Exhibit 99b(g)(2)
CUSTODIAN AGREEMENT
THIS AGREEMENT, dated as of March 1, 2004, between SEI Institutional
Investments Trust, an open-end management investment company organized under the
laws of the Commonwealth of Massachusetts and registered with the SEC under the
1940 ACT (the TRUST), on behalf of its portfolios listed on Schedule A attached
hereto (each a FUND and, collectively, the FUNDS), and XXXXX BROTHERS XXXXXXXX &
CO., a limited partnership formed under the laws of the State of New York
(BBH&CO. or the CUSTODIAN).
W I T N E S S E T H:
WHEREAS, the Trust wishes to employ BBH&Co. to act as custodian for the
Trust, with respect to the Funds, and to provide related services, all as
provided herein, and BBH&Co. is willing to accept such employment, subject to
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the Trust and BBH&Co. hereby agree, as follows:
1. APPOINTMENT OF CUSTODIAN. The terms of this agreement shall apply
separately and respectively to each Fund that is designated by the Trust as a
separate account on the books of the Custodian. The Trust hereby appoints
BBH&Co. as the Trust's custodian, with respect to the Funds, and BBH&Co. hereby
accepts such appointment. All Investments of a Fund delivered to the Custodian
or its agents or Subcustodians shall be dealt with as provided in this Agreement
and any attachments or schedules thereto. The duties of the Custodian with
respect to a Fund's Investments shall be only as set forth expressly in this
Agreement, which duties are generally composed of safekeeping of assets and
various administrative duties that will be performed in accordance with
Instructions, as such term is defined in Section 4 below, and as reasonably
required to effect Instructions.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE TRUST. The Trust hereby
represents, warrants and covenants each of the following:
2.1 This Agreement has been, and, at the time of delivery of each
Instruction, the Instruction will have been, duly authorized, executed and
delivered by the Trust. This Agreement does not violate any Applicable Law
or conflict with or constitute a default under the respective Fund's
prospectuses or other organic document, agreement, judgment, order or
decree to which the Trust is a party or by which it or the Funds'
Investments are bound.
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2.2 By providing an Instruction with respect to the first acquisition
of an Investment by a Fund in a jurisdiction other than the United States
of America, the Trust shall be deemed to have confirmed to the Custodian
that the Trust has: (a) assessed all material Country or Sovereign Risks
and accepted responsibility for their occurrence; (b) made all
determinations required to be made by the Trust under the 1940 Act, except
those delegated to the Custodian pursuant to Delegation Schedule attached
hereto; and (iii) if deemed appropriate by the Trust, adequately disclosed
to its shareholders and prospective investors, all material investment
risks, including any Country Risks. Nothing in this section shall relieve
the Custodian of its responsibility for performance of its duties under
Section 8.2 with respect to foreign depository information in connection
with Rule 17f-7 under the 0000 Xxx.
2.3 The Trust shall safeguard and shall solely be responsible for its
safekeeping of any testkeys, identification codes, passwords, other
security devices or statements of account with which the Custodian provides
it (except to the extent that any failure by the Trust to safe keep such
devices or statements is beyond its reasonable control or is caused or
contributed to by the Custodian or by the design, or intended use or
manufacture of the device or statement). In furtherance and not limitation
of the foregoing, in the event the Trust utilizes any on-line service
offered by the Custodian, the Trust and the Custodian shall be fully
responsible for the security of its own connecting terminal, access thereto
and the proper and authorized use thereof and the initiation and
application of continuing effective safeguards in respect thereof (except
to the extent that any failure by the Trust to safe keep such devices or
statements is beyond its reasonable control or is caused or contributed to
by the Custodian or by the design, or intended use or manufacture of the
device or statement). Additionally, if the Trust uses any on-line or
similar communications service made available by the Custodian, the Trust
shall be solely responsible for ensuring the security of its access to the
service and for the use of the service (except to the extent that any
failure by the Trust to safe keep such devices or statements is beyond its
reasonable control or is caused or contributed to by the Custodian or by
the design, or intended use or manufacture of the device or statement) 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 Trust relating to the services described in this
Agreement, the Trust will only use the software for the purposes for which
the Custodian provided the software to the Trust, and will abide by the
license agreement accompanying the software and any other security policies
that 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
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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. BBH&Co. further
represents and warrants that it has adopted and maintains reasonable facilities
and procedures to provide for continued services in the event of an emergency or
disaster.
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 Trust, acting directly or
through its Board of Trustees, officers or other Authorized Persons, as such
term is defined in Section 4.1 below, which directive shall conform to the
requirements of this Section 4.
4.1 AUTHORIZED PERSONS. For purposes hereof, an AUTHORIZED PERSON shall
be a person or entity authorized by the Trust to give Instructions for or on
behalf of the Trust and the Funds and designated as such by written notices from
the Trust to the Custodian (or otherwise in accordance with procedures delivered
to and acknowledged by the Custodian). The Custodian may treat any Authorized
Person as having full authority of the Trust 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
previously designated Authorized Persons until it receives appropriate written
notice from the Trust 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 Trust from time to time unless the Trust elects to transmit
such Instruction in accordance with Sections 4.2.1 through 4.2.3 of this
Section.
4.2.1 TRUST DESIGNATED SECURED-TRANSMISSION METHOD. Instructions may
be transmitted through a secured or tested electro-mechanical means
identified by the Trust 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 (unless such method is a product
proprietary to the Custodian and offered to the Trust by the Custodian).
4.2.2 WRITTEN INSTRUCTIONS. Instructions may be transmitted in a
writing that bears the manual signature of an Authorized Person.
4.2.3 OTHER FORMS OF INSTRUCTION. Instructions may also be
transmitted by another means
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determined by the Trust or Authorized Persons and acknowledged and accepted
by the Custodian (subject to the same limits as to acknowledgements as is
contained in Section 4.2.1, above) including, but not limited to,
Instructions given orally or by SWIFT, telex or telefax (whether tested or
untested).
When an Instruction is given by means established under Sections 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 (unless such method is a product proprietary to the Custodian and
offered to the Trust by the Custodian). Oral Instructions shall be binding upon
the Custodian only if and when the Custodian takes action with respect thereto.
With respect to telefax 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 reasonable reliance on inaccurately
stated, illegible or unauthorized telefax instructions. Custodian shall promptly
notify the Trust once it becomes aware that it has received an illegible or
unauthorized Instruction and shall be protected in waiting to act until such
Instruction is clarified. 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 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 a Fund's
Investments and upon any delivery and transfer of any Investment or moneys, the
Authorized 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
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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 will give prompt notice of such determination to the
Trust, and the Trust shall thereupon amend or otherwise reform such Instruction.
In such event, the Custodian shall have no obligation to take any 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 Trust shall
take into consideration generally acknowledged or known delays which may occur
due to the involvement of a Subcustodian or an agent, differences in time zones,
and other factors particular to a given market, exchange or issuer. When the
Custodian has established, and communicated to the Trust in advance and in
writing, specific timing requirements or deadlines with respect to particular
classes of Instructions, 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 Trust.
5. SAFEKEEPING OF FUND ASSETS. The Custodian shall hold Investments delivered
to it or its Subcustodians for a Fund in accordance with the provisions of this
Section. 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 its 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 Trust (and the Funds) 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
Trust (and for the relevant 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 Securities Depository, either directly or through
one or more Subcustodians appointed by the Custodian.
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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 Trust (or a
Fund) or in bulk segregation in an account maintained for the non-proprietary
assets of the entity holding such Investments in the Depository with appropriate
identification of the Trust's (and the Funds') Investments on the Custodian's
books. If market practice or the rules and regulations of the Securities
Depository prevent the Custodian, the Subcustodian (or any nominee or agent of
either) from holding its client assets in such a non-proprietary account, the
Custodian, the Subcustodian or other agent shall as appropriate segregate such
Investments for benefit of the Trust (or the Funds) or for benefit of clients of
the Custodian generally on its own books with appropriate identification of the
Trust's (or the Funds') Investments on the Custodian's books. Investments of a
Fund maintained with a Securities Depository, either directly or through one or
more Subcustodians appointed by the Custodian, shall be held separately from
Investments of any other Fund.
5.2 CERTIFICATED ASSETS. Investments that 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 that are registered may be registered
in the name of the Custodian, a Subcustodian, or in the name of the Trust (or a
Fund) or a nominee for any of the foregoing, and may be held in any manner set
forth in paragraph 5.2.
5.4 BOOK-ENTRY ASSETS. Investments that 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 pay to the applicable
Fund the fair market value of such Investment based on the last available price
as of the close of business in the relevant market on the date that a claim was
first made to the Custodian with respect to such loss or, if less, such other
amount as shall be agreed by the parties as the date for settlement.
6. ADMINISTRATIVE DUTIES OF THE CUSTODIAN. The Custodian shall perform the
following administrative duties with respect to Investments of the Fund.
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6.1 PURCHASE OF INVESTMENTS. Pursuant to Instruction, Investments
purchased for the account of the Trust (or a 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 Trust (or a 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 A FUND OR OTHER
COLLATERAL AND MARGIN REQUIREMENTS. Pursuant to Instruction, the Custodian may
deliver or receive Investments or cash of the Trust (or a Fund) in connection
with borrowings or loans by the Trust (or 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 Trust and a futures commission
merchant regarding margin (TRI-PARTY 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 Trust 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 Trust shall have designated as initial, maintenance or
variation "margin" deposits or other collateral intended to secure the Trust'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 under 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 Trust's Investments
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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 Trust acquires 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; (b) in
accordance with the Trust's or an Authorized Person's Instructions, sign solely
as the Trust's attorney-in-fact under a power-of-attorney, and not as a party to
or a participant in, documentation representing the Trust's interest in such
transactions; and (c) perform on the Trust's account in accordance with the
terms of the applicable arrangement, but only to the extent directed to do so by
Instruction. Except as provided herein, the Custodian shall have no
responsibility for agreements running to the Trust 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, execute documents
on behalf of the Trust, and, in accordance with Instruction, to include such
arrangements in reports made to the Trust.
The Trust hereby agrees and acknowledge that (i) in performing the duties
provided for in this Section 6.5, the Custodian is acting solely as the
designated attorney of the Trust and is in no way to be construed to be acting
as agent for the Grantor or the Borrower (each as defined under the relevant
participant documentation); and (ii) the custodial arrangement provided for
herein is not intended to constitute, and shall not be construed to establish, a
partnership or joint venture between the Custodian and the Trust, or between the
Custodian, the Grantor or the Borrower. Without limiting the generality of the
foregoing, the Custodian (a) makes no warranty or representation and shall not
be responsible for any warranty or representation made in or in connection with
any of the participation documents and related credit agreements, notes and
other agreements referenced therein, or for the financial condition of any
Borrower, or for the observance or performance of any obligations of a Grantor,
a Borrower or any other person, or for the truth or accuracy of any document
provided to the Trust that the Custodian has initially received from, or that
the Custodian has prepared based upon information received from, a Grantor, a
Borrower or any other person; (b) make no warranty or representation and shall
not be responsible for the due execution, validity, enforceability, sufficiency
or collectibility of any of the participation documents and related credit
agreements, notes and other agreements referenced therein, except with respect
to the Custodians's due execution of such participation document as the Trust's
designated attorney-in-fact hereunder; (c) make no warranty or guarantee as to:
(i) future payments by a Borrower or any other obligor or guarantor of the
loans, (ii) a Grantor's or Borrower's future compliance with or performance of
any of the terms and conditions contained in the participations documents and
related credit agreements, notes and other agreements referenced therein, or
(iii) the collectibility of the loans or the collateral as described in any
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participation documents and related credit agreements, notes and other
agreements referenced therein.
6.6 EXCHANGE OF SECURITIES. Unless otherwise directed by Instruction, the
Custodian shall: (a) exchange securities held for the account of the Trust (or a
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; 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 Trust's (or a Fund's)
account and promptly notify the Trust 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 Trust with respect to
a Fund's Investments (including without limitation dividends, interest and other
income and distribution payable thereon) and promptly credit the amount
collected to a Principal or Agency Account, as such terms are defined in Section
7.1 below; 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 Trust with respect to Investments.
6.11 OWNERSHIP CERTIFICATES AND DISCLOSURE OF A FUND'S INTEREST. The
Custodian is hereby
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authorized to execute on behalf of the Trust 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
Trust with respect to a Fund's Investments, or in connection with the sale,
purchase or ownership of a Fund's Investments. With respect to securities issued
in the United States of America, the Custodian may not release the identity of
the Trust 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 Trust. 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 promptly deliver, or cause to be
delivered, to the Trust proxy forms, notices of meeting, and any other notices
or announcements materially affecting or relating to Investments received by the
Custodian or any nominee.
6.13. TAXES. The Custodian shall use its good faith efforts consistent with
the standard of care to obtain refunds of taxes withheld on dividends and
interest payments received by the Trust that are available under applicable tax
laws, treaties, and regulations. 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 Trust's tax
status that is received from or on behalf of the Trust without duty of separate
inquiry (subject to Section 13.9 below).
6.14 OTHER DEALINGS. The Custodian shall otherwise act as directed by
Instruction, including without limitation effecting the free payments of moneys
(including payments of dividends and distributions to Fund shareholders and
payments of Fund expenses) 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 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
Custodian shall account to the Trust with respect to such expenses.
In fulfilling the duties set forth in Sections 6.6 through 6.10 above, the
Custodian shall transmit promptly to the Trust all written information
(including, without limitation, pendency of calls and maturities of domestic
securities and expirations of rights in connection therewith and notices of
exercise of call and put options written by a Fund and the maturity of futures
contracts purchased or sold) received by the Custodian
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from issuers of the Investments being held for a Fund. With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Trust all written
information received by the Custodian from issuers of the Investments whose
tender or exchange is sought and from the party (or its agent) making the tender
or exchange offer. If the Trust desires to take action with respect to any
tender offer, exchange offer and any other similar transaction, the Trust shall
notify the Custodian prior to the date on which the Custodian is to take such
action.
7. CASH ACCOUNTS, DEPOSITS AND MONEY MOVEMENTS. Subject to the terms and
conditions set forth in this Section 7, the Trust 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 Trust maintains Investments or in such other currencies
as the Trust 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 Trust (or a
Fund). Such accounts collectively shall be a deposit obligation of the Custodian
and shall be subject to the terms of this Section 7 and the general liability
provisions contained in Section 10. Cash accounts opened on the books of a
Subcustodian may be opened in the name of the Trust (or a Fund), in the name of
the Custodian or in the name of the Custodian for its customers generally, but
reflected on the books of the Custodian as being held for the Trust (or a Fund)
(AGENCY ACCOUNTS). Such deposits shall be obligations of the Subcustodian and
shall be treated as an Investment of the Trust (or a 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. Nothing in this section shall relieve the
Custodian from responsibility for selection and monitoring of Foreign or
Domestic Subcustodians with due care as required by the terms of this Agreement.
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 a Fund's Investments, payments of dividends and
distributions to Fund shareholders, payments of Fund expenses, 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. The Custodian
shall give the Fund prompt notice of any such reversal. Unless otherwise
specifically agreed in writing by the Custodian or any Subcustodian, all
deposits shall be payable only at the
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branch of the Custodian or Subcustodian where the deposit is made or carried.
7.3 CURRENCY AND RELATED RISKS. Except as otherwise provided herein, the
Funds bear the risks of holding or transacting in any currency. Except as
otherwise provided herein, 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 adversely
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
prevented or adversely 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 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 10 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 a 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 a 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 a 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 unless such limitation was also in effect on
the trade 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
12
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 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 Funds accept 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
Funds shall be responsible for any and all costs and interest charges
which may be incurred by a Fund or the Custodian as a result of the
failure or delay of third parties to deliver foreign exchange.
Nothing in this section shall relieve the Custodian of its
responsibility for its own actions in connection with such
transactions.
7.4.2 FOREIGN EXCHANGE WITH THE CUSTODIAN AS PRINCIPAL. The
Custodian may undertake foreign exchange transactions with a 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 an
Instruction in the absence of a specific agreement, such transaction
will be performed in accordance with the usual commercial terms of
the Custodian.
7.5 DELAYS. In the event that a delay shall have been caused by the
negligence, bad faith or willful misconduct of the Custodian in carrying out an
Instruction to credit or transfer cash, the Custodian shall be liable to and
indemnify the Fund for damages, plus: (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 that are not due to the
Custodian's own negligence, bad faith or willful misconduct.
13
7.6 ADVANCES. If, for any reason in the proper conduct of its safekeeping
duties pursuant to Section 5 hereof or its administration of the Funds' assets
pursuant to Section 6 hereof, the Custodian or any Subcustodian advances monies
to facilitate settlement or otherwise for benefit of a Fund (whether or not any
Principal or Agency Account shall be overdrawn either during, or at the end of,
any Business Day), the Trust hereby does:
7.6.1 acknowledge that a Fund shall have no right or title to
any Investments purchased with such Advance, except 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 security interest in all Investments under Applicable
Law.
Neither the Custodian nor any Subcustodian shall be obligated to advance
monies to a 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. If the Fund
shall fail to repay when due the principal balance of an Advance and accrued and
unpaid interest thereon, 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 the extent that cash is insufficient) 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 under this Section to a Subcustodian. 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).
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 Dollars) shall collectively
constitute a single and indivisible current account with respect to a 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 hereunder to the extent that the
14
aggregate of all Principal Accounts is overdrawn.
8. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Subject to the provisions
hereinafter set forth in this Section 8, the Funds hereby authorize the
Custodian to utilize Securities Depositories to act on behalf of a Fund and to
appoint from time to time and to utilize Subcustodians. With respect to
Investments 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 a 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 and of the SEC. 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 a Fund
as A Subcustodian for purposes of holding Investments of the Fund in the
United States. The Custodian shall only use depositories that qualify as
such under Rule 17f-4 under the 1940 Act and shall hold Investments of a
Fund in such depositories in a manner consistent with the provisions of the
rule governing the manner in which a custodian may maintain securities in
such a depository.
8.2 FOREIGN SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Unless
instructed otherwise by a Fund, the Custodian may deposit and/or maintain
non-U.S. Investments of the Fund in any Foreign 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
SEC is exempted therefrom. Prior to the time that Investments are placed
with such depository, the Custodian shall have prepared and delivered to
the Fund a written 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
15
of an "eligible foreign custodian" under Rule 17f-5, or any successor rule
or regulation ("Rule 17f-5"), or which by order of the SEC 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 in accordance with the Delegation Schedule. Such appointment
of foreign Subcustodians shall be subject to approval of the Funds in
accordance with Sections 8.2.1 and 8.2.2 hereof, and use of Foreign
Securities Depositories shall be subject to the terms of Sections 8.2.3
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 Fund's ability to invest in such
country. Nothing in this Section shall relieve the Custodian of its
responsibility for performance of its duties under Section 8.2.3 or the
Delegation Schedule.
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 Section 8.2.2
below, the Custodian shall, prior to the appointment of any
Subcustodian for purposes of holding Investments of a Fund outside
the United States, obtain written confirmation of the approval of the
Trust's Board of Trustees 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
Trust's Board. In such event, the Custodian's duties and obligations
with respect to this delegated review will be performed in accordance
with the terms of the attached Delegation Schedule to this Agreement.
8.2.3 MONITORING AND RISK ASSESSMENT OF SECURITIES
DEPOSITORIES. Prior to the placement of any assets of a Fund with a
Foreign Securities Depository, the Custodian: (a) shall provide to
the Fund or its authorized representative a written assessment of the
custody risks associated with maintaining assets within such
Securities Depository, which shall include a determination as to
whether the Securities Depository qualifies as an "eligible
securities depository" as defined under Rule 17f-7; (b) shall have
established a system to monitor the custody risks associated with
maintaining assets with such Securities Depository
16
and the continued qualification of the Depository as an "eligible
securities depository" on a continuing basis, and to promptly notify
the Fund's Investment Adviser of any material changes in such risk or
qualification; and (c) will promptly notify the Fund in writing of
any such material changes. In performing its duties under this
subsection, the Custodian shall use reasonable care, prudence and
diligence, 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 acted with
reasonable care in performing its monitoring and assessment duties,
gathering such information, choosing such sources, and relying on
such information and sources. The risk assessment shall be provided
to the Funds or their Investment Advisor by such means as the
Custodian and the Funds shall reasonably agree. 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. The Custodian shall be liable to
the Trust for any loss or damage to the Trust (or a Fund) caused by or resulting
from the acts or omissions of any Subcustodian, to the extent that the Custodian
would be liable to the Trust (or the Fund) hereunder.
8.4 NEW COUNTRIES. The Custodian and the Funds will work together in good
faith to arrange for custody in such new markets as a Fund may request,
recognizing that it may not be possible to secure an eligible foreign custodian
meeting the requirements of Rule 17f-5 under the 1940 Act. Each Fund shall be
responsible for informing the Custodian sufficiently in advance of a proposed
investment that 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.
17
9. THIRD PARTY SECURITIES LENDING. In addition to the Custodian's other
responsibilities hereunder, the Trust hereby directs the Custodian to, among the
other activities as shall be set forth in the Third Party Lending Agent/BBH&Co.
Securities Lending Operating Document (the "Guidelines") by and among the Trust,
on behalf of the Funds, the Custodian and the Trust's designated third party
lending agent (the "Lending Agent"), deliver securities out of custody to a
borrower and to receive securities from a borrower (the "Securities Lending
Activities") in accordance with instructions received from time to time from the
Lending Agent. In so directing the Custodian, both parties agree that the
Custodian shall be responsible for exercising reasonable care in acting on the
instructions of the Lending Agent. But, absent Custodian's negligence, bad faith
and willful misconduct in the performance of its duties under this Agreement,
the Custodian shall not be liable to the Trust for the acts or omissions of the
Lending Agent and for any risks in connection with Securities Lending
Activities. Accordingly, the Trust hereby acknowledges certain risks inherent in
the lending of securities through a Lending Agent, including, but not limited to
such risks as outlined below, and agrees that such risks are for the account of
the Trust:
- the failure or insolvency of any third party (including any issuer of any of
security which is a part of the Securities Lending Activities or book-entry
or other agent of such an issuer, any counterparty with respect to any such
securities, a borrower, the Lending Agent, or any other third parties
similarly beyond the control or choice of the Custodian);
- the default of a borrower and any resulting damages;
- the late return of loaned securities by the borrower which results in market
buy-ins, or failed trades and the penalties and costs related thereto
resulting from the late return of a loan, a late or incorrect loan
instruction, or any other reason for which the Custodian is not responsible;
- the failure of any third party including the Lending Agent to inform the
Custodian, the Fund or a borrower of pending corporate actions;
- the failure of the Custodian to inform the Lending Agent, the Fund or a
borrower of pending corporate actions for securities of a particular issuer
on loan, but only to the extent that all such securities are on loan when the
Custodian receives notice of the corporate action;
- the receipt of collateral in connection with securities lending activities
(including any xxxx to market of an outstanding loan), which shall be held by
the Lending Agent or its agent;
18
- the market risks associated with the investment of collateral;
- the legal, tax or regulatory issues inherent in any jurisdiction in which
securities are loaned; and
- the failure of the Lending Agent to properly safe keep and administer any
securities of the Fund held overnight by the Lending Agent.
The Trust further acknowledges and agrees in connection with the Securities
Lending Activities, that the Custodian in its sole discretion may refuse to
settle any transaction for certain types of securities, or any transaction
occurring in certain markets in contravention of Applicable Law or regulation or
which might give rise to material adverse tax consequences. In the event that
the Trust or its Lending Agent transmits an instruction to which the previous
sentence applies, the Custodian shall promptly provide the Trust with written or
other agreed-form notice of such fact.
10. RESPONSIBILITY OF THE CUSTODIAN. In performing its duties and obligations
hereunder, the Custodian shall exercise good faith, and use reasonable care.
Subject to the specific provisions of this Section, the Custodian shall be
liable for any damage incurred by the Trust in consequence of the Custodian's
(or its employees', partners' or officers') negligence, bad faith or willful
misconduct. In no event shall either party be liable hereunder to the other for
any special, indirect, punitive or consequential damages arising out of,
pursuant to or in connection with this Agreement. It is agreed that, except as
otherwise provided herein, the Custodian shall have no duty to assess the risks
inherent in a Fund's Investments (except as provided in Sections 8.2 and 8.2.3
of this Agreement) 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.
10.1 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:
10.1.1 FORCE MAJEURE. FORCE MAJEURE shall mean any circumstance
or event which is beyond the reasonable control of the Fund,
Custodian, a Subcustodian or any agent of the Custodian or a
Subcustodian and which adversely affects the performance by a Fund or
the 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 beyond the
relevant party's reasonable control which caused by, arising out of
or involving (a) an act of God, (b) accident, fire, water damage or
explosion, (c) any
19
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 party's reasonable control.
The Funds shall not be responsible under this Agreement and shall not
be liable hereunder for any loss or damage in consequence of any
Force Majeure circumstance or event.
10.1.2 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. Nothing under this
section shall relieve the Custodian of its responsibilities under
Section 8.2.3 of this Agreement or the Delegation Schedule attached
hereto.
10.1.3 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, all risks of (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
20
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. Nothing in this section shall
relieve Custodian of its obligations under Section 8.2.3.
10.2. LIMITATIONS ON LIABILITY. The Custodian shall not be liable for any
loss, claim, damage or other liability arising from the following causes:
10.2.1 FAILURE OF THIRD PARTIES. The failure of any third party
(other than a Subcustodian or agent for which the Custodian is
responsible in accordance with the terms of this Agreement)
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 or other agent (other than a
Subcustodian or agent for which the Custodian is responsible in
accordance with the terms of this Agreement) of a Fund; or (d)
failure of other third parties similarly beyond the control or choice
of the Custodian.
10.2.2 INFORMATION SOURCES. The Custodian may rely upon
information (excluding legal advice, which shall be governed by
Section 13.10) received from issuers of Investments or agents of such
issuers, information (excluding legal advice, which shall be governed
by Section 13.10) received from Subcustodians and from other
commercially reasonable sources such as commercial data bases, but
shall not be responsible for specific inaccuracies in such
information, provided that the Custodian has relied upon such
information in good faith and has acted with reasonable care.
10.2.3 RELIANCE ON INSTRUCTION. Action by the Custodian or the
Subcustodian in accordance with an Instruction, even when such action
conflicts with, or is contrary to any provision of, the Fund's
declaration of trust, certificate of incorporation or by-laws,
Applicable Law, or actions by the trustees, directors or shareholders
of the Fund.
10.2.4 RESTRICTED SECURITIES. The limitations inherent in the
rights, transferability or similar investment characteristics of a
given Investment of the Fund.
11. INDEMNIFICATION. Except for such claims and liabilities as may arise from
the negligence, bad faith,
21
willful misconduct or other breach of this Agreement, each Fund hereby
indemnifies the Custodian and each Subcustodian, and their respective agents,
nominees and the partners, employees, officers and directors, and agrees to hold
each of them harmless from and against all claims and liabilities, including
counsel fees and taxes, incurred or assessed against any of them in connection
with the performance of this Agreement, any Instruction and the Securities
Lending Activities. 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. Not more than thirty
(30) days following the date of such notice, unless the Custodian shall be
liable under Section 8 hereof in respect of such claim, the Fund will pay the
amount of such claim or reimburse the Custodian for any payment made by the
Custodian in respect thereof. Except for such claims and liabilities as may
arise from a Fund's negligence, bad faith, willful misconduct or other breach of
this Agreement, the Custodian hereby indemnifies the Fund and its employees,
officers, trustees and agents, and agrees to hold each of them harmless from and
against all claims and liabilities, including counsel fees and taxes, incurred
or assessed against any of them for which the Custodian is responsible under
this Agreement.
12. REPORTS AND RECORDS. The Custodian shall:
12.1 create and maintain records relating to the performance of its
obligations under this Agreement (including without limitation such reports
as may be required pursuant to Section 31(a) of the 1940 Act and the rules
thereunder);
12.2 make available to the Fund, its auditors, agents and employees,
during regular business hours of the Custodian, upon reasonable request and
during normal business hours of the Custodian, all records maintained by
the Custodian pursuant to paragraph 12.1 above, subject, however, to all
reasonable security requirements of the Custodian then applicable to the
records of its custody customers generally; and
12.3 make available to the Funds 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.
The Funds shall examine all records, howsoever produced or transmitted,
promptly upon receipt thereof and notify the Custodian promptly of any
discrepancy or error therein. Unless a 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
22
future obtain information on the value of assets from outside sources that may
be utilized in certain reports made available to the Funds. 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.
13. MISCELLANEOUS.
13.1 LIMITATION OF LIABILITY. The execution and delivery of this Agreement have
been authorized by the Trust's Board of Trustees and signed by an authorized
officer of the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, and the obligations of this Agreement are not binding upon any of
the Trustees or Shareholders of the Trust, but bind only the appropriate
property of the Trust, a Fund, or Class, as provided in the Trust's Declaration
of Trust. Further, no Fund will be liable or responsible for the acts, omissions
or obligations of another Fund.
13.2 PROXIES, ETC. The Trust 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, the services contemplated by this Agreement.
13.3 ENTIRE AGREEMENT. Except as specifically provided herein, this
Agreement (together with any exhibits, schedules or other agreements or
documents referenced herein) constitutes the entire agreement between the Trust
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 Trust and the Custodian with respect to the
custody of the Funds' Investments.
13.4 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 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.
13.5 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 hereby agree to
the non-exclusive jurisdiction of federal courts sitting in the State of New
York or the
23
Commonwealth of Massachusetts, or of the State courts of either such State or
such Commonwealth.
13.6 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 Trust:
SEI Institutional Investments Trust
c/o SEI Invesments
0 Xxxxxxx Xxxxxx Xxxxx
Xxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
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,
or such other address as the Trust or the Custodian may have designated in
writing to the other.
13.7 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.
13.8 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 Trust and the Custodian.
13.9 CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially all information provided by each party to the other regarding its
business and operations. All confidential information
24
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.
13.10 COUNSEL. In fulfilling its duties hereunder, the Custodian shall be
entitled to receive and act upon the advice of (a) counsel regularly retained by
the Custodian in respect of such matters, (b) the Trust's counsel, or (c) such
counsel as the Trust and the Custodian may agree upon, with respect to all
matters, and, provided that the Trust has been appropriately notified of such
advice, the Custodian shall be without liability for any action reasonably taken
or omitted pursuant to such advice.
14. DEFINITIONS. The following defined terms will have the respective meanings
set forth below.
14.1 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 a Fund or in discharge of any expense, tax or other
item payable by the Fund.
14.2 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.
14.3 APPLICABLE LAW shall mean with respect to each jurisdiction, all (a)
laws, statutes, 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.
14.4 AUTHORIZED PERSON(S) shall mean any person or entity authorized to
give Instructions on behalf of a Fund in accordance with Section 4.1 hereof.
14.5 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.
25
14.6 CLEARING CORPORATION shall mean any entity or system established for
purposes of providing securities settlement and movement and associated
functions for a given market.
14.7 DELEGATION SCHEDULE shall mean any schedule entered into between the
Custodian and the Trust 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 under the 1940 Act.
14.8 ELECTRONIC AND ONLINE SERVICES SCHEDULE shall mean any schedule to
this agreement entered into between the Custodian and the Fund or its authorized
representative with respect to certain matters concerning electronic and online
services as described therein and as may be made available from time to time by
the Custodian to the Trust.
14.09 ELECTRONIC REPORTS shall mean any reports prepared by the Custodian
and remitted to the Trust or its authorized representative via the internet or
electronic mail.
14.10 FOREIGN CUSTODY MANAGER shall mean the Trust's foreign custody
manager appointed pursuant to Rule 17f-5 under the 1940 Act.
14.11 FOREIGN FINANCIAL REGULATORY AUTHORITY shall have the meaning given
by Section 2(a)(50) of the 0000 Xxx.
14.12 FUNDS TRANSFER SERVICES SCHEDULE shall mean any schedule entered into
between the Custodian and the Trust or its authorized representative with
respect to certain matters concerning the processing of payment orders from
Principal Accounts of the Trust (or a Fund).
14.13 GUIDELINES shall have the meaning assigned in Section 9 hereof.
14.14 GLOBAL CUSTODY NETWORK LISTING shall mean the Countries approved by
the Trust and Subcustodians selected by the Custodian in connection
with a Fund's Investments in non-U.S. Markets.
14.15 INSTRUCTION(S) shall have the meaning assigned in Section 4 hereof.
14.16 INVESTMENT ADVISOR shall mean any person or entity that is an
Authorized Person to give Instructions with respect to the investment and
reinvestment of a Fund's Investments.
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14.17 INVESTMENT(S) shall mean any investment asset of a Fund, including
without limitation securities, bonds, notes, and debentures as well as
receivables, derivatives, contractual rights or entitlements and other
intangible assets.
14.18 LENDING AGENT shall have the meaning assigned in Section 9 hereof.
14.19 MARGIN ACCOUNT shall have the meaning set forth in Section 6.4
hereof.
14.20 PRINCIPAL ACCOUNT(S) shall mean deposit accounts of the Trust (or a
Fund) carried on the books of BBH&Co. as principal in accordance with Section 7
hereof.
14.21 SAFEKEEPING ACCOUNT shall mean an account established on the books of
the Custodian or any Subcustodian for purposes of segregating the interests of
the Trust (or a Fund) (or clients of the Custodian or Subcustodian) from the
assets of the Custodian or any Subcustodian.
14.22 SEC shall mean the U.S. Securities and Exchange Commission
14.23 SECURITIES DEPOSITORY shall mean a central or book entry system or
agency established under Applicable Law 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.
14.24 SECURITIES LENDING ACTIVITIES shall have the meaning assigned in
Section 9 hereof.
14.25 SUBCUSTODIAN(S) shall mean each bank appointed by the Custodian
pursuant to Section 8 hereof, but shall not include Securities Depositories.
14.26 TRI-PARTY AGREEMENT shall have the meaning set forth in Section 6.4
hereof.
14.27 1940 ACT shall mean the Investment Company Act of 1940.
15. COMPENSATION. The Trust agrees to pay to the Custodian (a) a fee in an
amount set forth in the fee letter between the Trust and the Custodian in effect
on the date hereof or as amended from time to time, and (b) all out-of-pocket
expenses incurred by the Custodian, including the fees and expenses of all
27
Subcustodians, and payable from time to time provided that such fees and
expenses are timely accounted to the Trust. Amounts payable by the Fund under
and pursuant to this Section 15 shall be payable by wire transfer to the
Custodian at BBH&Co. in New York, New York.
16. 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.
Upon termination the Custodian shall take reasonable and customary steps to
facilitate transition including, without limitation, the transfer of Fund
records.
16.1 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 13.6 hereof.
16.2 SUCCESSOR CUSTODIAN. In the event of the appointment of a successor
custodian, it is agreed that the Investments of the Funds 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 Trust
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 Funds' Investments in accordance with Instructions.
16.3 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 Trust either (a) deliver the Funds' Investments held hereunder to the Funds
at the address designated for receipt of notices hereunder; or (b) deliver any
Investments held hereunder to a bank or trust company having a capitalization of
$2,000,000 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 Funds. In the event that Investments or moneys of a 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
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 is accomplished.
28
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
XXXXX BROTHERS XXXXXXXX & CO. SEI INSTITUTIONAL INVESTMENTS
TRUST
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------- ---------------------------
Name: Xxxxx X. Xxxx Name: Xxxxxxx X. Xxxxx
Title: Managing Director Title: Vice President and Secretary
Date: March 1, 2004 Date: March 1, 2004
29
SCHEDULE A
International Equity Fund
Emerging Markets Equity Fund
International Fixed Income Fund
30
FUNDS TRANSFER SERVICES SCHEDULE TO CUSTODIAN AGREEMENT
1. EXECUTION OF PAYMENT ORDERS. Xxxxx Brothers Xxxxxxxx & Co. (the CUSTODIAN)
is hereby instructed by SEI Institutional Investments Trust (the TRUST ) to
execute each payment order, whether denominated in United States dollars or
other applicable currencies, received by the Custodian in the Trust's name as
sender and authorized and confirmed by an Authorized Person as defined in a
Custodian Agreement dated as of March 1, 2004 by and between the Custodian and
the Trust, as amended or restated from time thereafter (the AGREEMENT), provided
that the Trust 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 Trust as set forth in this Funds Transfer Services Schedule
or any amendment hereafter; (iii) is authorized by the Trust 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 Trust 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 Trust 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 Trust agrees and acknowledges in connection with (i) the size,
type and frequency of payment orders normally issued or expected to be issued by
the Trust to the Custodian, (ii) all of the security procedures offered to the
Trust 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 Trust
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 Trust
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 Trust notifies the Custodian
that its password is not secure.
31
/ / SWIFT. The Custodian and the Trust 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 the Trust have agreed to use.
/ / COMPUTER TRANSMISSION. The Custodian is able to accept transmissions
sent from the Trust'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 Trust.
/ / TELEFAX INSTRUCTIONS. A payment order transmitted to the Custodian by
telefax transmission shall transmitted by the Trust 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 Trust at its last known telephone
number, request to speak to the Trust 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 that 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
32
2. If a telephonic non-repetitive payment order, the Custodian
will perform a Callback.
In the event the Trust chooses a procedure which is not a Security Procedure as
described above, the Trust 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 Trust.
3. REJECTION OF PAYMENT ORDERS. The Custodian shall give the Trust prompt
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 Trust immediate notice of the Custodian's
non-execution, the Custodian shall be liable only for the Trust's actual
damages. 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,
even if the Custodian has been advised of the possibility of such damages.
4. CANCELLATION OF PAYMENT ORDERS. The Trust 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.
5. RESPONSIBILITY FOR THE DETECTION OF ERRORS AND UNAUTHORIZED PAYMENT ORDERS.
Except as may be provided, the Custodian is not responsible for detecting any
error of the Trust contained in any payment order sent by the Trust to the
Custodian. In the event that the Trust'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 Trust so notifies the Custodian within thirty
(30) business days following the Trust's receipt of notice that such payment
order had been processed. If a payment order in the name of the Trust and
accepted by the Custodian was not authorized by the Trust, the liability of the
parties will be governed by the applicable provisions of UCC 4A.
33
6. LAWS AND REGULATIONS. The rights and obligations of the Custodian and the
Trust 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 (OFAC). The Custodian
represents and warrants that it has established and maintains controls and
procedures reasonably designed to comply with OFAC regulations, and with all
applicable anti-money laundering laws or regulations, including but not limited
to the USA Patriot Act of 2001. Any taxes, fines, costs, charges or fees imposed
by relevant authorities on such transactions shall be for the account of the
Trust.
7. MISCELLANEOUS. All accounts opened by the Trust 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.
The execution and delivery of this Agreement have been authorized by the Board
of Trustees of each Fund and signed by an authorized officer of each Fund,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, and
the obligations of this Agreement are not binding upon any of the Trustees or
Shareholders of the Funds, but bind only the appropriate property of the Fund,
portfolio, or Class, as provided in the relevant Trust's Declaration of Trust.
Further, no Fund or portfolio will be liable or responsible for the acts,
omissions or obligations of another Fund or portfolio.
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 TRUST AGREES
TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL
LOSSES THEREFROM.
34
OPTIONAL: The Custodian will perform a Callback if instructions are
sent by telefax or telephonic means as provided in Paragraph 2. THE TRUST
MAY, AT ITS OWN RISK AND BY HEREBY AGREEING TO INDEMNIFY THE CUSTODIAN AND
ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL LOSSES THEREFROM (EXCEPT AS
MAY ARISE FROM THE GROSS NEGLIGENCE, WILL MISCONDUCT OR ACTIVE COLLUSION OF
THE CUSTODIAN), ELECT TO WAIVE A CALLBACK BY THE CUSTODIAN BY INITIALLING
HERE:____
Accepted and agreed:
XXXXX BROTHERS XXXXXXXX & CO. SEI INSTITUTIONAL INVESTMENTS
TRUST
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------- ---------------------------
Name: Xxxxx X. Xxxx Name: Xxxxxxx X. Xxxxx
Title: Managing Director Title: Vice President and Secretary
Date: March 1, 2004 Date: March 1, 2004
35
ELECTRONIC AND ON-LINE SERVICES
SCHEDULE
This Electronic and On-Line Services Schedule (this SCHEDULE) to a Custodian
Agreement dated as of March 1, 2004 (as amended from time to time hereafter, the
AGREEMENT) by and between Xxxxx Brothers Xxxxxxxx & Co. (WE, US, OUR) and SEI
Institutional Investments Trust (YOU, YOUR OR FUND), 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 March 1, 2004 (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.
36
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.
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
37
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. You may
also opt to receive printed reports. 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),
except to the extent that we provided or transmitted, whether intentionally
or unintentionally, such virus, code, program, device, method or token to
you. You agree to take all necessary actions and precautions as you would
with your own systems to prevent the introduction and proliferation of any
Malicious Code into those systems that interact with the Services.
6. INDEMNIFICATION.
For avoidance of doubt, each party hereby agrees that the provisions in the
Related Agreement(s) related to indemnification and any limitations on
liability and responsibilities 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 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, bad faith or negligence. The provisions
of this paragraph shall survive the termination of this Schedule and the
Related Agreements.
38
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 10 (ten) 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. MISCELLANEOUS.
9.1. 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).
9.2. 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.
9.3. BINDING EFFECT; ASSIGNMENT; SEVERABILITY. The execution and delivery
of this Agreement have been authorized by the Trust's Board of
Trustees and signed by an authorized officer of the Trust, acting as
such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not
binding upon any of the Trustees or Shareholders of the Trust, but
bind only the appropriate property of the Trust, a Fund or Class, as
provided in the Trust's Declaration of Trust. Further, no Fund will
be liable or responsible for the acts, omissions or obligations of
another Fund. Your rights under this Schedule
39
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.
9.4. CHOICE OF LAW; JURY TRIAL. 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 hereby agree to the non-exclusive jurisdiction of federal
courts sitting in the State of New York or the Commonwealth of
Massachusetts, or of the State courts of either such State or such
Commonwealth.
SEI INSTITUTIONAL INVESTMENTS TRUST
BY: /S/ XXXXXXX X. XXXXX
----------------------------
XXXXXXX X. XXXXX
TITLE: VICE PRESIDENT AND SECRETARY
----------------------------
DATE: MARCH 1, 2004
----------------------------
40
DELEGATION SCHEDULE
By its execution of this Delegation Schedule dated as of Mach 1, 2004, SEI
Institutional Investments Trust, a 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 (the TRUST), 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 Trust's Assets outside the United
States.
1. MAINTENANCE OF THE TRUST'S ASSETS ABROAD. The Trust, 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 Trust and the Delegate (the CUSTODIAN AGREEMENT) to place and
maintain the Trust's Assets in countries outside the United States in accordance
with Instructions received from the Trust's Investment Advisor and in accordance
with this Schedule. Such instruction shall represent an Instruction under the
terms of the Custodian Agreement. The Trust 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 Delegate's Global
Custody Network Listing, as may be revised from time to time upon advance
written notice to Trust; (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. Delegate will
provide the Trust with advance written notice of such countries.
2. DELEGATION. Pursuant to the provisions of Rule 17f-5 under the 1940 Act
as amended, the Board hereby delegates to the Delegate, and the Delegate hereby
accepts such delegation and agrees to perform those duties set forth in this
Delegation Schedule concerning the safekeeping of the Trust's Assets in each of
the countries designated on the Global Custody Network Listing. The Delegate is
hereby authorized to take such actions on behalf of or in the
1
name of the Trust as are reasonably required to discharge its duties under this
Delegation Schedule, including, without limitation, to cause the Trust's Assets
to be placed with a particular Eligible Foreign Custodian in accordance
herewith. The Trust confirms to the Delegate that the Trust or its investment
adviser has considered the Sovereign Risk and 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 Trust'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 1940 Act Rule 17f-7
and the terms of the Custodian Agreement governing such duties), and the laws
relating to the safekeeping and recovery of the Trust's Assets held in custody
pursuant to the terms of the Custodian Agreement. The Delegate agrees to provide
the Board from time to time such reasonable documentation of its capacity to
exercise reasonable care in respect of the duties described in this attachment
as the Board may reasonably require.
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 Trust's foreign custodial arrangements:
(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIAN. The Delegate shall
place and maintain the Trust's Assets with an Eligible Foreign Custodian;
PROVIDED that the Delegate shall have determined that the Trust'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 Trust's Assets;
(iii) The Eligible Foreign Custodian's general reputation and
standing; and
(iv) Whether the Trust will have jurisdiction over and be able to
enforce
2
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.
(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 Trust assets based on the standards applicable to custodians
in the relevant market. 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 Trust will be adequately
protected against the risk of loss of assets held in accordance with such
contract;
(ii) That the Trust'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 Trust'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
Trust's Assets as belonging to the Trust or as being held by a third party
for the benefit of the Trust;
(v) That the Trust'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 (and the Trust, if the Trust so requests)
will receive sufficient and timely periodic reports with respect to the
safekeeping of the Trust's Assets, including, but not limited to,
notification of any transfer to or from the Trust's account or a third
party account containing the Trust's Assets.
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
3
provisions, in their entirety.
(c) LIMITATION TO DELEGATED SELECTION. Notwithstanding anything in
this Delegation Schedule to the contrary, and unless otherwise agreed upon by
the parties, 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 and maintain a system to
monitor at reasonable intervals (but at least annually) the appropriateness of
maintaining the Trust'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
Trust's Assets in accordance with the criteria established under Section 3(a) of
this Delegation Schedule. The Delegate shall monitor the performance and
continuing appropriateness of the contract governing the Trust's arrangements in
accordance with the criteria established under Section 3(b) of this Delegation
Schedule.
5. REPORTING. At least annually and more frequently as mutually agreed
between the parties, the Delegate shall provide to the Board written reports
specifying placement of the Trust'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. The Delegate also will provide the
Trust with any additional information about the Trust's foreign custody
arrangements as the Trust may reasonably request from time to time.
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 Trust'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 Trust's Assets or would materially impair the liquidity, value or
other
4
investment characteristics of the Trust's Assets, it shall be the duty of the
Delegate to provide information regarding the particular circumstances and to
act only in accordance with Instructions of the Trust or its Investment Advisor
with respect to such liquidation or other withdrawal.
7. DIRECTION AS TO ELIGIBLE FOREIGN CUSTODIAN. Notwithstanding this
Delegation Schedule, the Trust, acting through its Board, its Investment Advisor
or its other authorized representative, may direct the Delegate to place and
maintain the Trust'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 Trust'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 Trust 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 Trust and is a legal,
valid and binding agreement of the Trust.
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
5
with the termination of the Custodian Agreement.
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 in this Delegation Schedule have the
following meanings:
a. ELIGIBLE FOREIGN CUSTODIAN - shall have the meaning set forth in
Rule 17f-5(a)(1) and shall also include a U.S. Bank.
b. TRUST'S ASSETS - shall mean any of the Trust'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 Trust 's transactions in such investments.
c. INSTRUCTIONS - shall have the meaning set forth in the Custodian
Agreement.
d. SECURITIES DEPOSITORY - shall have the meaning set forth in Rule
17f-7.
e. SOVEREIGN RISK - shall have the meaning set forth in
Section 10.1.3 of the Custodian Agreement.
f. U.S. BANK - shall mean a bank that qualifies to serve as a
custodian of assets of investment companies under Section 17(f) of the
Act.
13. 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 hereby agree to
the non-exclusive jurisdiction of federal courts sitting in the State of New
York or the Commonwealth of Massachusetts, or of the State courts of
6
either such State or such Commonwealth.
14. 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, and indemnification provisions.
15. LIMITATION OF LIABILITY. The execution and delivery of this Agreement
have been authorized by the Trust's Board of Trustees and signed by an
authorized officer of the Trust, acting as such, and neither such authorization
by such Trustees nor such execution and delivery by such officer shall be deemed
to have been made by any of them individually or to impose any liability on any
of them personally, and the obligations of this Agreement are not binding upon
any of the Trustees or Shareholders of the Trust, but bind only the appropriate
property of the Trust, portfolio, or Class, as provided in the Trust's
Declaration of Trust. Further, no portfolio will be liable or responsible for
the acts, omissions or obligations of another portfolio.
7
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
XXXXX BROTHERS XXXXXXXX & CO. SEI INSTITUTIONAL INVESTMENTS
TRUST
By:/s/ Xxxxx X. Xxxx By:/s/ Xxxxxxx X. Xxxxx
-------------------------- ---------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxxxx X. Xxxxx
Title: Managing Director Title: Vice President and Secretary
Date: March 1, 2004 Date: March 1, 2004
8
