Exhibit 8(c)(1)
SUBCUSTODIAN AGREEMENT
AGREEMENT dated September 1, 1996 between THE CHASE MANHATTAN BANK, N.A.
("Bank") and STATE STREET BANK AND TRUST COMPANY ("Company").
1. Custody Account. The Bank agrees to establish and maintain (a) a custody
account in the name of the Company, acting as custodian for XXXXXXX GROWTH AND
INCOME FUND, a Massachusetts business trust ("Fund") ("Custody Account") for any
and all stocks, shares, bonds, debentures, notes, mortgages or other obligations
for the payment of money and any certificates, receipts, warrants or other
instruments representing rights to receive, purchase or subscribe for the same
or evidencing or representing any other rights or interests therein and other
similar property (hereinafter called "Securities") from time to time received by
the flank or its subcustodian (as defined in the last sentence of Section 3) for
the account of the Company, and (b) a deposit account in the name of the Company
acting as custodian for the Fund ("Deposit Account") for any and all cash in any
currency received by the Bank or its subcustodian for the account of the
Company, which cash shall not be subject to withdrawal by draft or check.
2. Maintenance of Securities Abroad. Securities in the Custody Account
shall be held in the country or other jurisdiction as shall be specified from
time to time in Instructions, provided that such country or other jurisdiction
shall be one in which the principal trading market for such
Securities is located or the country or other jurisdiction in which such
Securities are to be presented for payment or are acquired for the custody
Account and cash in the Deposit Account shall be credited to an account in such
amounts and in the country or other jurisdiction as shall be specified from time
to time in Instructions, provided that such country or other jurisdiction shall
be one in which such cash is the legal currency for the payment of public or
private debts.
3. Eligible Foreign Custodians and Securities Depositories. The Company
authorizes the flank to hold the Securities in the Custody Account and the cash
in the Deposit Account in custody and deposit accounts, respectively, which have
been established by the Bank with one of its branches, a branch of a qualified
U.S. bank, an eligible foreign custodian or an eligible foreign securities
depository; provided, however, that the Board of Trustees of the Fund has
approved the use of, and the Bank's contract with, such eligible foreign
custodian or eligible foreign securities depository by resolution, and
Instructions to such effect have been provided to the Bank. Furthermore, if one
of the Bank's branches, a branch of a qualified U.S. bank or an eligible foreign
custodian is selected to act as the Bank's subcustodian to hold any of the
Securities or cash, such entity is authorized to hold such Securities or cash in
its account with any eligible foreign securities depository in which it
participates. For purposes of this Agreement (a) "qualified U.S. bank" shall
mean a qualified U.S. bank as defined in Rule 17f-5 under the Investment Company
Act of 1940; (b) "eligible foreign custodian" shall mean (i) a banking
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institution or trust company incorporated or organized under the laws of a
country other than the United States that is regulated as such by that country's
government or an agency thereof and that has shareholders' equity in excess of
$200 million in U.S. currency (or a foreign currency equivalent thereof), (ii) a
majority owned direct or indirect subsidiary of a qualified U.S. bank or bank
holding company that is incorporated or organized under the laws of a country
other than the United States and that has shareholders' equity in excess of $100
million in U.S. currency (or a foreign currency equivalent thereof) or (iii) a
banking institution or trust company incorporated or organized under the laws of
a country other than the United States or a majority owned direct or indirect
subsidiary of a qualified U.S. bank or bank holding company that is incorporated
or organized under the laws of a country other than the United States which has
such other qualifications as shall be specified in Instructions and approved by
the Bank; and (c) "eligible foreign securities depository" shall mean a
securities depository or clearing agency, incorporated or organized under the
laws of a country other than the United States, which operates (i) the central
system for handling of securities or equivalent book-entries in that country or
(ii) a transnational system for the central handling of securities or equivalent
book-entries.
Hereinafter the term "subcustodian" will refer to any branch of a qualified
U.S. bank, any eligible foreign custodian or any eligible foreign securities
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depository with which the Bank has entered an agreement of the type contemplated
hereunder regarding Securities and/or cash held in or to be acquired for the
Custody Account or the Deposit Account.
4. Use of Subcustodian. With respect to Securities and other assets which
are maintained by the Bank in the physical custody of a subcustodian pursuant to
Section 3 (as used in this Section 4, the term "Securities" means such
Securities and other assets).
(a) The Bank will identify on its books as belonging to the Fund any
Securities held by such subcustodian.
(b) In the event that a subcustodian permits any of the Securities placed
in its care to be held in an eligible foreign securities depository,
such subcustodian will be required by its agreement with the Bank to
identify on its book such Securities as being held for the account of
the Bank as a custodian for its customers.
(c) Any Securities in the Custody Account held by a subcustodian of the
Bank will be subject only to the instructions of the Bank or its
agents; and any Securities held in an eligible foreign securities
depository for the account of a subcustodian will be subject only to
the instructions of such subcustodian.
(d) The Bank will only deposit Securities in an account with a
subcustodian which includes exclusively the assets held by the Bank
for its customers, and the Bank will cause such account to be
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designated by such subcustodian as a special custody account for the
exclusive benefit of customers of the Bank.
(e) Any agreement the Bank shall enter into with a subcustodian with
respect to the holding of Securities shall require that (i) the
Securities are not subject to any right, charge, security interest,
lien or claim of any kind in favor of such subcustodian except for
their safe custody or administration and (ii) beneficial ownership of
such Securities is freely transferable without the payment of money or
value other than for safe custody or administration; provided,
however, that the foregoing shall not apply to the extent that any of
the above-mentioned rights, charges, etc. result from any compensation
or other expenses arising with respect to the safekeeping of
Securities pursuant to such agreement or from any arrangements made by
the Company with any such subcustodian.
(f) The Bank shall allow independent public accountants of the Fund such
reasonable access to the records of the Bank relating to the
Securities held in the Custody Account as is required by such
accountants in connection with their examination of the books and
records pertaining to the affairs of the Fund. The Bank shall, subject
to restrictions under applicable law, also obtain from any
subcustodian with which the Bank maintains the physical custody of any
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Securities in the custody Account an undertaking to permit independent
public accountants of the Fund such reasonable access to the records
of such subcustodian as may be required in connection with their
examination of the books and records pertaining to the affairs of the
Fund. Upon a reasonable request from the Company, the Bank shall
furnish to the Fund and the Company such reports (or portions thereof)
of the Bank's external auditors as relate directly to the Bank's
system of internal accounting controls applicable to the Bank's duties
under this Agreement. The Bank shall use its best efforts to obtain
and furnish the Fund and the Company with such similar reports as the
Fund or the Company may reasonably request with respect to each
eligible foreign custodian and eligible foreign securities depository
holding Securities of the Company.
(g) The Bank will supply to the Fund and the Company from time to time as
mutually agreed upon a statement in respect to any Securities in the
Custody Account held by a subcustodian, including an identification of
the entity having possession of the Securities, and the Bank will send
to the Fund and the Company an advice or notification of any transfers
of Securities to or from the Custody Account, indicating, as to
Securities acquired for the Company, the identity of the entity having
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physical possession of such Securities. In the absence of the filing
in writing with the Bank by the Company of exceptions or objections to
any such statement within ninety (90) days, the Company shall be
deemed to have approved such statement; and in such case or upon
written approval of the Company of any such statement the Bank shall,
to the extent permitted by law, be released, relieved and discharged
with respect to all matters and things readily apparent on the face of
such statement as though such statement has been settled by the decree
of a court of competent jurisdiction in an action in which the Company
and all persons having any equity interest in the Company were
parties.
(h) The Bank hereby warrants to the Fund and the Company that in its
opinion, after due inquiry, the established procedures to be followed
by each of its branches, each branch of a qualified U.S. bank, each
eligible foreign custodian and each eligible foreign securities
depository holding Securities of the Fund in the account of the
Company pursuant to this Agreement afford protection for such
Securities at least equal to that afforded by the Bank's established
procedures with respect to similar securities held by the Bank (and
its securities depositories) in New York.
5. Deposit Account Payments. Subject to the provisions of Section 7, the
Bank shall make, or cause its subcustodians to make, payments of cash credited
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to the Deposit Account only
(a) in connection with the purchase of Securities for the Fund and the
delivery of such securities to, or the crediting of such Securities to
the account of, the Bank or its subcustodian, each such payment to be
made at prices as confirmed by Instructions (as defined in Section 9
hereof) from Authorized Persons (as defined in Section 10 hereof);
(b) for the payment for the account of the Fund of dividends, interest,
taxes, management or supervisory fees, capital distributions or
operating expenses;
(c) for the payments to be made in connection with the conversion,
exchange or surrender of Securities held in the Custody Account;
(d) for other proper corporate purposes of the Fund; or
(e) upon the termination of this Custody Agreement as hereinafter set
forth.
All payments of cash for a purpose permitted by subsection (a), (b) or (c)
of this Section 5 will be made only upon receipt by the Bank of Instructions
from Authorized Persons which shall specify the purpose for which the payment is
to be made and the applicable subsection of this Section 5. In the case of any
payment to be made for the purpose permitted by subsection (d) of this Section
5, the Bank must first receive a certified copy of a resolution of the Board of
Trustees of the Fund adequately describing such payment, declaring such purpose
to be a proper corporate purpose, and naming the person or persons to whom such
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payment is to be made. Any payment pursuant to subsection (e) of this Section.5
will be made in accordance with Section 17.
In the event that any payment made under this Section 5 exceeds the funds
available in the Deposit Account, the Bank may, in its discretion, advance the
Company an amount equal to such excess and such advance shall be deemed a loan
from the Bank to the Company, payable on demand, bearing interest at the rate of
interest customarily charged by the Bank on similar loans.
If the Bank causes the Deposit Account to be credited on the payable date
for interest, dividends or redemptions, the Company will promptly return to the
Bank any such amount or property so credited upon oral or written notification
that neither the Xxxx nor its subcustodian can collect such amount or property
in the ordinary course of business. The Bank or its subcustodian, as the case
may be, shall have no duty or obligation to institute legal proceedings, file a
claim or proof of claim in any insolvency proceeding or take any other action
with respect to the collection of such amount or property beyond its ordinary
collection procedures.
6. Custody Account Transaction. Subject to the provisions of Section 7,
Securities in be transferred, exchanged or delivered subcustodians only
(a) upon sale of such Securities for the Fund and receipt by the Bank or
its subcustodian only of payment therefor, each such payment to be in
the amount confirmed by Instructions from Authorized Persons;
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(b) when such securities are called, redeemed or retired, or otherwise
become payable;
(c) in exchange for or upon conversion into other Securities alone or
other Securities and cash pursuant to any plan or merger,
consolidation, reorganization, recapitalization or readjustment;
(d) upon conversion of such Securities pursuant to their terms into other
securities;
(e) upon exercise of subscription, purchase or other similar rights
represented by such Securities;
(f) for the purpose of exchanging interim receipts or temporary Securities
for definitive Securities;
(g) for other proper corporate purposes of the Fund;
(h) upon the termination of this Custody Agreement as hereinafter set
forth.
All transfers, exchanges or deliveries of Securities in the Custody Account
for a purpose permitted by either subsection (a), (b), (c), (d), (e) or (f) of
this Section 6 will be made, except as provided in Section 8, only upon receipt
by the Bank of Instructions from Authorized Persons which shall specify the
purpose of the transfer, exchange or delivery to be made and the applicable
subsection of this Section 6. In the case of any transfer, exchange or delivery
to be made for the purpose permitted by subsection (g) of this Section 6, the
Bank must first receive a certified copy of a resolution of the Board of
Trustees of the Fund adequately describing such transfer,
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exchange or delivery, declaring such purpose to be a proper corporate purpose,
and naming the person or persons to whom delivery of such Securities shall be
made. Any transfer or delivery pursuant to subsection (h) of this Section 6 will
be made in accordance with Section 17.
7. Custody Account Procedures. With respect to any transaction involving
Securities held in or to be acquired for the Custody Account, the Bank in its
discretion may cause the Deposit Account to be credited on the contractual
settlement date with the proceeds of any sale or exchange of Securities from the
Custody Account and to be debited on the contractual settlement date for the
cost of Securities purchased or acquired for the Custody Account. The Bank may
reverse any such credit or debit if the transaction with respect to which such
credit or debit were made fails to settle within a reasonable period, determined
by the Bank in its discretion, after the contractual settlement date, except
that if any Securities delivered pursuant to this Section 7 are returned by the
recipient thereof, the Bank may cause any such credits and debits to be reversed
at any time. With respect to any transactions as to which the Bank does not
determine so to credit or debit the Deposit Account, the proceeds from the sale
or exchange of Securities will be credited and the cost of such Securities
purchased or acquired will be debited to the Deposit Account on the date such
proceeds or Securities are received by the Bank.
Notwithstanding the preceding paragraph, settlement and payment for
Securities received for, and delivery of Securities out of, the custody Account
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may be effected in accordance with the customary or established securities
trading or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without limitation,
delivering 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.
8. Actions of the Bank. Until the Bank receives Instructions from
Authorized Persons to the contrary, the Bank will, or will instruct its
subcustodian, to
(a) present for payment any Securities in the Custody Account which are
called, redeemed or retired or otherwise become payable and all
coupons and other income items which call for payment upon
presentation to the extent that the Bank or subcustodian is aware of
such opportunities for payment, and hold cash received upon
presentation of such Securities in accordance with the provisions of
Sections 2, 3 and 4 of this Agreement;
(b) in respect of Securities in the Custody Account, execute in the name
of the Company such ownership and other certificates as may be
required to obtain payments in respect thereof;
(c) exchange interim receipts or temporary Securities in the Custody
Account for definitive Securities;
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(d) convert moneys received with respect to Securities of foreign issue
into United States dollars or any other currency necessary to effect
any transaction involving the Securities whenever it is practicable to
do so through customary banking channels, using any method or agency
available, including but not limited to, the facilities of the Bank,
its subsidiaries., affiliates or subcustodians; and
(e) appoint brokers and agents for any transaction involving the
Securities in the Custody Account, including, without limitation,
affiliates of the Bank or any subcustodian, but except as otherwise
specifically provided herein the Bank or its subcustodian, as the case
may be, will not be responsible for any act, omission or default of,
or for the solvency of, any such broker or agent.
9. Instructions. As used in this Agreement, the term "Instructions" means
instructions of the Company received by the Bank, via telephone, telex, TWX,
facsimile transmission, bank wire or other teleprocess or electronic instruction
system acceptable to the Bank which the Bank reasonably believes in good faith
to have been given by Authorized Persons or which are transmitted with proper
testing or authentication pursuant to terms and conditions which the Bank may
specify.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Company will hold the
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Bank harmless for its failure to send such confirmation in writing or the
failure of such confirmation to conform to the telephone instructions received.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until cancelled or superseded. If the Bank requires test
arrangements, authentication methods or other security devices to be used with
respect to Instructions, any Instructions given by the Company thereafter shall
be given and processed in accordance with such terms and conditions for the use
of such arrangements, methods or devices as the Bank may put into effect and
modify from time to time. The Company shall safeguard any testkeys9
identification codes or other security devices which the Bank shall make
available to it. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions, with respect to the Custody
Account.
10. Authorized Persons. As used in this Agreement, the term "Authorized
Persons" means such officers or such agents of the Fund or the Company as have
been designated by a resolution of the Board of Trustees of the Fund or the
Company, as the case may be, a certified copy of which has been provided to the
Bank, to act on behalf of the Fund or the Company in the performance of any acts
which Authorized Persons may do under this Agreement. Such persons shall
continue to be Authorized Persons until such time as the Bank receives
Instructions from Authorized Persons that any such officer or agent is no longer
an Authorized Person.
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11. Nominees. Securities in the Custody Account which are ordinarily held
in registered form may be registered in the name of the Bank's nominee or, as to
any Securities in the possession of any entity other than the Bank, in the name
of such entity's nominee. The Company agrees to hold any such nominee harmless
from any liability as a holder of record of such Securities. The Bank may
without notice to the Company cause any such Securities to cease to be
registered in the name of any such nominee and to be registered in the name of
the Company. In the event that any Securities registered in the name of the
Bank's nominee or held by one of its subcustodians and registered in the name of
such subcustodian's nominee are called for partial redemption by the issuer of
such Security, the Bank may allot, or cause to be alloted, the called portion to
the respective beneficial holders of such class of security in any manner the
Bank deems to be fair and equitable.
12. Standard of Care. The Bank shall be responsible for the performance of
only such duties as are set forth herein or contained in Instructions given to
the Bank by Authorized Persons which are not contrary to the provisions of this
Agreement. The Bank will use reasonable care with respect to the safekeeping of
Securities in the Custody Account. The Bank shall be liable to the Fund and the
Company for any loss which shall occur as the result of the failure of a
subcustodian or an eligible foreign securities depository engaged by such
subcustodian to exercise reasonable care with respect to the safekeeping of such
securities and other assets to the same extent that the Bank would be liable to
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the Fund and the Company if the Bank were holding such Securities and other
assets in New York. In the event of any loss to the Fund or the Company by
reason of the failure of the Bank or its subcustodian or an eligible foreign
securities depository engaged by such subcustodian to utilize reasonable care,
the Bank shall be liable to the Fund or the Company to the extent of the Fund's
or the Company's damages, to be determined based on the market value of the
property which is the subject of the loss at the date of discovery of such loss
and without reference to any special conditions or circumstances. The Bank shall
be held to the exercise of reasonable care in carrying out this Agreement but
shall be indemnified by, and shall be without liability to, the Fund or the
Company for any action taken or omitted by the Bank in good faith without
negligence. The Bank shall be entitled to rely, and may act, on advice of
counsel (who may be counsel for the Fund or the Company) on all matters and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice. The Bank need not maintain any insurance for the benefit of the
Fund or the Company.
All collections of funds or other property paid or distributed in respect
of Securities in the Custody Account shall be made at the risk of the Company.
The Bank shall have no liability for any loss occasioned by delay in the actual
receipt of notice by the Bank or by its subcustodian of any payment, redemption
or other transaction regarding Securities in the Custody Account in respect of
which the Bank has agreed to take action as provided in Section 8 hereof. The
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Bank shall not be liable for any action taken in good faith upon Instructions or
upon any certified copy of any resolution and may rely on the genuineness of any
such documents which it may in good faith believe to be validly executed. The
Bank shall not be liable for any loss resulting from, or caused by
nationalization, expropriation, currency restrictions, acts of war or terrorism,
insurrection, revolutions nuclear fusion, fission or radiation, acts of God or
other similar events or acts not due to the failure of the Bank, subcustodians
or eligible foreign securities depositories to exercise reasonable care in the
performance of their duties.
13. Compliance with Securities and Exchange Commission Rules and Orders.
Except to the extent the Bank has specifically agreed pursuant to this Agreement
to comply with a condition of a rule, regulation, interpretation or exemptive
order promulgated by or under the authority of the Securities and Exchange
Commission, the Fund and the Company shall be solely responsible to assure that
the maintenance of Securities and cash under this Agreement complies with any
such rule, regulation, interpretation or exemptive order.
14. Corporate Action. The Bank or its subcustodian is to forward to the
Company only such communications relative to the Securities in the Custody
Account as call for voting or the exercise of rights or other specific action
(including material relative to legal proceedings intended to be transmitted to
security holders) to the extent sufficient copies are received or may be
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reproduced by the Bank or its subcustodian in time for forwarding to each
customer. The Bank or its subcustodian will cause its nominee to execute and
deliver to the Company proxies relating to Securities in the Custody Account
registered in the name of such nominee but without indicating the manner in
which such proxies are to be voted. Proxies relating to bearer Securities will
be delivered in accordance with written instructions from Authorized Persons.
15. Fees and Expenses. The Company agrees to pay to the Bank from time to
time such compensation for its services pursuant to this Agreement as may be
mutually agreed upon in writing from time to time and the Bank's out-of-pocket
or incidental expenses, including (but without limitation) legal fees. The
Company hereby agrees to hold the Bank harmless from any liability or loss
resulting from any taxes or other governmental charges, and any expenses related
thereto, which may be imposed, or assessed with respect to the Custody Account
or any Securities in the Custody Account and also agrees to hold the Bank, its
subcustodians, and their respective nominees harmless from any liability as a
record holder of Securities in the Custody Account. The Bank is authorized to
charge any account of the Company for such items and the Bank shall have a lien
on Securities in the Custody Account and on cash in the Deposit Account for any
amount owing to the Bank from time to time under this Agreement, as long as such
lien would not contravene the provisions of the Order of the Securities and
Exchange Commission contained in Release No. 12053, dated November 20, 1981, as
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the same may be amended from time to time.
16. Effectiveness. This Agreement shall be effective on the date first
noted above.
17. Termination. This Agreement may be terminated by the Company or the
Bank by 60 days written notice to the other, sent by registered mail, provided
that any termination by the Company shall be authorized by a resolution of its
Board of Trustees, a certified copy of which shall accompany such notice of
termination, and provided further, that such resolution shall specify the names
of the persons to whom the Bank shall deliver the Securities in the Custody
Account and to whom the cash in the Deposit Account shall be paid. If notice of
termination is given by the Bank, the Company shall, within 60 days following
the giving of such notice, deliver to the Bank a certified copy of a resolution
of its Board of Trustees specifying the names of the persons to whom the Bank
shall deliver the Securities in the Custody Account and to whom the cash in the
Deposit Account shall be paid. In either case the Bank will deliver such
Securities and cash to the persons so specified, after deducting therefrom any
amounts which the Bank determines to be owed to it under Section 15. If within
60 days following the giving of a notice of termination by the Bank, the Bank
does not receive from the Company a certified copy of a resolution of the Board
of Trustees specifying the names of the persons to whom the Bank shall deliver
the Securities in the Custody Account and to whom the cash in the Cash Account
shall be paid, the Bank, at its election, may deliver such Securities and pay
such cash to a bank or trust company doing business in the State of New York to
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be held and disposed of pursuant to the provisions of this Agreement, or to
Authorized Persons, or may continue to hold such Securities and cash until a
certified copy of one or more resolutions as aforesaid is delivered to the Bank.
The obligations of the parties hereto regarding the use of reasonable care,
indemnities and payment of fees and expenses shall survive the termination of
this Agreement.
18. Notices. Any notice or other communication from the Company to the Bank
is to be sent to the office of the Bank at 1211 Avenue of the Americas (33rd
floor), New York, New York, 10036, Attention Global Custody Division, or such
other address as may hereafter be given to the Company in accordance with the
notice provisions hereunder, and any notice from the Bank to the Fund or the
Company is to be mailed postage prepaid, addressed to the Fund at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and to the Company at the address appearing
below, or as it may hereafter be changed on the Bank's records in accordance
with notice hereunder from the Fund or the Company.
19. Governing Law and Successors and Assigns. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
either party, but shall bind the successors and assigns of the Company and the
Bank.
20. Readings. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.
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XXXXX XXXXXX XXXX AND TRUST COMPANY
By /s/ [Illegible]
---------------------------------
Vice President
Address for record c/x XXXXXXX GROWTH AND INCOME FUND
X.X. XXX 0000
Xxxxxx, XX 00000
------------------------------------
THE CHASE MANHATTAN BANK, N.A.
By /s/ [Illegible]
---------------------------------
Vice President
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