Exhibit (g)(1) under Form N-1A
Exhibit 10 under Item 601/Reg.S-K
AMENDED AND RESTATED CUSTODIAN AGREEMENT
THIS AGREEMENT, dated as of July 13, 2000, and amended
and restated as of August 4, 2003, severally and not jointly,
among BBH FUND, INC., a Maryland corporation, BBH TRUST a
Massachusetts business trust, and BBH U.S. MONEY MARKET
PORTFOLIO, a New York Trust (collectively, the "Fund") on behalf
of each of their series (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 Fund wishes to employ BBH&Co. to act as
custodian for the Fund and to provide related services, all as
provided herein, and BBH&Co. is willing to accept such
employment, subject to the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained, the Fund and BBH&Co.
hereby agree, as follows:
1. Appointment of Custodian. The Fund hereby appoints
BBH&Co. as the Fund's custodian, and BBH&Co. hereby accepts such
appointment. All Investments of the Fund delivered to the
Custodian or its agents or Subcustodians shall be dealt with as
provided in this Agreement. The duties of the Custodian with
respect to the Fund's Investments shall be only as set forth
expressly in this Agreement which duties are generally comprised
of safekeeping and various administrative duties that will be
performed in accordance with Instructions and as reasonably
required to effect Instructions.
2. Representations, Warranties and Covenants of the
Fund. The Fund hereby represents, warrants and covenants each of
the following:
2.1 This Agreement has been, and at the time of delivery of
each Instruction such Instruction will have been, duly
authorized, executed and delivered by the Fund. This
Agreement
does not violate any Applicable Law or conflict with or
constitute a default under the Fund's prospectus or other
organic document, agreement, judgment, order or decree to
which the Fund is a party or by which it or its Investments
is bound.
2.2 By providing an Instruction with respect to the first
acquisition of an Investment in a jurisdiction other than
the United States of America, the Fund shall be deemed to
have confirmed to the Custodian that the Fund has (a)
assessed and accepted all material Country or Sovereign
Risks and accepted responsibility for their occurrence, (b)
made all determinations required to be made by the Fund, and
(iii) appropriately and adequately disclosed to its
shareholders, other investors and all persons who have
rights in or to such Investments, all material investment
risks, including those relating to the custody and
settlement infrastructure or the servicing of securities in
such jurisdiction.
2.3 The Fund shall safeguard and shall solely be
responsible for the safekeeping of any testkeys,
identification codes, passwords, other security devices or
statements of account with which the Custodian provides it.
In furtherance and not limitation of the foregoing, in the
event the Fund utilizes any on-line service offered by the
Custodian, the Fund and the Custodian shall be fully
responsible for the security of each party's connecting
terminal, access thereto and the proper and authorized use
thereof and the initiation and application of continuing
effective safeguards in respect thereof. Additionally, if
the Fund uses any on-line or similar communications service
made available by the Custodian, the Fund shall be solely
responsible for ensuring the security of its access to the
service and for the use of the service, and shall only
attempt to access the service and the Custodian's computer
systems as directed by the Custodian. If the Custodian
provides any computer software to the Fund relating to the
services described in this Agreement, the Fund will only use
the software for the purposes for which the Custodian
provided the software to the Fund, and will abide by the
license agreement accompanying the software and any other
security policies which the Custodian provides to the Fund.
3. Representation and Warranty of BBH&Co. BBH&Co. hereby
represents and warrants that this Agreement has been duly
authorized, executed and delivered by BBH&Co. and does not and
will not violate any Applicable Law or conflict with or
constitute a default under BBH&Co.'s limited partnership
agreement or any agreement, instrument, judgment, order or decree
to which BBH&Co. is a party or by which it is bound.
4. Instructions. Unless otherwise explicitly indicated
herein, the Custodian shall perform its duties pursuant to
Instructions. As used herein, the term Instruction shall mean a
directive initiated by the Fund, acting directly or through its
board of trustees, officers or other Authorized Persons, which
directive shall conform to the requirements of this Section 4.
4.1 Authorized Persons. For purposes hereof, an
Authorized Person shall be a person or entity authorized to
give Instructions for or on behalf of the Fund by written
notices to the Custodian or otherwise in accordance with
procedures delivered to and acknowledged by the Custodian,
including without limitation the Fund's Investment Adviser
or Foreign Custody Manager. The Custodian may treat any
Authorized Person as having full authority of the Fund to
issue Instructions hereunder unless the notice of
authorization contains explicit limitations as to said
authority. The Custodian shall be entitled to rely upon
the authority of Authorized Persons until it receives
appropriate written notice from the Fund to the contrary.
4.2 Form of Instruction. Each Instruction shall be
transmitted by such secured or authenticated
electro-mechanical means as the Custodian shall make
available to the Fund from time to time unless the Fund
shall elect to transmit such Instruction in accordance with
Subsections 4.2.1 through 4.2.3 of this Section.
4.2.1Fund Designated Secured-Transmission Method.
Instructions may be transmitted through a secured or
tested electro-mechanical means identified by the Fund
or by an Authorized Person entitled to give Instruction
and acknowledged and accepted by the Custodian; it
being understood that such acknowledgment shall
authorize the Custodian to receive and process such
means of delivery but shall not represent a judgment by
the Custodian as to the reasonableness or security of
the method determined by the Authorized Person.
4.2.2Written Instructions. Instructions may be
transmitted in a writing that bears the manual
signature of Authorized Persons.
4.2.3Other Forms of Instruction. Instructions may
also be transmitted by another means determined by the
Fund or Authorized Persons and acknowledged and
accepted by the Custodian (subject to the same limits
as to acknowledgements as is contained in Subsection
4.2.1, above) including Instructions given orally or by
SWIFT, telex or telefax (whether tested or untested).
When an Instruction is given by means established under
Subsections 4.2.1 through 4.2.3, it shall be the responsibility
of the Custodian to use reasonable care to adhere to any security
or other procedures established in writing between the Custodian
and the Authorized Person with respect to such means of
Instruction, but such Authorized Person shall be solely
responsible for determining that the particular means chosen is
reasonable under the circumstances. Oral Instructions shall be
binding upon the Custodian only if and when the Custodian takes
action with respect thereto. With respect to telefax
instructions, the parties agree and acknowledge that receipt of
legible instructions cannot be assured, that the Custodian cannot
verify that authorized signatures on telefax instructions are
original or properly affixed, and that the Custodian shall not be
liable for losses or expenses incurred through actions taken in
reliance on inaccurately stated, illegible or unauthorized
telefax instructions. The provisions of Section 4A of the
Uniform Commercial Code shall apply to Funds Transfers performed
in accordance with Instructions. In the event that a Funds
Transfer Services Agreement is executed between the Fund or and
Authorized Person and the Custodian, such an 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 the
Fund's Investments and upon any delivery and transfer of any
Investment or moneys, the person initiating such Instruction
shall give the Custodian an Instruction with appropriate
detail, including, without limitation:
4.3.1 The transaction date and the date and
location of settlement;
4.3.2 The specification of the type of transaction;
4.3.4 A description of the Investments or moneys in
question, including, as appropriate, quantity, price
per unit, amount of money to be received or delivered
and currency information. Where an Instruction is
communicated by electronic means, or otherwise where an
Instruction contains an identifying number such as a
CUSIP, SEDOL or ISIN number, the Custodian shall be
entitled to rely on such number as controlling
notwithstanding any inconsistency contained in such
Instruction, particularly with respect to Investment
description;
4.3.5 The name of the broker or similar entity
concerned with execution of the transaction.
If the Custodian shall determine that an Instruction is either
unclear or incomplete, the Custodian may give prompt notice of
such determination to the Fund, and the Fund shall thereupon
amend or otherwise reform such Instruction. In such event, the
Custodian shall have no obligation to take any action in response
to the Instruction initially delivered until the redelivery of an
amended or reformed Instruction
4.4 Timeliness of Instructions. In giving an Instruction,
the Fund shall take into consideration delays which may
occur due to the involvement of a Subcustodian or agent,
differences in time zones, and other factors particular to a
given market, exchange or issuer. When the Custodian has
established specific timing requirements or deadlines with
respect to particular classes of Instruction, or when an
Instruction is received by the Custodian at such a time that
it could not reasonably be expected to have acted on such
instruction due to time zone differences or other factors
beyond its reasonable control, the execution of any
Instruction received by the Custodian after such deadline or
at such time (including any modification or revocation of a
previous Instruction) shall be at the risk of the Fund.
5. Safekeeping of Fund Assets. The Custodian shall hold
Investments delivered to it or Subcustodians for the Fund in
accordance with the provisions of this Section. The Custodian
shall not be responsible for (a) the safekeeping of Investments
not delivered or that are not caused to be issued to it or its
Subcustodians; or, (b) pre-existing faults or defects in
Investments that are delivered to the Custodian, or its
Subcustodians. The Custodian is hereby authorized to hold with
itself or a Subcustodian, and to record in one or more accounts,
all Investments delivered to and accepted by the Custodian, any
Subcustodian or their respective agents pursuant to an
Instruction or in consequence of any corporate action. The
Custodian shall hold Investments for the account of the Fund and
shall segregate Investments from assets belonging to the
Custodian and shall cause its Subcustodians to segregate
Investments from assets belonging to the Subcustodian in an
account held for the Fund or in an account maintained by the
Subcustodian generally for non-proprietary assets of the
Custodian.
5.1 Use of Securities Depositories. The Custodian may
deposit and maintain Investments in any Securities
Depository, either directly or through one or more
Subcustodians appointed by the Custodian. Investments held
in a Securities Depository shall be held (a) subject to the
agreement, rules, statement of terms and conditions or other
document or conditions effective between the Securities
Depository and the Custodian or the Subcustodian, as the
case may be, and (b) in an account for the Fund or in bulk
segregation in an account maintained for the non-proprietary
assets of the entity holding such Investments in the
Depository. If market practice or the rules and regulations
of the Securities Depository prevent the Custodian, the
Subcustodian or (any agent of either) from holding its
client assets in such a separate account, the Custodian, the
Subcustodian or other agent shall as appropriate segregate
such Investments for benefit of the Fund or for benefit of
clients of the Custodian generally on its own books.
5.2 Certificated Assets. Investments which are
certificated may be held in registered or bearer form: (a)
in the Custodian's vault; (b) in the vault of a Subcustodian
or agent of the Custodian or a Subcustodian; or (c) in an
account maintained by the Custodian, Subcustodian or agent
at a Securities Depository; all in accordance with customary
market practice in the jurisdiction in which any Investments
are held.
5.3 Registered Assets. Investments which are registered
may be registered in the name of the Custodian, a
Subcustodian, or in the name of the Fund or a nominee for
any of the foregoing, and may be held in any manner set
forth in paragraph 5.2 above with or without any
identification of fiduciary capacity in such registration.
5.4 Book Entry Assets. Investments which are represented
by book-entry may be so held in an account maintained by the
Book-Entry Agent on behalf of the Custodian, a Subcustodian
or another agent of the Custodian, or a Securities
Depository.
5.5 Replacement of Lost Investments. In the event of a
loss of Investments for which the Custodian is responsible
under the terms of this Agreement, the Custodian shall
replace such Investment, or in the event that such
replacement cannot be effected, the Custodian shall pay to
the 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.
6.1 Purchase of Investments. Pursuant to Instruction,
Investments purchased for the account of the Fund shall be
paid for (a) against delivery thereof to the Custodian or a
Subcustodian, as the case may be, either directly or through
a Clearing Corporation or a Securities Depository (in
accordance with the rules of such Securities Depository or
such Clearing Corporation), or (b) otherwise in accordance
with an Instruction, Applicable Law, generally accepted
trade practices, or the terms of the instrument representing
such Investment.
6.2 Sale of Investments. Pursuant to Instruction,
Investments sold for the account of the Fund shall be
delivered (a) against payment therefor in cash, by check or
by bank wire transfer, (b) by credit to the account of the
Custodian or the applicable Subcustodian, as the case may
be, with a Clearing Corporation or a Securities Depository
(in accordance with the rules of such Securities Depository
or such Clearing Corporation), or (c) otherwise in
accordance with an Instruction, Applicable Law, generally
accepted trade practices, or the terms of the instrument
representing such Investment.
6.3 Delivery in Connection with Borrowings of the Fund or
other Collateral and Margin Requirements. Pursuant to
Instruction, the Custodian may deliver Investments or cash
of the Fund in connection with borrowings and other
collateral and margin requirements.
6.4 Futures and Options. If, pursuant to an Instruction,
the Custodian shall become a party to an agreement with the
Fund and a futures commission merchant regarding margin
(Tri-Party Agreement), the Custodian shall (a) receive and
retain, to the extent the same are provided to the
Custodian, confirmations or other documents evidencing the
purchase or sale by the Fund of exchange-traded futures
contracts and commodity options, (b) when required by such
Tri-Party Agreement, deposit and maintain in an account
opened pursuant to such Agreement (Margin Account),
segregated either physically or by book-entry in a
Securities Depository for the benefit of any futures
commission merchant, such Investments as the Fund shall have
designated as initial, maintenance or variation "margin"
deposits or other collateral intended to secure the Fund's
performance of its obligations under the terms of any
exchange-traded futures contracts and commodity options; and
(c) thereafter pay, release or transfer Investments into or
out of the margin account in accordance with the provisions
of the 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. The Custodian
shall in no event be responsible for the acts and omissions
of any futures commission merchant to whom Investments are
delivered pursuant to this Section; for the sufficiency of
Investments held in any Margin Account; or, for the
performance of any terms of any exchange-traded futures
contracts and commodity options.
6.5 Contractual Obligations and Similar Investments. From
time to time, the Fund's Investments may include Investments
that are not ownership interests as may be represented by
certificate (whether registered or bearer), by entry in a
Securities Depository or by book entry agent, registrar or
similar agent for recording ownership interests in the
relevant Investment. If the Fund shall at any time acquire
such Investments, including without limitation deposit
obligations, loan participations, repurchase agreements and
derivative arrangements, the Custodian shall (a) receive and
retain, to the extent the same are provided to the
Custodian, confirmations or other documents evidencing the
arrangement; and (b) perform on the Fund's account in
accordance with the terms of the applicable arrangement, but
only to the extent directed to do so by Instruction. The
Custodian shall have no responsibility for agreements
running to the Fund as to which it is not a party other than
to retain, to the extent the same are provided to the
Custodian, documents or copies of documents evidencing the
arrangement and, in accordance with Instruction, to include
such arrangements in reports made to the Fund.
6.6 Exchange of Securities. Unless otherwise directed by
Instruction, the Custodian shall: (a) exchange securities
held for the account of the Fund for other securities in
connection with any reorganization, recapitalization,
conversion, split-up, change of par value of shares or
similar event, and (b) deposit any such securities in
accordance with the terms of any reorganization or
protective plan.
6.7 Surrender of Securities. Unless otherwise directed by
Instruction, the Custodian may surrender securities: (a) in
temporary form for definitive securities; (b) for transfer
into the name of an entity allowable under Section 5.3; and
(c) for a different number of certificates or instruments
representing the same number of shares or the same principal
amount of indebtedness.
6.8 Rights, Warrants, Etc. Pursuant to Instruction, the
Custodian shall (a) deliver warrants, puts, calls, rights or
similar securities to the issuer or trustee thereof, or to
any agent of such issuer or trustee, for purposes of
exercising such rights or selling such securities, and (b)
deposit securities in response to any invitation for the
tender thereof.
6.9 Mandatory Corporate Actions. Unless otherwise
directed by Instruction, the Custodian shall: (a) comply
with the terms of all mandatory or compulsory exchanges,
calls, tenders, redemptions or similar rights of securities
ownership affecting securities held on the Fund's account
and promptly notify the Fund of such action, and (b) collect
all stock dividends, rights and other items of like nature
with respect to such securities.
6.10 Income Collection. Unless otherwise directed by
Instruction, the Custodian shall collect any amount due and
payable to the Fund with respect to Investments and promptly
credit the amount collected to a Principal or Agency
Account; provided, however, that the Custodian shall not be
responsible for: (a) the collection of amounts due and
payable with respect to Investments that are in default, or
(b) the collection of cash or share entitlements with
respect to Investments that are not registered in the name
of the Custodian or its Subcustodians. The Custodian is
hereby authorized to endorse and deliver any instrument
required to be so endorsed and delivered to effect
collection of any amount due and payable to the Fund with
respect to Investments.
6.11 Ownership Certificates and Disclosure of the Fund's
Interest. The Custodian is hereby authorized to execute on
behalf of the Fund ownership certificates, affidavits or
other disclosure required under Applicable Law or
established market practice in connection with the receipt
of income, capital gains or other payments by the Fund with
respect to Investments, or in connection with the sale,
purchase or ownership of Investments.
6.12 Proxy Materials. The Custodian shall deliver, or
cause to be delivered, to the Fund proxy forms, notices of
meeting, and any other notices or announcements materially
affecting or relating to Investments received by the
Custodian or any nominee.
6.13 Taxes. The Custodian shall, where applicable, assist
the Fund in the reclamation of taxes withheld on dividends
and interest payments received by the Fund. In the
performance of its duties with respect to tax withholding
and reclamation, the Custodian shall be entitled to rely on
the advice of counsel and upon information and advice
regarding the Fund's tax status that is received from or on
behalf of the Fund without duty of separate inquiry.
6.14 Other Dealings. The Custodian shall otherwise act as
directed by Instruction, including without limitation
effecting the free payments of moneys or the free delivery
of securities, provided that such Instruction shall indicate
the purpose of such payment or delivery and that the
Custodian shall record the party to whom such payment or
delivery is made.
The Custodian shall attend to all nondiscretionary details
in connection with the sale or purchase or other administration
of Investments, except as otherwise directed by an Instruction,
and may make payments to itself or others for minor expenses of
administering Investments under this Agreement; provided that
the Fund shall have the right to request an accounting with
respect to such expenses.
In fulfilling the duties set forth in Sections 6.6
through 6.10 above, the Custodian shall provide to the Fund all
material information pertaining to a corporate action which the
Custodian actually receives; provided that the Custodian shall
not be responsible for the completeness or accuracy of such
information. Any advance credit of cash or shares expected to be
received as a result of any corporate action shall be subject to
actual collection and may, when the Custodian deems collection
unlikely, be reversed by the Custodian.
The Custodian may at any time or times in its
discretion appoint (and may at any time remove) agents (other
than Subcustodians) to carry out some or all of the
administrative provisions of this Agreement (Agents), provided,
however, that the appointment of such agent shall not relieve the
Custodian of its administrative obligations under this
Agreement.
7. Cash Accounts, Deposits and Money Movements.
Subject to the terms and conditions set forth in this Section 7,
the Fund hereby authorizes the Custodian to open and maintain,
with itself or with Subcustodians, cash accounts in United States
Dollars, in such other currencies as are the currencies of the
countries in which the Fund maintains Investments or in such
other currencies as the Fund shall from time to time request by
Instruction.
7.1 Types of Cash Accounts. Cash accounts opened on the
books of the Custodian (Principal Accounts) shall be opened
in the name of the Fund. Such accounts collectively shall
be a deposit obligation of the Custodian and shall be
subject to the terms of this Section 7 and the general
liability provisions contained in Section 9. Cash accounts
opened on the books of a Subcustodian may be opened in the
name of the Fund or the Custodian or in the name of the
Custodian for its customers generally (Agency Accounts).
Such deposits shall be obligations of the Subcustodian and
shall be treated as an Investment of the Fund. Accordingly,
the Custodian shall be responsible for exercising reasonable
care in the administration of such accounts but shall not be
liable for their repayment in the event such Subcustodian,
by reason of its bankruptcy, insolvency or otherwise, fails
to make repayment.
7.2 Payments and Credits with Respect to the Cash
Accounts. The Custodian shall make payments from or
deposits to any of said accounts in the course of carrying
out its administrative duties, including but not limited to
income collection with respect to the Fund's Investments,
and otherwise in accordance with Instructions. The
Custodian and its Subcustodians shall be required to credit
amounts to the cash accounts only when moneys are actually
received in cleared funds in accordance with banking
practice in the country and currency of deposit. Any credit
made to any Principal or Agency Account before actual
receipt of cleared funds shall be provisional and may be
reversed by the Custodian in the event such payment is not
actually collected. Unless otherwise specifically agreed in
writing by the Custodian or any Subcustodian, all deposits
shall be payable only at the branch of the Custodian or
Subcustodian where the deposit is made or carried.
7.3 Currency and Related Risks. The Fund bears risks of
holding or transacting in any currency. The Custodian
shall not be liable for any loss or damage arising from the
applicability of any law or regulation now or hereafter in
effect, or from the occurrence of any event, which may delay
or affect the transferability, convertibility or
availability of any currency in the country (a) in which
such Principal or Agency Accounts are maintained or (b) in
which such currency is issued, and in no event shall the
Custodian be obligated to make payment of a deposit
denominated in a currency during the period during which its
transferability, convertibility or availability has been
affected by any such law, regulation or event. Without
limiting the generality of the foregoing, neither the
Custodian nor any Subcustodian shall be required to repay
any deposit made at a foreign branch of either the Custodian
or Subcustodian if such branch cannot repay the deposit due
to a cause for which the Custodian would not be responsible
in accordance with the terms of Section 9 of this Agreement
unless the Custodian or such Subcustodian expressly agrees
in writing to repay the deposit under such circumstances.
All currency transactions in any account opened pursuant to
this Agreement are subject to exchange control regulations
of the United States and of the country where such currency
is the lawful currency or where the account is maintained.
Any taxes, costs, charges or fees imposed on the
convertibility of a currency held by the Fund shall be for
the account of the Fund.
7.4 Foreign Exchange Transactions. The Custodian shall,
subject to the terms of this Section, settle foreign
exchange transactions (including contracts, futures, options
and options on futures) on behalf and for the account of the
Fund with such currency brokers or banking institutions,
including Subcustodians, as the Fund may direct pursuant to
Instructions. The Custodian may act as principal in any
foreign exchange transaction with the Fund in accordance
with Section 7.4.2 of this Agreement. The obligations of
the Custodian in respect of all foreign exchange
transactions (whether or not the Custodian shall act as
principal in such transaction) shall be contingent on the
free, unencumbered transferability of the currency
transacted on the actual settlement date of the transaction.
7.4.1Third Party Foreign Exchange Transactions. The
Custodian shall process foreign exchange transactions
(including without limitation contracts, futures,
options, and options on futures), where any third party
acts as principal counterparty to the Fund on the same
basis it performs duties as agent for the Fund with
respect to any other of the Fund's Investments.
Accordingly the Custodian shall only be responsible for
delivering or receiving currency on behalf of the Fund
in respect of such contracts pursuant to Instructions.
The Custodian shall not be responsible for the failure
of any counterparty (including any Subcustodian) in
such agency transaction to perform its obligations
thereunder. The Custodian (a) shall transmit cash and
Instructions to and from the currency broker or banking
institution with which a foreign exchange contract or
option has been executed pursuant hereto, (b) may make
free outgoing payments of cash in the form of Dollars
or foreign currency without receiving confirmation of a
foreign exchange contract or option or confirmation
that the countervalue currency completing the foreign
exchange contract has been delivered or received or
that the option has been delivered or received, and (c)
shall hold all confirmations, certificates and other
documents and agreements received by the Custodian and
evidencing or relating to such foreign exchange
transactions in safekeeping. The Fund accepts full
responsibility for its use of third-party foreign
exchange dealers and for execution of said foreign
exchange contracts and options and understands that the
Fund shall be responsible for any and all costs and
interest charges which may be incurred by the Fund or
the Custodian as a result of the failure or delay of
third parties to deliver foreign exchange.
7.4.2Foreign Exchange with the Custodian as Principal.
The Custodian may undertake foreign exchange
transactions with the Fund as principal as the
Custodian and the Fund may agree from time to time. In
such event, the foreign exchange transaction will be
performed in accordance with the particular agreement
of the parties, or in the event a principal foreign
exchange transaction is initiated by Instruction in the
absence of specific agreement, such transaction will be
performed in accordance with the usual commercial terms
of the Custodian.
7.5 Delays. If no event of Force Majeure shall have
occurred and be continuing and in the event that a delay
shall have been caused by the negligence or willful
misconduct of the Custodian in carrying out an Instruction
to credit or transfer cash, the Custodian shall be liable to
the Fund: (a) with respect to Principal Accounts, for
interest to be calculated at the rate customarily paid on
such deposit and currency by the Custodian on overnight
deposits at the time the delay occurs for the period from
the day when the transfer should have been effected until
the day it is in fact effected; and, (b) with respect to
Agency Accounts, for interest to be calculated at the rate
customarily paid on such deposit and currency by the
Subcustodian on overnight deposits at the time the delay
occurs for the period from the day when the transfer should
have been effected until the day it is in fact effected. The
Custodian shall not be liable for delays in carrying out
such Instructions to transfer cash which are not due to the
Custodian's own negligence or willful misconduct.
7.6 Advances. If, for any reason in the conduct of its
safekeeping duties pursuant to Section 5 hereof or its
administration of the Fund's assets pursuant to Section 6
hereof, the Custodian or any Subcustodian advances monies to
facilitate settlement or otherwise for benefit of the Fund
(whether or not any Principal or Agency Account shall be
overdrawn either during, or at the end of, any Business
Day), the Fund hereby does:
7.6.1 acknowledge that the Fund shall have no right
or title to any Investments purchased with such Advance
save a right to receive such Investments upon: (a) the
debit of the Principal or Agency Account; or, (b) if
such debit would produce an overdraft in such account,
other reimbursement of the associated Advance;
7.6.2 grant to the Custodian a security interest in
all Investments; and,
7.6.3 agree that the Custodian may secure the
resulting Advance by perfecting a security interest in
all Investments under Applicable Law.
Neither the Custodian nor any Subcustodian shall be obligated to
advance monies to the Fund, and in the event that such Advance
occurs, any transaction giving rise to an Advance shall be for
the account and risk of the Fund and shall not be deemed to be a
transaction undertaken by the Custodian for its own account and
risk. If such Advance shall have been made by a Subcustodian or
any other person, the Custodian may assign the security interest
and any other rights granted to the Custodian hereunder to such
Subcustodian or other person. If the Fund shall fail to repay
when due the principal balance of an Advance and accrued and
unpaid interest thereon, the Custodian or its assignee, as the
case may be, shall be entitled to utilize the available cash
balance in any Agency or Principal Account and to dispose of any
Investments to the extent necessary to recover payment of all
principal of, and interest on, such Advance in full. The
Custodian may assign any rights it has hereunder to a
Subcustodian or third party. Any security interest in
Investments taken hereunder shall be treated as financial assets
credited to securities accounts under Articles 8 and 9 of the
Uniform Commercial Code (1997). 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 the
Fund's obligations to the Custodian, or its assignee, and
balances in such Principal Accounts shall be available for
satisfaction of the Fund's obligations under this Section
7. The Custodian shall further have a right of offset
against the balances in any Agency Account maintained
hereunder to the extent that the aggregate of all Principal
Accounts is overdrawn.
8. Subcustodians and Securities Depositories. Subject to
the provisions hereinafter set forth in this Section 8, the Fund
hereby authorizes the Custodian to utilize Securities
Depositories to act on behalf of the Fund and to appoint from
time to time and to utilize Subcustodians. With respect to
securities and funds held by a Subcustodian, either directly or
indirectly (including by a Securities Depository or Clearing
Corporation), notwithstanding any provisions of this Agreement to
the contrary, payment for securities purchased and delivery of
securities sold may be made prior to receipt of securities or
payment, respectively, and securities or payment may be received
in a form, in accordance with (a) governmental regulations, (b)
rules of Securities Depositories and clearing agencies, (c)
generally accepted trade practice in the applicable local market,
(d) the terms and characteristics of the particular Investment,
or (e) the terms of Instructions.
8.1 Domestic Subcustodians and Securities
Depositories. The Custodian may deposit and/or maintain, either
directly or through one or more agents appointed by the
Custodian, Investments of the Fund in any Securities Depository
in the United States, including The Depository Trust company,
provided such Depository meets applicable requirements of the
Federal Reserve Bank or of the Securities and Exchange
Commission. The Custodian may, at any time and from time to time,
appoint any bank as defined in Section 2(a)(5) of the 1940 Act
meeting the requirements of a custodian under Section 17(f) of
the 1940 Act and the rules and regulations thereunder, to act on
behalf of the Fund as a Subcustodian for purposes of holding
Investments of the Fund in the United States.
8.2 Foreign Subcustodians and Securities Depositories.
Unless instructed otherwise by the Fund, the Custodian may
deposit and/or maintain non-U.S. Investments of each Fund in any
non-U.S. Securities Depository, provided such Securities
Depository meets the requirements of an "eligible securities
depository" under Rule 17f-7 promulgated under the 1940 Act or
any successor rule or regulation ("Rule 17f-7"), or which by
order of the Securities and Exchange Commission is exempted
therefrom. Prior to the time that securities are placed with
such depository, but subject to the provisions of Section 8.2.3
below, the Custodian shall have prepared an analysis 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 8.2.2 of this Section Additionally, the Custodian
may, at any time and from time to time, appoint (a) any bank,
trust company or other entity meeting the requirements of an
"eligible foreign custodian" under Rule 17f-5 or which by order of
the Securities and Exchange Commission is exempted therefrom, or
(b) any bank as defined in Section 2(a)(5) of the 1940 Act
meeting the requirements of a custodian under Section 17(f) of
the 1940 Act and the rules and regulations thereunder, to act on
behalf of the Fund as a Subcustodian for purposes of holding
Investments of the Fund outside the United States. Such
appointment of foreign Subcustodians shall be subject to the
provisions of the attached 17f-5 DELEGATION SCHEDULE. The use of
non-U.S. Securities Depositories shall be subject to the terms of
Subsections 8.2.2 and 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 authorization of the Fund to
invest in such country.
8.2.1Delegation of Board Review of Subcustodians. From
time to time, the Custodian may agree to perform
certain reviews of Subcustodians and of Subcustodian
Contracts as delegate of the Fund's Board. In such
event, the Custodian's duties and obligations with
respect to this delegated review will be performed in
accordance with the terms of the 17f-5 Delegation
Schedule to this Agreement.
8.2.2Monitoring and Risk Assessment of Securities
Depositories. Prior to the placement of any assets of
a Fund with a Securities Depository, the Custodian:
(a) shall provide to the Fund's Investment Advisor an
assessment of the custody risks associated with
maintaining assets within such Securities Depository;
and (b) shall have established a system to monitor the
custody risks associated with maintaining assets with
such Securities Depository on a continuing basis and to
promptly notify the Fund or its Investment Adviser of
any material changes in such risk. In performing its
duties under this subsection, the Custodian shall use
reasonable care and may rely on such reasonable sources
of information as may be available, including, but not
limited to: (i) published ratings; (ii) information
supplied by a Subcustodian that is a participant in
such Securities Depository; (iii) industry surveys or
publications; and/or (iv) information supplied by the
depository itself, by its auditors (internal or
external) or by the relevant foreign Financial
Regulatory Authority. It is acknowledged that
information procured through some or all of these
sources may not be independently verifiable by the
Custodian and that direct access to Securities
Depositories is limited under most circumstances.
Accordingly, the Custodian shall not be responsible for
errors or omissions in its duties hereunder provided
that it has performed its monitoring and assessment
duties with reasonable care. The risk assessment shall
be provided to the Fund's Investment Advisor by such
means as the Custodian shall reasonably establish
Advice of material changes in such assessments may be
provided by the Custodian in the manner established as
customary between the Fund's Investment Adviser and the
Custodian for the transmission of material market
information.
8.3 Responsibility for Subcustodians. With respect to
securities and funds held by a Subcustodian, either directly
or indirectly (including by a Foreign Depository, Securities
System or foreign clearing agency), including demand deposit
and interest bearing deposits, currencies or other deposits
and foreign exchange contracts as referred to herein, the
Custodian shall be liable to the Fund if and only to the
extent that such Subcustodian is liable to the Custodian and
the Custodian recovers under the applicable subcustodian
agreement.
8.4 New Countries. The Fund shall be responsible for
informing the Custodian sufficiently in advance of a
proposed investment which is to be held in a country in
which no Subcustodian is authorized to act in order that the
Custodian shall, if it deems appropriate to do so, have
sufficient time to establish a subcustodial arrangement in
accordance herewith. In the event, however, the Custodian is
unable to establish such arrangements prior to the time such
investment is to be acquired, the Custodian is authorized to
designate at its discretion a local safekeeping agent, and
the use of such local safekeeping agent shall be at the sole
risk of the Fund, and accordingly the Custodian shall be
responsible to the Fund for the actions of such agent if and
only to the extent the Custodian shall have recovered from
such agent for any damages caused the Fund by such agent.
9. Responsibility of the Custodian. In performing its
duties and obligations hereunder, the Custodian shall use
reasonable care under the facts and circumstances prevailing in
the market where performance is effected. Subject to the
specific provisions of this Section, the Custodian shall be
liable for any direct damage incurred by the Fund in consequence
of the Custodian's negligence, bad faith or willful misconduct.
In no event shall the Custodian be liable hereunder for any
special, indirect, punitive or consequential damages arising out
of, pursuant to or in connection with this Agreement even if the
Custodian has been advised of the possibility of such damages.
It is agreed that the Custodian shall have no duty to assess the
risks inherent in the Fund's Investments or to provide investment
advice with respect to such Investments and that the Fund as
principal shall bear any risks attendant to particular
Investments such as failure of counterparty or issuer.
9.1 Limitations of Performance. The Custodian shall not be
responsible under this Agreement for any failure to perform
its duties, and shall not liable hereunder for any loss or
damage in association with such failure to perform, for or
in consequence of the following causes:
9.1.1Force Majeure. Force Majeure shall mean any
circumstance or event which is beyond the reasonable
control of the Custodian, a Subcustodian or any agent
of the Custodian or a Subcustodian and which adversely
affects the performance by the Custodian of its
obligations hereunder, by the Subcustodian of its
obligations under its Subcustody Agreement or by any
other agent of the Custodian or the Subcustodian,
including any event caused by, arising out of or
involving (a) an act of God, (b) accident, fire, water
damage or explosion, (c) any computer, system or other
equipment failure or malfunction caused by any computer
virus or the malfunction or failure of any
communications medium, (d) any interruption of the
power supply or other utility service, (e) any strike
or other work stoppage, whether partial or total, (f)
any delay or disruption resulting from or reflecting
the occurrence of any Sovereign Risk, (g) any
disruption of, or suspension of trading in, the
securities, commodities or foreign exchange markets,
whether or not resulting from or reflecting the
occurrence of any Sovereign Risk, (h) any encumbrance
on the transferability of a currency or a currency
position on the actual settlement date of a foreign
exchange transaction, whether or not resulting from or
reflecting the occurrence of any Sovereign Risk, or (i)
any other cause similarly beyond the reasonable control
of the Custodian.
9.1. Country Risk. Country Risk shall mean, with
respect to the acquisition, ownership, settlement or
custody of Investments in a jurisdiction, all risks
relating to, or arising in consequence of, systemic and
markets factors affecting the acquisition, payment for
or ownership of Investments including (a) the
prevalence of crime and corruption, (b) the inaccuracy
or unreliability of business and financial information,
(c) the instability or volatility of banking and
financial systems, or the absence or inadequacy of an
infrastructure to support such systems, (d) custody and
settlement infrastructure of the market in which such
Investments are transacted and held, (e) the acts,
omissions and operation of any Securities Depository,
(f) the risk of the bankruptcy or insolvency of banking
agents, counterparties to cash and securities
transactions, registrars or transfer agents, and (g)
the existence of market conditions which prevent the
orderly execution or settlement of transactions or
which affect the value of assets.
9.1.3 Sovereign Risk. Sovereign Risk shall mean,
in respect of any jurisdiction, including the United
States of America, where Investments is acquired or
held hereunder or under a Subcustody Agreement, (a) any
act of war, terrorism, riot, insurrection or civil
commotion, (b) the imposition of any investment,
repatriation or exchange control restrictions by any
Governmental Authority, (c) the confiscation,
expropriation or nationalization of any Investments by
any Governmental Authority, whether de facto or de
jure, (iv) any devaluation or revaluation of the
currency, (d) the imposition of taxes, levies or other
charges affecting Investments, (vi) any change in the
Applicable Law, or (e) any other economic or political
risk incurred or experienced.
9.2. Limitations on Liability. The Custodian shall not be
liable for any loss, claim, damage or other liability
arising from the following causes:
9.2.1Failure of Third Parties. The failure of any
third party including: (a) any issuer of Investments
or book-entry or other agent of and issuer; (b) any
counterparty with respect to any Investment, including
any issuer of exchange-traded or other futures, option,
derivative or commodities contract; (c) failure of an
Investment Advisor, Foreign Custody Manager or other
agent of the Fund; or (d) failure of other third
parties similarly beyond the control or choice of the
Custodian.
9.2..2 Information Sources. The Custodian may rely
upon information received from issuers of Investments
or agents of such issuers, information received from
Subcustodians and from other commercially reasonable
sources such as commercial data bases and the like, but
shall not be responsible for specific inaccuracies in
such information, provided that the Custodian has
relied upon such information in good faith, or for the
failure of any commercially reasonable information
provider.
9.2.3Reliance 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 Fund or
by-laws, Applicable Law, or actions by the trustees, or
shareholders of the Fund.
9.2.4Restricted Securities. The limitations inherent
in the rights, transferability or similar investment
characteristics of a given Investment of the Fund.
10. Indemnification. The Fund hereby indemnifies the
Custodian and each Subcustodian, and their respective agents,
nominees and the partners, employees, 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 and any Instruction. 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
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.
11. Reports and Records. The Custodian shall:
11.1 create and maintain records relating to the performance
of its obligations under this Agreement;
11.2 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 (a) above, subject, however, to all
reasonable security requirements of the Custodian then
applicable to the records of its custody customers
generally; and
11.3 make available to the Fund all Electronic Reports; it
being understood that the Custodian shall not be liable
hereunder for the inaccuracy or incompleteness thereof or
for errors in any information included therein.
The Fund shall examine all records, howsoever produced
or transmitted, promptly upon receipt thereof and notify the
Custodian promptly of any discrepancy or error therein. Unless
the Fund delivers written notice of any such discrepancy or error
within a reasonable time after its receipt thereof, such records
shall be deemed to be true and accurate. It is understood that
the Custodian now obtains and will in the future obtain
information on the value of assets from outside sources which may
be utilized in certain reports made available to the Fund. The
Custodian deems such sources to be reliable but it is
acknowledged and agreed that the Custodian does not verify nor
represent nor warrant as to the accuracy or completeness of such
information and accordingly shall be without liability in
selecting and using such sources and furnishing such information.
12. Miscellaneous.
12.1 Proxies, etc. The Fund will promptly execute and
deliver, upon request, such proxies, powers of attorney or
other instruments as may be necessary or desirable for the
Custodian to provide, or to cause any Subcustodian to
provide, custody services.
12.2 Entire Agreement. Except as specifically provided
herein, this Agreement constitutes the entire agreement
between the Fund and the Custodian with respect to the
subject matter hereof. Accordingly, this Agreement
supersedes any custody agreement or other oral or written
agreements heretofore in effect between the Fund and the
Custodian with respect to the custody of the Fund's
Investments.
12.3 Waiver and Amendment. No provision of this Agreement
may be waived, amended or modified, and no addendum to this
Agreement shall be or become effective, or be waived,
amended or modified, except by an instrument in writing
executed by the party against which enforcement of such
waiver, amendment or modification is sought; provided,
however, that an Instruction shall, whether or not such
Instruction shall constitute a waiver, amendment or
modification for purposes hereof, shall be deemed to have
been accepted by the Custodian when it commences actions
pursuant thereto or in accordance therewith.
12.4 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS
OF, THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW OF SUCH STATE. THE PARTIES HERETO
IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS
LOCATED IN NEW YORK CITY IN THE BOROUGH OF MANHATTAN.
12.5 Notices. Notices and other writings contemplated by
this Agreement, other than Instructions, shall be delivered
(a) by hand, (b) by first class registered or certified
mail, postage prepaid, return receipt requested, (c) by a
nationally recognized overnight courier or (d) by facsimile
transmission, provided that any notice or other writing sent
by facsimile transmission shall also be mailed, postage
prepaid, to the party to whom such notice is addressed. All
such notices shall be addressed, as follows:
If to the Fund:
BBH Fund, Inc.
BBH Trust
c/o Signature Financial Group
00 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn.: Xx. Xxxxxx Xxxxxxxx
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 Fund or the Custodian may
have designated in writing to the other.
12.6 Headings. Paragraph headings included herein are for
convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof.
12.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an
original. This Agreement shall become effective when one or
more counterparts have been signed and delivered by the Fund
and the Custodian.
12.8 Confidentiality. The parties hereto agree that each shall
treat confidentially the terms and conditions of this
Agreement and all information provided by each party to the
other regarding its business and operations. All
confidential information provided by a party hereto shall be
used by any other party hereto solely for the purpose of
rendering or obtaining services pursuant to this Agreement
and, except as may be required in carrying out this
Agreement, shall not be disclosed to any third party without
the prior consent of such providing party. The foregoing
shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly
available other than through a breach of this Agreement, or
that is required to be disclosed by or to any bank examiner
of the Custodian or any Subcustodian, any Regulatory
Authority, any auditor of the parties hereto, or by judicial
or administrative process or otherwise by Applicable Law.
12.9 Counsel. In fulfilling its duties hereunder, the Custodian
shall be entitled to receive and act upon the advice of (i)
counsel regularly retained by the Custodian in respect of
such matters, (ii) counsel for the Fund or (iii) such
counsel as the Fund and the Custodian may agree upon, with
respect to all matters, and the Custodian shall be without
liability for any action reasonably taken or omitted
pursuant to such advice.
13. Definitions. The following defined terms will have
the respective meanings set forth below.
13.1 Advance shall mean any extension of credit by or
through the Custodian or by or through any Subcustodian and
shall include amounts paid to third parties for account of
the Fund or in discharge of any expense, tax or other item
payable by the Fund.
13.2 Agency Account shall mean any deposit account opened on
the books of a Subcustodian or other banking institution in
accordance with Section 7.1.
13.3 Agent shall have the meaning set forth in the last
system of Section 6.
13.4 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.
13.5 Authorized Person shall mean any person or entity
authorized to give Instructions on behalf of the Fund in
accordance with Section 4.1.
13.6 Book-entry Agent shall mean an entity acting as
agent for the issuer of Investments for purposes of
recording ownership or similar entitlement to Investments,
including without limitation a transfer agent or registrar.
13.7 Clearing Corporation shall mean any entity or
system established for purposes of providing securities
settlement and movement and associated functions for a given
market.
13.8 Delegation Agreement shall mean any separate
agreement entered into between the Custodian and the Fund or its
authorized representative with respect to certain matters
concerning the appointment and administration of Subcustodians
delegated to the Custodian pursuant to Rule 17f-5.
13.9 Foreign Custody Manager shall mean the Fund's
foreign custody manager.
13.10Foreign Financial Regulatory Authority shall have
the meaning given by Section 2(a)(50) of the 0000 Xxx.
13.11 Funds Transfer Services Agreement shall mean
any separate agreement entered into between the Custodian and the
Fund or its authorized representative with respect to certain
matters concerning the processing of payment orders from
Principal Accounts of the Fund.
13.12Instruction(s) shall have the meaning assigned in
Section 4.
13.13 Investment Advisor shall mean any person or
entity who is an Authorized Person to give Instructions with
respect to the investment and reinvestment of the Fund's
Investments.
13.14Investments shall mean any investment asset of the
Fund, including without limitation securities, bonds, notes, and
debentures as well as receivables, derivatives, contractual
rights or entitlements and other intangible assets.
13.15Margin Account shall have the meaning set forth in
Section 6.4 hereof.
13.16Principal Account shall mean deposit accounts of
the Fund carried on the books of BBH&Co. as principal in
accordance with Section 7.
13.17 Safekeeping Account shall mean an account
established on the books of the Custodian or any Subcustodian for
purposes of segregating the interests of the Fund (or clients of
the Custodian or Subcustodian) from the assets of the Custodian
or any Subcustodian.
13.18 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, if a foreign Securities
Depository, meets the definitional requirements of Rule 17f-7
under the 1940 Act.
13.19 Subcustodian shall mean each foreign bank
appointed by the Custodian pursuant to Section 8, but shall not
include Securities Depositories.
13.20Tri-Party Agreement shall have the meaning set
forth in Section 6.4 hereof.
14. Compensation. The Fund agrees to pay to the Custodian
(a) a fee in an amount set forth in the fee letter between the
Fund and the Custodian in effect on the date hereof or as amended
from time to time, and (b) all out-of-pocket expenses incurred by
the Custodian, including the fees and expenses of all
Subcustodians, and payable from time to time. Amounts payable by
the Fund under and pursuant to this Section 14 shall be payable
by wire transfer to the Custodian at BBH&Co. in New York, New
York.
15. Termination. This Agreement may be terminated by
either party in accordance with the provisions of this Section.
The provisions of this Agreement and any other rights or
obligations incurred or accrued by any party hereto prior to
termination of this Agreement shall survive any termination of
this Agreement.
15.1 Notice and Effect. This Agreement may be terminated
by either party by written notice effective no sooner than
seventy-five days following the date that notice to such
effect shall be delivered to other party at its address set
forth in paragraph 12.5 hereof.
15.2 Successor Custodian. In the event of the appointment
of a successor custodian, it is agreed that the Investments
of the Fund held by the Custodian or any Subcustodian shall
be delivered to the successor custodian in accordance with
reasonable Instructions. The Custodian agrees to cooperate
with the Fund in the execution of documents and performance
of other actions necessary or desirable in order to
facilitate the succession of the new custodian. If no
successor custodian shall be appointed, the Custodian shall
in like manner transfer the Fund's Investments in accordance
with Instructions.
15.3 Delayed Succession. If no Instruction has been given
as of the effective date of termination, Custodian may at
any time on or after such termination date and upon ten days
written notice to the Fund either (a) deliver the
Investments of the Fund held hereunder to the Fund 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 $2M USD equivalent and
operating under the Applicable law of the jurisdiction where
such Investments are located, such delivery to be at the
risk of the Fund. In the event that Investments or moneys
of the Fund remain in the custody of the Custodian or its
Subcustodians after the date of termination owing to the
failure of the Fund to issue Instructions with respect to
their disposition or owing to the fact that such disposition
could not be accomplished in accordance with such
Instructions despite diligent efforts of the Custodian, the
Custodian shall be entitled to compensation for its services
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.
15.4 Several Liability. The parties agree that the assets and
liabilities of each Fund are separate and distinct from the
assets and liabilities of each other Fund and that no Fund
shall be liable or shall be charged for any debt, obligation
or liability of any other Fund, whether arising under this
Agreement or otherwise.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed as of the date first above written.
BBH FUND, INC.
I. BBH TRUST
II. BBH U.S. MONEY MARKET PORTFOLIO
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
XXXXX BROTHERS XXXXXXXX & CO.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Partner
Date: 9/18/03
17f-5 DELEGATION SCHEDULE
By its execution of this Delegation Schedule, BBH FUND,
INC., an open-end management investment company organized under
the laws of the State of Maryland, acting through and under the
direction of its Board of Directors (the "Corporation"), 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 outside the United States of the Assets of
each series of the Corporation (each a "Fund" and collectively
the "Funds").
1. Maintenance of Fund Assets Abroad. The Corporation
hereby instructs Delegate pursuant to the terms of the Custodian
Agreement to place and maintain each Fund's Assets in countries
outside the United States in accordance with Instructions
received from the Fund's investment advisor. Such instruction
shall represent a Proper Instruction under the terms of the
Custodian Agreement. The Corporation acknowledges that - (a) the
Delegate shall perform services hereunder only with respect to
the countries where it provides custodial services to the Funds
under the Custodian Agreement; (b) depending on conditions in the
particular country, advance notice may be required before the
Delegate shall be able to perform its duties hereunder in or with
respect to such country (such advance notice to be reasonable in
light of the specific facts and circumstances attendant to
performance of duties in such country); and (c) nothing in this
Delegation Schedule shall require the Delegate to provide
delegated or custodial services in any country, and there may
from time to time be countries as to which the Delegate
determines it will not provide delegation services.
2. 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 each Fund's foreign
custodian arrangement:
(a) Selection of Eligible Foreign Custodian. The Delegate
shall place and maintain each Fund's Assets with an Eligible
Foreign Custodian; provided that the Delegate shall have
determined that each Fund's Assets will be subject to reasonable
care based on the standards applicable to custodians in the
relevant markets 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 Funds' Assets;
(iii)The Eligible Foreign Custodian's general
reputation and standing; and
(iv) Whether the Fund will have jurisdiction over and
be able to enforce judgments against the Eligible Foreign
Custodian, such as by virtue of the existence of any offices
of such Eligible Foreign Custodian in the United States or
such Eligible Foreign Custodian's appointment of an agent
for service or 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 Fund
assets based on the standards specified in Section (c)(1) of Rule
17f-5. Each such contract shall, except as set forth in the last
paragraph of this subsection (b), include provisions that provide:
(i) For indemnification or insurance arrangements (or
any combination of the foregoing) such that the Fund will be
adequately protected against the risk of loss of assets held
in accordance with such contract;
(ii) That the Funds' 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 each Funds'
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 each Funds' Assets as belonging to the Fund or
as being held by a third party for the benefit of the Fund;
(v) That each Fund's independent public accountants
will be given access to those records described in (iv)
above or confirmation of the contents of such records; and
(vi) That the Delegate will receive sufficient and
timely periodic reports with respect tot he safekeeping of
the Funds' Assets, including, but not limited to,
notification of any transfer to or from each Fund's account
or a third party account containing he Fund's Assets.
(c) Limitation to Delegated Selection. Notwithstanding
anything in this Delegation Schedule to the contrary, the duties
under this Section 3 shall apply only to Eligible Foreign
Custodians selected by the Delegate and shall not apply to
Securities Depositories or to any Eligible Foreign Custodian that
the Delegate is directed to use pursuant to Section 7.
(d) Most Favored Client. If at any time prior to
termination of this Agreement, the Delegate, as a matter of
standard business practice, accepts delegation as Foreign Custody
Manager for its U.S. mutual fund clients on terms of materially
greater benefit to the Funds than set forth in this Agreement,
the Delegate hereby agrees to negotiate with the Corporation in
good faith with respect thereto.
4. Monitoring. The Delegate shall establish a system to
monitor at reasonable intervals (but at least annually) the
appropriateness of maintaining the Funds' 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
Funds' Assets in accordance with the criteria established under
Section 3(a) if this Delegation Schedule. The Delegate shall
monitor the continuing appropriateness of the contract governing
the Funds' 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 Corporation's Board written reports specifying placement
of the Funds' 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
report with respect to any Eligible Foreign Custodian that the
Delegate has been instructed to use pursuant to Section 7 only to
the extent specifically agreed with respect to the particular
situation.
6. Withdrawal of Fund 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 Funds' Assets from the non-complying
arrangement as soon as reasonably practicable, and shall place
the Funds' Assets with another Eligible Foreign Custodian
selected by the Delegate, if possible; provided, however, that if
in the reasonable judgment of the Delegate such withdrawal would
require liquidation of any Fund Assets or would materially impair
the liquidity, value or other investment characteristics of the
Funds' Assets, it shall be the duty of the Delegate to provide
information regarding the particular circumstances and to act
only in accordance with Proper Instructions of the Fund or its
Investment Advisor with respect to such liquidation or other
withdrawal.
7. Direction as to Eligible Foreign Custodian.
Notwithstanding this Delegation Schedule, the Corporation acting
through its Board, its Investment Advisor or its other authorized
representative, may direct the Delegate to place and maintain the
Funds' 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 a Proper Instruction under the terms
of the Custodian Agreement and shall have no duties under this
Delegation Schedule with respect to such arrangements 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 Funds' 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 Corporation hereby represents and warrants that
this Delegation Schedule has been duly authorized, executed and
delivered by the Corporation and is a legal, valid and binding
agreement of the Corporation.
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, and shall
supercede in its entirety any Foreign Custody Manager Delegation
Agreement previously executed by the parties. 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 90th day
following the date on which the non-terminating party shall
receive the foregoing notice. The foregoing to the contrary
notwithstanding, this Delegation Schedule shall be deemed to have
been terminated concurrently with the termination of the
Custodian Agreement.
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. Fund Assets - shall mean any of the Funds' 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 Funds' transactions in
such investments.
c. Proper 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 9.1.3 of the Custodian Agreement.
f. U.S. Bank - shall mean a bank which qualifies to serve
as a custodian of assets of investment companies under Section
17(f) of the Act.
13. Governing Law and Jurisdiction. This Delegation
Schedule shall be construed in accordance with the laws of the
State of New York. The parties hereby submit to the exclusive
jurisdiction of the 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.
14. Fees. Delegate shall perform its function under this
Delegation Schedule for the compensation determined under the
Custodian Agreement.
15. Integration. This Delegation Schedule sets forth all
of the Delegate's duties with respect to the selection and
monitoring of Eligible Foreign Custodians, the administration of
contracts with Eligible Foreign Custodians, the withdrawal of
assets from Eligible Foreign Custodians and the issuance of
reports in connection with such duties. The terms of the
Custodian Agreement shall apply generally as to matters not
expressly covered in this Delegation Schedule, including dealings
with the Eligible Foreign Custodians in the course of discharge
of the Delegate's obligations under the Custodian Agreement.
The Delegate agrees that any claims by it against the
Corporation under this Delegation Schedule may be satisfied only
from the assets of the affected Fund(s); that the person
executing this Delegation Schedule has executed it on behalf of
the Corporation and not individually, and that the obligations of
the Corporation arising out of this Delegation Schedule are not
binding upon such person or the Funds' shareholders individually
but are binding only upon the assets and property of the Funds;
and that no shareholders, trustees or officers of the Corporation
may be held personally liable or responsible for any obligations
of the Corporation arising out of this Delegation Schedule.
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be duly executed as of the date first
above written.
BBH FUND, INC.
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
XXXXX BROTHERS XXXXXXXX & CO.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Partner
Date: 9/18/03
