CUSTODY AGREEMENT Dated ______, 2010 Between UMB BANK, N.A. and PARTNERS GROUP PRIVATE EQUITY (INSTITUTIONAL TEI), LLC
Exhibit
(j)
Dated
______, 2010
Between
UMB
BANK, N.A.
and
Exhibit
(j)
TABLE
OF CONTENTS
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SECTION
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PAGE
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1.
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Appointment
of Custodian
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1
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2.
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Definitions
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1
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(a)
Securities
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1
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(b)
Assets
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1
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(c)
Instructions and Special Instructions
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1
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3.
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Delivery
of Corporate Documents
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2
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4.
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Powers
and Duties of Custodian and Domestic Subcustodian
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2
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(a)
Safekeeping
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3
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(b)
Manner of Holding Securities
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3
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(c)
Free Delivery of Assets
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4
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(d)
Exchange of Securities
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4
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(e)
Purchases of Assets
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4
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(f)
Sales of Assets
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5
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(g)
Options
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5
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(h)
Futures Contracts
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6
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(i)
Segregated Accounts
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6
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(j)
Depositary Receipts
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6
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(k)
Corporate Actions, Put Bonds, Called Bonds, Etc.
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6
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(l)
Interest Bearing Deposits
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7
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(m)
Foreign Exchange Transactions
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7
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(n)
Pledges or Loans of Securities
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8
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(o)
Stock Dividends, Rights, Etc.
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8
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(p)
Routine Dealings
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8
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(q)
Collections
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8
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(r)
Bank Accounts
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9
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(s)
Dividends, Distributions and Redemptions
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9
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(t)
Proceeds from Shares Sold
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9
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(u)
Proxies and Notices; Compliance with the Shareholders
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Communication
Act of 1985
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9
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(v)
Books and Records
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9
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(w)
Opinion of Fund’s Independent Registered Public
Accountants
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10
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(x)
Reports by Independent Certified Public Accountants
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10
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(y)
Bills and Others Disbursements
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10
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(z)
Deposit and Maintenance of Underlying Shares with Transfer
Agent
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10
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5.
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Subcustodians
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11
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(a)
Domestic Subcustodians
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11
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(b)
Foreign Subcustodians
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11
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(c)
Interim Subcustodians
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12
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(d)
Special Subcustodians
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12
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(e)
Termination of a Subcustodian
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12
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(f)
Certification Regarding Foreign Subcustodians
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12
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6.
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Standard
of Care
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12
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(a)
General Standard of Care
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12
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(b)
Actions Prohibited by Applicable Law, Events Beyond Custodian’s Control,
Armed
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13
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Conflict,
Sovereign Risk, Etc.
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Exhibit
(j)
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(c)
Liability for Past Records
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13
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(d)
Advice of Counsel
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13
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(e)
Advice of the Fund and Others
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13
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(f)
Instructions Appearing to be Genuine
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13
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(g)
Exceptions from Liability
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13
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7.
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Liability
of the Custodian for Actions of Others
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14
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(a)
Domestic Subcustodians
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14
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(b)
Liability for Acts and Omissions of Foreign Subcustodians
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14
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(c)
Securities Systems, Interim Subcustodians, Special Subcustodians,
Securities
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14
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Depositories
and Clearing Agencies
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(d)
Defaults or Insolvency of Brokers, Banks, Etc.
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14
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(e)
Reimbursement of Expenses
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14
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8.
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Indemnification
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14
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(a)
Indemnification by the Fund
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14
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(b)
Indemnification by the Custodian
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15
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9.
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Advances
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15
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10.
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Liens
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15
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11.
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Compensation
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16
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12.
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Powers
of Attorney
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16
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13.
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Termination
and Assignment
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16
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14.
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Notices
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16
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15.
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Miscellaneous
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17
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This agreement made as of this [__] day
of [___] 2010 between UMB Bank, n.a., a national banking association with its
principal place of business located in Kansas City, Missouri (hereinafter the
"Custodian"), and Partners Group Private Equity (Institutional TEI), LLC (the
“Fund”).
WITNESSETH:
WHEREAS, the Fund is
registered as a closed-end management investment company under the Investment
Company Act of 1940, as amended (the “1940 Act”); and
WHEREAS, the Fund desires to
appoint the Custodian as its custodian for the custody of Assets (as hereinafter
defined) owned by the Fund which Assets are to be held in such accounts as the
Fund may establish from time to time; and
WHEREAS, the Custodian is
willing to accept such appointment on the terms and conditions
hereof.
NOW, THEREFORE, in
consideration of the mutual promises contained herein, the parties hereto,
intending to be legally bound, mutually covenant and agree as
follows:
1. APPOINTMENT
OF CUSTODIAN.
The Fund hereby constitutes and
appoints the Custodian as custodian of Assets belonging to the Fund which have
been or may be from time to time deposited with the Custodian. The
Custodian accepts such appointment as a custodian and agrees to perform the
duties and responsibilities of the Custodian as set forth herein on the
conditions set forth herein.
2. DEFINITIONS.
For purposes of this Agreement, the
following terms shall have the meanings so indicated:
(a) "Security" or
"Securities" shall mean stocks, bonds, bills, rights, script, warrants, interim
certificates and all negotiable or nonnegotiable paper commonly known as
Securities and any other instruments or obligations including, but not limited
to, those included within the definition of a “Security” in Section 2(a)(36) of
the ▇▇▇▇ ▇▇▇.
(b) "Assets" shall mean
Securities, monies and other property held by the Custodian for the benefit of
the Fund.
(c)(1) "Instructions," as
used herein, shall mean: (i) a written (including, without limitation, facsimile
transmission) request, direction, instruction or certification signed or
initialed by or on behalf of the Fund by an Authorized Person; (ii) a telephonic
or other oral communication from a person the Custodian reasonably believes to
be an Authorized Person; or (iii) a communication effected directly between an
electro-mechanical or electronic device or system (including, without
limitation, computers) on behalf of the Fund. The Custodian
recommends, but does not require, that any Instructions transmitted by the Fund
via email be done so through a secure system or process. Instructions
in the form of oral communications shall be confirmed by the Fund in writing in
the manner set forth in clause (i) above, but the lack of such confirmation
shall in no way affect any action taken by the Custodian in reliance upon such
oral Instructions prior to the Custodian's receipt of such
confirmation. The Fund authorizes the Custodian to record any and all
telephonic or other oral Instructions communicated to the
Custodian.
(c)(2) "Special
Instructions," as used herein, shall mean Instructions countersigned or
confirmed in writing by the President, CFO or CCO of the Fund or any other
person designated by such persons in writing, which countersignature or
confirmation shall be included on the same instrument containing the
Instructions or on a separate instrument relating thereto.
(c)(3) Instructions and
Special Instructions shall be delivered to the Custodian at the address and/or
telephone, facsimile transmission number agreed upon from time to time by the
Custodian and the Fund.
(c)(4) Where noted and
applicable, Instructions and Special Instructions shall be continuing
instructions.
3. DELIVERY
OF CORPORATE DOCUMENTS.
Each of the parties to this Agreement
represents that its execution does not violate any of the provisions of its
respective charter, articles of incorporation, articles of association or bylaws
and all required corporate action to authorize the execution and delivery of
this Agreement has been taken.
The Fund has furnished the Custodian
with copies, properly certified or authenticated, with all amendments or
supplements thereto, of the following documents:
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(a)
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Certificate
of Formation (or equivalent document) of the Fund as in effect on the date
hereof;
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(b)
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The
Limited Liability Company Operating Agreement of the Fund as in effect on
the date hereof;
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(c)
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Resolutions
of the Board of Managers of the Fund appointing the Custodian and
approving the form of this Agreement;
and
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(d)
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The
Fund's current confidential private placement memorandum and statements of
additional information.
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The Fund shall promptly furnish the
Custodian with copies of any updates, amendments or supplements to the foregoing
documents.
In addition, the Fund has delivered or
will promptly deliver to the Custodian, copies of the resolution(s) of its Board
of Managers and all amendments or supplements thereto, properly certified or
authenticated, designating certain officers or employees of the Fund who will
have continuing authority to certify to the Custodian: (a) the names, titles,
signatures and scope of authority of all persons authorized to give Instructions
or any other notice, request, direction, instruction, certificate or instrument
on behalf of the Fund, and (b) the names, titles and signatures of those persons
authorized to countersign or confirm Special Instructions on behalf of the Fund
(in both cases collectively, the "Authorized Persons" and individually, an
"Authorized Person"). Such resolutions and certificates may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and shall be considered to be in full force and effect until
delivery to the Custodian of a similar resolution or certificate to the
contrary. Upon delivery of a certificate which deletes or does not
include the name(s) of a person previously authorized to give Instructions or to
countersign or confirm Special Instructions, such persons shall no longer be
considered an Authorized Person authorized to give Instructions or to
countersign or confirm Special Instructions. Unless the certificate
specifically requires that the approval of anyone else will first have been
obtained, the Custodian will be under no obligation to inquire into the right of
the person giving such Instructions or Special Instructions to do
so. Notwithstanding any of the foregoing, no Instructions or Special
Instructions received by the Custodian from the Fund will be deemed to authorize
or permit any manager, officer, employee, or agent of the Fund to withdraw any
of the Assets of the Fund upon the mere receipt of such authorization, Special
Instructions or Instructions from such manager, officer, employee or
agent.
4. POWERS
AND DUTIES OF CUSTODIAN AND DOMESTIC SUBCUSTODIAN.
Except for Assets held by any
Subcustodian appointed pursuant to Sections 5(b), (c), or (d) of this Agreement,
the Custodian shall have and perform the powers and duties hereinafter set forth
in this Section 4. For purposes of this Section 4 all references to
powers and duties of the "Custodian" shall also refer to any Domestic
Subcustodian appointed pursuant to Section 5(a).
2
(a) Safekeeping.
The Custodian will keep safely the
Assets of the Fund which are delivered to it from time to time. The
Custodian shall not be responsible for any property of the Fund held or received
by the Fund and not delivered to the Custodian.
(b) Manner of Holding
Securities.
(1) The Custodian shall at
all times hold Securities of the Fund either: (i) by physical possession of the
share certificates, subscription agreements or other instruments representing
such Securities in registered or bearer form; or (ii) in book-entry form by a
Securities System (as hereinafter defined) in accordance with the provisions of
sub-paragraph (3) below.
(2) The Custodian may hold
registrable portfolio Securities which have been delivered to it in physical
form, by registering the same in the name of the Fund or its nominee, or in the
name of the Custodian or its nominee, for whose actions the Fund and Custodian,
respectively, shall be fully responsible. Upon the receipt of
Instructions to do so, the Custodian shall hold such Securities in street
certificate form, so called, with or without any indication of fiduciary
capacity. However, unless it receives Instructions to the contrary,
the Custodian will register all such Securities in the name of the Custodian's
authorized nominee. All such Securities shall be held in an account
of the Custodian containing only assets of the Fund or only assets held by the
Custodian as a fiduciary, provided that the records of the Custodian shall
indicate at all times the Fund or other customer for which such Securities are
held in such accounts and the respective interests therein.
(3) The Custodian may
deposit and/or maintain domestic Securities owned by the Fund in, and the Fund
hereby approves use of: (a) The Depository Trust Company; and (b) any
book-entry system as provided in (i) Subpart O of Treasury Circular ▇▇. ▇▇▇, ▇▇
▇▇▇ 306.115, (ii) Subpart B of Treasury Circular Public Debt Series ▇▇. ▇▇-▇▇,
▇▇ ▇▇▇ 350.2, or (iii) the book-entry regulations of federal agencies
substantially in the form of 31 CFR 306.115. Upon the receipt of
Special Instructions to do so, the Custodian may deposit and/or maintain
domestic Securities owned by the Fund in any other domestic clearing agency
registered with the Securities and Exchange Commission ("SEC") under Section 17A
of the Securities Exchange Act of 1934 (or as may otherwise be authorized by the
SEC to serve in the capacity of depository or clearing agent for the Securities
or other assets of investment companies) which acts as a Securities
depository. Each of the foregoing shall be referred to in this
Agreement as a "Securities System," and all such Securities Systems shall be
listed on the attached Appendix A. Use of a Securities System shall
be in accordance with applicable Federal Reserve Board and SEC rules and
regulations, if any, and subject to the following provisions:
(i) The
Custodian may deposit the Securities directly or through one or more agents or
Subcustodians which are also qualified to act as custodians for investment
companies.
(ii) The
Custodian shall deposit and/or maintain the Securities in a Securities System,
provided that such Securities are represented in an account ("Account") of the
Custodian in the Securities System that includes only assets held by the
Custodian as a fiduciary, custodian or otherwise for the Custodian’s
customers.
(iii) The
books and records of the Custodian shall at all times identify those Securities
belonging to the Fund which are maintained in a Securities System.
(iv) The
Custodian shall pay for Securities purchased for the account of the Fund only
upon (a) receipt of advice from the Securities System that such Securities have
been transferred to the Account of the Custodian in accordance with the rules of
the Securities System, and (b) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account of the
Fund. The Custodian shall transfer Securities sold for the account of
the Fund only upon (a) receipt of advice from the Securities System that payment
for such Securities has been transferred to the Account of the Custodian in
accordance with the rules of the Securities System, and (b) the making of an
entry on the records of the Custodian to reflect such transfer and payment for
the account of the Fund. Copies of all advices from the Securities
System relating to transfers of Securities for the account of the Fund shall be
maintained for the Fund by the Custodian. On each business day, the
Custodian shall deliver to the Fund, or provide access to, a daily transaction
report that shall include all of the previous business day's transactions in the
Securities System for the account of the Fund. Such transaction
reports shall be delivered or made available to the Fund or any agent designated
by the Fund pursuant to Instructions, by computer or in such other manner as the
Fund and the Custodian may agree.
3
(v) The
Custodian shall, if requested by the Fund pursuant to Instructions, provide the
Fund with reports obtained by the Custodian or any Subcustodian with respect to
a Securities System's accounting system, internal accounting control and
procedures for safeguarding Securities deposited in the Securities
System.
(vi) Upon
receipt of Special Instructions to do so, the Custodian shall terminate the use
of any Securities System on behalf of the Fund as promptly as practicable and
shall take all actions reasonably practicable to safeguard the Securities of the
Fund maintained with such Securities System.
(vii) The
Custodian otherwise complies with the requirements of Rule 17f-4 under the 1940
Act.
(c) Free Delivery of
Assets.
Notwithstanding any other provision
of this Agreement and except as provided in Section 3 hereof, the Custodian,
upon receipt of Special Instructions, will undertake to make free delivery of
Assets, provided such Assets are on hand and available, in connection with the
Fund's transactions and to transfer such Assets to such broker, dealer,
Subcustodian, bank, agent, Securities System or otherwise as specified in such
Special Instructions.
(d) Exchange of
Securities.
Upon receipt of Instructions to do
so, the Custodian will exchange portfolio Securities held by it for the Fund for
other Securities or cash paid in connection with any reorganization,
recapitalization, merger, consolidation, or conversion of convertible
Securities, and will deposit any such Securities in accordance with the terms of
any reorganization or protective plan.
Without Instructions, the Custodian
is authorized to exchange Securities held by it in temporary form for Securities
in definitive form, to surrender Securities for transfer into a name or nominee
name as permitted in Section 4(b)(2), to effect an exchange of shares in a stock
split or when the par value of the stock is changed, to sell any fractional
shares, and, upon receiving payment therefor, to surrender bonds or other
Securities held by it at maturity or call.
(e) Purchases of
Assets.
(1) Securities
Purchases. In accordance with Instructions to purchase
Securities, the Custodian shall pay for such Securities out of monies held for
the Fund's account for which the purchase was made, but only insofar as monies
are available therein for such purpose, and receive the portfolio Securities so
purchased. Unless the Custodian has received Special Instructions to
the contrary, such payment will be made only upon receipt of Securities by the
Custodian, a clearing corporation of a national Securities exchange of which the
Custodian is a member, or a Securities System in accordance with the provisions
of Section 4(b)(3) hereof. Notwithstanding the foregoing, upon
receipt of Instructions to do so: (i) in connection with a repurchase agreement,
the Custodian may release funds to a Securities System prior to the receipt of
advice from the Securities System that the Securities underlying such repurchase
agreement have been transferred by book-entry into the Account maintained with
such Securities System by the Custodian, provided that the Custodian's
instructions to the Securities System require that the Securities System may
make payment of such funds to the other party to the repurchase agreement only
upon transfer by book-entry of the Securities underlying the repurchase
agreement into such Account; (ii) in the case of Interest Bearing Deposits,
currency deposits, and other deposits, foreign exchange transactions, futures
contracts or options, pursuant to Sections 4(g), 4(h), 4(l), and 4(m) hereof,
the Custodian may make payment therefor before receipt of an advice of
transaction; and (iii) in the case of Securities as to which payment for the
Security and receipt of the instrument evidencing the Security are under
generally accepted trade practice or the terms of the instrument representing
the Security expected to take place in different locations or through separate
parties, such as commercial paper which is indexed to foreign currency exchange
rates, derivatives and similar Securities, the Custodian may make payment for
such Securities prior to delivery thereof in accordance with such generally
accepted trade practice or the terms of the instrument representing such
Security.
4
(2) Other Assets
Purchased. Upon receipt of Instructions and except as
otherwise provided herein, the Custodian shall pay for and receive other Assets
for the account of the Fund as provided in Instructions.
(f) Sales of
Assets.
(1) Securities
Sold. In accordance with Instructions to sell Securities, the
Custodian will deliver or cause to be delivered the Securities thus designated
as sold to the broker or other person specified in the Instructions relating to
such sale. Unless the Custodian has received Special Instructions to
the contrary, such delivery shall be made only upon receipt of payment therefor
in the form of: (a) cash, certified check, bank cashier's check, bank credit, or
bank wire transfer; (b) credit to the account of the Custodian with a clearing
corporation of a national Securities exchange of which the Custodian is a
member; or (c) credit to the Account of the Custodian with a Securities System,
in accordance with the provisions of Section 4(b)(3)
hereof. Notwithstanding the foregoing, Securities held in physical
form may be delivered and paid for in accordance with "street delivery custom"
to a broker or its clearing agent, against delivery to the Custodian of a
receipt for such Securities, provided that the Custodian shall have taken
reasonable steps to ensure prompt collection of the payment for, or return of,
such Securities by the broker or its clearing agent, and provided further that
the Custodian shall not be responsible for the selection of or the failure or
inability to perform of such broker or its clearing agent or for any related
loss arising from delivery or custody of such Securities prior to receiving
payment therefor.
(2) Other Assets
Sold. Upon receipt of Instructions and except as otherwise
provided herein, the Custodian shall receive payment for and deliver other
Assets for the account of the Fund as provided in Instructions.
(g) Options.
(1) Upon receipt of
Instructions to purchase an option or to sell a covered call option, the
Custodian shall: (a) receive and retain confirmations or other
documents, if any, evidencing the purchase or writing of the option by the Fund;
(b) if the transaction involves the sale of a covered call option, deposit and
maintain in a segregated account the Securities (either physically or by
book-entry in a Securities System) subject to the covered call option written on
behalf of the Fund; and (c) pay, release and/or transfer such Securities, cash
or other Assets in accordance with any notices or other communications
evidencing the expiration, termination or exercise of such options which are
furnished to the Custodian by the Options Clearing Corporation (the "OCC"), the
securities or options exchanges on which such options were traded, or such other
organization as may be responsible for handling such option
transactions.
(2) Upon receipt of
Instructions to sell a naked option (including stock index and commodity
options), the Custodian, the Fund and the broker-dealer shall enter into an
agreement to comply with the rules of the OCC or of any registered national
securities exchange or similar organizations(s). Pursuant to that
agreement and the Fund’s Instructions, the Custodian shall: (a)
receive and retain confirmations or other documents, if any, evidencing the
writing of the option; (b) deposit and maintain in a segregated account,
Securities (either physically or by book-entry in a Securities System), cash
and/or other Assets; and (c) pay, release and/or transfer such Securities, cash
or other Assets in accordance with any such agreement and with any notices or
other communications evidencing the expiration, termination or exercise of such
option which are furnished to the Custodian by the OCC, the securities or
options exchanges on which such options were traded, or such other organization
as may be responsible for handling such option transactions. The Fund
and the broker-dealer shall be responsible for determining the quality and
quantity of assets held in any segregated account established in compliance with
applicable margin maintenance requirements and the performance of other terms of
any option contract.
5
(h) Futures
Contracts.
Upon receipt of Instructions to do
so, the Custodian shall enter into a futures margin procedural agreement among
the Fund, the Custodian and the designated futures commission merchant (a
"Procedural Agreement"). Under any such Procedural Agreement the
Custodian shall: (a) receive and retain confirmations, if any,
evidencing the purchase or sale of a futures contract or an option on a futures
contract by the Fund; (b) deposit and maintain in a segregated account cash,
Securities and/or other Assets designated as initial, maintenance or variation
"margin" deposits intended to secure the Fund’s performance of its obligations
under any futures contracts purchased or sold, or any options on futures
contracts written by the Fund, in accordance with the provisions of any
Procedural Agreement designed to comply with the provisions of the Commodity
Futures Trading Commission and/or any commodity exchange or contract market
(such as the Chicago Board of Trade), or any similar organization(s), regarding
such margin deposits; and (c) release Assets from and/or transfer Assets into
such margin accounts only in accordance with any such Procedural
Agreements. The Fund and such futures commission merchant shall be
responsible for determining the type and amount of Assets held in the segregated
account or paid to the broker-dealer in compliance with applicable margin
maintenance requirements and the performance of any futures contract or option
on a futures contract in accordance with its terms.
(i) Segregated
Accounts.
Upon receipt of Instructions to do
so, the Custodian shall establish and maintain on its books a segregated account
or accounts for and on behalf of the Fund, into which account or accounts may be
transferred Assets of the Fund, including Securities maintained by the Custodian
in a Securities System pursuant to Paragraph (b)(3) of this Section 4, said
account or accounts to be maintained (i) for the purposes set forth in Sections
4(g), 4(h) and 4(n) and (ii) for the purpose of compliance by the Fund with the
procedures required by the SEC Investment Company Act Release Number 10666 or
any subsequent release or releases or other applicable SEC interpretations
relating to the maintenance of segregated accounts by registered investment
companies, or (iii) for such other purposes as may be set forth, from time to
time, in Special Instructions. The Custodian shall not be responsible
for the determination of the type or amount of Assets to be held in any
segregated account referred to in this paragraph, or for compliance by the Fund
with required procedures noted in (ii) above.
(j) Depositary
Receipts.
Upon receipt of Instructions to do
so, the Custodian shall surrender or cause to be surrendered Securities to the
depositary used for such Securities by an issuer of American Depositary Receipts
or International Depositary Receipts (hereinafter referred to, collectively, as
"ADRs"), against a written receipt therefor adequately describing such
Securities and written evidence satisfactory to the organization surrendering
the same that the depositary has acknowledged receipt of instructions to issue
ADRs with respect to such Securities in the name of the Custodian or a nominee
of the Custodian, for delivery in accordance with such
instructions.
Upon
receipt of Instructions to do so, the Custodian shall surrender or cause to be
surrendered ADRs to the issuer thereof, against a written receipt therefor
adequately describing the ADRs surrendered and written evidence satisfactory to
the organization surrendering the same that the issuer of the ADRs has
acknowledged receipt of instructions to cause its depository to deliver the
Securities underlying such ADRs in accordance with such
instructions.
(k) Corporate Actions, Put
Bonds, Called Bonds, Etc.
Upon receipt of Instructions to do
so, the Custodian shall: (a) deliver warrants, puts, calls, rights or similar
Securities to the issuer or trustee thereof (or to the agent of such issuer or
trustee) for the purpose of exercise or sale, provided that the new Securities,
cash or other Assets, if any, acquired as a result of such actions are to be
delivered to the Custodian; and (b) deposit Securities upon invitations for
tenders thereof, provided that the consideration for such Securities is to be
paid or delivered to the Custodian, or the tendered Securities are to be
returned to the Custodian.
6
Notwithstanding any provision of this
Agreement to the contrary, the Custodian shall take all necessary action, unless
otherwise directed to the contrary in Instructions, to comply with the terms of
all mandatory or compulsory exchanges, calls, tenders, redemptions, or similar
rights of security ownership of which the Custodian receives notice through
publications to which it normally subscribes, and shall notify the Fund of such
action in writing by facsimile transmission or in such other manner as the Fund
and Custodian may agree in writing.
The Fund agrees that if it gives an
Instruction for the performance of an act on the last permissible date of a
period established by any optional offer or on the last permissible date for the
performance of such act, the Fund shall hold the Custodian harmless from any
adverse consequences in connection with acting upon or failing to act upon such
Instructions.
(l) Interest Bearing
Deposits.
Upon receipt of Instructions
directing the Custodian to purchase interest bearing fixed term and call
deposits (hereinafter referred to, collectively, as "Interest Bearing Deposits")
for the account of the Fund, the Custodian shall purchase such Interest Bearing
Deposits in the name of the Fund with such banks or trust companies, including
the Custodian, any Subcustodian or any subsidiary or affiliate of the Custodian
(hereinafter referred to as "Banking Institutions"), and in such amounts as the
Fund may direct pursuant to such Instructions. Such Interest Bearing
Deposits may be denominated in U.S. dollars or other currencies, as the Fund may
determine and direct pursuant to the relevant Instructions. The
responsibilities of the Custodian to the Fund for Interest Bearing Deposits
issued by the Custodian shall be that of a U.S. bank for a similar
deposit. With respect to Interest Bearing Deposits other than those
issued by the Custodian, (a) the Custodian shall be responsible for the
collection of income and the transmission of cash to and from such accounts; and
(b) the Custodian shall have no duty with respect to the selection of the
Banking Institution or for the failure of such Banking Institution to pay upon
demand.
(m) Foreign Exchange
Transactions.
(l) The Fund hereby appoints
the Custodian as its agent in the execution of all currency exchange
transactions. The Custodian agrees to provide exchange rate and U.S.
Dollar information, in writing, to the Fund. Such information shall
be supplied by the Custodian at least by the business day prior to the value
date of the foreign exchange transaction, provided that the Custodian receives
the request for such information at least two business days prior to the value
date of the transaction.
(2) Upon receipt of
Instructions, the Custodian shall settle foreign exchange contracts or options
to purchase and sell foreign currencies for spot and future delivery on behalf
of and for the account of the Fund with such currency brokers or Banking
Institutions as the Fund may determine and direct pursuant to such
Instructions. If, in the relevant Instructions, the Fund does not
direct the Custodian to utilize a particular currency broker or Banking
Institution, the Custodian is authorized to select such currency broker or
Banking Institution as it deems appropriate to execute the Fund’s foreign
currency transaction.
(3) The Fund accepts full
responsibility for its use of third party foreign exchange brokers and for
execution of said foreign exchange contracts and understands that the Fund shall
be responsible for any and all costs and interest charges which may be incurred
as a result of the failure or delay of its third party broker to deliver foreign
exchange. The Custodian shall have no responsibility or liability
with respect to the selection of the currency brokers or Banking Institutions
selected by the Fund or the performance of such brokers or Banking
Institutions.
(4) Notwithstanding anything
to the contrary contained herein, upon receipt of Instructions to do so, the
Custodian may, in connection with a foreign exchange contract, make free
outgoing payments of cash in the form of U.S. Dollars or foreign currency prior
to receipt of confirmation of such foreign exchange contract or confirmation
that the countervalue currency completing such contract has been delivered or
received.
(5) The Custodian shall not
be obligated to enter into foreign exchange transactions as
principal. However, if the Custodian has made available to the Fund
its services as a principal in foreign exchange transactions and subject to any
separate agreement between the parties relating to such transactions, the
Custodian shall enter into foreign exchange contracts or options to purchase and
sell foreign currencies for spot and future delivery on behalf of and for the
account of the Fund, with the Custodian as principal.
7
(n) Pledges or Loans of
Securities.
(1) Upon receipt of
Instructions from the Fund, the Custodian will release or cause to be released
Securities held in custody to the pledgees designated in such Instructions by
way of pledge or hypothecation to secure loans incurred by the Fund with various
lenders including but not limited to UMB Bank, n.a.; provided, however, that the
Securities shall be released only upon payment to the Custodian of the monies
borrowed, except that in cases where additional collateral is required to secure
existing borrowings, further Securities may be released or delivered, or caused
to be released or delivered for that purpose upon receipt of Instructions to do
so. Upon receipt of Instructions to do so, the Custodian will pay,
but only from funds available for such purpose, any such loan upon re-delivery
to it of the Securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing such loan. In lieu of delivering
collateral to a pledgee, the Custodian, on the receipt of Instructions to do so,
shall transfer the pledged Securities to a segregated account for the benefit of
the pledgee.
(2) Upon receipt of
Instructions, and the execution of a separate Securities Lending Agreement, the
Custodian will release Securities held in custody to the borrower designated in
such Instructions and may, except as otherwise provided below, deliver such
Securities prior to the receipt of collateral, if any, for such borrowing,
provided that, in case of loans of Securities held by a Securities System that
are secured by cash collateral, the Custodian's instructions to the Securities
System shall require that the Securities System deliver the Securities of the
Fund to the borrower thereof only upon receipt of the collateral for such
borrowing. The Custodian shall have no responsibility or liability
for any loss arising from the delivery of Securities prior to the receipt of
collateral. Upon receipt of Instructions and the loaned Securities,
the Custodian will release the collateral to the borrower.
(o) Stock Dividends, Rights,
Etc.
The Custodian shall receive and
collect all stock dividends, rights, and other items of like nature and, upon
receipt of Instructions, take action with respect to the same as directed in
such Instructions.
(p) Routine
Dealings.
The Custodian will, in general,
attend to all routine and mechanical matters in accordance with industry
standards in connection with the sale, exchange, substitution, purchase,
transfer, or other dealings with Securities or other property of the Fund except
as may be otherwise provided in this Agreement or directed from time to time by
Instructions from the Fund. The Custodian may also make payments to
itself or others from the Assets for disbursements and out-of-pocket expenses
incidental to handling Securities or other similar items relating to its duties
under this Agreement, provided that all such payments shall be accounted for to
the Fund.
(q) Collections.
The Custodian shall (a) collect
amounts due and payable to the Fund with respect to portfolio Securities and
other Assets; (b) promptly credit to the account of the Fund all income and
other payments relating to portfolio Securities and other Assets held by the
Custodian hereunder upon Custodian's receipt of such income or payments or as
otherwise agreed in writing by the Custodian and the Fund; (c) promptly endorse
and deliver any instruments required to effect such collection; and (d) promptly
execute ownership and other certificates and affidavits for all federal, state,
local and foreign tax purposes in connection with receipt of income or other
payments with respect to portfolio Securities and other Assets, or in connection
with the transfer of such Securities or other Assets; provided, however, that
with respect to portfolio Securities registered in so-called street name, or
physical Securities with variable interest rates, the Custodian shall use its
best efforts to collect amounts due and payable to the Fund. The
Custodian shall notify the Fund in writing by facsimile transmission or in such
other manner as the Fund and Custodian may agree in writing if any amount
payable with respect to portfolio Securities or other Assets is not received by
the Custodian when due. The Custodian shall not be responsible for
the collection of amounts due and payable with respect to portfolio Securities
or other Assets that are in default.
8
(r) Bank
Accounts.
Upon Instructions to do so, the
Custodian shall open and operate a bank account or accounts on the books of the
Custodian; provided that such bank account(s) shall be in the name of the
Custodian or a nominee thereof, for the account of the Fund, and shall be
subject only to draft or order of the Custodian. The responsibilities
of the Custodian to the Fund for deposits accepted on the Custodian's books
shall be that of a U.S. bank for a similar deposit.
(s) Dividends, Distributions and
Redemptions.
To enable the Fund to pay dividends
or other distributions to shareholders of the Fund and to make payment to
shareholders who have requested repurchase or redemption of their units in the
Fund (collectively, the "Units"), the Custodian shall release cash or Securities
insofar as available. In the case of cash, the Custodian shall, upon
the receipt of Instructions, transfer such funds by check or wire transfer to
any account at any bank or trust company designated by the Fund in such
Instructions. In the case of Securities, the Custodian shall, upon
the receipt of Special Instructions, make such transfer to any entity or account
designated by the Fund in such Special Instructions.
(t) Proceeds from Units
Sold.
The Custodian shall receive funds
representing cash payments received for Units issued or sold from time to time
by the Fund, and shall credit such funds to the account of the
Fund. The Custodian shall notify the Fund of Custodian's receipt of
cash in payment for Units issued by the Fund by facsimile transmission or in
such other manner as the Fund and the Custodian shall agree. Upon
receipt of Instructions to do so, the Custodian shall: (a) deliver all federal
funds received by the Custodian in payment for Units as may be set forth in such
Instructions and at a time agreed upon between the Custodian and the Fund; and
(b) make federal funds available to the Fund as of specified times agreed upon
from time to time by the Fund and the Custodian, in the amount of checks
received in payment for Units which are deposited to the accounts of the
Fund.
(u) Proxies and Notices;
Compliance with the Shareholders Communication Act of 1985.
The Custodian shall deliver or cause
to be delivered to the Fund all forms of proxies, all notices of meetings, and
any other notices or announcements affecting or relating to Securities owned by
the Fund that are received by the Custodian, any Subcustodian, or any nominee of
either of them, and, upon receipt of Instructions to do so, the Custodian shall
execute and deliver, or cause such Subcustodian or nominee to execute and
deliver, such proxies or other authorizations as may be
required. Except as directed pursuant to Instructions, neither the
Custodian nor any Subcustodian or nominee shall vote upon any such Securities,
or execute any proxy to vote thereon, or give any consent or take any other
action with respect thereto.
The Custodian will not release the
identity of the Fund to an issuer which requests such information pursuant to
the Shareholder Communications Act of 1985 for the specific purpose of direct
communications between such issuer and the Fund unless the Fund directs the
Custodian otherwise in writing.
(v) Books and
Records.
The Custodian shall maintain such
records relating to its activities under this Agreement as are required to be
maintained by Rule 31a-1 under the 1940 Act and to preserve them for the periods
prescribed in Rule 31a-2 under the 1940 Act. These records shall be
open for inspection by duly authorized officers, employees or agents (including
independent public accountants) of the Fund during normal business hours of the
Custodian.
The Custodian shall provide
accountings relating to its activities under this Agreement as shall be agreed
upon by the Fund and the Custodian.
9
(w) Opinion of Fund’s
Independent Registered Public Accountants.
The Custodian shall take all
reasonable action as the Fund may request to obtain from year to year favorable
opinions from the Fund’s independent registered public accountants with respect
to the Custodian's activities hereunder and in connection with the preparation
of the Fund’s periodic reports to the SEC and with respect to any other
requirements of the SEC.
(x) Reports by Independent
Certified Public Accountants.
At the request of the Fund, the
Custodian shall deliver to the Fund a written report prepared by the Custodian's
independent certified public accountants with respect to the services provided
by the Custodian under this Agreement, including, without limitation, the
Custodian's accounting system, internal accounting control and procedures for
safeguarding cash, Securities and other Assets, including cash, Securities and
other Assets deposited and/or maintained in a Securities System or with a
Subcustodian. Such report shall be of sufficient scope and in
sufficient detail as may reasonably be required by the Fund and as may
reasonably be obtained by the Custodian.
(y) Bills and Other
Disbursements.
Upon receipt of Instructions to do
so, the Custodian shall pay, or cause to be paid, all bills, statements, or
other obligations of the Fund.
(z) Deposit and Maintenance of
Underlying Shares with Transfer Agent.
The Fund and the Custodian agree that
the provisions of this Section 4(z) shall govern the custody
of the underlying shares (the “Underlying Shares”) and that, to the extent there
is a conflict between said provisions and the provisions of any other Section of
this Agreement with respect to Underlying Shares, the terms of this Section
4(z) shall
control.
(1) The Fund and the Custodian
acknowledge and agree that, notwithstanding the custody services to be provided
by the Custodian to the Fund hereunder, the Underlying Shares beneficially owned
by the Fund shall be deposited and/or maintained in an account or accounts
maintained by a transfer agent, registrar, corporate secretary, general partner
or other relevant third party (each referred to herein as a “Transfer Agent”) as
notified to the Custodian by Instructions.
(2) The Fund and the Custodian further
acknowledge and agree that the Custodian’s only responsibilities with respect to
Underlying Shares shall be limited to the following:
(i) Upon receipt of a written
confirmation or statement from a Transfer Agent that such Transfer Agent is
holding or maintaining Underlying Shares in the name of the Fund or the
Custodian (or a nominee of the Custodian) for the benefit of the Fund, the Fund,
or the Custodian shall (A) ▇▇▇▇ such holdings on its books and records and (B)
identify by book-entry that the Underlying Shares are being held by the
Custodian as custodian for the benefit of the Fund.
(ii) With respect to the purchase of
Underlying Shares, upon receipt of Instructions, the Custodian shall (A) pay out
money from the Assets in furtherance of said purchase of Underlying Shares for
the account of the Fund as directed by said Instructions, and (B) record such
payment from the account of the Fund on the books and records of the Custodian;
and
(iii) With respect to the sale or
redemption of Underlying Shares, upon receipt of Instructions, the Custodian
shall (A) transfer Underlying Shares redeemed for the account of the Fund in
accordance with said Instructions, and (B) record such transfer on the books and
records of the Custodian and, upon receipt of the proceeds of said sale or
redemption, record the payment of said proceeds for the account of the Fund on
said books and records.
10
(3) The Custodian shall not be liable
to the Fund for any loss or damage to the Fund resulting from the maintenance of
Underlying Shares with a Transfer Agent except for losses resulting directly
from the negligence, bad faith or willful misfeasance of the Custodian or its
agents.
5. SUBCUSTODIANS.
From time to time, in accordance with
the relevant provisions of this Agreement, the Custodian may appoint one or more
Domestic Subcustodians, Foreign Subcustodians, Special Subcustodians, or Interim
Subcustodians (as each are hereinafter defined) to act on behalf of the
Fund. A Domestic Subcustodian, in accordance with the provisions of
this Agreement, may also appoint a Foreign Subcustodian, Special Subcustodian,
or Interim Subcustodian to act on behalf of the Fund. For purposes of
this Agreement, all Domestic Subcustodians, Foreign Subcustodians, Special
Subcustodians and Interim Subcustodians shall be referred to collectively as
"Subcustodians."
(a) Domestic
Subcustodians.
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 or any trust company or other entity, any of which meet the requirements of
a custodian under Section 17(f) of the 1940 Act and the rules and regulations
thereunder, to act for the Custodian on behalf of the Fund as a subcustodian for
purposes of holding Assets of the Fund and performing other functions of the
Custodian within the United States (a "Domestic Subcustodian"). The
Fund shall approve in writing the appointment of the proposed Domestic
Subcustodian; and the Custodian's appointment of any such Domestic Subcustodian
shall not be effective without such prior written approval of the
Fund. Each such duly approved Domestic Subcustodian shall be listed
on Appendix A attached hereto, as it may be amended, from time to
time.
(b) Foreign
Subcustodians.
The Custodian may at any time
appoint, or cause a Domestic Subcustodian to appoint, any bank, trust company or
other entity meeting the requirements of an "eligible foreign custodian" under
Section 17(f) of the 1940 Act and the rules and regulations thereunder to act
for the Custodian on behalf of the Fund as a subcustodian or sub-subcustodian
(if appointed by a Domestic Subcustodian) for purposes of holding Assets of the
Fund and performing other functions of the Custodian in countries other than the
United States of America (hereinafter referred to as a "Foreign Subcustodian" in
the context of either a subcustodian or a sub-subcustodian); provided that the
Custodian shall have obtained written confirmation from the Fund of the approval
of the Board of Managers or other governing body of the Fund (which approval may
be withheld in the sole discretion of such Board of Managers or other governing
body or entity) with respect to (i) the identity of any proposed Foreign
Subcustodian (including branch designation), (ii) the country or countries in
which, and the securities depositories or clearing agencies (hereinafter
"Securities Depositories and Clearing Agencies"), if any, through which, the
Custodian or any proposed Foreign Subcustodian is authorized to hold Securities
and other Assets of the Fund, and (iii) the form and terms of the subcustodian
agreement to be entered into with such proposed Foreign
Subcustodian. Each such duly approved Foreign Subcustodian and the
countries where and the Securities Depositories and Clearing Agencies through
which they may hold Securities and other Assets of the Fund shall be listed on
Appendix A attached hereto, as it may be amended, from time to
time. 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 Foreign Subcustodian is authorized to act, in order that
there shall be sufficient time for the Custodian, or any Domestic Subcustodian,
to effect the appropriate arrangements with a proposed Foreign Subcustodian,
including obtaining approval as provided in this Section 5(b). In
connection with the appointment of any Foreign Subcustodian, the Custodian
shall, or shall cause the Domestic Subcustodian to, enter into a subcustodian
agreement with the Foreign Subcustodian in form and substance approved by the
Fund. The Custodian shall not consent to the amendment of, and shall
cause any Domestic Subcustodian not to consent to the amendment of, any
agreement entered into with a Foreign Subcustodian, which materially affects the
Fund’s rights under such agreement, except upon prior written approval of the
Fund pursuant to Special Instructions.
11
(c) Interim
Subcustodians.
Notwithstanding the foregoing, in the
event that the Fund shall invest in an Asset to be held in a country in which no
Foreign Subcustodian is authorized to act, the Custodian shall notify the Fund
in writing by facsimile transmission or in such other manner as the Fund and the
Custodian shall agree in writing of the unavailability of an approved Foreign
Subcustodian in such country; and upon the receipt of Special Instructions from
the Fund to do so, the Custodian shall, or shall cause its Domestic Subcustodian
to, appoint or approve an entity (referred to herein as an "Interim
Subcustodian") designated in such Special Instructions to hold such Security or
other Asset.
(d) Special
Subcustodians.
Upon receipt of Special Instructions,
the Custodian shall, on behalf of the Fund, appoint one or more banks, trust
companies or other entities designated in such Special Instructions to act for
the Custodian on behalf of the Fund as a subcustodian for purposes of: (i)
effecting third-party repurchase transactions with banks, brokers, dealers or
other entities through the use of a common custodian or subcustodian; (ii)
providing depository and clearing agency services with respect to certain
variable rate demand note Securities, (iii) providing depository and clearing
agency services with respect to dollar denominated Securities, and (iv)
effecting any other transactions designated by the Fund in such Special
Instructions. Each such designated subcustodian (hereinafter referred
to as a "Special Subcustodian") shall be listed on Appendix A attached hereto,
as it may be amended from time to time. In connection with the
appointment of any Special Subcustodian, the Custodian shall enter into a
subcustodian agreement with the Special Subcustodian in form and substance
approved by the Fund in Special Instructions. The Custodian shall not
amend any subcustodian agreement entered into with a Special Subcustodian, or
waive any rights under such agreement, except upon prior approval pursuant to
Special Instructions.
(e) Termination of a
Subcustodian.
The Custodian may, at any time in its
discretion upon notification to the Fund, terminate any Subcustodian of the Fund
in accordance with the termination provisions under the applicable subcustodian
agreement, and upon the receipt of Special Instructions, the Custodian will
terminate any Subcustodian in accordance with the termination provisions under
the applicable subcustodian agreement.
(f) Certification Regarding
Foreign Subcustodians.
Upon request of the Fund, the
Custodian shall deliver to the Fund a certificate stating: (i) the
identity of each Foreign Subcustodian then acting on behalf of the Custodian;
(ii) the countries in which and the Securities Depositories and Clearing
Agencies through which each such Foreign Subcustodian is then holding cash,
Securities and other Assets of the Fund; and (iii) such other information as may
be requested by the Fund, and as the Custodian shall be reasonably able to
obtain, to evidence compliance with rules and regulations under the 1940
Act.
6. STANDARD
OF CARE.
(a) General Standard of
Care.
The Custodian shall be liable to the
Fund for all losses, damages and reasonable costs and expenses suffered or
incurred by the Fund resulting from the negligence, bad faith or willful
misfeasance of the Custodian, or the Custodian’s reckless disregard of its
duties under this Agreement; provided, however, in no event shall the Custodian
be liable for special, indirect or consequential damages arising under or in
connection with this Agreement.
12
(b) Actions Prohibited by
Applicable Law, Events Beyond Custodian's Control, Sovereign Risk,
Etc.
In no event shall the Custodian or
any Domestic Subcustodian incur liability hereunder (i) if the Custodian or any
Subcustodian or Securities System, or any subcustodian, Securities System,
Securities Depository or Clearing Agency utilized by the Custodian or any such
Subcustodian, or any nominee of the Custodian or any Subcustodian (individually,
a "Person") is prevented, forbidden or delayed from performing, or omits to
perform, any act or thing which this Agreement provides shall be performed or
omitted to be performed, by reason of: (a) any provision of any present or
future law or regulation or order of the United States of America, or any state
thereof, or of any foreign country, or political subdivision thereof or of any
court of competent jurisdiction (and neither the Custodian nor any other Person
shall be obligated to take any action contrary thereto); or (b) any event beyond
the control of the Custodian or other Person such as armed conflict, riots,
strikes, lockouts, labor disputes, equipment or transmission failures, natural
disasters, or failure of the mails, transportation, communications or power
supply; or (ii) for any loss, damage, cost or expense resulting from "Sovereign
Risk." A "Sovereign Risk" shall mean nationalization, expropriation,
currency devaluation, revaluation or fluctuation, confiscation, seizure,
cancellation, destruction or similar action by any governmental authority, de
facto or de jure; or enactment, promulgation, imposition or enforcement by any
such governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund’s Assets; or acts of armed conflict,
terrorism, insurrection or revolution; or any other act or event beyond the
Custodian's or such other Person's control.
(c) Liability for Past
Records.
Neither the Custodian nor any
Domestic Subcustodian shall have any liability in respect of any loss, damage or
expense suffered by the Fund, insofar as such loss, damage or expense arises
from the performance of the Custodian or any Domestic Subcustodian in reliance
upon records that were maintained for the Fund by entities other than the
Custodian or any Domestic Subcustodian prior to the Custodian's employment
hereunder.
(d) Advice of
Counsel.
The Custodian and all Domestic
Subcustodians shall be entitled to receive and act upon advice of counsel of its
own choosing on all matters. The Custodian and all Domestic
Subcustodians shall be without liability for any actions taken or omitted in
good faith pursuant to the advice of counsel.
(e) Advice of the Fund and
Others.
The Custodian and any Domestic
Subcustodian may rely upon the advice of the Fund and upon statements of its
accountants and other persons believed by it in good faith to be expert in
matters upon which they are consulted, and neither the Custodian nor any
Domestic Subcustodian shall be liable for any actions taken or omitted, in good
faith, pursuant to such advice or statements.
(f) Instructions Appearing to be
Genuine.
The Custodian and all Domestic
Subcustodians shall be fully protected and indemnified in acting as a custodian
hereunder upon any resolutions of the Board of Managers, Instructions, Special
Instructions, advice, notice, request, consent, certificate, instrument or paper
appearing to it to be genuine and to have been properly executed and shall,
unless otherwise specifically provided herein, be entitled to receive as
conclusive proof of any fact or matter required to be ascertained from the Fund
hereunder a certificate signed by any officer of the Fund authorized to
countersign or confirm Special Instructions. The Custodian shall have
no liability for any losses, damages, or expenses incurred by the Fund arising
from the use of a non-secure form of email or other non-secure electronic system
or process.
(g) Exceptions from
Liability.
Without limiting the generality of
any other provisions hereof, neither the Custodian nor any Domestic Subcustodian
shall be under any duty or obligation to inquire into, nor be liable
for:
(i) the validity of the
issue of any Securities purchased by or for the Fund, the legality of the
purchase thereof or evidence of ownership required to be received by any the
Fund, or the propriety of the decision to purchase or amount paid
therefor;
(ii) the legality of the
sale of any Securities by or for the Fund, or the propriety of the amount for
which the same were sold; or
13
(iii) any other
expenditures, encumbrances of Securities, borrowings or similar actions with
respect to the Fund’s Assets;
and may,
until notified to the contrary, presume that all Instructions or Special
Instructions received by it are not in conflict with or in any way contrary to
any provisions of any the Limited Liability Company Operating Agreement or
similar governing instruments or votes or proceedings of the shareholders,
trustees, partners or managers of any the Fund, or its currently effective
Registration Statement on file with the SEC.
7. LIABILITY
OF THE CUSTODIAN FOR ACTIONS OF OTHERS.
(a) Domestic
Subcustodians.
The Custodian shall be liable for the
acts or omissions of any Domestic Subcustodian to the same extent as if such
actions or omissions were performed by the Custodian itself.
(b) Liability for Acts and
Omissions of Foreign Subcustodians.
The Custodian shall be liable to the
Fund for any loss or damage to the Fund caused by or resulting from the acts or
omissions of any Foreign Subcustodian to the extent that, under the terms set
forth in the subcustodian agreement between the Custodian or a Domestic
Subcustodian and such Foreign Subcustodian, the Foreign Subcustodian has failed
to perform in accordance with the standard of conduct imposed under such
subcustodian agreement and the Custodian or Domestic Subcustodian recovers from
the Foreign Subcustodian under the applicable subcustodian
agreement.
(c) Securities Systems, Interim
Subcustodians, Special Subcustodians, Securities Depositories and Clearing
Agencies.
The Custodian shall not be liable to
the Fund for any loss, damage or expense suffered or incurred by the Fund
resulting from or occasioned by the actions or omissions of a Securities System,
Interim Subcustodian, Special Subcustodian, or Securities Depository and
Clearing Agency, unless such loss, damage or expense is caused by, or results
from, the negligence, bad faith or willful misfeasance of the Custodian, or the
Custodian’s reckless disregard of its duties under this Agreement.
(d) Defaults or Insolvency of
Brokers, Banks, Etc.
The Custodian shall not be liable for
any loss, damage or expense suffered or incurred by the Fund resulting from or
occasioned by the actions, omissions, neglects, defaults or insolvency of any
broker, bank, trust company
or any
other person with whom the Custodian may deal (other than any of such entities
acting as a Subcustodian, Securities System or Securities Depository and
Clearing Agency, for whose actions the liability of the Custodian is set out
elsewhere in this Agreement) unless such loss, damage or expense is caused by,
or results from, the negligence, bad faith or willful misfeasance of the
Custodian, or the Custodian’s reckless disregard of its duties under this
Agreement.
(e) Reimbursement of
Expenses.
The Fund agrees to reimburse the
Custodian for all reasonable out-of-pocket expenses incurred by the Custodian in
connection with this Agreement, but excluding salaries and usual overhead
expenses, provided that such expenses are invoiced to the Fund in reasonable
detail sufficient for verification.
8. INDEMNIFICATION.
(a) Indemnification by the
Fund.
Subject to the limitations set forth
in this Agreement, the Fund agrees to indemnify and hold harmless the Custodian
and its nominees from all losses, damages and expenses (including attorneys'
fees) suffered or incurred by the Custodian or its nominee caused by or arising
from actions taken by the Custodian, its employees or agents in the performance
of its duties and obligations under this Agreement, including, but not limited
to, any indemnification obligations undertaken by the Custodian under any
relevant subcustodian agreement; provided, however, that such indemnity shall
not apply to the extent the Custodian is liable under Sections 6 or 7
hereof.
14
If the Fund requires the Custodian to
take any action with respect to Securities, which action involves the payment of
money or which may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund being liable for the payment of money or
incurring liability of some other form, the Fund, as a prerequisite to requiring
the Custodian to take such action, shall provide indemnity to the Custodian in
an amount and form satisfactory to it.
(b) Indemnification by the
Custodian.
Subject to the limitations set forth
in this Agreement and in addition to the obligations provided in Sections 6 and
7, the Custodian agrees to indemnify and hold harmless the Fund from all losses,
damages and expenses suffered or incurred by the Fund caused by the negligence,
bad faith or willful misfeasance of the Custodian, or the Custodian’s reckless
disregard of its duties under this Agreement.
9. ADVANCES.
In the event that, pursuant to
Instructions, the Custodian or any Subcustodian, Securities System, or
Securities Depository or Clearing Agency acting either directly or indirectly
under agreement with the Custodian (each of which for purposes of this Section 9
shall be referred to as "Custodian"), makes any payment or transfer of funds on
behalf of the Fund as to which there would be, at the close of business on the
date of such payment or transfer, insufficient funds held by the Custodian on
behalf of the Fund, the Custodian may, in its discretion without further
Instructions, provide an advance ("Advance") to the Fund in an amount sufficient
to allow the completion of the transaction by reason of which such payment or
transfer of funds is to be made. In addition, in the event the
Custodian is directed by Instructions to make any payment or transfer of funds
on behalf of the Fund as to which it is subsequently determined that the Fund
has overdrawn its cash account with the Custodian as of the close of business on
the date of such payment or transfer, said overdraft shall constitute an
Advance. Any Advance shall be payable by the Fund on behalf of which
the Advance was made on demand by Custodian, unless otherwise agreed by the Fund
and the Custodian, and shall accrue interest from the date of the Advance to the
date of payment by the Fund to the Custodian at a rate agreed upon in writing
from time to time by the Custodian and the Fund. It is understood
that any transaction in respect of which the Custodian shall have made an
Advance, including but not limited to a foreign exchange contract or transaction
in respect of which the Custodian is not acting as a principal, is for the
account of and at the risk of the Fund on behalf of which the Advance was made,
and not, by reason of such Advance, deemed to be a transaction undertaken by the
Custodian for its own account and risk. The Custodian and the Fund
acknowledge that the purpose of Advances is to finance temporarily the purchase
or sale of Securities for prompt delivery in accordance with the settlement
terms of such transactions or to meet emergency expenses not reasonably
foreseeable by the Fund. The Custodian shall promptly notify the Fund
of any Advance. Such notification shall be sent by facsimile
transmission or in such other manner as the Fund and the Custodian may
agree.
10. LIENS.
The Custodian shall have a lien on
the Assets in the Fund’s Account to secure payment of fees and expenses for the
services rendered under this Agreement. If the Custodian advances
cash or securities to the Fund for any purpose or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of its duties hereunder, except such as may arise from its or its nominee's
negligent action, negligent failure to act, bad faith, willful misconduct or the
Custodian’s reckless disregard of its duties under this Agreement; any Assets at
any time held for the Fund’s Account shall be security therefor and the Fund
hereby grants a security interest therein to the Custodian. The Fund
shall promptly reimburse the Custodian for any such advance of cash or
securities or any such taxes, charges, expenses, assessments, claims or
liabilities upon request for payment, but should the Fund fail to so reimburse
the Custodian, the Custodian shall be entitled to dispose of such Assets to the
extent necessary to obtain reimbursement. The Custodian shall be
entitled to debit any account of the Fund with the Custodian including, without
limitation, the Custody Account, in connection with any such advance and any
interest on such advance as the Custodian deems reasonable.
15
11. COMPENSATION.
The Fund will pay to the Custodian
such compensation as is agreed to in writing by the Custodian and the Fund from
time to time. Such compensation, together with all amounts for which
the Custodian is to be reimbursed in accordance with Section 7(e), shall be
billed to the Fund and paid in cash to the Custodian.
12. POWERS OF
ATTORNEY.
Upon request, the Fund shall deliver
to the Custodian such proxies, powers of attorney or other instruments as may be
reasonable and necessary or desirable in connection with the performance by the
Custodian or any Subcustodian of their respective obligations under this
Agreement or any applicable subcustodian agreement.
13. TERMINATION
AND ASSIGNMENT.
The Fund or the Custodian may
terminate this Agreement by notice in writing, delivered or mailed, postage
prepaid (certified mail, return receipt requested) to the other not less than 90
days prior to the date upon which such termination shall take
effect. Upon termination of this Agreement, the Fund shall pay to the
Custodian such fees as may be due the Custodian hereunder as well as its
reimbursable disbursements, costs and expenses paid or incurred. Upon
termination of this Agreement, the Custodian shall deliver, at the terminating
party's expense, all Assets held by it hereunder to the Fund or as otherwise
designated by the Fund by Special Instructions. Upon such delivery,
the Custodian shall have no further obligations or liabilities under this
Agreement except as to the final resolution of matters relating to activity
occurring prior to the effective date of termination.
This Agreement may not be assigned by
the Custodian or the Fund without the respective consent of the other, duly
authorized by a resolution by its Board of Directors or Managers.
14. NOTICES.
(a) Material
Notices.
(i) Notices to the Fund
relating to termination of the Agreement, breaches of contractual duties,
initiation of legal proceedings, complaints in relation to services provided
hereunder or any other material notices under the Agreement, other than notices
given in the ordinary course of business (a “Material Notice”), must be given in
writing (either by way of facsimile or registered mail). A notice sent by
facsimile shall be deemed to have been served at the close of business on the
day upon which the other party confirms receipt . A notice sent by
registered mail shall be deemed to have been served at the close of business on
the day upon which it is delivered. Material Notices shall be sent as follows,
or to such other address as the parties may agree from time to
time:
c/o
Partners Group (USA) Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: Executive
Office
Re:
Material Notice, Partners Group Private Equity (Institutional TEI),
LLC
|
Facsimile:
|
(▇▇▇)
▇▇▇ ▇▇▇▇
|
|
Telephone:
|
(▇▇▇)
▇▇▇ ▇▇▇▇
|
with a
copy to:
Partners
Group AG
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇
▇▇-▇▇▇▇
▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
16
Attention: Executive
Office
Re:
Material Notice, Partners Group Private Equity (Institutional TEI),
LLC
|
Facsimile:
|
▇▇▇
▇▇ ▇▇▇ ▇▇ ▇▇
|
|
Telephone:
|
▇▇▇
▇▇ ▇▇▇ ▇▇ ▇▇
|
(b) Ordinary Notices.
(i) As to the Fund,
notices, requests, instructions and other writings given in the ordinary course
of business may be delivered to ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, postage prepaid, or to such other address as the Fund may
have designated to the Custodian in writing, shall be deemed to have been
properly delivered or given to the Fund.
(ii) As to the Custodian,
notices, requests, instructions and other writings given in the ordinary course
of business may be delivered to the Securities Administration department of the
Custodian at its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, postage prepaid, or to such other addresses as the
Custodian may have designated to the Fund in writing, shall be deemed to have
been properly delivered or given to the Custodian hereunder; provided, however,
that procedures for the delivery of Instructions and Special Instructions shall
be governed by Section 2(c) hereof.
15. MISCELLANEOUS.
(a) This Agreement is
executed and delivered in the State of Missouri and shall be governed by the
laws of such state.
(b) All of the terms and
provisions of this Agreement shall be binding upon, and inure to the benefit of,
and be enforceable by the respective successors and assigns of the parties
hereto.
(c) No provisions of this
Agreement may be amended, modified or waived, in any manner except in writing,
properly executed by both parties hereto; provided, however, Appendix A may be
amended from time to time as Domestic Subcustodians, Foreign Subcustodians,
Special Subcustodians, and Securities Depositories and Clearing Agencies are
approved or terminated according to the terms of this Agreement.
(d) The captions in this
Agreement are included for convenience of reference only, and in no way define
or delimit any of the provisions hereof or otherwise affect their construction
or effect.
(e) This Agreement shall
be effective as of the date of execution hereof.
(f) This Agreement may be
executed simultaneously in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.
(g) The following terms
are defined terms within the meaning of this Agreement, and the definitions
thereof are found in the following sections of the Agreement:
|
Term
|
Section
|
|
|
Account
|
4(b)(3)(ii)
|
|
|
ADR'S
|
4(j)
|
|
|
Advance
|
9
|
|
|
Assets
|
2(b)
|
|
|
Authorized
Person
|
3
|
|
|
Banking
Institutions
|
4(1)
|
|
|
Domestic
Subcustodian
|
5(a)
|
|
|
Foreign
Subcustodian
|
5(b)
|
|
|
Instruction
|
2(c)(1)
|
|
|
Interim
Subcustodian
|
5(c)
|
17
|
Term
|
Section
|
|
|
Interest
Bearing Deposits
|
4(1)
|
|
| Liens | 10 | |
|
Material
Notice
|
14(a)(i)
|
|
|
OCC
|
4(g)(1)
|
|
|
Person
|
6(b)
|
|
|
Procedural
Agreement
|
4(h)
|
|
|
SEC
|
4(b)(3)
|
|
|
Securities
|
2(a)
|
|
|
Securities
Depositories and Clearing Agencies
|
5(b)(ii)
|
|
|
Securities
System
|
4(b)(3)
|
|
|
Shares
|
4(s)
|
|
|
Sovereign
Risk
|
6(b)
|
|
|
Special
Instructions
|
2(c)(2)
|
|
|
Special
Subcustodian
|
5(d)
|
|
|
Subcustodians
|
5
|
|
|
1940
Act
|
Recitals
|
(h) If any part, term or
provision of this Agreement is held to be illegal, in conflict with any law or
otherwise invalid by any court of competent jurisdiction, the remaining portion
or portions shall be considered severable and shall not be affected, and the
rights and obligations of the parties shall be construed and enforced as if this
Agreement did not contain the particular part, term or provision held to be
illegal or invalid.
(i) This Agreement
constitutes the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof, and accordingly supersedes, as of the
effective date of this Agreement, any custodian agreement heretofore in effect
between the Fund and the Custodian.
(j) The Custodian
undertakes to comply with material applicable requirements of US securities laws
and material laws, rules and regulations of governmental authorities having
jurisdiction with respect to the duties to be performed by the Custodian
hereunder. Except as specifically set forth herein, the Custodian assumes no
responsibility for such compliance by the Fund.
(k) The Custodian agrees
on behalf of itself and its employees to treat confidentially and as proprietary
information of the Fund all records relative to the Fund, including such
proprietary information received by the Custodian prior to the effective date of
this Agreement (“Confidential Information”), not to use such Confidential
Information for any purpose other than performance of its responsibilities and
duties hereunder, and not to disclose such Confidential Information except where
the Custodian may be exposed to civil or criminal proceedings for failure to
comply, when requested to divulge Confidential Information by duly constituted
authorities or court process, when subject to governmental or regulatory audit
or investigation, or when so requested by the Fund. In case of any requests or
demands for inspection of the records of the Fund or for the release of
Confidential Information, the Custodian will endeavor to notify the Board of
Managers of the Fund promptly and to secure instructions from a representative
of such Board as to such inspection, unless prohibited by law from making such
notification. In the event that the Custodian has reasonably determined that
prior notification of the relevant Board is not possible (including due to any
prohibition under applicable law), the Custodian will notify the Fund of the
request, demand and/or release of Confidential Information, together with an
explanation of the associated circumstances, as soon as reasonably practicable.
Records and information which have become known to the public through no
wrongful act of the Custodian or any of its employees, agents or
representatives, and information which was already in the possession of the
Custodian prior to the date hereof, shall not be considered as “Confidential
Information” subject to this paragraph.
(l) The Custodian shall
maintain a disaster recovery and business continuity plan and adequate and
reliable computer and other equipment necessary and appropriate to carry out its
obligations under this Agreement. Subject to Section 8(b), the Custodian assumes
no responsibility hereunder, and shall not be liable, for any default, damage,
loss of data or documents, errors, delay or any other loss whatsoever caused by
events beyond its reasonable control. The Custodian will, however,
take all reasonable steps to minimize service interruptions for any period that
such interruption continues beyond its control.
18
(m) The Custodian shall have no power
or authority to assign, hypothecate, pledge or otherwise dispose of any
securities or investments, except as expressly provided in Section 10 or
elsewhere in this Agreement, or upon Instructions authorizing the
transaction.
(n) The Custodian shall furnish to
the Fund the following reports: (i) such periodic and special reports as the
Fund may reasonably request; (ii) a monthly statement summarizing all
transactions and entries for the account of the Fund, listing each portfolio
security belonging to the Fund (with the corresponding security identification
number) held at the end of such month and stating the cash balance of the Fund
at the end of such month; (iii) the reports required to be furnished to the
Fund’s adviser pursuant to Rule 17f-4 of the 1940 Act; and (iv) such other
information as may be agreed upon from time to time between the Fund’s adviser
and the Custodian.
[The
remainder of this page intentionally left blank]
19
IN
WITNESS WHEREOF, the parties hereto have caused this Custody Agreement to be
executed by their respective duly authorized officers.
|
By:
|
By:
|
|
|
Name:
|
Name:
|
|
|
Title:
|
Title:
|
|
|
Date:
|
Date:
|
|
|
UMB
BANK, N.A.
|
||
|
By:
|
Attest:
|
|
|
Name: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
|
||
|
Title: Vice
President
|
||
|
Date:
|
||
20
APPENDIX
A
DOMESTIC
SUBCUSTODIANS:
Citibank (Foreign
Securities Only)
SECURITIES
SYSTEMS:
Federal Book Entry
Depository Trust Company
SPECIAL
SUBCUSTODIANS:
|
SECURITIES
DEPOSITORIES
|
||||
|
COUNTRIES
|
FOREIGN SUBCUSTODIANS
|
CLEARING AGENCIES
|
||
|
Euroclear
|
||||
|
By:
|
By:
|
|
|
Name:
|
Name:
|
|
|
Title:
|
Title:
|
|
|
Date:
|
Date:
|
|
|
UMB
BANK, N.A.
|
||
|
By:
|
Attest:
|
|
|
Name: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
|
||
|
Title: Vice
President
|
||
|
Date:
|
||
21