EXHIBIT (g)(2)
FOREIGN CUSTODY MANAGER AGREEMENT
AGREEMENT made as of July 22, 1998, between General American
Capital Company (the "Fund") and The Bank of New York ("BNY").
W I T N E S S E T H:
WHEREAS, the Fund desires to appoint BNY as a Foreign Custody
Manager on the terms and conditions contained herein;
WHEREAS, BNY desires to serve as a Foreign Custody Manager and
perform the duties set forth herein on the terms and condition contained
herein;
NOW THEREFORE, in consideration of the mutual promises hereinafter
contained in this Agreement, the Fund and BNY hereby agrees as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following
meanings:
1. "BOARD" shall mean the board of directors or board of
trustees, as the case may be, of the Fund.
2. "ELIGIBLE FOREIGN CUSTODIAN" shall have the meaning provided
in the Rule.
3. "MONITORING SYSTEM" shall mean a system established by BNY
to fulfill the Responsibilities specified in clauses 1(d) and 1(e) of
Article III of this Agreement.
4. "QUALIFIED FOREIGN BANK" shall have the meaning provided in
the Rule.
5. "RESPONSIBILITIES" shall mean the responsibilities delegated
to BNY as a Foreign Custody Manager with respect to each Specified
Country and each Eligible Foreign Custodian selected by BNY, as such
responsibilities are more fully described in Article III of this
Agreement.
6. "RULE" shall mean Rule 17f-5 under the Investment Company
Act of 1940, as amended, as such Rule became effective on June 16, 1997.
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7. "SECURITIES DEPOSITORY" shall mean any securities depository
or clearing agency within the meaning of Section (a)(1)(ii) or
(a)(1)(iii) of the Rule.
8. "SPECIFIED COUNTRY" shall mean each country listed on
Schedule I attached hereto and each country, other than the United
States, constituting the primary market for a security with respect to
which the Fund has given settlement instructions to The Bank of New York
as custodian (the "Custodian") under its Custody Agreement with the
Fund.
ARTICLE II
BNY AS A FOREIGN CUSTODY MANAGER
1. The Fund on behalf of its Board hereby delegates to BNY with
respect to each Specified Country the Responsibilities.
2. BNY accepts the Board's delegation of Responsibilities with
respect to each Specified Country and agrees in performing the
Responsibilities as a Foreign Custody Manager to exercise reasonable
care, prudence and diligence such as an experienced person having
responsibility for the safekeeping of the Fund's assets would exercise.
3. BNY shall provide to the Board at such times as the Board
deems reasonable and appropriate based on the circumstances of the
Fund's foreign custody arrangements written reports notifying the Board
of the placement of assets of the Fund with a particular Eligible
Foreign Custodian within a Specified Country and of any material change
in the arrangements (including, in the case of Qualified Foreign Banks,
any material change in any contract governing such arrangements and in
the case of Securities Depositories, any material change in the
established practices or procedures of such Securities Depositories)
with respect to assets of the Fund with any such Eligible Foreign
Custodian.
ARTICLE III
RESPONSIBILITIES
1. Subject to the provisions of this Agreement, BNY shall with
respect to each Specified Country select an Eligible Foreign Custodian.
In connection therewith, BNY shall: (a) determine that assets of the
Fund held by such Eligible Foreign Custodian will be subject to
reasonable care, based on the standards applicable to custodians in the
relevant market in which such Eligible Foreign Custodian operates, after
considering all factors relevant to the safekeeping of such assets,
including, without limitation, those contained in Section (c)(l) of the
Rule; (b) determine that the Fund's foreign custody arrangements with
each Qualified Foreign Bank are governed by a written contract with the
Custodian (or, in the case of a Securities Depository, by such a
contract, by the rules or established practices or procedures of the
Securities Depository, or by any combination of the foregoing) which
will provide reasonable care for the Fund's assets based on the
standards specified in paragraph (c)(1) of the Rule; (c) determine that
each contract with a Qualified Foreign Bank shall include the provisions
specified in paragraph (c)(2)(i)(A) through (F) of the Rule or,
alternatively, in lieu
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of any or all of such (c)(2)(i)(A) through (F) provisions, such other
provisions as BNY determines will provide, in their entirety, the same
or a greater level of care and protection for the assets of the Fund
as such specified provisions; (d) monitor pursuant to the Monitoring
System the appropriateness of maintaining the assets of the Fund with
a particular Eligible Foreign Custodian pursuant to paragraph (c)(l)
of the Rule and in the case of a Qualified Foreign Bank, any material
change in the contract governing such arrangement and in the case of
a Securities Depository, any material change in the established practices
or procedures of such Securities Depository; and (e) advise the Fund
whenever an arrangement (including, in the case of a Qualified Foreign
Bank, any material change in the contract governing such arrangement
and in the case of a Securities Depository, any material change in the
established practices or procedures of such Securities Depository)
described in preceding clause (d) no longer meets the requirements of
the Rule. Anything in this Agreement to the contrary notwithstanding,
BNY shall in no event be deemed to have selected any Securities
Depository the use of which is mandatory by law or regulation or
because securities cannot be withdrawn from such Securities Depository,
or because maintaining securities outside the Securities Depository
is not consistent with prevailing custodial practices in the relevant
market (each, a "Compulsory Depository"); it being understood however,
that for each Compulsory Depository utilized or intended to be
utilized by the Fund, BNY shall provide the Fund from time to time with
information addressing the factors set forth in Section (c)(l) of the
Rule and BNY's opinions with respect thereto so that the Fund may
determine the appropriateness of placing Fund assets therein.
2. (a) For purposes of Clauses (a) and (b) of preceding Section
1 of this Article, with respect to Securities Depositories, it is
understood that such determination shall be made on the basis of and
limited by, publicly available information with respect to each such
Securities Depository.
(b) For purposes of clause (d) of preceding Section 1 of this
Article, BNY's determination of appropriateness shall not include, nor
be deemed to include, any evaluation of Country Risks associated with
investment in a particular country. For purposes hereof "Country Risks"
shall mean systemic risks of holding assets in a particular country
including, but not limited to, (a) the use of Compulsory Depositories,
(b) such country's financial infrastructure, (c) such country's
prevailing custody and settlement practices, (d) nationalization,
expropriation or other governmental actions, (e) regulation of the
banking or securities industry, (f) currency controls, restrictions,
devaluations or fluctuations, and (g) market conditions which affect the
orderly execution of securities transactions or affect the value of
securities.
ARTICLE IV
REPRESENTATIONS
1. The Fund hereby represents that: (a) this Agreement has been
duly authorized, executed and delivered by the Fund, constitutes a valid
and legally binding obligation of the Fund enforceable in accordance
with its terms, and no statute, regulation, rule, order, judgment or
contract binding on the Fund prohibits the Fund's execution or
performance of
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this Agreement; (b) this Agreement has been approved and ratified by
the Board at a meeting duly called and at which a quorum was at all
times present; and (c) the Board or its investment advisor has
considered the Country Risks associated with investment in each
Specified Country and will have considered such risks prior to any
settlement instructions being given to the Custodian with respect to any
other Specified Country.
2. BNY hereby represents that: (a) BNY is duly organized and
existing under the laws of the State of New York, with full power to
carry on its businesses as now conducted, and to enter into this
Agreement and to perform its obligations hereunder; (b) this Agreement
has been duly authorized, executed and delivered by BNY, constitutes a
valid and legally binding obligation of BNY enforceable in accordance
with its terms, and no statute, regulation, rule, order, judgment or
contract binding on BNY prohibits BNY's execution or performance of this
Agreement; and (c) BNY has established the Monitoring System.
ARTICLE V
CONCERNING BNY
1. BNY shall not be liable for any costs, expenses, damages,
liabilities or claims, including attorneys' and accountants' fees,
sustained or incurred by, or asserted against, the Fund except to the
extent the same arises out of the failure of BNY to exercise the care,
prudence and diligence required by Section 2 of Article II hereof. In no
event shall BNY be liable to the Fund, the Board, or any third party for
special, indirect or consequential damages, or for lost profits or loss
of business, arising in connection with this Agreement.
2. The Fund shall indemnify BNY and holds it harmless from and
against any and all costs, expenses, damages, liabilities or claims,
including attorneys' and accountants' fees, sustained or incurred by, or
asserted against, BNY by reason or as a result of any action or
inaction, or arising out of BNY's performance hereunder, provided that
the Fund shall not indemnify BNY to the extent any such costs, expenses,
damages, liabilities or claims arises out of BNY's failure to exercise
the reasonable care, prudence and diligence required by Section 2 of
Article II hereof.
3. For its services hereunder, the Fund agrees to pay to BNY
such compensation and out-of-pocket expenses as shall be mutually
agreed.
4. BNY shall have only such duties as are expressly set forth
herein. In no event shall BNY be liable for any Country Risks associated
with investments in a particular country.
ARTICLE VI
MISCELLANEOUS
1. This Agreement constitutes the entire agreement between the
Fund and BNY, and no provision in the Custody Agreement between the Fund
and the Custodian shall affect the duties and obligations of BNY
hereunder, nor shall any provision in this Agreement affect the duties
or obligations of the Custodian under the Custody Agreement.
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2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to BNY, shall be sufficiently
given if received by it at its offices at 00 Xxxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other place as BNY may from time to
time designate in writing.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Fund shall be sufficiently
given if received by it at its offices at General American Capital
Company, 000 Xxxxxx Xxxxxx, Xx Xxxxx, Xx. 00000, Attention: Law
Division, or at such other place as the Fund may from time to time
designate in writing.
4. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions shall
not in any way be affected thereby. This Agreement may not be amended or
modified in any manner except by a written agreement executed by both
parties. This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided
however, that this Agreement shall not be assignable by either party
without the written consent of the other.
5. This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to conflicts
of laws principles thereof. The Fund and BNY hereby consent to the
jurisdiction of a state or federal court situated in New York City, New
York in connection with any dispute arising hereunder. The Fund hereby
irrevocably waives, to the fullest extent permitted by applicable law,
any objection which it may now or hereafter have to the laying of venue
of any such proceeding brought in such a court and any claim that such
proceeding brought in such a court has been brought in an inconvenient
forum. The Fund and BNY each hereby irrevocably waives any and all
rights to trial by jury in any legal proceeding arising out of or
relating to this Agreement.
6. The parties hereto agree that in performing hereunder, BNY
is acting solely on behalf of the Fund and no contractual or service
relationship shall be deemed to be established hereby between BNY and
any other person.
7. 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.
8. This Agreement shall terminate simultaneously with the
termination of the Custody Agreement between the Fund and the Custodian,
and may otherwise be terminated by either party giving to the other
party a notice in writing specifying the date of such termination, which
shall be not less than thirty (30) days after the date of such notice.
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IN WITNESS WHEREOF, the Fund and BNY have caused this Agreement to
be executed by their respective officers, thereunto duly authorized, as
of the date first above written.
GENERAL AMERICAN CAPITAL
COMPANY
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx
Title: President
Tax Identification No.:
THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxx
---------------------------
XXXXX X. XXXXX
Title: VP
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FOREIGN CUSTODY MANAGER AGREEMENT
SCHEDULE I
Argentina Malaysia
Australia Mauritius
Austria Mexico
Bangladesh Morocco
Belgium Namibia
Bermuda Netherlands
Botswana New Zealand
Brazil Nigeria
Bulgaria Norway
Canada Pakistan
Chile Peru
China Philippines
Columbia Poland
Cyprus Portugal
Czech Republic Russia
Denmark Singapore
Easdaq Slovenia
Ecuador South Africa
Egypt Spain
Estonia Sri Lanka
Finland Swaziland
France Sweden
Germany Switzerland
Ghana Taiwan
Greece Thailand
Hong Kong Tunisia
Hungary Turkey
India Ukraine
Indonesia United Kingdom
Ireland United States
Israel Uruguay
Italy Venezuela
Ivory Coast Zambia
Japan Zimbabwe
Jordan
Kenya
Korea
Latvia
Lebanon
Lithuania
Luxembourg
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