(h)); provided that if the
Client shall fail to report the delay to the Custodian within 10
days from the date when the payment would, but for the negligence,
of the Custodian or a BNY Affiliate, have been made, then the
Custodian shall not be liable for an interest equivalent for more
than a total of 10 days.
(j) Client's Reporting Obligations. The Client shall be solely
responsible for compliance with any notification, license or other
requirement of any jurisdiction relating to or affecting the
Client's beneficial ownership of the Securities, and neither the
Custodian nor any Subcustodian assumes liability for noncompliance
with such requirements.
(k) No Investment Advice. Neither the Custodian nor any
Subcustodian or BNY Affiliate is under any duty to provide any
Client with investment advice or to supervise its investments.
(l) Fraudulent Securities. The Custodian shall have no liability
for losses incurred by the Client or any other person as a result
of the receipt or acceptance of fraudulent, forged or invalid
Securities (or Securities which are otherwise not freely
transferable or deliverable without encumbrance in any relevant
market).
(m) Third Party Information. The Custodian shall have no
responsibility for the accuracy of any information provided by the
Custodian to a Client that has been obtained from third parties
pursuant to Section 7 or 8(c) of this Agreement.
12. Use of BNY Affiliates.
(a) Executing Orders. The Custodian shall, in its sole discretion
and if permitted by applicable law, accept orders from the Client
for the purchase or sale of Securities and either execute such
orders itself or by means of BNY Affiliates or brokers or other
financial organizations of its choice, subject to the fees and
commissions in effect from time to time. The Custodian shall not
be responsible for any act or omission, or for the solvency, of any
broker or other financial organization so selected to effect any
transaction for the account of a Client. When instructed to buy or
sell Securities for which the Custodian or a BNY Affiliate acts as
a dealer, the Custodian may buy or sell such Securities from or to
either itself, as principal, or such BNY Affiliate.
(b) Disclosure to BNY Affiliates. Notwithstanding the provisions
of Section 26 hereof, the Custodian may disclose to any BNY
Affiliate details with respect to the Securities and the
transactions effected hereunder. Such disclosure shall be for the
purpose of identifying banking, securities and financial services
that BNY Affiliates may be able to provide to the Client.
(c) Sub-Contracting. The Client hereby agrees that the Custodian
may arrange with any BNY Affiliate to perform on behalf of the
Custodian any act required to be performed by the Custodian
hereunder.
13. Fees. The Client agrees to pay the Custodian as compensation
for the services provided hereunder a fee computed at rates
determined by the Custodian from time to time and communicated to
the Client in advance, as well as all assessments, charges and
expenses (including, without limitation, legal expenses and
attorney's fees) incurred by the Custodian in connection with this
Agreement.
14. Right to Debit and Set-Off. The Custodian has the right to
debit any subaccount of a Client's Cash Account for any amount
payable by the Client in connection with any and all obligations of
the Client to the Custodian. In addition to the rights of the
Custodian under applicable law and other agreements, at any time
when a Client shall not have honored any and all of its obligations
to the Custodian, the Custodian shall have the right without notice
to the Client to retain or set-off, against such obligations of the
Client, any assets the Custodian or any BNY Affiliate may directly
or indirectly hold for the account of the Client, and any
obligations (whether matured or unmatured) that the Custodian or
any BNY Affiliate may have to the Client in any currency or
Composite Currency Unit, including time deposits and all assets
credited to any of the Client's Securities Accounts other than an
Unencumbered Securities Account. Any such asset of, or obligation
to, the Client may be transferred among the Custodian and any BNY
Affiliates in order to effect the above rights. For purposes of
this Agreement, an "Unencumbered Securities Account" means any
Securities Account that is designated by the Client, and
acknowledged by the Custodian in writing, as containing only
securities held for the account of the Client's customers and any
other Securities Account as to which the Client and the Custodian
have agreed in writing shall be considered an Unencumbered
Securities Account.
15. Security Interests. In order to secure the prompt and
complete payment when due of any and all obligations of a Client to
the Custodian, now outstanding or which may be outstanding at any
time in the future, the Client hereby pledges and grants to the
Custodian a security interest in (i) all of the Client's right,
title and interest in and to the Client's Cash Account, including
any credit or debit balance which now appears or may at any time in
the future appear in any currency or Composite Currency Unit
subaccount of such Cash Account, (ii) all of the Client's right,
title and interest in and to all time deposit accounts and notice
accounts that the Client may open from time to time with the
Custodian, (iii) all of the Client's right, title and interest in
and to all of the Client's Securities Accounts (other than
Unencumbered Securities Accounts) and the amount of all securities
which are now or at any time in the future shall be standing to the
credit of such Securities Accounts (other than an Unencumbered
Securities Account) (clauses (i), (ii) and (iii) of this Section 15
being referred to collectively herein as the Client's
"Collateral"), (iv) all amounts of cash, securities or other
property or countervalue received or to be received with respect to
or in exchange for any and all of the then existing Collateral
which are, or are intended, to be credited to the Client's Cash
Account or one of the Client's Securities Accounts (other than an
Unencumbered Securities Account) and (v) to the extent not covered
by the foregoing, all proceeds, product, offspring, rents or
profits of any or all of the foregoing (whether acquired before or
after the commencement of any bankruptcy or liquidation proceeding
by or in respect of the Client) which are, or are intended to be
credited to the Client's Cash Account or one of the Client's
Securities Accounts (other than an Unencumbered Securities
Account). All time deposit accounts and notice accounts shall be
deemed constituted for an indefinite period, even though a Client
and the Custodian may agree from time to time that interest thereon
will be paid on specified dates rather than only at final maturity.
The foregoing security interests are granted as security only and
shall not subject the Custodian to, or transfer or in any way
affect or modify, any obligation or liability of the Client with
respect to any of the Client's Collateral or any transaction in
connection therewith. The Client authorizes the Custodian to
perform all acts which the Custodian, in its sole discretion, deems
necessary or desirable to perfect and preserve its security
interests and rights under this Section 15. Upon any breach by the
Client of its obligations hereunder, the Custodian shall be
entitled to exercise all of the remedies available to a secured
creditor under applicable law.
16. Indemnification by the Client. The Client agrees to indemnify
the Custodian and to hold the Custodian harmless from any loss or
liability (including, without limitation, the reasonable fees and
disbursements of counsel and other legal advisors) incurred by the
Custodian or any Subcustodian in rendering services hereunder to
the Client or in connection with any breach of the terms of this
Agreement by such Client, except such loss or liability which
results from the Custodian's or such Subcustodian's failure to
exercise the standard of care required by Section 10(a) hereof.
17. Termination. This Agreement may be terminated by the
Custodian or the Client, following receipt by the other party of 60
days' prior written notice thereof; provided that such termination
may be immediate if the other party shall be in breach of its
obligations hereunder or shall become the subject of bankruptcy,
insolvency, reorganization, receivership or other similar
proceedings. If notice of termination is given by the Custodian,
then such Client shall, within 60 days following receipt of such
notice, specify in an Authorized Instruction the names of the
persons to whom all of such Client's Securities and Cash shall be
delivered or paid. In such case, the Custodian shall, subject to
the payment of amounts owed to it pursuant to Sections 6(b) and 13
hereof, deliver such Securities and Cash, and cause the
Subcustodian to deliver any such Securities or Cash held by such
Subcustodian, to the persons so specified. If within 60 days
following the receipt of a notice of termination by the Custodian,
the Custodian does not receive from the Client the names of the
persons to whom such Securities and Cash shall be delivered, the
Custodian, at its election, may deliver such Securities and Cash,
and instruct the Subcustodian holding any Securities or Cash to
deliver such Securities and Cash, to a bank or a trust company
doing business in the state or country where such Securities and
Cash were held. Securities or Cash so delivered shall be held and
disposed of pursuant to the provisions of this Agreement or an
Authorized Instruction or may be continued to be held until the
names of such persons are delivered to the Custodian. If notice of
termination is given by the Client, the Custodian shall, subject to
the payment of all amounts owed to it pursuant to Sections 6(b) and
13 hereof, deliver such Securities and Cash, and instruct the
Subcustodian holding any Securities or Cash to deliver such
Securities or Cash, to the persons specified in an Authorized
Instruction. If this Agreement is terminated by the Custodian or
the Client, but the Custodian or a BNY Affiliate continues to
provide other services to the Client in connection with which the
Client uses Communication Products, then the provisions of Sections
27 and 28 hereof shall survive the termination of this Agreement
until the time that no such other services continue to be provided
by the Custodian or a BNY Affiliate to the Client or until
otherwise terminated in writing by the Client or the Custodian.
The provisions of Sections 20, 24, 26 and Appendix G hereof and the
indemnity provisions of this Agreement and the provisions limiting
the liabilities of the Custodian and the Subcustodians shall
survive the termination of this Agreement (including any subsequent
termination of Sections 27 and 28 hereof).
18. Notices. Except as otherwise specified herein, any notice or
other communication to the Custodian or the Client is to be
addressed to the respective party as set forth in Appendix D
hereto, or in such manner as may be specified by the one party to
the other in writing from time to time. Unless otherwise specified
herein, notices shall be effective when received. If any
Authorized Instruction is given to the Custodian orally, then the
Custodian's record of such instruction shall constitute conclusive
evidence of the contents of such instruction, notwithstanding any
conflicting written confirmation or record of such instruction
provided by the Client.
19. Amendments and Waivers. Any provision of this Agreement
(including the Appendices hereto) may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by
the Client and the Custodian; provided that (i) the Custodian may
from time to time delete the name of any Subcustodian or Securities
Depository from Appendix A without notice to or consent by the
Client and, (ii) the Custodian may from time to time add the name
of any bank, securities depository, book-entry system or clearing
system to Appendix A if it notifies the Client by first class mail
of such addition and does not receive in writing an objection to
such addition within 30 days after the date such notice is mailed.
20. Claims. Any claim arising out of or related to this Agreement
must be brought no later than one year after such claim has
accrued.
21. Successors and Assigns; Governing Law; Jurisdiction. This
Agreement shall bind the successors and assigns of the Custodian
and the Client. Except as otherwise provided by the terms of this
Agreement, neither the Custodian nor the Client may assign any of
its rights or obligations under this Agreement without the prior
written consent of the other party. This Agreement shall be
governed by and construed in accordance with the law of Belgium,
[Alternate: This Agreement shall be governed by and construed in
accordance with the law of the [State of New York] [England] except
that the provisions set forth in Sections 4(b) and 15 shall be
governed by the law of Belgium.] The Client hereby submits to the
non-exclusive jurisdiction of any civil or commercial court in
Brussels [any federal or state court in New York City] [the High
Court of Justice in London] for purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions
contemplated hereby. The Client hereby irrevocably waives, to the
fullest extent permitted by applicable law, any objection which it
may now or hereafter have to the laying of venue of any such
proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an
inconvenient forum. [For New York law only: The Client and the
Custodian each hereby irrevocably waives any and all rights to
trial by jury in any legal proceeding arising out of or relating to
this Agreement.] [To the extent that the Client has or may
hereafter have any immunity (sovereign or otherwise) from
jurisdiction of any court or from any legal process with respect to
itself or its property, the Client hereby irrevocably waives such
immunity in respect of its obligations under this Agreement.]
22. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures thereto and
hereto were upon the same instrument.
23. Headings. The section headings used herein are for
information only and shall not affect the interpretation of any
provision of this Agreement.
24. Evidence. The Custodian's books and records (whether on
paper, microfilm, microfiche, by electronic or magnetic recording,
or any other mechanically reproducible form or otherwise) shall be
deemed to constitute, in the absence of manifest error, sufficient
evidence of the facts stated therein and of any obligations of the
Client to the Custodian.
25. Integration. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any and all prior
agreements and understanding, oral or written, relating to the
subject matter hereof.
26. Confidentiality. The parties hereto agree not to disclose to
any other party and to keep confidential the terms and conditions
of this Agreement, any amendment hereof, and any Exhibit,
Attachment or Appendix hereto, including but not limited to service
level profiles. The Client agrees to cause all of its Authorized
Persons to comply with the provisions of this Section 26. In the
event that either a Client (including any of its Authorized
Persons) or the Custodian breaches any provision of this Section
26, the other party shall be entitled to temporary and permanent
injunctive relief against the other party (or such Authorized
Person, as the case may be) without the necessity of proving actual
damages. Notwithstanding any other provision herein, the Custodian
may disclose the Client's name, address and securities position and
other information to such persons and to such an extent as required
by law (including, but not limited to, article 28 of the Belgian
Law of December 4, 1990 relating to securities transactions
suspected of constituting market manipulation, xxxxxxx xxxxxxx and
other breaches of financial regulations), the rules of any stock
exchange or regulatory or self-regulatory organization or any order
or decrees of any court or administrative body that is binding on
the Custodian or any Subcustodian or Securities Depository.
27. Security Procedures. The validity of all Authorized
Instructions (including communications requesting cancellation or
amendment of an Authorized Instruction), shall be subject to
compliance with the applicable Security Procedure. The Client
shall (i) not disclose, or permit any Authorized Person to
disclose, except on a "need to know" basis, any aspects of any
Security Procedure, (ii) notify the Custodian immediately if the
confidentiality of any Security Procedure is compromised and (iii)
act to prevent the Security Procedures from being further
compromised. The Client shall designate one or more persons, as
identified in Appendix E to receive Security Procedure materials
from the Custodian. The Client may amend Appendix E from time to
time upon seven days' prior written notice to the Custodian in
accordance with Section 18 of this Agreement. The Client
acknowledges that it has been fully informed of the protections and
risks associated with each of the various Security Procedures. If
the Client chooses not to use any Security Procedure, then the
Client agrees to be bound by any instruction that the Custodian
believes in good faith to have been given by an Authorized Person.
28. License. The Custodian hereby grants to the Client a
personal, nontransferable and nonexclusive license to use, for its
internal purposes only, the respective number of copies of any
hardware, firmware, microcode and software set forth in Appendix F
or hereafter identified by the Custodian in writing as
communication products (the "Communication Products"), for the
respective terms set forth in Appendix F and at the respective
locations set forth in Appendix F, solely in connection with
transmitting and receiving electronic communications to and from
the Custodian in connection with this Agreement. The Client hereby
acknowledges and agrees that this license is subject to the terms
and conditions set forth in Appendix G.
29. Severability. In the event any of the terms or provisions of
this Agreement shall be held to be illegal or unenforceable, the
validity of the remaining provisions shall not be affected.
In Witness Whereof, the parties have caused this Agreement to be
duly executed by their respective authorized representatives as of
the day and year first above written.
The Bank of New York Orchard Series Fund
By: ______________________________ By: __________________
Xxxxxxxxxxx X. Xxxxxx Xxxxx X. Xxxx
Title: Vice President Title: President
Rev. 4/94 5.CUS
000x.XX
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