Exhibit 9(c)
AMENDMENT No. 1, dated as of May 22, 1998 to the September 1, 1995 custody
agreement ("Agreement") (as amended and restated on August 1, 1997), between
Excelsior Funds, Inc. ("Customer"), having a place of business at 00 Xxxxxxx
Xx., Xxxxxx, XX 00000, and The Chase Manhattan Bank ("Bank"), having a place of
business at 000 Xxxx Xxx., Xxx Xxxx, X.X. 00000-0000.
It is hereby agreed as follows:
Section 1. Except as modified hereby, the Agreement is confirmed in all
respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
Section 2. The Agreement is amended as follows by adding the following
as new (S)24:
"Unless the context clearly requires otherwise, the following words shall
have the meanings set forth below when used herein:
(a) "CMBI" shall mean Chase Manhattan Bank International, an indirect wholly-
owned subsidiary of Bank, located in Moscow, Russia, and any nominee
companies appointed by it.
(b) "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.
(c) "Negligence" shall mean the failure to exercise "Reasonable Care".
(d) "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 (S)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.
(e) "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.
(f) "Registrar Company" shall mean any entity providing share registration
services to an issuer of Russian Securities.
(g) "Registrar Contract" shall mean a contract between CMBI and a Registrar
Company (and as the same may be amended from time to time) containing,
inter alia, the contractual provisions described at paragraphs (a)-(e) on
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pps. 5-6 of the No-Action Letter.
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(h) "Russian Security" shall mean an equity Security issued by a Russian
issuer.
(i) "Share Extract" shall mean: (1) an extract of its share registration books
issued by a Registrar Company indicating an investor's ownership of a
security; and (2) a form prepared by CMBI or its agent in those cases where
a Registrar Company is unwilling to issue a Share Extract.
Section 3. Section 6 of the Agreement is amended by adding the following
paragraph at the end thereof: "With respect to Russia, payment for Russian
Securities shall not be made prior to the issuance and receipt of the Share
Extract (as defined in Section 24(i)(1)) relating to such Russian Security.
Delivery of Russian Securities may be made in accordance with the customary or
established securities trading or securities processing practices and procedures
in Russia. Delivery of Russian Securities may also be made in any manner
specifically required by Instructions acceptable to the Bank. Customer shall
promptly supply such transaction and settlement information as may be requested
by Bank or CMBI in connection with particular transactions."
Section 4. Section 12(a)(i) of the Agreement is amended with respect to
Russian custody by deleting the phrase "reasonable care" wherever it appears and
substituting, in lieu thereof, the phrase "Reasonable Care".
Section 5. Section 12(a)(i) of the Agreement is further amended with
respect to Russian custody only by only inserting the following at the end of
the first sentence thereof: "; provided that, with respect to Russian
Securities, Bank's responsibilities shall be limited to safekeeping relevant
Share Extracts."
Section 6. Section 12(a)(i) of the Agreement is further amended with
respect to Russian custody by inserting the following after the second sentence
thereof: "Delegation by Bank to CMBI shall not relieve Bank of any
responsibility to Customer for any loss due to such delegation, and Bank shall
be liable for any loss or claim arising out of or in connection with the
performance by CMBI of such delegated duties to the same extent as if Bank had
itself provided the custody services hereunder. In connection with the
foregoing, neither Bank nor CMBI shall assume responsibility for, and neither
shall be liable for, any action or inaction of any Registrar Company not
affiliated with Bank or CMBI and no Registrar Company shall be, or shall be
deemed to be, Bank, CMBI, a Subcustodian, a securities depository or the
employee, agent or personnel of any of the foregoing. To the extent that CMBI
employs agents unaffiliated with CMBI to perform any of the functions to be
performed by Bank or CMBI with respect to Russian Securities, neither Bank nor
CMBI 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 Bank or CMBI uses (i) an affiliated nominee or
(ii) an agent to perform the share registration or share confirmation functions
described in paragraphs (a)-(e) on pps. 5-6 of the No-Action Letter, and, to the
extent applicable to CMBI, the share registration functions described on pps. 2-
3 of the No-Action Letter, Bank and CMBI shall be liable to Customer as if CMBI
were responsible for performing such services itself."
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Section 7. Section 12(a)(ii) is amended with respect to Russian custody
by deleting the word "negligently" and substituting, in lieu thereof, the word
"Negligently".
Section 8. Section 12(a)(iii) is amended with respect to Russian custody
by deleting the word "negligence" and substituting, in lieu thereof, the word
"Negligence".
Section 9. Section 14(b) of the Agreement is amended by adding a new
subparagraph to the end thereof as follows: "(iv) It is understood and agreed
that Bank need only use its reasonable efforts with respect to performing the
functions described in this (S)14(b) with respect to Russian Securities (except
that Bank shall use Reasonable Care with respect to its duties to transmit
information to Customer).
Section 10. Add a new Section 25 to the Agreement as follows:
(a) Bank will advise Customer (and will update such advice from time to time as
changes occur) of those Registrar Companies with which CMBI has entered
into a Registrar Contract. Bank shall cause CMBI both to monitor each
Registrar Company and to promptly advise Customer and its investment
advisor when CMBI has actual knowledge of the occurrence of any one or more
of the events described in paragraphs (i)-(v) on pps. 8-9 of the No-Action
Letter with respect to a Registrar Company that serves in that capacity for
any issuer the shares of which are held by Customer.
(b) Where Customer is considering investing in the Russian Securities of an
issuer as to which CMBI does not have a Registrar Contract with the
issuer's Registrar Company, Customer may request that Bank ask that CMBI
both consider whether it would be willing to attempt to enter into such a
Registrar Contract and to advise Customer of its willingness to do so.
Where CMBI has agreed to make such an attempt, Bank will advise Customer of
the occurrence of any one or more of the events described in paragraphs
(i)-(iv) on pps. 8-9 of the No-Action Letter of which CMBI has actual
knowledge.
(c) Where Customer is considering investing in the Russian Securities of an
issuer as to which CMBI has a Registrar Contract with the issuer's
Registrar Company, Customer may advise Bank of its interest in investing in
such issuer and, in such event, Bank will advise Customer of the occurrence
of any one or more of the events described in paragraphs (i)-(v) on pps. 8-
9 of the No-Action Letter of which CMBI has actual knowledge."
Section 11. Add a new Section 26 to the Agreement as follows: "Customer
shall pay for and hold Bank and CMBI 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 Bank, CMBI or their respective agents with
respect to income on Customer's Russian Securities.
Section 12. Add a new Section 27 to the Agreement as follows: "Customer
acknowledges and agrees that CMBI may not be able, in given cases and despite
its reasonable efforts, to obtain a Share Extract from a Registrar Company and
CMBI shall not be liable in any such event including with respect to any losses
resulting from such failure."
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Section 13. Add a new Section 28 to the Agreement as follows: "Customer
acknowledges that it has received, reviewed and understands Bank's market report
for Russia, including, but not limited to, the risks described therein."
Section 14. Add a new Section 29 to the Agreement as follows: "Subject
to the cooperation of a Registrar Company, for at least the first two years
following CMBI's first use of a Registrar Company, Bank shall cause CMBI to
conduct share confirmations on at least a quarterly basis, although thereafter
confirmations may be conducted on a less frequent basis if Customer's Board of
Directors, in consultation with CMBI, determines it to be appropriate."
Section 15. Add a new Section 30 to the Agreement as follows: "Bank
shall cause CMBI to prepare for distribution to Customer's Board of Directors a
quarterly report identifying: (i) any concerns it has regarding the Russian
share registration system that should be brought to the attention of the Board
of Directors; and (ii) the steps CMBI has taken during the reporting period to
ensure that Customer's interests continue to be appropriately recorded."
Section 16. Add a new Section 31 to the Agreement as follows: "Except as
provided in new (S)25(b), the services to be provided by Bank hereunder with
respect to Russian Securities will be provided only in relation to Russian
Securities for which CMBI has entered into a Registrar Contract with the
relevant Registrar Company."
Section 17. Add a new Section 32 to the Agreement as follows: "Bank
confirms that its procedures and arrangements as set forth herein are designed
to comply with the No-Action Letter."
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
EXCELSIOR FUNDS, INC. THE CHASE MANHATTAN BANK
By: /s/ Xxxxxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxxxxx X. Xxxxxx Name: Xxxxxx Xxxxxx
Title: President and Treasurer Title: Chairman and CEO
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