EXHIBIT-99.g9
This Agreement, dated MARCH 13, 2006 is between:
(1) AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.- AMERICAN CENTURY NT EMERGING
MARKETS FUND (the "CUSTOMER") having a place of business at 000 XXXXX
XXXXXX, XXX XXXX, XX 00000; and
(2) JPMORGAN CHASE BANK, N.A (THE "BANK").
WHEREAS:
(A) The Customer has entered into a custody agreement with the Bank dated
as of AUGUST 9, 1996 (the "CUSTODY AGREEMENT"), which provides that
the Bank will act as custodian of certain securities of the Customer.
(B) The Customer now wishes that the Bank provide certain services in
respect of Russian Securities, which is a market not specified in the
Schedule to the Custody Agreement, and the Bank hereby agrees that it
shall provide those services pursuant to the terms and conditions set
forth in this Agreement, and which shall be supplemental to the
Custody Agreement.
NOW IT IS HEREBY AGREED AS FOLLOWS:
SECTION 1. INTENTION OF THE PARTIES
(a) The Customer appoints the Bank to provide the services as described
herein in relation to Russian Securities, and the Bank agrees to
provide those services with effect from the date hereof, but only in
relation to Russian Securities for which X.X. Xxxxxx Bank
International ("JPMBI") has entered into a Registrar Contract with the
relevant Registrar Company (as defined herein).
(b) Nothing in this Agreement shall be construed or interpreted as
implying an alteration in the standards of care of the Bank as
depository bank imposed by law, regulation, or by the regulator
itself.
SECTION 2. DEFINITIONS
The following words shall have the meanings ascribed to them herein:
(a) "BOARD OF DIRECTORS" shall mean the board of directors from time to
time of the Customer.
(b) "DEPOSITORY EXTRACT" shall mean an extract issued by a Russian
Securities Depository as provided in Section 2(n) hereof.
(c) "INTERNATIONAL FINANCIAL INSTITUTION" shall mean any bank in the top
1,000 (together with their affiliated companies) as measured by "Tier
1" capital or any broker/dealer in the top 100 as measured by capital.
(d) "JPMBI" shall mean X.X. Xxxxxx Bank International (Limited Liability
Company), an indirect wholly-owned subsidiary of X.X. Xxxxxx Xxxxx &
Co., located in Moscow, Russia, and any nominee companies appointed by
it.
(e) "MINFIN BONDS" shall mean Russian Ministry of Finance USD denominated
bonds, issued in physical form.
(f) "NEGLIGENCE" shall mean the failure to exercise Reasonable Care or to
use Reasonable Efforts (as defined below).
(g) "NO-ACTION LETTER" shall mean the response of the Securities and
Exchange Commission's Office of Chief Counsel of Investment
Management, dated April 18, 1995, in respect of the Xxxxxxxxx Russia
Fund, Inc. (SEC Ref. No. 95-151-CC, File No. 811-8788) providing
"no-action" relief under ss.17(f) of The Investment Company Act of
1940, as amended, and SEC Rule 17f-5 thereunder, in connection with
custody of such Xxxxxxxxx Russia Fund, Inc.'s investments in Russian
Securities."
(h) "REASONABLE CARE" shall mean the use of reasonable custodial practices
under the applicable circumstances as measured by the custodial
practices then prevailing in Russia of International Financial
Institutions acting as custodians for their institutional investor
clients in Russia including, in relation to the appointment of
nominees and agents, the taking of reasonable steps in order to assess
the reputation and competence of such nominees and agents.
(i) "REASONABLE EFFORTS" shall mean in relation to Share Extracts and
corporate actions, the taking of such steps as are considered by the
Bank as being reasonably appropriate to obtain Share Extracts and to
exercise corporate actions respectively under the given circumstances
having regard to cost, time and other practical constraints.
(j) "REGISTRAR COMPANY" shall mean any entity providing share registration
services to an issuer of Russian Securities and appropriately licensed
by the Federal Commission for Securities and Securities Markets in
Russia.
(k) "REGISTRAR CONTRACT" shall mean a contract between JPMBI and a
Registrar Company (and as the same may be amended from time to time)
containing, INTER ALIA, substantially the following contractual
provisions:
(i) REGULAR SHARE CONFIRMATIONS - each Registrar Contract will
establish JPMBI's right to conduct regular share confirmations on
behalf of JPMBI's customers. In conducting these share
confirmations, a JPMBI employee or agent will request either a
duplicate Share Extract or some other sufficient evidence of
verification and will determine if the extract reflects the same
information as contained in JPMBI's records. For at least the
first two (2) years following JPMBI's initial use of a Registrar
Company in connection with an investment by the Customer, JPMBI
will conduct these share confirmations at least quarterly.
(ii) PROMPT RE-REGISTRATION - Registrar Companies will be obligated to
effect re-registrations within seventy-two (72) hours of
receiving the necessary documentation.
(iii) USE OF NOMINEE NAME - each Registrar Contract will establish
JPMBI's right to hold shares not held directly in the beneficial
owner's name but in the name of "X.X. Xxxxxx Bank International
(Limited Liability Company) as Nominal Holder". JPMBI may,
subject to the approval of the Customer and after having received
all necessary regulatory consent (if any is so required), appoint
such additional nominal holders as it deems appropriate.
(iv) AUDITOR VERIFICATION - each Registrar Contract will establish
JPMBI's right to obtain direct access to the share register for
the independent auditors of JPMBI's customers.
(v) SPECIFICATION OF THE REGISTRAR COMPANY'S RESPONSIBILITIES AND
LIABILITIES - each contract will set forth the Registrar
Company's responsibilities in relation to distributions and other
corporate actions; the Registrar Company's liabilities as
established under the regulations applicable to the share
registration system; and the procedures for making a claim
against and receiving compensation from the Registrar Company in
the event that a loss is incurred.
(vi) USE OF AGENTS - in addition to the appointment of nominees as
referred to in Section 2 (k) (iii) and the appointment of agents
in relation to the share registration functions referred to in
Section 14 hereof, the Bank or JPMBI may, subject to the approval
of the Customer and after having received all necessary
regulatory consent (if any is so required), appoint such other
agents as it deems appropriate.
(l) "RUSSIAN SECURITY" shall mean an equity Security issued by a Russian
issuer.
(m) "RUSSIAN SECURITIES DEPOSITORY" shall mean any entity licensed under
Russian Federal law to carry out, as a depository, registration of
rights to Russian Securities, which, in turn, the Russian Securities
Depository has registered on an omnibus basis with Registrar
Companies.
(n) "SHARE EXTRACT" shall mean an extract of its share registration books
issued by a Registrar Company or shareholding statement from a Russian
Securities Depository indicating an investor's ownership of a
security.
(o) "VTB"* shall mean the Bank for Foreign Trade (Vneshtorgbank), the `de
facto' central clearing and settlement agent for MinFin Bonds. *(It is
mandatory to settle immobilised securities in the VTB, although they
can be uplifted upon the Customer's request.)
SECTION 3. PAYMENT AND SETTLEMENT
Notwithstanding anything to the contrary in the Custody Agreement, with
respect to purchasing Russian Securities, payment therefor shall not be
made prior to the issuance by the Registrar Company of the Share Extract
evidencing the transfer of ownership of the Russian Securities being
purchased and the Customer's receipt thereof. Delivery of Russian
Securities will be accepted by the Bank or JPMBI on behalf of the Customer,
in accordance with the customary or established securities trading or
securities processing practices and procedures in place in Russia. Delivery
of Russian Securities may also be made in any manner specifically required
by instructions acceptable to the Bank. The Customer shall promptly supply
such transaction and settlement information as may be required by the Bank
or JPMBI in connection with particular transactions.
SECTION 4. CORPORATE ACTIONS
It is understood and agreed that the Bank need only use its Reasonable
Efforts with respect to any corporate action, such as a rights issue, stock
dividend or stock split with respect to Russian Securities (except that the
Bank shall use Reasonable Care with respect to its duties to transmit
information to the Customer), it being understood that proxy voting
services are only available with respect to Russian Securities by agreement
and where a Registrar Contract is in place.
SECTION 5. RESPONSIBILITY FOR REGISTRAR COMPANIES
Delegation by the Bank to JPMBI shall not relieve the Bank of any
responsibility to the Customer for any loss due to such delegation, and the
Bank shall be liable for any loss or claim arising out of or in connection
with the performance by JPMBI of such delegated duties to the same extent
as if the Bank had itself provided the custody services hereunder. In
connection with the foregoing, neither the Bank nor JPMBI shall assume
responsibility for, and neither shall be liable for the safekeeping of
Russian Securities or, any action or inaction of any Registrar Company or
Russian Securities Depository and no Registrar Company or Russian
Securities Depository shall be, or shall be deemed to be the Bank, JPMBI, a
correspondent, a subcustodian or the employee, agent or personnel of any of
the foregoing. In addition, no Registrar Company shall be deemed to be a
securities depository. Furthermore, neither the Bank nor JPMBI shall assume
responsibility for, and neither shall be liable for any loss occasioned by
reason of the liquidation, bankruptcy or insolvency of any Registrar
Company. To the extent that JPMBI employs agents to perform any of the
functions to be performed by the Bank or JPMBI with respect to Russian
Securities, neither the Bank nor JPMBI shall be responsible for any act,
omission, default or for the solvency of any such agent unless the
appointment of such agent was made with Negligence or in bad faith, except
that where the Bank or JPMBI uses an (i) affiliated nominee or (ii) an
agent to perform share registration or share confirmation functions
described in Section 2(k)(i)-(v) hereof, and to the extent applicable to
JPMBI, the share registration functions described in Section 14 hereof, the
Bank and JPMBI shall be liable to the Customer as if the Bank or JPMBI were
performing such functions themselves, provided however that the Bank shall
not be liable for any act, omission, default or for the solvency of the
Depository Clearing Company (the "DCC"), which has been appointed by the
Bank in relation to re-registration of Russian Securities. To the extent,
the Bank has entered into a Registrar Contract with the DCC, neither the
Bank nor JPMBI shall assume responsibility for, and neither shall be liable
for any action or inaction of the DCC provided however that the Bank and
JPMBI are subject to the monitoring duties set forth in Section 7 hereof.
The Bank will from time to time inform the Customer of the agents which are
used and shall on request provide further details of the functions they
perform.
SECTION 6. SAFEKEEPING
Subject to Section 15 hereof, the only safekeeping function which the Bank
shall perform, with respect to Russian Securities, shall be limited to the
safekeeping of relevant Share Extracts and Depository Extracts.
SECTION 7. MISCELLANEOUS
(a) The Bank and JPMBI will perform their respective duties as described
in the No-Action Letter and such duties are set out in Section
7(b)(i)-(v) hereof.
(b) The Bank will advise the Customer (and will update such advice from
time to time as changes occur) of those Registrar Companies with which
JPMBI has entered into a Registrar Contract and the identity of those
Russian Securities Depositories of which it is a member. In the case
of Russian Securities which are held for the accounts through a
Registrar Company, but not through a Russian Securities Depository,
the Bank shall cause JPMBI both to monitor each Registrar Company and
to promptly advise the Customer and its investment advisor when JPMBI
has actual knowledge of the occurrence of any one or more of the
following events with respect to a Registrar Company that serves in
that capacity for any issuer the Russian Securities of which are held
by the Customer:
(i) a Registrar Company has eliminated the name of a shareholder from
a register or otherwise altered the shareholder's interest and
that shareholder alleges that such elimination or alteration was
unlawful;
(ii) a Registrar Company informs JPMBI that it no longer will be able
materially to comply with the protective provisions of the
Registrar Contract between JPMBI and the Registrar Company, or
JPMBI has actual knowledge that a Registrar Company has engaged
in conduct that indicates that it will not materially comply with
these protective provisions;
(iii) a Registrar Company has refused to re-register shares in the
name of a particular purchaser and the purchaser or seller
alleges that such refusal was unlawful;
(iv) a Registrar Company holds for its own account shares of the
issuer for which it serves as Registrar Company; and
(v) JPMBI determines that a Registrar Company has materially breached
its Registrar Contract with JPMBI and has failed to cure such
breach within a reasonable period of time.
(c) Where the Customer is considering investing in the Russian Securities
of an issuer as to which JPMBI does not have a Registrar Contract with
the issuer's Registrar Company and which Russian Securities either are
held through a Russian Securities Depository or are held in a Russian
Securities Depository of which JPMBI is not a member, the Customer may
request that the Bank ask that JPMBI both consider whether it would be
willing to attempt to enter into such a Registrar Contract or become a
member of such a Russian Securities Depository and JPMBI shall advise
the Customer of its willingness to do so. Where JPMBI has agreed to
make such an attempt, the Bank will advise the Customer of the
occurrence of any one or more of the events described in Section
7(b)(i)-(v) hereof, of which JPMBI has actual knowledge.
Notwithstanding the foregoing, the services to be provided by the Bank
will be provided only in relation to Russian Securities for which
JPMBI has entered into a Registrar Contract with the relevant
Registrar Company or which are held through a Russian Securities
Depository of which JPMBI is a member.
(d) Where the Customer is considering investing in the Russian Securities
of an issuer in relation to which JPMBI has a Registrar Contract with
the issuer's Registrar Company, the Customer may advise the Bank of
its interest in investing in such issuer and, in such event, the Bank
will endeavour so far as is reasonably practicable to advise the
Customer of the occurrence of any one or more of the events described
in Section 7(b)(i)-(v) hereof, of which JPMBI has actual knowledge.
JPMBI will only enter into a Registrar Contract with Registrar
Companies which JPMBI considers to be reputable and competent, as
measured by the compliance of the relevant Registrar Company with the
specific contractual provisions of the Registrar Contract, provided
however, that as set forth in Section 5 hereof, neither the Bank nor
JPMBI shall be liable for any action or inaction of any Registrar
Company.
(e) Where the Customer is considering investing in MinFin Bonds, the
Customer acknowledges and understands that MinFin Bonds are
immobilised in the VTB. In the event that the Customer wishes to
instruct the Bank to uplift MinFin Bonds from the VTB and for the Bank
to be responsible for the safekeeping of MinFin Bonds in physical
form, the Bank reserves the right to refuse to accept delivery of
MinFin Bonds in physical form. In the event that the Bank is not able
to accept delivery of such MinFin Bonds in physical form, the Customer
shall make their own arrangements for the transportation and
safekeeping of such MinFin Bonds and the Bank shall have no duty in
respect of, and accepts no liability for, such arrangements.
(f) The Customer understands that holding MinFin Bonds in physical form
exposes the Customer to additional risks associated with the physical
transportation of bearer instruments and further acknowledges that
additional costs incurred will be charged to the Customer which may
include, but are not limited to, insurance, courier, security and
safekeeping costs.
(g) The Bank and JPMBI shall use Reasonable Care in relation to the
appointment of additional nominees (if any) and agents (if any)
referred to in Sections 2 (k)(iii) and 2 (k)(vi) hereof.
SECTION 8. INDEMNITY
The Customer shall pay for and hold the Bank and JPMBI harmless from any
liability or loss resulting from the imposition or assessment of any taxes
(including, but not limited to, state, stamp and other duties) or other
governmental charges, and any related expenses incurred by the Bank, JPMBI,
its nominee or their respective agents with respect to income on the
Customer's Russian Securities.
SECTION 9. SHARE EXTRACTS/DEPOSITORY EXTRACTS
The Customer acknowledges and agrees that JPMBI may not be able, in given
cases and despite its Reasonable Efforts, to obtain a Share Extract from a
Registrar Company or a Depository Extract from a Russian Securities
Depository and that neither the Bank nor JPMBI will be liable in any such
event including with respect to any losses resulting from such failure,
provided that the Bank has used Reasonable Efforts to obtain such Share
Extract or Depository Extract (as the case may be).
SECTION 10. MARKET PROFILE
The Customer acknowledges that it has received, reviewed and understands
the Bank's market Profile for Russia, including, but not limited to, the
risks described therein, although it is acknowledged that the market
profile does not form part of this document.
SECTION 11. SHARE CONFIRMATIONS
Subject to the co-operation of a Registrar Company for at least the first
two (2) years following JPMBI's initial use of a Registrar Company, the
Bank shall cause JPMBI to conduct share confirmations with that Registrar
Company on at least a quarterly basis, although thereafter confirmations
may be conducted on a less frequent basis if the Customer or the Customer's
Board of Directors (as the case may be), in consultation with JPMBI,
determines it to be appropriate.
SECTION 12. PROVISION OF INFORMATION
The Bank shall cause JPMBI to prepare for distribution to the Customer or
the Customer's Board of Directors (as the case may be) a quarterly Profile
identifying: (i) any concerns it has regarding the Russian share
registration system that should be brought to the attention of the Customer
or the Customer's Board of Directors (as the case may be) and (ii) the
steps that JPMBI has taken during the Profileing period to ensure that the
Customer's interests continue to be appropriately recorded.
SECTION 13. CUSTODY AGREEMENT
Save as otherwise provided herein, the provisions of the Custody Agreement
shall continue in full force and effect. Throughout the Custody Agreement,
in so far as it could be construed as relating to Russian Securities, all
references to "negligence" and "reasonable care" and "reasonable efforts"
shall be amended to read as "Negligence", "Reasonable Care" and "Reasonable
Efforts" respectively.
SECTION 14. SHARE REGISTRATION FUNCTIONS PERFORMED BY JPMBI
The Bank will cause a JPMBI employee or agent, which may include the DCC to
present to the relevant Registrar Company in person the documentation
necessary to effect a transaction, including information from the
Customer's broker concerning the trade and a valid transfer instruction.
The Registrar Contract will provide that the Registrar Company will effect
the re-registration of the shares to reflect the Customer's ownership and
will issue to the JPMBI employee or agent a Share Extract reflecting the
ownership of all the shares registered. Share Extracts are not securities
and cannot be used to transfer ownership. They may, however, be useful in
establishing proper ownership if any dispute arises as to the Customer's
ownership of certain shares. Only after receiving this Share Extract will
the Customer pay for the Russian Securities.
Equities generally will be held in the name of X.X. Xxxxxx Bank
International (Limited Liability Company) as Nominal Holder. An omnibus
account on the books of each Registrar Company will be established for X.X.
Xxxxxx Bank International (Limited Liability Company) as Nominal Holder.
Under an omnibus account, all assets held as nominal holder are maintained
in a single account. Each omnibus account will contain only assets of
JPMBI's customers. Ownership of shares by JPMBI's customers will be
recorded on the books of JPMBI. To verify the holdings of its customers,
JPMBI will compare the total shares held in the omnibus account according
to the Registrar Company with the total shown on the books of JPMBI.
SECTION 15. OCCURRENCE OF ANY CHANGES
Each party acknowledges that the position regarding recording of
entitlement to Russian Securities is likely to change, and each party
agrees that in the event of a material change during the continuance of the
Custody Agreement and this Agreement they shall from time to time consider
whether the terms of this Agreement remain pertinent to the then changed
situation and shall discuss in good faith with the other party the
appropriate course of action, including (where appropriate) whether this
Agreement should be terminated. The Bank will endeavour to keep itself
informed as to any change in the prevailing Russian system for recording
entitlement to Russian Securities.
SECTION 16. GOVERNING LAW
This Agreement is governed by and construed in accordance with THE STATE OF
MISSOURI, USA law and any litigation to occur in relation to such Agreement
shall be subject to the non-exclusive jurisdiction of the competent courts
of THE UNITED STATES OF AMERICA.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
Signed for and on behalf of JPMORGAN CHASE BANK, N.A
By: /s/ Xxx X. Osti
--------------------------------
Authorised Signature
Name: Xxx X. Osti
Title: Vice President
Signed for and on behalf of AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.- AMERICAN
CENTURY NT EMERGING MARKETS FUND
By: /s/ Xxxx X. Xxxxx
-------------------------------
Authorised Signature
Name: Xxxx X. Xxxxx
Title: Vice President
