CUSTODY AGREEMENT Dated July 30, 2007 Between UMB BANK, N.A. And ACP Strategic Opportunities Fund II, LLC
Exhibit
99.J
Dated July
30, 2007
Between
UMB
BANK, N.A.
And
ACP
Strategic Opportunities Fund II, LLC
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 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 Certified 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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5.
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Subcustodians
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10
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(a)
Domestic Subcustodians
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10
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(b)
Foreign Subcustodians
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10
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(c)
Interim Subcustodians
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11
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(d)
Special Subcustodians
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11
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(e)
Termination of a Subcustodian
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11
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(f)
Certification Regarding Foreign Subcustodians
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11
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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 Conflict, Sovereign Risk, etc.
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12
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(c)
Liability for Past Records
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12
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(d)
Advice of Counsel
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12
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(e)
Advice of the Fund and Others
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12
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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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13
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(a)
Domestic Subcustodians
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13
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(b)
Liability for Acts and Omissions of Foreign Subcustodians
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13
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(c)
Securities Systems, Interim Subcustodians, Special Subcustodians,
Securities Depositories and Clearing Agencies
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13
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(d)
Defaults or Insolvency’s 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 Fund
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14
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(b)
Indemnification by Custodian
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14
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9.
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Advances
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14
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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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15
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12.
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Powers
of Attorney
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15
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13.
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Termination
and Assignment
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15
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14.
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Additional
Funds
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15
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15.
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Notices
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16
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16.
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Miscellaneous
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16
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This agreement made as of
this ______ day of _________ , 2007, between
UMB Bank, n.a., a national banking association with its principal place of
business located in Kansas City, Missouri (hereinafter "Custodian"), and each of
the Funds listed on Appendix B hereof, together with such additional Funds which
shall be made parties to this Agreement by the execution of Appendix B hereto
(individually, a "Fund" and collectively, the "Funds").
WITNESSETH:
WHEREAS, each Fund is
registered as a closed-end management investment company under the Investment
Company Act of 1940, as amended; and
WHEREAS, each Fund desires to
appoint Custodian as its custodian for the custody of Assets (as hereinafter
defined) owned by such Fund which Assets are to be held in such accounts as such
Fund may establish from time to time; and
WHEREAS, 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.
Each Fund hereby constitutes and
appoints the Custodian as custodian of Assets belonging to each such Fund which
have been or may be from time to time deposited with the
Custodian. Custodian accepts such appointment as a custodian and
agrees to perform the duties and responsibilities of 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 other instruments or obligations.
(b) "Assets" shall mean
Securities, monies and other property held by the Custodian for the benefit of a
Fund.
(c)(1) "Instructions", as
used herein, shall mean: (i) a tested telex, a written (including, without
limitation, facsimile transmission) request, direction, instruction or
certification signed or initialed by or on behalf of a 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 a
Fund. Custodian recommends that any Instructions transmitted by a
Fund via email be done so only through a secure system or
process. Custodian can make available to Fund a secure email system
if Fund so desires. Instructions in the form of oral communications
shall be confirmed by the appropriate Fund by tested telex or 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. Each 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 Treasurer or any Assistant Treasurer of a Fund or
any other person designated by the Treasurer of such Fund in writing, which
countersignature or confirmation shall be included on the same instrument
containing the Instructions or on a separate instrument relating
thereto.
1
(c)(3) Instructions and
Special Instructions shall be delivered to the Custodian at the address and/or
telephone, facsimile transmission or telex number agreed upon from time to time
by the Custodian and each Fund.
(c)(4) Where appropriate,
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.
Each 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 Incorporation (or equivalent document) of the Fund as in effect on the
date hereof;
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(b)
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Resolutions
of the Board of Directors of the Fund appointing the Custodian and
approving the form of this Agreement;
and
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(c)
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The
Fund's current offering memorandum.
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Each Fund shall promptly furnish the
Custodian with copies of any updates, amendments or supplements to the foregoing
documents.
In addition, each Fund has delivered or
will promptly deliver to the Custodian, copies of the Resolution(s) of its Board
of Directors or Trustees and all amendments or supplements thereto, properly
certified or authenticated, designating certain officers or employees of each
such 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 each Fund, and (b) the names, titles and
signatures of those persons authorized to countersign or confirm Special
Instructions on behalf of each 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 a Fund will be deemed to authorize or permit any director, trustee,
officer, employee, or agent of such Fund to withdraw any of the Assets of such
Fund upon the mere receipt of such authorization, Special Instructions or
Instructions from such director, trustee, 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 each Fund which are delivered to it from time to time. The
Custodian shall not be responsible for any property of a Fund held or received
by such Fund and not delivered to the Custodian.
(b) Manner of Holding
Securities.
(1) The
Custodian shall at all times hold Securities of each Fund either: (i) by
physical possession of the share certificates or other instruments representing
such Securities in registered or bearer form; or (ii) in book-entry form by a
Securities System or in the form of a limited partnership (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 appropriate Fund
or its nominee, or in the name of the Custodian or its nominee, for whose
actions such Fund and Custodian, respectively, shall be fully
responsible. Upon the receipt of Instructions, 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 portfolio
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 appropriate 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 will deposit and/or maintain all domestic Securities eligible for
deposit therein owned by a Fund in, and each 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, the
Custodian may deposit and/or maintain domestic Securities owned by a 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 customers.
(iii) The
books and records of the Custodian shall at all times identify those Securities
belonging to any one or more Funds which are maintained in a Securities
System.
(iv) The
Custodian shall pay for Securities purchased for the account of a 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 such
Fund. The Custodian shall transfer Securities sold for the account of
a 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 such Fund. Copies of all advices from the Securities
System relating to transfers of Securities for the account of a Fund shall be
maintained for such Fund by the Custodian. The Custodian shall
deliver to a Fund on the next succeeding business day daily transaction reports
that shall include each day's transactions in the Securities System for the
account of such Fund. Such transaction reports shall be delivered to
such Fund or any agent designated by such Fund pursuant to Instructions, by
computer or in such other manner as such Fund and Custodian may
agree.
3
(v) The
Custodian shall, if requested by a Fund pursuant to Instructions, provide such
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, the Custodian shall terminate the use of any
Securities System on behalf of a Fund as promptly as practicable and shall take
all actions reasonably practicable to safeguard the Securities of such Fund
maintained with such Securities System.
(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 a 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, the Custodian will exchange portfolio Securities held
by it for a 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, the Custodian
shall, with respect to a purchase of Securities, pay for such Securities out of
monies held for a 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:
(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 a Fund as provided in Instructions.
(f) Sales of
Assets.
(1) Securities
Sold. In accordance with Instructions, the Custodian will,
with respect to a sale, 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 a Fund as provided in Instructions.
(g) Options.
(1) Upon
receipt of Instructions relating to the purchase of an option or sale of 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 a 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 such 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 relating to the sale of a naked option (including stock
index and commodity options), the Custodian, the appropriate 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 such 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 appropriate 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, the Custodian shall enter into a futures margin
procedural agreement among the appropriate Fund, the Custodian and the
designated futures commission merchant (a "Procedural
Agreement"). Under the 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
such 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 such Fund's performance of its obligations under any
futures contracts purchased or sold, or any options on futures contracts written
by such 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
appropriate 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, the Custodian shall establish and maintain on its books
a segregated account or accounts for and on behalf of a Fund, into which account
or accounts may be transferred Assets of such 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 such Fund with the procedures required by the SEC Investment
Company Act Release Number 10666 or any subsequent release or releases 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, 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, 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, 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.
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 appropriate Fund of such action in writing by facsimile transmission
or in such other manner as such Fund and Custodian may agree in
writing.
6
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 a Fund, the Custodian shall
purchase such Interest Bearing Deposits in the name of such 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 such Fund may direct pursuant to
Instructions. Such Interest Bearing Deposits may be denominated in
U.S. dollars or other currencies, as such Fund may determine and direct pursuant
to Instructions. The responsibilities of the Custodian to a 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) Each
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 Funds. 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 a Fund with such currency brokers or Banking
Institutions as such Fund may determine and direct pursuant to
Instructions. If, in its Instructions, a 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) Each
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 with which a Fund deals or the performance of
such brokers or Banking Institutions.
(4) Notwithstanding
anything to the contrary contained herein, upon receipt of Instructions 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 a 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 a 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 such
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. Upon receipt of Instructions, 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, shall transfer the pledged Securities to a segregated account for
the benefit of the pledgee.
(2) Upon
receipt of Special Instructions, and 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 appropriate 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 each Fund except as may be otherwise provided in this Agreement or
directed from time to time by Instructions from any particular
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 appropriate
Fund.
(q) Collections.
The
Custodian shall (a) collect amounts due and payable to each Fund with respect to
portfolio Securities and other Assets; (b) promptly credit to the account of
each 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 any
particular 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 any such Fund. The Custodian shall
notify a Fund in writing by facsimile transmission or in such other manner as
such 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, 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 one or more
Funds, and shall be subject only to draft or order of the
Custodian. The responsibilities of the Custodian to any one or more
such Funds 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
each Fund to pay dividends or other distributions to shareholders of each such
Fund and to make payment to shareholders who have requested repurchase or
redemption of their shares of each such Fund (collectively, the "Shares"), 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 each such 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 each
such Fund in such Special Instructions.
(t) Proceeds from Shares
Sold.
The
Custodian shall receive funds representing cash payments received for shares
issued or sold from time to time by each Fund, and shall credit such funds to
the account of the appropriate Fund. The Custodian shall notify the
appropriate Fund of Custodian's receipt of cash in payment for shares issued by
such Fund by facsimile transmission or in such other manner as such Fund and the
Custodian shall agree. Upon receipt of Instructions, the Custodian
shall: (a) deliver all federal funds received by the Custodian in payment for
shares as may be set forth in such Instructions and at a time agreed upon
between the Custodian and such Fund; and (b) make federal funds available to a
Fund as of specified times agreed upon from time to time by such Fund and the
Custodian, in the amount of checks received in payment for shares which are
deposited to the accounts of such Fund.
(u) Proxies and Notices;
Compliance with the Shareholders Communication Act of 1985.
The
Custodian shall deliver or cause to be delivered to the appropriate Fund all
forms of proxies, all notices of meetings, and any other notices or
announcements affecting or relating to Securities owned by such Fund that are
received by the Custodian, any Subcustodian, or any nominee of either of them,
and, upon receipt of Instructions, 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 any 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 any such Fund
unless a particular 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 Investment
Company Act of 1940 ("the 1940 Act") and other applicable securities, laws,
rules, and regulations, and to preserve them for the periods prescribed in Rule
31a-2 under the 1940 Act and other applicable securities, laws, rules, and
regulations. These records shall be open for inspection by duly
authorized officers, employees or agents (including independent public
accountants) of the appropriate 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 each Fund and the
Custodian.
9
(w) Opinion of Fund's
Independent Certified Public Accountants.
The
Custodian shall cooperate with the Fund’s independent public accountants and
take all reasonable action as each Fund may request to obtain from year to year
favorable opinions from each such Fund's independent certified public
accountants with respect to the Custodian's activities hereunder and in
connection with the preparation of each such 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 a Fund, the Custodian shall deliver to such 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
such Fund and as may reasonably be obtained by the Custodian.
(y) Bills and Other
Disbursements.
Upon
receipt of Instructions, the Custodian shall pay, or cause to be paid, all
bills, statements, or other obligations of a Fund.
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 any one or more Funds. 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 any one or more Funds. 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, 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 any one or
more Funds as a subcustodian for purposes of holding Assets of such Fund(s) and
performing other functions of the Custodian within the United States (a
"Domestic Subcustodian"). Such bank or trust company shall have
aggregate capital, surplus, and undivided profits according to its last
published report, of at least $1 million, if it is a subsidiary or affiliate of
the Custodian, or at least $20 million if such bank or trust company is not a
subsidiary or affiliate of the Custodian. Each 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(s). Each such duly approved
Domestic Subcustodian shall be listed on Appendix A attached hereto, as it may
be amended, from time to time.
10
(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 any one or more
Funds as a subcustodian or sub-subcustodian (if appointed by a Domestic
Subcustodian) for purposes of holding Assets of the Fund(s) 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 each Fund of the approval of the Board of
Directors or other governing body of each such Fund (which approval may be
withheld in the sole discretion of such Board of Directors 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 each such 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(s) shall be listed
on Appendix A attached hereto, as it may be amended, from time to
time. Each 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 each
such 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 any
Fund's rights under such agreement, except upon prior written approval of such
Fund pursuant to Special Instructions.
(c) Interim
Subcustodians.
Notwithstanding
the foregoing, in the event that a 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 such Fund in writing by facsimile transmission or in such other
manner as such 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 such Fund, 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 a Fund,
appoint one or more banks, trust companies or other entities designated in such
Special Instructions to act for the Custodian on behalf of such 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
such 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 appropriate 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
appropriate Fund(s), terminate any Subcustodian of such Fund(s) 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 a Fund, the Custodian shall deliver to such 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 such Fund; and (iii) such
other information as may be requested by such Fund, and as the Custodian shall
be reasonably able to obtain, to evidence compliance with rules and regulations
under the 1940 Act.
11
6. STANDARD
OF CARE.
(a) General Standard of
Care.
The
Custodian shall be liable to a Fund for all losses, damages and reasonable costs
and expenses suffered or incurred by such Fund resulting from the negligence,
bad faith, reckless disregard or willful misfeasance of the Custodian; provided,
however, in no event shall the Custodian be liable for special, indirect or
consequential damages arising under or in connection with this
Agreement.
(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
provided the standard of care in 6(a) has been met (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 a 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 a 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 such Fund by
entities other than the Custodian or any Domestic Subcustodian prior to the
Custodian's employment hereunder provided the standard of care in 6(a) has been
met.
(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 any Fund and
upon statements of such Fund's 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.
12
(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 Directors or Trustees, 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 any Fund hereunder a certificate signed
by any officer of such Fund authorized to countersign or confirm Special
Instructions. The Custodian shall have no liability for any losses,
damages, or expenses incurred by a 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 any Fund, the
legality of the purchase thereof or evidence of ownership required to be
received by any such 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 any Fund, or the propriety of
the amount for which the same were sold; or
(iii) any
other expenditures, encumbrances of Securities, borrowings or similar actions
with respect to any 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 such Fund's Declaration of Trust, Partnership Agreement,
Articles of Incorporation or By-Laws or votes or proceedings of the
shareholders, trustees, partners or directors of any such Fund, or any such
Fund's 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 a Fund for any loss or damage to such 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 any Fund for any loss, damage or expense
suffered or incurred by such 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 bad faith, reckless disregard, negligence or
willful misfeasance of the Custodian.
13
(d) Defaults or Insolvency’s of
Brokers, Banks, Etc.
The
Custodian shall not be liable for any loss, damage or expense suffered or
incurred by any 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 bad faith, reckless disregard, negligence or willful
misfeasance of the Custodian.
(e) Reimbursement of
Expenses.
Each Fund
agrees to reimburse the Custodian for all out-of-pocket expenses incurred by the
Custodian in connection with this Agreement, but excluding salaries and usual
overhead expenses.
8. INDEMNIFICATION.
(a) Indemnification by
Fund.
Subject
to the limitations set forth in this Agreement, each 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.
If any
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 such Fund being
liable for the payment of money or incurring liability of some other form, such
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
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 each Fund from all losses, damages and expenses suffered or
incurred by each such Fund caused by the bad faith, reckless disregard,
negligence or willful misfeasance of the Custodian.
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 any 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 any such Fund, the Custodian may, in
its discretion without further Instructions, provide an advance ("Advance") to
any such 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 any Fund as
to which it is subsequently determined that such 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 such Fund and the Custodian, and
shall accrue interest from the date of the Advance to the date of payment by
such Fund to the Custodian at a rate agreed upon in writing from time to time by
the Custodian and such 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 each of the Funds which are
parties to this Agreement 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 a Fund. The Custodian shall promptly notify
the appropriate Fund of any Advance. Such notification shall be sent
by facsimile transmission or in such other manner as such Fund and the Custodian
may agree.
14
10. LIENS.
The
Custodian shall have a lien on the Property in the Custody 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 bad faith, reckless disregard, negligent action,
negligent failure to act or willful misconduct, any Property at any time held
for the Custody 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 Property 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.
11. COMPENSATION.
Each Fund
will pay to the Custodian such compensation as is agreed to in writing by the
Custodian and each such 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 each such Fund and paid in cash
to the Custodian.
12. POWERS OF
ATTORNEY.
Upon
request, each 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.
Any 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 60 days prior to the date upon which such termination shall take
effect. Upon termination of this Agreement, the appropriate 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 appropriate Fund or as otherwise designated by such 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 without the respective consent of
the other, duly authorized by a resolution by its Board of Directors or
Trustees.
14. ADDITIONAL
FUNDS.
An
additional Fund or Funds may become a party to this Agreement after the date
hereof by an instrument in writing to such effect signed by such Fund or Funds
and the Custodian. If this Agreement is terminated as to one or more
of the Funds (but less than all of the Funds) or if an additional Fund or Funds
shall become a party to this Agreement, there shall be delivered to each party
an Appendix B or an amended Appendix B, signed by each of the additional Funds
(if any) and each of the remaining Funds as well as the Custodian, deleting or
adding such Fund or Funds, as the case may be. The termination of
this Agreement as to less than all of the Funds shall not affect the obligations
of the Custodian and the remaining Funds hereunder as set forth on the signature
page hereto and in Appendix B as revised from time to time.
15
15. NOTICES.
As to
each Fund, notices, requests, instructions and other writings delivered to
[INSERT FUND COMPLEX ADDRESS], postage prepaid, or to such other address as any
particular Fund may have designated to the Custodian in writing, shall be deemed
to have been properly delivered or given to a Fund.
Notices,
requests, instructions and other writings 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 each 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.
16. 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
Institution
|
4(1)
|
|
Domestic
Subcustodian
|
5(a)
|
|
Foreign
Subcustodian
|
5(b)
|
|
Instruction
|
2(c)(1)
|
|
Interim
Subcustodian
|
5(c)
|
|
Interest
Bearing Deposit
|
4(1)
|
|
Liens
|
10
|
|
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
Instruction
|
2(c)(2)
|
|
Special
Subcustodian
|
5(d)
|
|
Subcustodian
|
5
|
|
1940
Act
|
4(v)
|
16
(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 the
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 Partnership or
any other entity.
(k) Each
party shall keep confidential any information relating to the other party’s
business (“Confidential Information”). Confidential Information shall include
(a) any data or information that is competitively sensitive material, and not
generally known to the public, including, but not limited to, information about
product plans, marketing strategies, finances, operations, customer
relationships, customer profiles, customer lists, sales estimates, business
plans, and internal performance results relating to the past, present or future
business activities of the Partnership or the Custodian, or their respective
subsidiaries and affiliated companies; (b) any scientific or technical
information, design, process, procedure, formula, or improvement that is
commercially valuable and secret in the sense that its confidentiality afford
the Partnership or the Custodian a competitive advantage over its competitors;
(c) all confidential or proprietary concepts, documentation, reports, data,
specifications, computer software, source code, object code, flow charts,
databases, inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as
confidential. Notwithstanding the foregoing, information shall not be
Confidential Information and shall not be subject to such confidentiality
obligations if: (a) it is already known to the receiving party at the time it is
obtained; (b) it is or becomes publicly known or available through no wrongful
act of the receiving party; (c) it is rightfully received from a third party
who, to the best of the receiving party’s knowledge, is not under a duty of
confidentiality; (d) it is released by the protected party to a third party
without restriction; (e) it is requested or required to be disclosed by the
receiving party pursuant to a court order, subpoena, governmental or
regulatory agency request or law (provided the receiving party will provide the
other party written notice of the same, to the extent such notice is
permitted); (f) release of such information by the Custodian is
necessary or desirable in connection with the provision of services under this
Agreement; (g) it is relevant to the defense or any claim or cause of action
asserted against the receiving party; or (h) it has been or is independently
developed or obtained by the receiving party.
(l) The
Custodian shall make and maintain reasonable provisions for emergency use of
electronic data processing equipment to the extent appropriate equipment is
available. In the event of equipment failures, the Custodian shall,
at no additional expense to the Fund, take reasonable steps to minimize service
interruptions. The Custodian shall have no liability with respect to
the loss of data or service interruptions caused by equipment failure provided
such loss or interruption is not caused by the Custodian’s own willful
misfeasance, bad faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
17
(m) The
Custodian shall have no power or authority to assign, hypothecate, pledge or
otherwise dispose of any such securities or investment, except as provided in
Section 10 or in other expressed terms of this Agreement, or upon Instructions
authorizing the transaction. In no case many any member of the Fund’s
Board of [Directors/Trustees], or any officer, employee or agent of the
Partnership withdraw any securities.
(n) The
Custodian shall furnish to the Partnership the following reports; (i) such
periodic and special reports as the Partnership may reasonable request; (ii) a
monthly statement summarizing all transactions and entries for the account of
each Portfolio, listing each portfolio security belonging to each Portfolio
(with the corresponding security identification number) held at the end of such
month and stating the cash balance of each Portfolio at the end of such month;
(iii) the reports required to be furnished to the Partnership 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 Partnership and the Custodian.
IN WITNESS WHEREOF, the
parties hereto have caused this Custody Agreement to be executed by their
respective duly authorized officers.
|
ACP
Strategic Opportunities Fund II, LLC
|
||
|
Attest:
|
By:
|
|
|
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
||
|
Title:
President & Chief Investment Officer
|
||
|
Date:
|
||
|
UMB
BANK, N.A.
|
||
|
Attest:
|
By:
|
|
|
Name: ▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇.
|
||
|
Title: Vice
President
|
||
|
Date:
|
18
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
|
|
ACP
Strategic Opportunities Fund II, LLC
|
UMB
BANK, N.A.
|
|
|
By: ▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
By:
|
|
|
Name:
|
Name: ▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇.
|
|
|
Title:
President & Chief Investment Officer
|
Title: Vice
President
|
|
|
Date:
|
Date:
|
▇▇
▇▇▇▇▇▇▇▇
▇
The following closed-end management
investment companies ("Funds") are hereby made parties to the Custody Agreement
dated ,
2007, with UMB Bank, n.a. ("Custodian") and ACP Strategic Opportunities Fund
II,LLC, and agree to be bound by all the terms and conditions contained in said
Agreement:
ACP
Strategic Opportunities Fund II, LLC
|
ACP
Strategic Opportunities Fund II, LLC
|
||
|
Attest:
|
By: ▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
|
|
Name:
|
||
|
Title:
President & Chief Investment Officer
|
||
|
Date:
|
||
|
UMB
BANK, N.A.
|
||
|
Attest:
|
By:
|
|
|
Name: ▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇.
|
||
|
Title: Vice
President
|
||
|
Date:
|
20
EXHIBIT
A
|
FUND
NAME
|
UMB ACCOUNT
NUMBER
|
|
|
ACP
Strategic Opportunities Fund II, LLC
|