Document:

Exhibit 10.2

 

COLLATERAL SUB-ADVISORY AGREEMENT

 

AGREEMENT
made as of this 27th day of September, 2010 (this “Agreement”),
by and between Nuveen Diversified Commodity Fund, a Delaware statutory trust
(the “Fund”), Nuveen Commodities Asset Management, LLC, a Delaware
limited liability company (“Manager”), and Nuveen Asset Management, a
Delaware corporation (“Collateral Subadvisor”).

 

WHEREAS,
Manager serves as the investment manager for the Fund, pursuant to that certain
Investment Management Agreement between Manager and the Fund (as such agreement
may be modified from time to time, the “Management Agreement”); and

 

WHEREAS,
Manager desires to retain Collateral Subadvisor to furnish investment advisory
services for the Fund, upon the terms and conditions hereafter set forth.

 

NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:

 

1.               Appointment.  Manager hereby appoints Collateral Subadvisor
to provide sub-investment advisory services to the Fund in the management of
the Fund’s Collateral (as defined below) for the period and on the terms set
forth in this Agreement.  Collateral
Subadvisor accepts such appointment and agrees to furnish the services herein
set forth for the compensation herein provided.

 

2.               Services to be Performed.  Subject always to the supervision of Manager,
Collateral Subadvisor will furnish an investment program in respect of, make
investment decisions for, and place all orders for the purchase and sale of
securities of the U.S. government, its agencies and instrumentalities,
corporate obligations and other high quality instruments comprising the Fund’s
assets not deposited with its clearing broker(s) to secure commodity
futures or options contracts (“Collateral”), all on behalf of the Fund
and as described in the Fund’s registration statement on Form S-1 as
declared effective by the United States Securities and Exchange Commission (the
“Registration Statement”), consistent with the investment objectives and
restrictions of the Fund described therein. 
In the performance of its duties, Collateral Subadvisor will satisfy its
fiduciary duties to the Fund, will select and monitor the Fund’s investments in
Collateral and will comply with the provisions of the Fund’s Amended and
Restated Trust Agreement (the “Trust Agreement”) as filed with the
Registration Statement, as the Trust Agreement may be amended from time to time
(to the extent Collateral Subadvisor has been notified in writing of such
amendments), and the Fund’s investment objectives, policies and restrictions as
disclosed in the Registration Statement, as such investment objectives,
policies and restrictions may be amended from time to time (to the extent
Collateral Subadvisor has been notified in writing of such amendments).  Manager will provide Collateral Subadvisor
with current copies of the Fund’s organizational documents, prospectus and any
amendments thereto, and any written objectives (as contained in the investment
guidelines, if any), policies, procedures or limitations not appearing therein
as they may be relevant to Collateral Subadvisor’s performance under this
Agreement, all of which will be binding on Collateral Subadvisor upon receipt
thereof from Manager.  Collateral
Subadvisor and Manager will each make its

 

 

officers and employees available to the other from time to time at
reasonable times to review investment policies of the Fund and to consult with
each other regarding the investment affairs of the Fund.  Collateral Subadvisor will report to Manager
with respect to Collateral Subadvisor’s services hereunder

 

Collateral
Subadvisor is authorized to select the brokers that will execute the purchases
and sales of Collateral for the Fund and is directed to use its commercially
reasonable efforts to obtain a combination of best price and execution, taking
into account all appropriate factors, including price, commission, size and
difficulty of the transaction and research or other services provided.  It is understood that Collateral Subadvisor
will not be deemed to have acted unlawfully, or to have breached a fiduciary
duty to the Fund, or be in breach of any obligation owing to the Fund under
this Agreement, or otherwise, solely by reason of its having caused the Fund to
pay a member of a securities exchange or a broker a commission for effecting a
transaction for the Fund in excess of the amount of commission another member
of an exchange or broker would have charged if Collateral Subadvisor determined
in good faith that the commission paid was reasonable in relation to the
brokerage or research services provided by such member or broker, viewed in
terms of that particular transaction or Collateral Subadvisor’s overall
responsibilities with respect to its accounts, including the Fund, as to which
it exercises investment discretion.  In
addition, if in the judgment of Collateral Subadvisor, the Fund would be
benefited by supplemental services, Collateral Subadvisor is authorized to pay
commissions to brokers furnishing such services in excess of commissions that
another broker may charge for the same transaction, provided that Collateral
Subadvisor determined in good faith that the commission paid was reasonable in
relation to the services provided. 
Collateral Subadvisor will properly communicate to Manager such information
relating to transactions for the Fund as Manager may reasonably request.  In no instance will Collateral be purchased
from the Fund or sold by the Fund to Manager, Collateral Subadvisor or any
affiliated person of the Fund, Manager or Collateral Subadvisor.

 

Collateral
Subadvisor further agrees that it:

 

a)              will use the same degree of
skill and care in providing such services as it uses in providing services to
fiduciary accounts for which it has investment responsibilities;

 

b)             will conform to all applicable
rules and regulations of the United States Securities and Exchange
Commission (the “SEC”) in all material respects and in addition will
conduct its activities under this Agreement in accordance with any applicable
regulations of any governmental authority pertaining to its investment advisory
and trading activities;

 

c)              will report regularly to
Manager and will make appropriate persons available for the purpose of
reviewing with representatives of Manager on a regular basis the management of
the Fund’s Collateral, including, without limitation, review of the general
investment strategies of the Fund with respect to Collateral Subadvisor’s
management of the Fund’s Collateral and the performance of the Fund’s
Collateral in relation to standard industry indices and general conditions
affecting the marketplace, and will provide various other reports from time to
time as reasonably requested by Manager;

 

2

 

d)             will monitor the pricing of
the Fund’s Collateral, and events relating to the collateral markets in which
the Fund trades, and will notify Manager promptly of any market events or other
situations that come to its attention (particularly those that may occur after
the close of a foreign market in which the Fund’s Collateral may primarily
trade but before the time at which the Fund’s Collateral is priced on a given
day) that may materially impact the pricing of one or more of the Fund’s
Collateral.  In addition, Collateral
Subadvisor will assist Manager in evaluating the impact that such an event may
have on the net asset value of the Fund and in determining a recommended fair
value of the affected asset or assets; and

 

e)              will prepare such books and
records with respect to the Fund’s Collateral as reasonably requested by
Manager and will furnish Manager such periodic and special reports as Manager
may reasonably request.

 

3.               Preparation of Materials.  Collateral Subadvisor will cooperate with the
Fund in the Fund’s endeavors to prepare and update, or cause to be prepared and
updated, the Registration Statement and a prospectus and disclosure document
included therein (the “Prospectus”), promotional brochures or other
marketing materials as well as any other materials reasonably requested or
required by Manager in connection with the organization, operation, or
marketing of the Fund or the registration or renewal of registration of the
Fund’s shares (the “Shares”) for sale to the public in all applicable
jurisdictions (collectively, with the Registration Statement and Prospectus,
the “Materials”).  In this regard,
Collateral Subadvisor will furnish to Manager such information as may be
reasonably requested for inclusion in such Materials.  Moreover, Collateral Subadvisor agrees to
provide to Manager such information as Manager requests in order for Manager to
make all necessary disclosures regarding Collateral Subadvisor, its principals,
its trading performance, customer accounts and otherwise as are required in the
judgment of Manager to be made in such Materials.

 

4.               Representations and
Warranties of Manager. 
Manager hereby represents and warrants to Collateral Subadvisor that:

 

a)              Manager is duly formed and
validly existing as a Delaware limited liability company, with full power to
carry out its obligations under this Agreement and the Trust Agreement.

 

b)             This Agreement has been duly
and validly authorized, executed and delivered by, and is a valid and binding
contract of, Manager, enforceable in accordance with its terms.

 

c)              Manager has met, and will
continue to meet for so long as this Agreement remains in effect, any
applicable federal or state requirements, or the applicable requirements of any
regulatory agency or self-regulatory organization, necessary to be met in order
to perform services for the Fund pursuant to this Agreement.

 

d)             Manager is a commodity pool
operator and commodity trading advisor duly registered with the United States
Commodity Futures Trading Commission (“CFTC”) and is a member in good
standing of the National Futures Association (“NFA”).  Manager shall

 

3

 

maintain such registrations and membership in good standing during the
term of this Agreement.  Further, Manager
agrees to notify Collateral Subadvisor promptly upon (i) a statutory
disqualification of Manager under Sections 8a(2) or 8a(3) of the
Commodity Exchange Act of 1936, as amended (“CEA”), (ii) a
suspension, revocation or limitation of Manager’s commodity trading advisor or
commodity pool operator registration or NFA membership, or (iii) the
institution of an action or proceeding that could lead to a statutory
disqualification under the CEA or an investigation by any governmental agency
or self-regulatory organization of which Manager is subject or has been advised
it is a target.

 

e)              The Materials do not and
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are made, not misleading,
or omit to state any material information required to be disclosed therein
under the CEA, the Securities Act of 1933, as amended, and the rules promulgated
thereunder; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished to Manager by or on behalf of Collateral Subadvisor,
as to it, including, without limitation, all references to Collateral
Subadvisor and its affiliates, controlling persons, shareholders, partners,
directors, officers and employees, as well as to Collateral Subadvisor’s
investment approach and past performance history, which has been or may be
provided by Collateral Subadvisor for inclusion in the Materials.

 

f)                Shares of the Fund will be
offered and sold in compliance with the requirements set forth in the
Registration Statement, the Prospectus, the Trust Agreement and the letter
issued by the Division of Clearing and Intermediary Oversight of the CFTC dated
March 29, 2010 (the “Staff Letter”).  In connection with the offer and sale of the
Shares, Manager will, and Manager will use its reasonable efforts to ensure
that any third party selling agents will, comply fully at all times with all
federal, state and foreign securities laws, the CEA, the Staff Letter, and all rules and
regulations applicable to the offer and sale of the Shares to the public.

 

g)             Manager has received, on
behalf of the Fund, Collateral Subadvisor’s Form ADV, Part II (“Form ADV”)
at least 48 hours prior to entering into this Agreement and is familiar with
the matters set forth therein.

 

h)             The representations and
warranties made in this Agreement by Manager shall be continuing during the
term of this Agreement, and if at any time any event has occurred which would
make or tend to make any of the foregoing not true, Manager will promptly
notify Collateral Subadvisor.

 

5.               Representations and
Warranties of Collateral Subadvisor.  Collateral Subadvisor hereby represents and
warrants to the Fund and Manager that:

 

a)              Collateral Subadvisor’s Form ADV,
and any other information relating to Collateral Subadvisor, its businesses,
principals, and past performance record that has been

 

4

 

requested by Manager, has been delivered to Manager and is current,
accurate and complete in all material respects and is in compliance with all
applicable laws, rules and regulations, including the Investment Advisers
Act of 1940, as amended (“Advisers Act”), and Collateral Subadvisor will
provide Manager with updated or amended copies of any such materials when and
if such materials are updated or amended.

 

b)             To the extent reasonably
available to it, Collateral Subadvisor has supplied or upon request will
supply, and has made available or upon request will make available, for review
by Manager or its agents substantially all documents, statements, agreements,
confirmations and workpapers relating to all accounts managed by Collateral
Subadvisor and any other persons or entities controlled by Collateral
Subadvisor for the period covered in any Materials, and Manager shall keep such
information confidential; provided, however, that Collateral Subadvisor may, in
its discretion, withhold from any such Materials the name of the client for
whom such account is maintained and any proprietary information relating to
Collateral Subadvisor’s trading methodologies.

 

c)              Collateral Subadvisor has
met, and will continue to meet for so long as this Agreement remains in effect,
any applicable federal or state requirements, or the applicable requirements of
any regulatory agency or industry self-regulatory organization, necessary to be
met in order to perform services for the Fund pursuant to this Agreement.

 

d)             Collateral Subadvisor is an investment
adviser duly registered with the SEC. 
Collateral Subadvisor shall maintain such registration in good standing
during the term of this Agreement. 
Further, Collateral Subadvisor agrees to notify Manager promptly upon (i) the
issuance of an order under Section 203(e) of the Advisers Act, (ii) the
occurrence of any event that would disqualify Collateral Subadvisor from
serving as an investment adviser to the Fund, or (iii) the institution of
an action or proceeding that could lead to the issuance of an order under Section 203(e) of
the Advisers Act or an investigation by any governmental agency or
self-regulatory organization of which Collateral Subadvisor is subject or has
been advised it is a target.

 

e)              Collateral Subadvisor is a
Delaware corporation with full power and authority to enter into this
Agreement.

 

f)                This Agreement has been duly
and validly authorized, executed and delivered by, and is a valid and binding
contract of, Collateral Subadvisor enforceable in accordance with its terms.

 

g)             The representations and
warranties made in this Agreement by Collateral Subadvisor shall be continuing
during the term of this Agreement, and if at any time any event has occurred
which would make or tend to make any of the representations and warranties in
this Agreement not true, Collateral Subadvisor will promptly notify Manager.

 

6.               Expenses.  During the term of this Agreement, Collateral
Subadvisor will pay all expenses incurred by it in connection with its
activities under this Agreement other than the cost of

 

5

 

investments (including
brokerage commissions and other related expenses) purchased or sold for the
Fund.

 

7.               Compensation.  For the services provided and the expenses
assumed pursuant to this Agreement, Manager will pay Collateral Subadvisor, and
Collateral Subadvisor agrees to accept as full compensation therefor, an annual
management fee based on the Fund’s average daily net assets (total assets of
the Fund, minus the sum of its accrued liabilities) calculated as follows:

 

	
  Average Daily Net Assets

  	
   

  	
  Annual Management Fee

  	
   

  
	
  Up to $500 million

  	
   

  	
  0.3000

  	
  %

  
	
  $500 million to $1 billion

  	
   

  	
  0.2875

  	
  %

  
	
  $1 billion to $1.5 billion

  	
   

  	
  0.2750

  	
  %

  
	
  $1.5 billion to $2 billion

  	
   

  	
  0.2625

  	
  %

  
	
  $2 billion and over

  	
   

  	
  0.2500

  	
  %

  

 

The
management fee shall accrue on each calendar day, and shall be payable monthly
on the first business day of the next succeeding calendar month.  The daily fee accrual shall be computed by
multiplying the fraction of one divided by the number of days in the calendar
year by the applicable annual rate of fee, and multiplying this product by the
net assets of the Fund (not reduced by its cash reserves) as of the close of
business on the last preceding business day on which the Fund’s net asset value
was determined.  The Fund’s net asset
value for this purpose shall be calculated as provided in the Fund’s prospectus
then in effect.

 

The Fund pays all other
costs and expenses of its operations, including custody fees, transfer agent
expenses, legal fees, expenses of independent auditors, expenses of preparing,
printing and distributing shareholder reports, notices, proxy statements,
reports to governmental agencies or self-regulatory organizations, and taxes,
if any.

 

For
the month and year in which this Agreement becomes effective or terminates,
there shall be an appropriate proration on the basis of the number of days that
the Agreement is in effect during the month and year, respectively.

 

8.               Independence of Collateral
Subadvisor.  Collateral
Subadvisor shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized herein,
have no authority to act for or represent Manager or the Fund in any way or
otherwise be deemed an agent of Manager or the Fund.  Collateral Subadvisor shall not offer or sell
or solicit any offers to purchase the Shares. 
However, when requested by Manager at such reasonable times and upon
adequate notice as mutually agreed to, Collateral Subadvisor will assist in the
general explanation and presentation of Collateral Subadvisor’s investment
strategies and methods solely to the employees of Manager or its affiliates and
to the Fund’s selling agents or to other agents of Manager; provided, however,
that nothing in this section will require Collateral Subadvisor to disclose
confidential and proprietary information concerning its investment strategies
and methods.  The parties acknowledge
that Collateral Subadvisor, individually or in conjunction with Manager, has
not been an organizer or promoter of the Fund. 
Nothing herein contained shall be deemed to require the

 

6

 

Fund to take any action contrary to the Trust Agreement, the Staff
Letter, or any applicable statute, regulation or exchange rule.

 

9.               Services to Others.  Manager understands that Collateral
Subadvisor now acts, or may in the future act, as an investment adviser to
other investment funds, provided that whenever the Fund and one or more other
investment advisory clients of Collateral Subadvisor have available funds for
investment, investments suitable and appropriate for each will be allocated in
a manner believed by Collateral Subadvisor to be equitable to each.  Manager recognizes that in some cases this
procedure may adversely affect the size of the position that the Fund may
obtain in a particular Collateral investment. 
It is further agreed that, on occasions when Collateral Subadvisor deems
the purchase or sale of Collateral to be in the best interests of the Fund as
well as other accounts, it may, to the extent permitted by applicable law, but
will not be obligated to, aggregate the Collateral to be so sold or purchased
for the Fund with those to be sold or purchased for other accounts in order to
obtain favorable execution and lower brokerage commissions.  In addition, Manager understands that the
persons employed by Collateral Subadvisor to assist in Collateral Subadvisor’s
duties under this Agreement will devote such efforts and service to the Fund as
Collateral Subadvisor deems appropriate. 
It is also agreed that Collateral Subadvisor may use any supplemental
research obtained for the benefit of the Fund in providing investment advice to
its other investment advisory accounts or for managing its own accounts.

 

10.         Records of the Fund.  Manager will instruct the Fund’s broker(s) to
furnish copies of all trade confirmations and monthly trading reports to
Collateral Subadvisor.  Collateral
Subadvisor will maintain a record of all orders for Collateral for the Fund’s
account that have been filled and will monitor the Fund’s open Collateral
positions.  Upon the request of Manager,
Collateral Subadvisor shall permit Manager or its agent to inspect such
information as Manager may reasonably request for the purpose of confirming
that the Fund has been treated equitably with respect to trading conducted
during the term of this Agreement by all accounts controlled by Collateral
Subadvisor or its principals.  Collateral
Subadvisor shall permit Manager to inspect the investment records of Collateral
Subadvisor, its principals and other clients for the purpose of confirming that
the Fund is being treated equitably by Collateral Subadvisor, including with
respect to any modifications of investment strategies resulting from priorities
of order entry to Collateral Subadvisor’s accounts, and Manager shall keep such
information confidential; provided, however, that Collateral Subadvisor may, in
its discretion, withhold from any such inspection the name of the client for
whom such account is maintained.

 

11.         Limitation of Liability. Collateral
Subadvisor shall not be liable for, and Manager will not take any action
against Collateral Subadvisor to hold Collateral Subadvisor liable for, any
error of judgment or mistake of law or for any loss suffered by the Fund
(including, without limitation, by reason of the purchase, sale or retention of
any asset) in connection with the performance of Collateral Subadvisor’s duties
under this Agreement, except for a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of Collateral Subadvisor in the
performance of its duties under this Agreement, or by reason of its reckless
disregard of its obligations and duties under this Agreement.

 

7

 

12.   Indemnity.

 

a)     In any threatened, pending
or completed action, suit, or proceeding to which Collateral Subadvisor, its
shareholders, officers, directors, employees or associated persons
(collectively, “its affiliates”) was or is a party or is threatened to be made
a party by reason of the fact that Collateral Subadvisor is or was an
investment adviser of the Fund or otherwise, the Fund and Manager, jointly and
severally, shall indemnify and hold harmless, subject to subsection (d) below,
Collateral Subadvisor and its affiliates against any loss, liability, damage,
cost, expenses (including attorneys’ fees and accountants’ fees), judgments and
amounts paid in settlement actually and reasonably incurred by it or its
affiliates in connection with any action, suit or proceeding if Collateral
Subadvisor acted in good faith and in a manner it reasonably believed to be in
or not opposed to the best interests of the Fund, and provided that its conduct
does not constitute willful misfeasance, bad faith or gross negligence or
reckless disregard of its obligations and duties under this Agreement.  The termination of any action, suit or
proceeding by judgment, order or settlement shall not, of itself, create a
presumption that Collateral Subadvisor acted in good faith and in a manner
which it reasonably believed to be in or not opposed to the best interests of
the Fund.

 

b)    Expenses incurred in
defending a threatened or pending civil, administrative or criminal action,
suit or proceeding against Collateral Subadvisor or its affiliates may, in the
sole discretion of Manager, be paid by the Fund and/or Manager in advance of
the final disposition of such action, suit or proceeding, if and to the extent
that the person on whose behalf such expenses are paid shall agree to reimburse
the Fund and/or Manager, as applicable, in the event indemnification is not
permitted under this Section 12.

 

c)     Collateral Subadvisor agrees
to indemnify, defend and hold harmless the Fund, Manager and Manager’s members,
officers, directors, employees or associated persons (collectively, “its
affiliates”) against any loss, liability, damage, cost, expenses (including
attorneys’ fees and accountants’ fees), judgments and amounts paid in
settlement actually and reasonably incurred by it or its affiliates by reason
of any act or omission of Collateral Subadvisor relating to the Fund (including
costs and expenses of investigating and defending any claims, demand or suit
and attorneys’ and accountants’ fees) if such act or omission materially
violated the terms of this Agreement or involved willful misfeasance, bad faith
or gross negligence on the part of Collateral Subadvisor in the performance of
its duties under this Agreement, or by reason of its reckless disregard of its
obligations and duties under this Agreement.

 

d)    Any indemnification under
subsections (a) or (c) above, unless ordered by a court or
administrative forum, shall be made only as authorized in the specific case and
only upon a determination by independent legal counsel in a written opinion
that indemnification is proper in the circumstances because the party claiming
indemnification (the “Indemnitee”) has met the applicable standard of
conduct set forth in subsection (a) or (c), as the case may be.  To the extent that the Indemnitee or its
affiliates have been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsection (a) or (c) above,
or in defense of any claim, issue or matter therein, the

 

8

 

immediately preceding sentence of this subsection (d) shall not
apply and the party obligated to indemnify the other party (the “Indemnitor”)
shall indemnify the Indemnitee or its affiliates against the expenses,
including attorneys’ and accountants’ fees, actually and reasonably incurred by
it or its affiliates in connection therewith.

 

e)     In the event that any claim,
dispute or litigation arises between Collateral Subadvisor and any party other
than the Fund or Manager, which claim, dispute or litigation is unrelated to
the Fund’s business, and if the Fund or Manager are made a party to such claim,
dispute or litigation by such other party, Collateral Subadvisor shall defend
any actions brought in connection therewith on behalf of the Fund and/or
Manager each of whom agree to cooperate in such defense and Collateral
Subadvisor shall indemnify and hold harmless the Fund and Manager from and with
respect to any amounts awarded to such other party.  If any claim, dispute or litigation arises
between the Fund and/or Manager and any party other than Collateral Subadvisor
which claim, dispute or litigation is unrelated to Collateral Subadvisor’s
duties under this Agreement, and if Collateral Subadvisor is made a party to
such claim, dispute or litigation by such other party, the Fund and/or Manager, jointly and severally, shall defend any actions
brought in connection therewith on behalf of Collateral Subadvisor or its
principals, each of whom agree to cooperate in such defense and the Fund and/or
Manager, jointly and severally, shall indemnify and hold harmless Collateral
Subadvisor and its affiliates from and with respect to any amounts awarded to
such other party.  Notwithstanding any
other provision of this subsection (e), if, in any claim as to which indemnity
is or may be available, any indemnified party reasonably determines that its
interests are or may be, in whole or in part, adverse to the interests of the
indemnifying party, the indemnified party may retain its own counsel in
connection with such claim and shall be indemnified by the indemnifying party
for any legal or any other expenses reasonably incurred in connection with
investigating or defending such claim.

 

f)     None of the foregoing
provisions for indemnification shall be applicable with respect to default
judgments, confessions of judgment or settlements entered into by the
Indemnitee without the prior consent of the Indemnitor; provided, however, that
should the Indemnitor refuse to consent to a settlement approved by the
Indemnitee, the Indemnitee may effect such settlement, pay such amount in
settlement as it shall deem reasonable and seek a judicial or regulatory
determination with respect to reimbursement by the Indemnitor of any loss,
liability, damage, cost or expenses (including reasonable attorneys’ and
accountants’ fees) incurred by the Indemnitee in connection with such
settlement to the extent such loss, liability, damage, cost or expense
(including reasonable attorneys’ and accountants’ fees) was caused by or
resulted from a material violation of this Agreement by the Indemnitor or
violation of the standard of conduct set forth herein.  Notwithstanding the foregoing, the Indemnitor
shall, at all times, have the right to offer to settle any matters, and if the
Indemnitor successfully negotiates a settlement and tenders payment therefor to
the Indemnitee, the Indemnitee must either use its best efforts to dispose of
the matter in accordance with the terms and conditions of the proposed
settlement or the Indemnitee may refuse to settle the matter and continue its
defense in which latter event the maximum liability of the Indemnitor to the
Indemnitee shall be the amount of said proposed settlement.

 

9

 

g)    The foregoing provisions for
indemnification shall survive the termination of this Agreement.

 

h)    Collateral Subadvisor
acknowledges as to it that the indemnities provided in this Agreement by
Manager and the Fund to Collateral Subadvisor shall be inapplicable in the
event of any liability accruing to the extent, if any, caused by or based upon
Collateral Subadvisor’s misrepresentations, omissions or breach of any warranty
in this Agreement.

 

13.   Term; Termination; Amendment.  This Agreement shall become effective with
respect to the Fund on the same date as the Management Agreement between the
Fund and Manager becomes effective, and shall remain in effect until otherwise
terminated pursuant to this Section 13.

 

This
Agreement may be terminated at any time, without penalty, by either Manager or
Collateral Subadvisor upon 120 days written notice.

 

Termination
of this Agreement shall not affect the right of Collateral Subadvisor to
receive payments on any unpaid balance of the compensation described in Section 7
earned prior to the effective date of such termination.

 

14.   Notice.  Any notice under this Agreement shall be in
writing, addressed and delivered or mailed, postage prepaid, to the other party

 

	
  If
  to Manager or the Fund:

  	
   

  	
  If
  to Collateral Subadvisor:

  
	
   

  	
   

  	
   

  
	
  Nuveen
  Commodities Asset Management, LLC

  	
   

  	
  Nuveen
  Asset Management

  
	
  333
  West Wacker Drive

  	
   

  	
  333
  West Wacker Drive

  
	
  Chicago, Illinois
  60606

  	
   

  	
  Chicago, IL
  60606

  
	
  Attention:  Gifford
  R. Zimmerman

  	
   

  	
  Attention:  Kevin
  J. McCarthy

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  With
  a copy to:

  
	
   

  	
   

  	
   

  
	
  Nuveen
  Investments, Inc.

  	
   

  	
  Nuveen
  Investments, Inc.

  
	
  333
  West Wacker Drive

  	
   

  	
  333
  West Wacker Drive

  
	
  Chicago, Illinois
  60606

  	
   

  	
  Chicago, IL
  60606

  
	
  Attention:
  General Counsel

  	
   

  	
  Attention:
  General Counsel

  

 

or
such address as each such party may designate for the receipt of such notice.

 

10

 

15.   Assignment and Successors.  This Agreement may not be assigned (within
the meaning of the Advisers Act) nor the duties hereunder delegated by either
party without the express written consent of the other party.  This Agreement is made solely for the benefit
of, and shall be binding upon, the parties and their respective successors and
assigns, and no other person shall have any right or obligation under it.

 

16.   Notice of Threatened,
Pending or Completed Actions, Suits or Proceedings.

 

a)     Manager will promptly give
written notice to Collateral Subadvisor of: 
(i) any threatened, pending or completed action, suit or
proceedings (including without limitation any reparations or administrative
proceeding threatened or instituted under the CEA) to which Manager or the Fund
was or is a party or is threatened to be a party; and (ii) any judgments
or amounts paid by Manager or the Fund in settlement in connection with any
such threatened, pending or completed action, suit or proceeding.

 

b)    Collateral Subadvisor will
promptly give written notice to Manager of: 
(i) any threatened, pending or completed action, suit or proceeding
(including without limitation any reparations or administrative proceeding
threatened or instituted under the CEA) to which Collateral Subadvisor was or
is a party or is threatened to be a party; and (ii) any judgments or
amounts paid by Collateral Subadvisor in settlement in connection with any such
threatened, pending or completed action, suit or proceeding.

 

c)     Written notices required to
be given pursuant to this Section 16 shall contain all pertinent
information concerning the threatened, pending or completed action, suit or
proceeding and, in the case of any pending or completed action suit or
proceeding, shall include a copy of the complaint, petition or similar
documents asserting a claim.

 

d)    Manager and Collateral
Subadvisor agree to use their best efforts to maintain the confidentiality of
notices received pursuant to this Section 16 and agree not to disclose the
contents of such notices to persons other than their affiliates and advisors,
or except as may be required, in their good faith judgment, by any applicable
law or regulation.

 

17.   Miscellaneous.  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. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be
affected thereby.

 

18.   Applicable Law, Entire
Agreement, Amendments, Arbitration.  This Agreement shall be construed in
accordance with applicable federal law and the laws of the State of Illinois.  This Agreement is the entire agreement of the
parties in respect of the subject matter and may be amended only by a writing
signed by the parties.  All disputes not
resolved by negotiation shall be exclusively resolved by confidential binding
arbitration in Chicago in accordance with the then rules of the American
Arbitration Association by a panel of three arbitrators, one selected by each
party and the third by the two so selected. 
The arbitrators shall have no

 

11

 

authority to amend this Agreement. 
Any award by the arbitrators may be entered as a judgment by any court
having jurisdiction.

 

19.   Obligations of Fund Only.  This Agreement is executed on behalf of the
Fund by officers of the Manager as officers and not individually and the
obligations imposed upon the Fund by this Agreement are not binding upon any of
the Fund’s trustees or shareholders individually but are binding only upon the
assets and property of the Fund.

 

20.   Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.

 

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

12

 

IN
WITNESS WHEREOF, Manager, the Fund and Collateral Subadvisor have caused this
Agreement to be executed as of the day and year first above written.

 

	
  NUVEEN
  COMMODITIES ASSET

  MANAGEMENT, LLC, a Delaware

  limited liability company

  	
  NUVEEN
  ASSET MANAGEMENT, a

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Gifford R. Zimmerman

  	
   

  	
  By:

  	
  /s/
  Kevin J. McCarthy

  
	
  Name:
  Gifford R. Zimmerman

  	
  Name:
  Kevin J. McCarthy

  	
   

  
	
  Title:
  Chief Administrative Officer

  	
  Title:
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUVEEN
  DIVERSIFIED COMMODITY

  FUND, a Delaware statutory trust

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  NUVEEN COMMODITIES ASSET

  MANAGEMENT, LLC, its Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gifford R. Zimmerman

  	
   

  	
   

  
	
   

  	
  Name:
  Gifford R. Zimmerman

  	
   

  	
   

  
	
   

  	
  Title:
  Chief Administrative Officer

  	
   

  	
   

  
								

 

13Exhibit 10.3

 

CUSTODIAN AGREEMENT

 

This
Agreement, dated as of September 27, 2010, is by and between NUVEEN
DIVERSIFIED COMMODITY FUND, a Delaware statutory trust (the “Trust”), and STATE
STREET BANK and TRUST COMPANY, a Massachusetts trust company (the “Custodian”).

 

WHEREAS, the Trust has selected and desires to
retain the Custodian to act as custodian of Trust assets, and the Custodian is
willing to provide such services to the Trust upon the terms and conditions
hereinafter set forth.

 

NOW, THEREFORE, in consideration of the
mutual covenants and agreements hereinafter contained, the parties hereto agree
as follows:

 

Section 1.                         Employment of
Custodian and Property to be Held by It

 

The Trust hereby employs the Custodian as the custodian of its assets,
including securities which the Trust desires to be held in places within the
United States (“domestic
securities”) and securities it desires to be held outside the
United States (“foreign
securities”). The Custodian shall not be responsible for any
property of the Trust which is not received by it or which is delivered out in
accordance with Proper Instructions (as such term is defined in Section 6
hereof) including, without limitation, Trust property (i) held by brokers,
private bankers or other entities on behalf of the Trust, (ii) held by
Special Sub-Custodians (as such term is defined in Section 4 hereof), (iii) held
by entities which have advanced monies to or on behalf of the Trust and which
have received Trust property as security for such advance(s), or (iv) delivered
or otherwise removed from the custody of the Custodian pursuant to Special
Instructions (as such term is defined in Section 6 hereof).  With respect to uncertificated shares of or
other interests (“Underlying Shares”) in
collective investment vehicles including, inter alia,
registered investment companies (“Underlying Funds”),
the holding of confirmation statements which identify such Underlying Shares as
being recorded in the Custodian’s name (or in the name of a nominee of the
Custodian) for the benefit of the Trust, shall be deemed custody for purposes
of this Agreement.

 

Upon receipt of Proper Instructions, the Custodian shall from time to
time employ one or more sub-custodians located in the United States, provided
that the Custodian shall have no more or less responsibility or liability to
the Trust on account of any actions or omissions of any sub-custodian so
employed than any such sub-custodian has to the Custodian.  The Custodian may employ as sub-custodians
for the Trust’s securities and other assets the foreign banking institutions
and foreign securities depositories designated in Schedule A hereto (as amended
by the Custodian from time to time by its delivery to the Trust of an updated
Schedule A).

 

 

Section 2.                         Duties of the
Custodian with Respect to Property of the Trust to be Held in the United States

 

2.1                                                              Holding
Securities.  The
Custodian shall hold and segregate for the account of the Trust all non-cash
property, to be held by it in the United States, including all domestic securities
owned by the Trust, other than (a) securities which are maintained
pursuant to Section 2.8 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S. Department of the
Treasury and certain federal agencies (each, a “U.S. Securities System”) and (b) Underlying
Shares owned by the Trust which are maintained pursuant to Section 2.10
hereof in an account with State Street Bank and Trust Company or such other
entity which may from time to time act as a transfer agent, registrar,
corporate secretary, general partner or other relevant third party for the
Underlying Funds and with respect to which the Custodian is provided with
Proper Instructions (the “Underlying Transfer Agent”).

 

2.2                                                              Delivery of
Securities.  The
Custodian shall release and deliver domestic securities owned by the Trust held
by the Custodian, in a U.S. Securities System account of the Custodian or in an
account at the Underlying Transfer Agent, only upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, and only in the following cases:

 

1)                                             Upon sale of
such securities for the account of the Trust and receipt of payment therefor;

 

2)                                              Upon the
receipt of payment in connection with any repurchase agreement related to such
securities entered into by the Trust;

 

3)                                              In the case of
a sale effected through a U.S. Securities System, in accordance with the
provisions of Section 2.8 hereof;

 

4)                                              To the
depository agent in connection with tender or other similar offers for
portfolio securities of the Trust;

 

5)                                              To the issuer
thereof or its agent when such securities are called, redeemed, retired or
otherwise become payable; provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;

 

6)                                              To the issuer
thereof, or its agent, for transfer into the name of the Trust or into the name
of any nominee or nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.7 or into the name or nominee
name of any sub-custodian appointed pursuant to Section 1; or for exchange
for a different number of bonds, certificates or other evidence representing
the same aggregate face amount or number of units; provided,  that, in any such case, the new securities are
to be delivered to the Custodian;

 

7)                                              Upon the sale
of such securities for the account of the Trust, to the broker or its clearing
agent, against a receipt, for examination in accordance with “street delivery”
custom; provided that in any such case, the Custodian shall have no 

 

2

 

responsibility
or liability for any loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise from the Custodian’s
own gross negligence or willful misconduct;

 

8)                                              For exchange or
conversion pursuant to any plan of merger, consolidation, recapitalization,
reorganization or readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained in such
securities, or pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered to the
Custodian;

 

9)                                              In the case of
warrants, rights or similar securities, the surrender thereof in the exercise
of such warrants, rights or similar securities or the surrender of interim
receipts or temporary securities for definitive securities; provided that, in
any such case, the new securities and cash, if any, are to be delivered to the
Custodian;

 

10)                                        For delivery in
connection with any loans of securities made by the Trust, (a) against
receipt of collateral as agreed upon from time to time by the Trust, except
that in connection with any loans for which collateral is to be credited to the
Custodian’s account in the book-entry system authorized by the U.S. Department
of the Treasury, the Custodian will not be held liable or responsible for the
delivery of securities owned by the Trust prior to the receipt of such collateral
or (b) to the lending agent, or the lending agent’s custodian, in
accordance with Proper Instructions (which may not provide for the receipt by
the Custodian of collateral therefor) agreed upon from time to time by the
Custodian and the Trust;

 

11)                                        For delivery as
security in connection with any borrowing by the Trust requiring a pledge of
assets by the Trust;

 

12)                                        For delivery in
accordance with the provisions of any agreement among the Trust, the Custodian
and a broker-dealer which is a member of The Financial Regulatory Authority (“FINRA”),
relating to compliance with the rules of The Options Clearing Corporation
and of any registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Trust;

 

13)                                        For delivery in
accordance with the provisions of any agreement among the Trust, the Custodian,
and a Futures Commission Merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of the Commodity Futures Trading
Commission (“CFTC”)
and/or any contract market, or any similar organization or organizations,
regarding account deposits in connection with transactions by the Trust;

 

3

 

14)                                        Upon the sale
or other delivery of such investments (including, without limitation, to one or
more (a) Special Sub-Custodians or (b) additional custodians
appointed by the Trust, and communicated to the Custodian from time to time via
a writing duly executed by an authorized officer of Nuveen Commodities Asset
Management, LLC, acting as the manager of the Trust (the “Manager”),
for the purpose of engaging in repurchase agreement transaction(s), each a “Repo Custodian”), and
prior to receipt of payment therefor, if any, as set forth in written Proper
Instructions (such delivery in advance of payment, along with payment in
advance of delivery made in accordance with Section 2.6(7), as applicable,
shall each be referred to herein as a “Free Trade”), provided that such Proper
Instructions shall set forth (a) the securities of the Trust to be
delivered and (b) the person(s) to whom delivery of such securities
shall be made;

 

15)                                        Upon receipt of
instructions from the transfer agent or registrar of the Trust, if any (“Transfer Agent”), or from the Trust,
if there is no such Transfer Agent, for delivery to such Transfer Agent or to
holders of Shares in connection with distributions in kind, in satisfaction of
requests by holders of Shares for withdrawal of their Shares;

 

16)                                        In the case of
a sale processed through the Underlying Transfer Agent of Underlying Shares, in
accordance with Section 2.10 hereof;

 

17)                                        For delivery as
initial or variation margin in connection with futures or options on futures
contracts entered into by the Trust; and

 

18)                                        For any other
purpose, but only upon receipt of Proper Instructions specifying (a) the
securities to be delivered and (b) the person(s) to whom delivery of
such securities shall be made.

 

2.3                                                              Registration of
Securities.  Domestic
securities held by the Custodian (other than bearer securities) shall be
registered in the name of the Trust or in the name of any nominee of the Trust
or of any nominee of the Custodian which nominee shall be assigned exclusively
to the Trust, unless the Trust has authorized in writing the appointment of a
nominee to be used in common with other investment companies or funds having
the same investment adviser as the Trust, or in the name or nominee name of any
agent appointed pursuant to Section 2.7 or in the name or nominee name of
any sub-custodian appointed pursuant to Section 1.  All securities accepted by the Custodian on
behalf of the Trust under the terms of this Agreement shall be in “street name”
or other good delivery form.  If, however,
the Trust directs the Custodian to maintain securities in “street name”, the
Custodian shall utilize its best efforts only to timely collect income due the
Trust on such securities and to notify the Trust on a best efforts basis only
of relevant corporate actions including, without limitation, pendency of calls,
maturities, tender or exchange offers.

 

4

 

2.4                                                              Bank Accounts.  The Custodian shall open and maintain a
separate bank account or accounts in the United States in the name of the
Trust, subject only to draft or order by the Custodian acting pursuant to the
terms of this Agreement, and shall hold in such account or accounts, subject to
the provisions hereof, all cash received by it from or for the account of the
Trust.  Funds held by the Custodian for
the Trust may be deposited by it to its credit as Custodian in the banking
department of the Custodian or in such other banks or trust companies as it may
in its discretion deem necessary or desirable. Such funds shall be deposited by
the Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.

 

2.5                                                              Collection of
Income.  Except with respect to Trust
property released and delivered pursuant to Section 2.2(14) or purchased
pursuant to Section 2.6(7), and subject to the provisions of Section 2.3,
the Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which the
Trust shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other payments
with respect to bearer domestic securities if, on the date of payment by the
issuer, such securities are held by the Custodian or its agent thereof and
shall credit such income, as collected, to the Trust’s custodian account.  Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they become due and shall
collect interest when due on securities held hereunder.  Income due the Trust on domestic securities
loaned pursuant to the provisions of Section 2.2(10) shall be the
responsibility of the Trust.  The Custodian
will have no duty or responsibility in connection therewith, other than to
provide the Trust with such information or data as may be necessary to assist
the Trust in arranging for the timely delivery to the Custodian of the income
to which the Trust is properly entitled.

 

2.6                                                              Payment of
Trust Monies.  Upon
receipt of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out monies of the
Trust in the following cases only:

 

1)                                              Upon the purchase
of domestic securities, options, futures contracts, forward contracts or
options on futures contracts for the account of the Trust but only (a) against
the delivery of such securities, or evidence of title to such options, futures
contracts, forward contracts or options on futures contracts, to the Custodian
(or any bank, banking firm or trust company doing business in the United States
or abroad as a custodian and has been designated by the Custodian as its agent
for this purpose) registered in the name of the Trust or in the name of a
nominee of the Custodian referred to in Section 2.3 hereof or in proper
form for transfer; (b) in the case of a purchase effected through a U.S.
Securities System, in accordance with the conditions set forth in Section 2.8
hereof; (c) in the case of a purchase of Underlying Shares, in accordance
with the conditions set forth in Section 2.10 hereof; or (d) in the
case of repurchase agreements entered into between the Trust and the Custodian,
or 

 

5

 

another
bank, or a broker-dealer which is a member of FINRA, (i) against delivery
of the securities either in certificated form or through an entry crediting the
Custodian’s account at the Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Trust of securities owned by
the Custodian along with written evidence of the agreement by the Custodian to
repurchase such securities from the Trust; or (e) for transfer to a time
deposit account of the Trust in any bank, whether domestic or foreign or any
savings and loan; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank or savings and loan
pursuant to Proper Instructions from the Trust as defined in Section 6
herein;

 

2)                                              In connection
with conversion, exchange or surrender of securities owned by the Trust as set
forth in Section 2.2 hereof;

 

3)                                              For the
payments in connection with withdrawal from the Trust by holders of Shares as set
forth in Section 5 hereof;

 

4)                                              For the payment
of any expense or liability incurred by the Trust, including but not limited to
the following payments for the account of the Trust:  interest, taxes, management, accounting,
Transfer Agent and legal fees, and operating expenses of the Trust whether or
not such expenses are to be in whole or part capitalized or treated as deferred
expenses;

 

5)                                              For the payment
of any distributions by the Trust;

 

6)                                              For payment of
the amount of dividends received in respect of securities sold short;

 

7)                                              Upon the
purchase of domestic investments including, without limitation, repurchase
agreement transactions involving delivery of Trust monies to Repo Custodian(s),
and prior to receipt of such investments, if any, as set forth in written
Proper Instructions (such payment in advance of delivery, along with delivery
in advance of payment made in accordance with Section 2.2(14), as
applicable, shall each be referred to herein as a “Free
Trade”), provided that such Proper Instructions shall also set
forth (a) the amount of such payment and (b) the person(s) to
whom such payment is made;

 

8)                                              For delivery as
initial or variation margin in connection with futures or options on futures
contracts entered into by the Trust;

 

9)                                              For delivery in
accordance with the provisions of any agreement among the Trust, the Custodian
and a broker-dealer which is a member of FINRA, relating to compliance with the
margin regulations of the Board of Governors of the Federal Reserve System, the
rules of The Options Clearing 

 

6

 

Corporation
and of any registered national securities exchange, or of any similar
organization or organizations, regarding escrow, margin, or other arrangements
in connection with transactions by the Trust; and

 

10)                                        For any other
purpose, but only upon receipt of Proper Instructions specifying (a) the
amount of such payment and (b) the person(s) to whom such payment is
to be made.

 

2.7                                                              Appointment of
Agents.  The Custodian may at any time
or times in its discretion appoint (and may at any time remove) any other bank
or trust company to act as a custodian, as its agent to carry out such of the
provisions of this Section 2 as the Custodian may from time to time
direct; provided, however, that the appointment of any agent shall not relieve
the Custodian of its responsibilities or liabilities hereunder; and provided
further, that, in the case of an agent maintaining records listed on Schedule A
of the Commodity Futures Trading Commission acknowledgment attached as Exhibit A
hereto, the Custodian shall only appoint such agent once an acknowledgment
substantially in the form of Exhibit A executed by the agent has been
filed by the Trust with the Commodity Futures Trading Commission.  The Underlying Transfer Agent shall not be
deemed an agent or sub-custodian of the Custodian for purposes of this Section 2.7
or any other provision of this Agreement.

 

2.8                                                              Deposit of
Trust Assets in U.S. Securities Systems.  The Custodian may deposit and/or maintain
domestic securities owned by the Trust in a U.S. Securities System in
accordance with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and to the extent applicable
hereto.

 

2.9                                                              Segregated
Account.  The Custodian shall upon
receipt of Proper Instructions establish and maintain a segregated account or
accounts for and on behalf of the Trust, into which account or accounts may be
transferred cash and/or securities, including securities maintained in an account
by the Custodian pursuant to Section 2.8 hereof, (a) in accordance
with the provisions of any agreement among the Trust, the Custodian and a
broker-dealer which is a member of FINRA (or any Futures Commission Merchant
registered under the Commodity Exchange Act), relating to compliance with the rules of
The Options Clearing Corporation and of any registered national securities
exchange (or the CFTC or any registered contract market), or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Trust, (b) for purposes of segregating
cash or government securities in connection with options purchased, sold or
written by the Trust or commodity futures contracts or options thereon
purchased or sold by the Trust, and (c) for any other purpose in
accordance with Proper Instructions.

 

2.10                                                        Deposit of
Underlying Shares with the Underlying Transfer Agent.  Underlying Shares beneficially owned by the
Trust shall be deposited and/or maintained in an account or accounts maintained
with an Underlying Transfer Agent and the Custodian’s only responsibilities
with respect thereto shall be limited to the following:

 

7

 

1)                                              Upon receipt of
a confirmation or statement from an Underlying Transfer Agent that such
Underlying Transfer Agent is holding or maintaining Underlying Shares in the
name of the Custodian (or a nominee of the Custodian) for the benefit of the
Trust, the Custodian shall identify by book-entry that such Underlying Shares
are being held by it as custodian for the benefit of the Trust.

 

2)                                              In respect of
the purchase of Underlying Shares for the account of the Trust, upon receipt of
Proper Instructions, the Custodian shall pay out monies of the Trust as so
directed, and record such payment from the account of the Trust on the
Custodian’s books and records.

 

3)                                              In respect of
the sale or redemption of Underlying Shares for the account of the Trust, upon
receipt of Proper Instructions, the Custodian shall transfer such Underlying
Shares as so directed, record such transfer from the account of the Trust on
the Custodian’s books and records and, upon the Custodian’s receipt of the
proceeds therefor, record such payment for the account of the Trust on the Custodian’s
books and records.

 

The Custodian shall not be liable to the Trust for any loss or damage
to the Trust resulting from the maintenance of Underlying Shares with
Underlying Transfer Agent except for losses resulting directly from the fraud,
gross negligence or willful misconduct of the Custodian or any of its agents or
of any of its or their employees.

 

2.11                                                        Ownership
Certificates for Tax Purposes.  The Custodian shall execute ownership and
other certificates and affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with respect to domestic
securities of the Trust held by it and in connection with transfers of such
securities.

 

2.12                                                        Proxies.  Except with respect to property released and
delivered pursuant to Section 2.2(14), or purchased pursuant to Section 2.6(7),
the Custodian shall, with respect to the domestic securities held hereunder,
cause to be promptly executed by the registered holder of such securities, if
the securities are registered otherwise than in the name of the Trust or a
nominee of the Trust, all proxies, without indication of the manner in which
such proxies are to be voted, and shall promptly deliver to the Trust such
proxies, all proxy soliciting materials and all notices relating to such
securities.

 

2.13                                                        Communications
Relating to Trust Securities.                   Except with respect to property released and
delivered pursuant to Section 2.2(14), or purchased pursuant to
Section 2.6(7), and subject to the provisions of Section 2.3, the
Custodian shall transmit promptly to the Trust all written information
(including, without limitation, pendency of calls and maturities of domestic
securities and expirations of rights in connection therewith and notices of
exercise of call and put options written by the Trust and the maturity of
futures contracts purchased or sold by the Trust) received by the 

 

8

 

Custodian
from issuers of the domestic securities being held for the Trust.   With respect to tender or exchange offers,
the Custodian shall transmit promptly to the Trust all written information
received by the Custodian from issuers of the securities whose tender or
exchange is sought and from the party (or its agents) making the tender or
exchange offer.  The Custodian shall not
be liable for any untimely exercise of any tender, exchange or other right or
power in connection with domestic securities or other property of the Trust at
any time held by it unless (i) the Custodian is in actual possession of such
domestic securities or property and (ii) the Custodian receives Proper
Instructions with regard to the exercise of any such right or power, and both (i) and
(ii) occur at least three business days prior to the date on which the
Custodian is to take action to exercise such right or power.  The Custodian shall also transmit promptly to
the Trust all written information received by the Custodian regarding any class
action or other litigation in connection with securities or other assets issued
in the United States and then held, or previously held, during the term of this
Agreement by the Custodian for the account of the Trust, including, but not
limited to, opt-out notices and proof-of-claim forms. For avoidance of doubt,
upon and after the effective date of any termination of this Agreement, the
Custodian shall have no responsibility to so transmit any information under
this Section 2.13.

 

2.14                                                        Reports to
Trust by Independent Public Accountants.  The Custodian shall provide the Trust, at
such times as the Trust may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on
futures contracts, including domestic securities deposited and/or maintained in
a U.S. Securities System, relating to the services provided by the Custodian
under this Agreement; such reports shall be of sufficient scope and in
sufficient detail, as may reasonably be required by the Trust to provide reasonable
assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so
state.

 

Section 3.                         Duties of the
Custodian with Respect to Property of the Trust to be Held Outside of the United
States

 

3.1                                                              Appointment of
Foreign Sub-Custodians.  The
Trust hereby authorizes and instructs the Custodian to employ as sub-custodians
for the Trust’s securities and other assets maintained outside the United
States the foreign banking institutions and foreign securities depositories
designated on Schedule A hereto (“foreign sub-custodians”).

 

3.2                                                              Foreign
Securities Systems.  Except as
may otherwise be agreed upon in writing by the Custodian and the Trust, assets
of the Trust shall be maintained in a clearing agency which acts as a
securities depository or in a book-entry system for the central handling of
securities located outside the United States (each, a “Foreign Securities System”)
only through arrangements implemented by the foreign banking institutions
serving as sub-custodians pursuant to the terms hereof (Foreign Securities
Systems and U.S. Securities Systems are collectively referred to herein as the “Securities Systems”).  

 

9

 

Where
possible, such arrangements shall include entry into agreements containing the
provisions set forth in Section 3.4 hereof.

 

3.3                                                              Holding
Securities.  The
Custodian may hold foreign securities and other non-cash property for all of
its customers, including the Trust, with a foreign sub-custodian in a single
account that is identified as belonging to the Custodian for the benefit of its
customers; provided, however, that (a) the records of the Custodian with
respect to foreign securities and other non-cash property of the Trust which
are maintained in such account shall identify by book-entry those foreign
securities and other non-cash property belonging to the Trust and (b) the
Custodian shall require that foreign securities and other non-cash property so
held by the foreign sub-custodian be held separately from any assets of the
foreign sub-custodian or of others.

 

3.4                                                              Agreements with
Foreign Banking Institutions.  The Custodian shall use commercially
reasonable efforts to require that each agreement with a foreign banking
institution employed as a foreign sub-custodian shall provide that:  (a) the Trust’s assets will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of the foreign banking institution or its creditors or agent, except a
claim of payment for their safe custody or administration or, in the case of
cash deposits, liens or rights in favor of creditors of the foreign banking
institution arising under bankruptcy, insolvency or similar laws; (b) beneficial
ownership of the Trust’s assets will be freely transferable without the payment
of money or value other than for custody or administration; (c) adequate
records will be maintained identifying the assets as belonging to the Trust; (d) officers
of or auditors employed by, or other representatives of the Manager or the
Trust, including to the extent permitted under applicable law the independent
public accountants for the Trust, will be given access to the books and records
of the foreign banking institution relating to its actions under its agreement
with the Custodian; and (e) assets of the Trust held by the foreign
sub-custodian will be subject only to the instructions of the Custodian or its
agents.

 

3.5                                                              Access of
Independent Accountants of the Trust.  Upon request of the Trust, the Custodian will
use commercially reasonable efforts to arrange for the independent accountants
of the Trust to be afforded access to the books and records of any foreign
banking institution employed as a foreign sub-custodian insofar as such books
and records relate to the performance of such foreign banking institution under
its agreement with the Custodian.

 

3.6                                                              Reports by
Custodian.  The
Custodian will supply to the Trust from time to time, as mutually agreed upon,
statements in respect of the securities and other assets of the Trust held by
foreign sub-custodians, including but not limited to an identification of
entities having possession of the Trust’s foreign securities and other assets
and advices or notifications of any transfers of securities to or from each
custodial account maintained by a foreign banking institution for the Custodian
on behalf of the Trust indicating, as to foreign securities acquired for the
Trust, the identity of the entity having physical possession of such securities.

 

10

 

3.7                                                              Transactions in
Foreign Custody Account.

 

(a) Except as otherwise provided in paragraph (b) of this Section 3.7,
the provision of Sections 2.2 and 2.6 of this Agreement shall apply, mutatis
mutandis to the foreign securities of the Trust held outside the United
States by foreign sub-custodians.

 

(b) Notwithstanding any provision of this Agreement to the
contrary, settlement and payment for foreign securities received for the
account of the Trust and delivery of foreign securities maintained for the account
of the Trust may be effected in accordance with the customary established
securities trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering foreign securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a receipt
with the expectation of receiving later payment for such securities from such
purchaser or dealer.

 

(c) The foreign securities maintained in the custody of a foreign
sub-custodian (other than bearer securities) shall be registered in the name of
the Trust or in the name of the Custodian or in the name of any foreign
sub-custodian or in the name of any nominee of the foregoing, and the Trust
agrees to hold any such nominee harmless from any liability as a holder of
record of such foreign securities.  The
Custodian or a foreign sub-custodian shall not be obligated to accept
securities on behalf of the Trust under the terms of this Agreement unless the
form of such securities and the manner in which they are delivered are in
accordance with reasonable market practice.

 

3.8                                                              Liability for
Foreign Sub-Custodians.  The
Custodian shall be liable for the acts or omissions of a foreign sub-custodian
to the same extent as set forth with respect to sub-custodians generally in
this Agreement and, regardless of whether assets are maintained in the custody
or banking department of a foreign sub-custodian or a Foreign Securities
System, the Custodian shall not be liable for any loss, damage, cost, expense,
liability or claim resulting from nationalization, expropriation, currency
restrictions, or acts of war or terrorism, or any other loss where the foreign
sub-custodian has otherwise acted with reasonable care, or any loss, damage,
cost, expense, liability or claim resulting from the bankruptcy, insolvency or
receivership of any Foreign Sub-Custodian.

 

3.9                                                              Bank Accounts.  The Custodian shall identify on its books as
belonging to the Trust cash (including cash denominated in foreign currencies)
deposited with the Custodian.  Where the
Custodian is unable to maintain, or market practice does not facilitate the
maintenance of, cash on the books of the Custodian, a bank account or bank
accounts shall be opened and maintained outside the United States on behalf of
the Trust with a foreign sub-custodian. 
All accounts referred to in this Section shall be subject only to
draft or order by the Custodian (or, if applicable, such foreign sub-custodian)
acting pursuant to the terms of this Agreement to hold cash received by or from
or for the account of the Trust.  Cash
maintained on the books of the Custodian (including its branches, subsidiaries
and affiliates), regardless of currency 

 

11

 

denomination,
is maintained in bank accounts established under, and subject to the laws of,
The Commonwealth of Massachusetts.

 

3.10                                                        Collection of
Income.  The Custodian shall use
reasonable commercial efforts to collect all income and other payments with
respect to the foreign securities held hereunder to which the Trust shall be
entitled and shall credit such income, as collected, to the Trust.  In the event that extraordinary measures are
required to collect such income, the Trust and the Custodian shall consult as
to such measures and as to the compensation and expenses of the Custodian
relating to such measures.

 

3.11                                                        Shareholder
Rights. 
With respect to the foreign securities held pursuant to this Section 3,
the Custodian will use reasonable commercial efforts to facilitate the exercise
of voting and other shareholder rights, subject always to the laws, regulations
and practical constraints that may exist in the country where such securities
are issued.  The Trust acknowledges that
local conditions, including lack of regulation, onerous procedural obligations,
lack of notice and other factors may have the effect of severely limiting the
ability of the Trust to exercise shareholder rights.

 

3.12                                                        Communications
Relating to Foreign Securities.  The Custodian shall
transmit promptly to the Trust written information with respect to materials
received by the Custodian via the foreign sub-custodians from issuers of the
foreign securities being held for the account of the Trust (including, without
limitation, pendency of calls and maturities of foreign securities and
expirations of rights in connection therewith). 
With respect to tender or exchange offers, the Custodian shall transmit
promptly to the Trust written information with respect to materials so received
by the Custodian from issuers of the foreign securities whose tender or
exchange is sought or from the party (or its agents) making the tender or
exchange offer.  The Custodian shall not be
liable for any untimely exercise of any tender, exchange or other right or
power in connection with foreign securities or other property of the Trust at
any time held by it unless (i) the Custodian or the respective foreign
sub-custodian is in actual possession of such foreign securities or property
and (ii) the Custodian receives Proper Instructions with regard to the
exercise of any such right or power, and both (i) and (ii) occur at
least three business days prior to the date on which the Custodian is to take
action to exercise such right or power. 
The Custodian shall also transmit promptly to the Trust all written
information received by the Custodian via the foreign sub-custodians from
issuers of the foreign securities being held for the account of the Trust
regarding any class action or other litigation in connection with foreign
securities or other assets issued outside the United States and then held, or
previously held, during the term of this Agreement by the Custodian for the
account of the Trust, including, but not limited to, opt-out notices and
proof-of-claim forms. For avoidance of doubt, upon and after the effective date
of any termination of this Agreement, the Custodian shall have no
responsibility to so transmit any information under this Section 3.12

 

12

 

Section 4.                         Special
Sub-Custodians

 

Upon receipt of Special Instructions (as such term is defined in Section 6
hereof), the Custodian shall, on behalf of the Trust, appoint one or more
banks, trust companies or other entities designated in such Special
Instructions to act as a sub-custodian for purposes of effecting such
transaction as may be designated by the Trust in Special Instructions.  Each such designated sub-custodian is
referred to herein as a “Special
Sub-Custodian.”  Each such
duly appointed Special Sub-Custodian shall be listed on Schedule B hereto, as
it may be amended from time to time by the Trust, with the acknowledgment of
the Custodian.  In connection with the
appointment of any Special Sub-Custodian, and in accordance with Special
Instructions, the Custodian shall enter into a sub-custodian agreement with the
Trust and the Special Sub-Custodian in form and substance approved by the
Trust.

 

Section 5.                         Payments for
Withdrawals and Sales of Shares

 

If
and as may be applicable, the Custodian shall receive from the distributor or
placing agent for shares of capital stock of the Trust (“Shares”)
or from the Transfer Agent and deposit into the Trust’s such payments as are
received for Shares thereof issued or sold from time to time by the Trust.  The Custodian will provide timely
notification to the Trust and the Transfer Agent of any receipt by it of
payments for Shares of the Trust.

 

If
and as may be applicable, from such funds as may be available for the purpose,
the Custodian shall, upon receipt of instructions from the Transfer Agent, make
funds available for payment to holders of Shares who have delivered to the
Transfer Agent a request for redemption or repurchase of their Shares. In
connection with the redemption or repurchase of Shares, the Custodian is
authorized upon receipt of instructions from the Transfer Agent to wire funds
to or through a commercial bank designated by the redeeming shareholders.  In connection with the redemption or
repurchase of Shares, the Custodian shall honor checks drawn on the Custodian
by a holder of Shares, which checks have been furnished by the Trust to the
holder of Shares, when presented to the Custodian in accordance with such
procedures and controls as are mutually agreed upon from time to time between
the Trust and the Custodian.

 

Section 6.                         Proper
Instructions and Special Instructions

 

“Proper
Instructions,”
as such term is used throughout this Agreement, means a writing signed or
initialed by one or more person or persons as the Trust shall have from time to
time authorized.  Each such writing shall
set forth the specific transaction or type of transaction involved.  Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved; the Trust shall cause all oral instructions to be confirmed in
writing.  Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices 

 

13

 

provided that the Trust and the Custodian agree to security procedures
including, but not limited to, the security procedures selected by the Trust
via the form of Funds Transfer Addendum attached hereto, the terms of which are
hereby agreed to.  For purposes of this
Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any three-party agreement which requires a segregated
asset account in accordance with Section 2.9.

 

“Special
Instructions,” as such term is used throughout this
Agreement, means Proper Instructions countersigned or confirmed in writing by
the Chief Financial Officer of the Manager acting on behalf of the Trust or any
other person designated in writing by the Trust, which countersignature or
confirmation shall be (a) included on the same instrument containing the
Proper Instructions or on a separate instrument clearly relating thereto and (b) delivered
by hand, by facsimile transmission, or in such other manner as the Trust and
the Custodian agree in writing.

 

Concurrently with the execution of this Agreement, and from time to
time thereafter, as appropriate, the Trust shall deliver to the Custodian, duly
certified by a duly authorized officer of the Manager acting on behalf of the
Trust, a certificate setting forth:  (i) the
names, titles, signatures and scope of authority of all persons authorized to
give Proper Instructions or any other notice, request, direction, instruction,
certificate or instrument on behalf of the Trust and (ii) the names,
titles and signatures of those persons authorized to give Special
Instructions.  Such certificate 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
receipt by the Custodian of a similar certificate to the contrary.

 

Section 7.                         Evidence of
Authority

 

The
Custodian shall be protected in acting upon any instructions, notice, request,
consent, certificate or other instrument or paper believed by it to be genuine
and to have been properly executed by or on behalf of the Trust.   The Custodian may receive and accept a copy
of a resolution of the Board, certified by the Secretary or an Assistant
Secretary of the Manager on behalf of the Trust, as conclusive evidence (a) of
the authority of any person to act in accordance with such resolution or (b) of
any determination or of any action by the Board as described in such
resolution, and such resolution may be considered as in full force and effect
until receipt by the Custodian of written notice to the contrary.

 

Section 8.                         Actions
Permitted without Express Authority

 

The Custodian may in its discretion, without express authority from the
Trust:

 

1)                                             make payments
to itself or others for minor  expenses
of handling securities or other similar items relating to its duties under this
Agreement, provided that all such payments shall be accounted for to the Trust;

 

14

 

2)                                              surrender
securities in temporary form for securities in definitive form;

 

3)                                              endorse for
collection, in the name of the Trust, checks, drafts and other negotiable
instruments; and

 

4)                                              in general,
attend to all non-discretionary details in connection with the sale, exchange,
substitution, purchase, transfer and other dealings with the securities and
property of the Trust except as otherwise directed by the Trust.

 

Section 9.                         Duties of
Custodian with Respect to the Books of Account and Calculation of Net Asset
Value and Net Income

 

The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Trust to keep the books of account of
the Trust and/or compute the net asset value per Share of the outstanding
Shares or, if directed in writing to do so by the Trust, shall itself keep such
books of account and/or compute such net asset value per Share, but only on a “book
basis,” and the Custodian shall have no responsibility for determining any tax
accounting for the Trust with respect to the Trust or with respect to any
holder’s interest in the Trust.  If so
directed, the Custodian shall also calculate the net income of the Trust as may
be agreed upon by the Custodian and the Trust but likewise, only on a book
basis, and shall advise the Trust of the total amounts of such net income.  The Trust acknowledges and agrees that, with
respect to investments maintained with the Underlying Transfer Agent, the Underlying
Transfer Agent is the sole source of information on the number of shares or
interests held by it on behalf of a Trust and that the Custodian has the right
to rely on holdings information furnished by the Underlying Transfer Agent to
the Custodian in performing its duties under this Agreement, including without
limitation, the duties set forth in this Section 9 and in Section 10
hereof; provided, however, that the Custodian shall be obligated to reconcile
information as to purchases and sales of Underlying Shares contained in trade
instructions and confirmations received by the Custodian and to report promptly
any discrepancies to the Underlying Transfer Agent.  The calculations of the net asset value per
Share and the income of the Trust shall be made at such time or times as may be
agreed upon by the Custodian and the Trust. 
The Trust acknowledges that, in keeping the books of account of the
Trust and/or making the calculations described herein with respect to Trust
property released and delivered pursuant to Section 2.2(14), or purchased
pursuant to Section 2.6(7) hereof, the Custodian is authorized and
instructed to rely upon information provided to it by the Trust, the Trust’s
counterparty(ies), or the agents of either of them.

 

Section 10.                   Records

 

The Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as may be agreed
to from time to time by the Trust and the Custodian, including the agreements
set forth in that certain 

 

15

 

Acknowledgment of Service Provider Maintaining Books and Records of the
Fund dated as of September 17, 2009, attached hereto as Exhibit A,
and shall at all times during the regular business hours of the Custodian be
open for inspection by duly authorized officers, employees or agents of the
Manager or the Trust.  The Custodian
shall, at the Trust’s request, supply the Trust with a tabulation of securities
owned by the Trust and held by the Custodian and shall, when requested to do so
by the Trust and for such compensation as shall be agreed upon between the
Trust and the Custodian, include certificate numbers in such tabulations.  The Trust acknowledges that, in creating and
maintaining the records as set forth herein with respect to Trust property
released and delivered pursuant to Section 2.2(14), or purchased pursuant
to Section 2.6(7) hereof, the Custodian is authorized and instructed
to rely upon information provided to it by the Trust, the Trust’s
counterparty(ies), or the agents of either of them.

 

Section 11.                   Opinion of
Trust’s Independent Accountant

 

The Custodian shall cooperate reasonably with the Trust’s independent
accountants.

 

Section 12.                   Compensation of
Custodian

 

The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between
the Trust and the Custodian.

 

Section 13.                   Responsibility
of Custodian

 

The
Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement and shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed
by it to be genuine and to be signed by the proper party or parties, including
any futures commission merchant acting pursuant to the terms of a three-party
futures or options agreement.  The
Custodian shall be held to the exercise of reasonable care in carrying out the provisions
of this Agreement, but shall be kept indemnified by and shall be without
liability to the Trust for any action taken or omitted by it in good faith
without gross negligence, including, without limitation, acting in accordance
with any Proper Instruction.  It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Trust) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.  The Custodian shall be entitled to rely upon,
and shall have no duty of inquiry with respect to, the accuracy of any
representation or warranty given to it by the Trust and shall be without
liability for any action reasonably taken or omitted by it in reliance
thereon.  The Custodian shall have no
responsibility and shall be without liability for any loss, liability, claim or
expense resulting from or caused by its reliance on any information, records,
reports or other data that is or was prepared or maintained for the Trust by
any person other than the Custodian.

 

16

 

Except
as may arise from the Custodian’s gross negligence or willful misconduct, the
Custodian shall be without liability to the Trust for any loss, liability,
claim or expense resulting from or caused by: (i) events or circumstances
beyond the reasonable control of the Custodian or any sub-custodian or
Securities System or any agent or nominee of any of the foregoing, including,
without limitation, nationalization or expropriation, imposition of currency
controls or restrictions, the interruption, suspension or restriction of
trading on or the closure of any securities market, power or other mechanical
or technological failures or interruptions, computer viruses or communications
disruptions, acts of war or terrorism, riots, revolutions, work stoppages,
natural disasters or other similar events or acts; (ii) errors by the
Trust, its investment manager or any other third-party agent of the Trust in
their respective instructions to the Custodian, provided such instructions have
been in accordance with this Agreement; (iii) the insolvency of or acts or
omissions by a Securities System; (iv) any delay or failure of any broker,
agent or intermediary, central bank or other commercially prevalent payment or
clearing system to deliver to the Custodian’s sub-custodian or agent securities
purchased or in the remittance or payment made in connection with securities
sold; (v) any delay or failure of any company, corporation, or other body
in charge or registering or transferring securities in the name of the
Custodian, the Trust, the Custodian’s sub-custodians, nominees or agents or any
consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vi) delays or inability to perform its duties due
to any disorder in market infrastructure with respect to any particular
security or Securities System; and (vii) any provision of any present or
future law or regulation or order of the United States of America, or any state
thereof, or any other country, or political subdivision thereof or of any court
of competent jurisdiction.

 

If
the Trust requires the Custodian to take any action with respect to securities,
which action involves the payment of money or which action may, in the opinion
of the Custodian, result in the Custodian or its nominee assigned to the Trust
being liable for the payment of money or incurring liability of some other
form, the Trust, 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.

 

If
the Custodian, or any of its affiliates, subsidiaries or agents, advance cash
or securities for any purpose (including but not limited to securities
settlements, foreign exchange contracts and assumed settlement), 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 this Agreement, except such as may arise from its or its nominee’s gross
negligence or willful misconduct, or if the Trust fails to compensate the
Custodian pursuant to Section 12 hereof, any property at any time held for
the account of the Trust shall be security therefor and should the Trust fail
to repay the Custodian promptly, the Custodian shall be entitled to utilize
available cash and to dispose of the Trust assets to the extent necessary to
obtain reimbursement.

 

17

 

In
no event shall the Custodian be liable for indirect, special or consequential
damages.

 

Section 14.                   Tax Law

 

The
Custodian shall have no responsibility or liability for any obligations now or
hereafter imposed on the Trust or the Custodian as custodian of the Trust by
the tax law of the United States or of any state or political subdivision
thereof. It shall be the responsibility of the Trust to notify the Custodian of
the obligations imposed on the Trust or the Custodian as custodian of the Trust
by the tax law of countries other than those mentioned in the above sentence,
including responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting.  The sole responsibility of the Custodian with
regard to such tax law shall be to use reasonable efforts to assist the Trust
with respect to any claim for exemption or refund under the tax law of
countries for which the Trust has provided such information.

 

Section 15.                   Representations
and Warranties

 

The
Trust represents and warrants to the Custodian that:

 

(a)                                 It is duly
formed, validly existing in good standing in its jurisdiction of formation and
qualified to conduct its business in every jurisdiction where its business is
conducted;

 

(b)                                The execution,
delivery and performance of this Agreement, all documents and instruments to be
delivered hereunder or thereunder and all transactions contemplated hereunder
or thereunder have been duly authorized by all necessary corporate action;

 

(c)                                 The person
executing this Agreement on its behalf has been duly authorized to act on its
behalf;

 

(d)                                This Agreement
constitutes its legal, valid, binding and enforceable agreement;

 

(e)                                 It has obtained
all authorizations, approvals and consents of any governmental body required in
connection with this Agreement and all transactions contemplated hereunder and
such authorizations are in full force and effect;

 

(f)                                   The execution,
delivery and performance of this Agreement and the transactions hereunder will
not violate any agreement, law, ordinance, charter, by-law, rule or
regulation applicable to it or by which it is bound or by which any of its
assets are affected.  Further, the Trust
hereby acknowledges and agrees that it shall promptly notify the Custodian of
any statute, regulation, rule, or other regulatory requirement or policy
governing the Trust, and any change thereto, which may affect the Custodian’s
responsibilities under this Agreement; and

 

18

 

(g)                                The aggregate
interest in any class (or similar designation, if any) of Shares held by
benefit plan investors (as such term is interpreted under The Employee
Retirement Income Security Act of 1974, as amended (“ERISA”)) shall not at any
time equal or exceed 25% of the outstanding Shares of such class (or similar
designation, if any) without the prior written consent of the Custodian and the
Trust shall not, without the prior written consent of the Custodian, permit the
assets of the Trust to be deemed assets of an employee benefit plan which is
subject to ERISA.  The Trust acknowledges
and agrees that the Custodian shall not grant its consent in either of the
foregoing circumstances unless and until (i) the Trust has entered into an
amendment to this Agreement in form and substance satisfactory to the Custodian
and (ii) the Trust’s investment adviser has (x) provided the
Custodian with satisfactory evidence of its compliance with the requirements of
the aforementioned amendment to this Agreement and (y) executed and
delivered to the Custodian an Indemnification and Contribution Agreement, in
form and substance satisfactory to the Custodian. If for any reason the Trust,
its investment manager or any other third-party agent of the Trust breaches or
otherwise fails to comply with the provisions of this Section 15(g), this
Agreement may be terminated immediately and without prior notice by the
Custodian.

 

Section 16.                   Effective
Period, Termination and Amendment

 

This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided, however that the Trust shall not amend or
terminate this Agreement in contravention of any applicable federal or state
regulations, or any provision of the Trust’s governing documents, and further
provided, that the Trust may at any time (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Agreement in the event of
the appointment of a conservator or receiver for the Custodian by the
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.

 

Upon termination of the Agreement, the Trust shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.  The provisions of Sections 12, 13 and 14 of
this Agreement shall survive termination of this Agreement for any reason.

 

19

 

Section 17.                   Successor
Custodian

 

If a successor custodian shall be appointed by the Trust, the Custodian
shall, upon termination and receipt of Proper Instructions, deliver to such
successor custodian at the office of the Custodian, duly endorsed and in the
form for transfer, all securities then held by it hereunder and shall transfer
to an account of the successor custodian all of the Trust’s securities held in
a Securities System or at an Underlying Transfer Agent.

 

If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of Proper Instructions, deliver at the office of
the Custodian and transfer such securities, funds and other properties in
accordance with such Proper Instructions.

 

In the event that no Proper Instructions designating a successor
custodian or alternative arrangements shall have been delivered to the
Custodian on or before the date when such termination shall become effective,
then the Custodian shall have the right to deliver to a bank or trust company
of its own selection, all securities, funds and other properties held by the
Custodian and all instruments held by the Custodian relative thereto and all
other property held by it under this Agreement and to transfer to an account of
such successor custodian all of the Trust’s securities held in any Securities
System or at an Underlying Transfer Agent. 
Thereafter, such bank or trust company shall be the successor of the
Custodian under this Agreement.

 

In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to provide Proper Instructions as aforesaid, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other properties
and the provisions of this Agreement relating to the duties and obligations of
the Custodian shall remain in full force and effect.

 

Section 18.                   Anti-Money
Laundering

 

The
Trust acknowledges that the Custodian is required to comply with a number of
federal regulations and policies concerning matters such as the identity of its
customers and the source of funds it handles, including the Bank Secrecy Act
and the USA Patriot Act, and all regulations issued thereunder, and the
regulations issued by the U.S. Department of Treasury, Office of Foreign Asset
Control (together, the “U.S. Money Laundering and
Investor Identification Requirements”).   Accordingly, the Trust confirms that it has
complied and shall continue to comply with all applicable U.S. Money Laundering
and Investor Identity Requirements with respect to the account of the Trust,
including without limitation maintaining and effecting appropriate procedures
to verify suspicious transactions and the source of funds for settlement of
transactions.

 

20

 

Section 19.      General

 

Section 19.1  Massachusetts
Law to Apply.  This Agreement shall
be construed and the provisions thereof interpreted under and in accordance
with laws of The Commonwealth of Massachusetts.

 

Section 19.2  Prior
Contracts.  This Agreement supersedes
and terminates, as of the date hereof, all prior contracts between the Trust
and the Custodian relating to the custody of the Trust’s assets.

 

Section 19.3  Assignment.  Neither this Agreement nor any rights or
obligations hereunder may be assigned by either party, whether voluntarily,
involuntarily or by operation of law, without the prior written consent of the
other, such consent not to be unreasonably withheld, except to entities
controlled by, under common control with or controlling the assigning party,
provided that such assignee has financial capacity at least equal to that of
the assignor.

 

Section 19.4  Interpretive
and Additional Provisions.  In
connection with the operation of this Agreement, the Custodian and the Trust
may from time to time agree on such provisions interpretive of or in addition
to the provisions of this Agreement as may in their joint opinion be consistent
with the general tenor of this Agreement. 
Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal
or state regulations or any provision of the Trust’s governing documents.  No interpretive or additional provisions made
as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.

 

Section 19.5  Remote
Access Services Addendum.  The
Custodian and the Trust agree to be bound by the terms of the Remote Access
Services Addendum attached hereto.

 

Section 19.6  Notices.  Any notice, instruction or other instrument
required to be given hereunder may be delivered in person to the offices of the
parties as set forth herein during normal business hours or delivered prepaid
registered mail or by telex, cable or telecopy to the parties at the following
addresses or such other addresses as may be notified by any party from time to
time.

 

To the Trust:                                                                         Nuveen
Commodities Asset Management, LLC

333 W. Wacker Drive

Suite 3300

Chicago, IL  60606

Attention:  General Counsel

Facsimile:  312-917-7952

 

To the Custodian:                                               State Street
Bank and Trust Company

2 Avenue de Lafayette

Boston, MA 
02111

 

21

 

Attention: Jennifer A. Vaudo, Vice President

Telephone:  617-662-0197

Facsimile:  617-662-4096

 

Such notice, instruction or other instrument shall be deemed to have
been served in the case of a registered letter at the expiration of five
business days after posting, in the case of overnight courier, upon receipt, in
the case of cable twenty-four hours after dispatch and, in the case of telex or
telecopy, immediately upon dispatch and if delivered by cable, telex or
telecopy outside normal business hours it shall be deemed to have been received
at the next time after delivery when normal business hours commence.  Evidence that the notice was properly
addressed, stamped and put into the post shall be conclusive evidence of
posting.

 

Section 19.7  Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts taken together shall constitute but one and the same Agreement.

 

Section 19.8  Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, unlawful or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired.

 

Section 19.9  Confidentiality.  The parties hereto agree that each shall
treat confidentially all information provided by each party to the other party
regarding its business and operations. 
All confidential information provided by a party hereto shall be used by
any other party hereto solely for the purpose of rendering or receiving
services pursuant to this Agreement and, except as may be required in carrying
out this Agreement, shall not be disclosed to any third party.  The foregoing shall not be applicable to any
information (i) that is publicly available when provided or thereafter
becomes publicly available, other than through a breach of this Agreement, or
that is independently derived by any party hereto without the use of any
information provided by the other party hereto in connection with this
Agreement, (ii) that is required in any legal or regulatory proceeding,
investigation, audit, examination, subpoena, civil investigative demand or
other similar process, or by operation of law or regulation, or (iii) where
the party seeking to disclose has received the prior written consent of the
party providing the information, which consent shall not be unreasonably
withheld.  Notwithstanding anything
herein to the contrary, the Custodian and its affiliates may report and use
nonpublic portfolio holdings information of its clients, including the Trust,
on an aggregated basis with all or substantially all other client information
and without specific reference to the Trust.

 

Section 19.10  Reproduction
of Documents.  This Agreement and all
schedules, exhibits, addenda, attachments and amendments hereto may be reproduced
by any photographic, photostatic, microfilm, micro-card, miniature photographic
or other similar process.  The parties
hereto all/each agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.

 

22

 

SECTION 19.11  Regulation GG.  The Trust hereby represents and warrants that
it does not engage in an “Internet gambling business,” as such term is defined
in Section 233.2(r) of Federal Reserve Regulation GG (12 CFR 233) (“Regulation GG”).  The Trust hereby covenants and agrees that it
shall not engage in an Internet gambling business.  In accordance with Regulation GG, the Trust
is hereby notified that “restricted transactions,” as such term is defined in Section 233.2(y) of
Regulation GG, are prohibited in any dealings with the Custodian pursuant to
this Agreement or otherwise between or among any party hereto.

 

SECTION 19.12  DATA
PRIVACY. The Custodian will implement and maintain a written information
security program that contains appropriate security measures to safeguard the
personal information of the Trust’s shareholders and employees, directors
and/or officers of the Manager that the Custodian receives, stores, maintains,
processes or otherwise accesses in connection with the provision of services
hereunder.  For these purposes, “personal information” shall mean (i) an
individual’s name (first initial and last name or first name and last name),
address or telephone number plus (a) social security number, (b) drivers
license number, (c) state identification card number, (d) debit or
credit card number, (e) financial account number or (f) personal
identification number or password that would permit access to a person’s
account or (ii) any combination of the foregoing that would allow a person
to log onto or access an individual’s account.  Notwithstanding the
foregoing “personal information” shall not include information that is lawfully
obtained from publicly available information, or from federal, state or local
government records lawfully made available to the general public.

 

Section 19.13  Shareholder
Communications.  Securities and
Exchange Commission Rule 14b-2 requires banks which hold securities for
the account of customers to respond to requests by issuers of securities for
the names, addresses and holdings of beneficial owners of securities of that
issuer held by the bank unless the beneficial owner has expressly objected to
disclosure of this information.  In order
to comply with the rule, the Custodian needs the Trust to indicate whether it
authorizes the Custodian to provide the Trust’s name, address, and share
position to requesting companies whose stock the Trust owns.  If the Trust tells the Custodian “no”, the
Custodian will not provide this information to requesting companies.  If the Trust tells the Custodian “yes” or do
not check either “yes” or “no” below, the Custodian is required by the rule to
treat the Trust as consenting to disclosure of this information for all
securities owned by the Trust or any funds or accounts established by the
Trust.  For the Trust’s protection, the Rule prohibits
the requesting company from using the Trust’s name and address for any purpose
other than corporate communications. 
Please indicate below whether the Trust consents or objects by checking
one of the alternatives below.

 

YES o       The
Custodian is authorized to release the Trust’s name, address, and share
positions.

 

NO  x      The Custodian is not authorized to release
the Trust’s name, address, and share positions.

 

23

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

24

 

IN
WITNESS WHEREOF, each of the parties has caused this instrument to be executed
in its name and behalf by its duly authorized representative and its seal to be
hereunder affixed as of the date first above-written.

 

 

	
  NUVEEN DIVERSIFIED COMMODITY FUND

  
	
   

  	
   

  
	
  By: Nuveen Commodities Asset Management, LLC, its manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Gifford R. Zimmerman

  	
   

  
	
  Name:
  Gifford R. Zimmerman

  	
   

  
	
  Title:
  Chief Administrative Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE STREET BANK AND TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:
  

  	
  /s/
  Michael F. Rogers

  	
   

  
	
  Name:
  Michael F. Rogers

  	
   

  
	
  Title:  Executive Vice President

  	
   

  

 

 

SCHEDULE B

to

CUSTODIAN AGREEMENT

 

SPECIAL SUB-CUSTODIANS

 

None

 

B-1

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