CUSTODY AGREEMENT
This CUSTODY AGREEMENT sets out the general terms and conditions by
which THE BANK OF N.T. ▇▇▇▇▇▇▇▇▇▇▇ & SON LTD. (the "Bank of ▇▇▇▇▇▇▇▇▇▇▇"), a
banking organization chartered under the laws of Bermuda, will provide custody
services for THE BAUPOST FUND (the "Fund"), a business trust organized under the
laws of The Commonwealth of Massachusetts.
WHEREAS, the Fund desires to be provided with custody in Bermuda of its
shares, bonds, debentures or any other securities (collectively, "Securities")
and its cash and cash equivalents (collectively, "Cash");
WHEREAS, the Fund wishes to utilize the services of Bank of ▇▇▇▇▇▇▇▇▇▇▇
as the Fund's agent within Bermuda for such purposes, and to establish with Bank
of ▇▇▇▇▇▇▇▇▇▇▇ a Special Custody Account which Bank of ▇▇▇▇▇▇▇▇▇▇▇ understands
and agrees will be used exclusively for Securities, Cash and other assets of the
Fund (the "Account");
NOW, THEREFORE, the services Bank of ▇▇▇▇▇▇▇▇▇▇▇ will provide to the
Fund and the manner in which such services will be performed will be as set
forth below.
1. The Account shall be used to hold, acquire, transfer or otherwise care
for, on behalf of the Fund, Securities and such Cash as is transferred
to Bank of ▇▇▇▇▇▇▇▇▇▇▇ or as is received in payment of any transfer of
or as payment on, or interest on or dividend from, any such Securities,
and beneficial ownership of the Securities and Cash in the Account
shall be freely transferable without payment of money or value other
than for safe custody and administration. All transactions involving
the Securities and Cash in the Account shall be executed solely in
accordance with the Fund's Instructions as that term is defined in
Section 10, except that until Bank of ▇▇▇▇▇▇▇▇▇▇▇ receives Instructions
from the Fund to the contrary, Bank of ▇▇▇▇▇▇▇▇▇▇▇ will:
a. present for payment all Securities held in the Account which
are called, redeemed or retired or otherwise become payable
and all coupons and other income items which call for payment
upon presentation and hold the cash received in the Account
pursuant to this Agreement;
b. in respect of Securities held in the Account, execute in the
name of the Fund such ownership and other certificates as may
be required to obtain payments in respect thereof;
c. exchange interim receipts or temporary Securities held in the
Account for definitive Securities; and
d. where any Securities held in any securities depository are
called for a partial redemption by the issuer of such
Securities, allot in Bank of ▇▇▇▇▇▇▇▇▇▇▇'▇ sole discretion the
called portion to the respective holders in any manner deemed
to be fair and equitable in Bank of ▇▇▇▇▇▇▇▇▇▇▇'▇ judgment.
Whenever pursuant to this Agreement or for any purpose relating hereto
anything whatsoever may or is required to be done or given by the Fund,
it shall be done or given, as the case may be, by and for the Fund by
such officer or officers of the Fund or other person or persons as the
governing body of the Fund shall specify from time to time by
resolution certified by the President, Vice President, Secretary, or
Assistant Secretary of the Fund. Bank of ▇▇▇▇▇▇▇▇▇▇▇ shall be
conclusively entitled to rely upon the identification of such persons
as the holders of those offices so specified in any such resolution,
absent Instructions to the contrary. The Fund shall furnish to Bank of
▇▇▇▇▇▇▇▇▇▇▇ specimens of the signatures of all such officers and
persons so specified in such resolution received by Bank of ▇▇▇▇▇▇▇▇▇▇▇
in force at the time of the receipt by Bank of ▇▇▇▇▇▇▇▇▇▇▇ of such
Instructions, and shall not be charged with any responsibility
respecting the application of monies out in accordance therewith.
Bank of ▇▇▇▇▇▇▇▇▇▇▇ shall not be liable for any act or omission in
respect of any Instructions so given except in the case of wilful
default, wilful negligence, fraud, bad faith, misconduct, or disregard
of duties on the part of the Bank of ▇▇▇▇▇▇▇▇▇▇▇. Bank of ▇▇▇▇▇▇▇▇▇▇▇
in executing all Instructions will take relevant action in accordance
with accepted industry practice.
2. The Account shall not be subject to any right, charge, security
interest, lien or claim of any kind (collectively, "Claims") in favor
of Bank of ▇▇▇▇▇▇▇▇▇▇▇ or any creditor of Bank of ▇▇▇▇▇▇▇▇▇▇▇,
including a receiver or trustee in bankruptcy, except to the extent of
Bank of ▇▇▇▇▇▇▇▇▇▇▇'▇ right to compensation or reimbursement with
regard to the Account's administration in accordance with the terms of
this Agreement. Bank of ▇▇▇▇▇▇▇▇▇▇▇ shall provide the Fund with prompt
notice of any attempt by any party to assert any Claim against the
Account and shall take all actions to protect the Account from such
Claim until the Fund has had a reasonable time to respond to such
notice.
3. The ownership of the assets of the Account, whether Securities, Cash or
both, and whether any such assets are held by Bank of ▇▇▇▇▇▇▇▇▇▇▇ or in
a securities depository or clearing agency as hereinafter authorized,
shall be clearly recorded on Bank of ▇▇▇▇▇▇▇▇▇▇▇'▇ books as for the
interest of the Fund, and, to the extent securities are physically held
in the Account, such Securities shall also be physically segregated
from the general assets of Bank of ▇▇▇▇▇▇▇▇▇▇▇ and the assets of Bank
of ▇▇▇▇▇▇▇▇▇▇▇'▇ other customers.
In order to facilitate the settlement of transactions, Bank of
▇▇▇▇▇▇▇▇▇▇▇ may, with the approval of the Fund, which shall not be
unreasonably withheld, maintain all or any
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part of the Securities in the Account with a securities depository or
clearing agency which is incorporated or organized under the law of a
country other than the United States of America and is supervised or
regulated by a government agency or regulatory authority in the foreign
jurisdiction having authority over such depositories or agencies, and
which operates the central system for handling of securities or
equivalent book entries, provided, however, that while so maintained
such Securities shall be subject only to the directions of Bank of
▇▇▇▇▇▇▇▇▇▇▇, and that Bank of ▇▇▇▇▇▇▇▇▇▇▇'▇ duties, obligations and
responsibilities with regard to such Securities shall be the same as if
such Securities were held by Bank of ▇▇▇▇▇▇▇▇▇▇▇.
Securities which are eligible for deposit in a depository may be
maintained with the depository in an account for Bank of ▇▇▇▇▇▇▇▇▇▇▇'▇
customers. Securities which are not deposited in a depository will be
held in the following forms:
a. Securities issued only in bearer form shall be held in bearer
form.
b. Securities issued only in registered form shall be registered
in the name of Palmar Limited, which name is not used by Bank
of ▇▇▇▇▇▇▇▇▇▇▇ for its own Securities, and that such
Securities are identified at all times, by book-entry or
otherwise, as belonging to the Fund and distinguished from
other Securities held for other clients using the same nominee
name, unless alternate instructions are furnished by the Fund.
c. Securities issued in both bearer and registered form which are
freely interchangeable without penalty (i) shall be registered
in the name of Bank of ▇▇▇▇▇▇▇▇▇▇▇, or in the name of Bank of
▇▇▇▇▇▇▇▇▇▇▇'▇ nominee, if received by Bank of ▇▇▇▇▇▇▇▇▇▇▇ in
registered form, provided that such name is not used by Bank
of ▇▇▇▇▇▇▇▇▇▇▇ for its own Securities, and that such
Securities are identified at all times, by book-entry or
otherwise, as belonging to the Fund and distinguished from
other Securities held for other clients using the same nominee
name, or (ii) shall be held in bearer form if received by Bank
of ▇▇▇▇▇▇▇▇▇▇▇ in bearer form, unless alternate instructions
are furnished by the Fund.
4. Subject to the provisions of Section 8 hereof:
a. Bank of ▇▇▇▇▇▇▇▇▇▇▇ shall be responsible for complying with
all provisions of the laws of Bermuda, or any other law
applicable to Bank of ▇▇▇▇▇▇▇▇▇▇▇ in connection with its
duties hereunder including (but not limited to) the payment of
all transfer or similar taxes and compliance with any currency
restrictions and securities laws;
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b. All collections of funds or other property paid or distributed
in respect of Securities held in the Account shall be made at
the risk of the Account; and
c. Bank of ▇▇▇▇▇▇▇▇▇▇▇ shall have no liability for any loss
occasioned by delay in the actual receipt of notice by its
Custody Division of any payment, redemption or other
transaction regarding Securities held in the Account in
respect of which Bank of ▇▇▇▇▇▇▇▇▇▇▇ has agreed to take action
as provided in Section 1 hereof.
5. Subject to applicable law, Bank of ▇▇▇▇▇▇▇▇▇▇▇ will permit independent
public accountants for the Fund reasonable access to its books and
records as they pertain to the Account in connection with such
accountants' examination of the books and records of the Account.
6. Bank of ▇▇▇▇▇▇▇▇▇▇▇ will either periodically or upon the Fund's request
supply the Fund with such statements regarding the Account as the Fund
may request and Bank of ▇▇▇▇▇▇▇▇▇▇▇ is able to supply, including an
identification of, and the location of, any person having physical
possession of the Securities in the Account, and the name and address
of the governmental agency or other regulatory authority that
supervises or regulates Bank of ▇▇▇▇▇▇▇▇▇▇▇. In addition, Bank of
▇▇▇▇▇▇▇▇▇▇▇ will furnish the Fund periodically with advises and/or
notifications of any transfers of such securities.
7. Bank of ▇▇▇▇▇▇▇▇▇▇▇ agrees that in the event of any loss of Securities
or Cash in the Account, Bank of ▇▇▇▇▇▇▇▇▇▇▇ will use its best efforts
to ascertain the circumstances relating to such loss and promptly
report the same to the Fund.
8. Bank of ▇▇▇▇▇▇▇▇▇▇▇ will indemnify the Fund for any loss or liability
to the Fund with respect to the Account (including, but not limited to,
the Fund's reasonable legal fees and expenses and any other reasonable
legal fees and expenses for which the Fund is liable, and any loss or
liability in connection with a claim settled by agreement between the
Fund and a shareholder, which agreement is accepted by Bank of
▇▇▇▇▇▇▇▇▇▇▇) to the extent that such loss or liability arises from
negligence, fraud, bad faith, misconduct or disregard of duties on the
part of Bank of ▇▇▇▇▇▇▇▇▇▇▇. The Fund will indemnify Bank of
▇▇▇▇▇▇▇▇▇▇▇ for any loss or liability Bank of ▇▇▇▇▇▇▇▇▇▇▇ incurs from
any action taken or omitted to be taken by Bank of ▇▇▇▇▇▇▇▇▇▇▇ with
respect to the Account, except such losses or liability as results from
the negligence, fraud, bad faith, misconduct or disregard of duties on
the part of Bank of ▇▇▇▇▇▇▇▇▇▇▇.
9. Bank of ▇▇▇▇▇▇▇▇▇▇▇ acknowledges that under U.S. regulatory
requirements Bank of ▇▇▇▇▇▇▇▇▇▇▇ must be a regulated entity and must
have a certain minimum shareholders' equity in order to be used by the
Fund to provide the services contemplated in this Agreement. Bank of
▇▇▇▇▇▇▇▇▇▇▇ represents and warrants that it (i) is a banking
institution organized under the law of Bermuda, (ii) is regulated as a
banking institution by The Bermuda Monetary Authority, and (iii) on and
after the date hereof or such
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later date as shall be specified in Instructions, has shareholders'
equity in excess of two hundred thirty million U.S. dollars (U.S.
$230,000,000), or such lesser amount as shall be specified in any order
of the United States Securities and Exchange Commission applicable to
Bank of ▇▇▇▇▇▇▇▇▇▇▇. For purposes of this Section, shareholders' equity
of the Bank of ▇▇▇▇▇▇▇▇▇▇▇ shall mean such shareholders' equity as
would be shown on any financial statement of the Bank of ▇▇▇▇▇▇▇▇▇▇▇ if
such financial statement were prepared according to United States
generally accepted accounting principles. Bank of ▇▇▇▇▇▇▇▇▇▇▇ will
immediately notify the Fund in writing or by other authorized means of
any development or occurrence (and the circumstances related thereto)
which could render Bank of ▇▇▇▇▇▇▇▇▇▇▇ unable to make the foregoing
representation at any date. Upon such notification the Fund may
terminate this Agreement immediately without prior notice to Bank of
▇▇▇▇▇▇▇▇▇▇▇.
10. As used in this Agreement, the term "Instructions" means instructions
of the Fund received by Bank of ▇▇▇▇▇▇▇▇▇▇▇ via telephone, or in
writing, including but not limited to telex, TWX, facsimile
transmission, Bank of ▇▇▇▇▇▇▇▇▇▇▇ wire or other teleprocess or
electronic instruction system which Bank of ▇▇▇▇▇▇▇▇▇▇▇ believes in
good faith to have been given by the Fund or which are transmitted with
proper testing or authentication pursuant to terms and conditions which
the Fund may specify. Unless otherwise expressly provided, all
Instructions shall continue in full force and effect until canceled or
superseded. Bank of ▇▇▇▇▇▇▇▇▇▇▇ shall safeguard any testkeys,
identification codes or other security devices which the Fund shall
make available to it. Either party may electronically record any
Instructions given by telephone, and any other telephone discussions,
with respect to the Account. Instructions by telephone shall be
confirmed by telex or such other communication as maybe mutually
acceptable.
11. The Fund agrees to pay Bank of ▇▇▇▇▇▇▇▇▇▇▇ such compensation, including
reimbursement of reasonable expenses (if not charged to the Account),
as may be mutually agreed upon from time to time between Bank of
▇▇▇▇▇▇▇▇▇▇▇ and the Fund.
12. Either Bank of ▇▇▇▇▇▇▇▇▇▇▇ or the Fund may terminate this Agreement by
60 days written notice to the other party, provided that any such
notice, whether given by the Fund or by Bank of ▇▇▇▇▇▇▇▇▇▇▇ shall be
followed within 60 days by Instructions specifying the names of the
persons to whom Bank of ▇▇▇▇▇▇▇▇▇▇▇ shall deliver the Securities in the
Account and to whom the cash in the Account shall be paid. If within 60
days following the giving of such notice of termination Bank of
▇▇▇▇▇▇▇▇▇▇▇ does not receive such Instructions, Bank of ▇▇▇▇▇▇▇▇▇▇▇
shall continue to hold such Securities and cash subject to this
Agreement until such Instructions are given. The obligations of the
parties under Section 4(a), 8 and 11 of this Agreement shall survive
the termination of this Agreement.
13. Notices with respect to termination, specification of officers and
other persons and terms and conditions for Instructions shall be in
writing, and delivered by mail, postage
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prepaid, to the following addresses (or to such other address as either
party hereto may from time to time designate by notice duly given in
accordance with this paragraph):
To Bank of ▇▇▇▇▇▇▇▇▇▇▇ at:
The Bank of ▇▇▇▇▇▇▇▇▇▇▇ Executor & Trustee Co. Ltd.
P.O. Box HM 1735
▇▇▇▇▇▇▇▇ ▇▇ GX
Bermuda
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telex: 3320 BETCO BA
Attention: The Manager - Trust Services
To the Fund at:
The Baupost Group, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telex: N/A
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇
14. To the extent the rules and conditions of the Bank of ▇▇▇▇▇▇▇▇▇▇▇
regarding accounts generally or custody accounts specifically are
inconsistent with this Agreement, such rules and conditions shall not
apply.
15. This Agreement shall not be assignable and the rights and obligations
hereunder shall not be delegated by either party, but this Agreement
shall bind any successor in interest of the Fund and Bank of
▇▇▇▇▇▇▇▇▇▇▇, respectively.
16. This Agreement shall be governed by and construed in accordance with
the laws of Bermuda, without regard to principles of conflicts of law.
17. A copy of the Declaration of Trust of the Fund is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby
given that the obligations of or arising out of this instrument are not
binding upon any of the trustees or beneficiaries individually but
binding only upon the assets and property of the Fund.
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IN WITNESS WHEREOF, each party has caused this Custody Agreement to be
executed by its officer thereunto duly authorized as of the date first above
written.
THE BANK OF
N.T. ▇▇▇▇▇▇▇▇▇▇▇ & SON LTD. THE BAUPOST FUND
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- --------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager - Trust Services Title: President
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