EXHIBIT 3
---------
U.S. INVESTMENT COMPANY
CUSTODIAL SERVICES AGREEMENT
AMONG
CITIBANK, N.A.,
CITICORP
AND
CHUBB AMERICA FUNDS
________________________________________________________________________________
U.S. INVESTMENT COMPANY
CUSTODIAL SERVICES AGREEMENT
________________________________________________________________________________
CUSTODIAL SERVICES AGREEMENT dated as of December 1, 1997 among CITIBANK,
N.A., a national banking association having an office at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 and acting through such office in New York (the "Bank"),
CITICORP, a corporation organized under the laws of the State of Delaware,
having an office at Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and CHUBB AMERICA FUNDS,*a Corporation organized under the laws of the
State of Maryland, having an office at One Granite Place, Concord, New Hampshire
(the "Fund").
WITNESSETH:
THAT WHEREAS, the Fund represents that it is a management investment company
registered under the Investment Company Act of 1940, as amended (the "Investment
Company Act");
WHEREAS, the Fund further represents that it is duly incorporated, organized
or associated and in good standing under the laws of its state of incorporation,
organization or association and the consummation of transactions contemplated
hereby or directed by it hereunder will not violate any applicable laws,
regulations or orders;
WHEREAS, the Fund represents that it is authorized to (a) open and maintain
a custody account (the "Custody Account") with the Bank to hold certain property
("Property"), including but not limited to stocks, bonds or other securities
("Securities"), cash and other property owned or held by the Fund, (b) to enter
into this Agreement and (c) direct all actions and transactions contemplated
hereunder; and
WHEREAS, the Securities and Exchange Commission issued on June 19, 1995, and
may in the future issue, an order or orders (the "Exemptive Orders") which,
among other things, exempt certain indirect subsidiaries of Citicorp (the
"Exempt Subsidiaries") from the shareholders' equity requirements of Rule 17f-5
promulgated under the Investment Company Act;
NOW, THEREFORE, in consideration of the premises and of the agreements
hereinafter set forth, the parties hereby agree as follows:
1. APPOINTMENT AND ACCEPTANCE
The Fund hereby appoints the Bank as custodian of the Property and as its
agent hereunder, and the Bank agrees to act as such upon the terms and
conditions hereinafter provided.
1
2. DELIVERY; SAFEKEEPING
The Fund has heretofore delivered, or will deliver or cause to be delivered,
Property to the Bank, which Property the Bank agrees to keep safely' as
custodian for the Fund. The Bank shall not surrender possession of Property
except upon properly authorized Instructions (as hereinafter defined) of the
Fund or as may be required by due process of applicable law.
3. IDENTIFICATION AND SEGREGATION OF ASSETS
With respect to Property in the Custody Account:
(A) Except as otherwise provided in this Agreement, the Bank will separately
identify on its books as belonging to the Fund and, to the extent
practicable, segregate all Property held pursuant to this Agreement by the
Bank or any other entity authorized to hold Property in accordance with
Section 6 or 7 hereof.
(B) The Bank shall supply to the Fund from time to time as mutually agreed
upon a written statement with respect to all of the Property in the Custody
Account. In the event that the Fund does not inform the Bank in writing of
any exceptions or objections within thirty (30) day's after receipt of such
statement, the Fund shall be deemed to have approved such statement.
4. STANDARD OF CARE
(A) The Bank shall exercise the same standard of care that it exercises over
its own assets in the safekeeping, handling, servicing, and disposition of
the Property in accordance with this Agreement. The Bank will exercise the
due care expected of a professional custodian for hire with respect to the
Property in its possession or control.
(B) The Bank shall be responsible for the acts or omissions of any Exempt
Subsidiary acting as a foreign subcustodian pursuant to an Exemptive Order
to the same extent as if the act or omission of such Exempt Subsidiary were
that of the Bank.
(C) Except as otherwise provided above, the Bank shall use reasonable care
in selecting, and shall be responsible only for the proper selection of, any
foreign subcustodian or foreign depository.
(D) The Bank's delegation of duties to an Exempt Subsidiary shall not
relieve the Bank of any responsibility to the Fund for any loss due to such
delegation, except such losses or damages which may result from (i)
political risk, including, but not limited to losses resulting from exchange
control restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities and (ii) other risk of loss
for which neither the Bank nor any foreign subcustodian would be liable
under Rule 17f-5 promulgated under the Investment Company Act.
2
(E) In the event the Fund enters into triparty repurchase agreements
pursuant to which collateral therefor is to be held by a custodian other
than the Bank and the Fund instructs the Bank to deliver Property to such
custodian, the Bank shall be under no duty to determine whether such
custodian satisfies the requirements of Section 17(f) of the Investment
Company Act or the Rules promulgated thereunder. Citibank shall have no
further duties or obligations under this Agreement with respect to such
Property.
(F) The Bank is not under any duty to supervise the investments of the Fund,
or to advise or make any recommendation to the Fund with respect to the
purchase or sale of any of the Securities or the investment of any cash. The
Fund shall have the sole and exclusive responsibility for investment of
Property held hereunder.
5. PERFORMANCE BY THE BANK
(A) General
-------
The Bank's performance of its duties hereunder and the day-to-day operations
of the Custody Account shall be in accordance with written service standards
furnished to the Fund by the Bank from time to time. Such service standards,
as amended from time to time, are incorporated herein by reference.
(B) Receipt, Delivery and Disposal of Securities
--------------------------------------------
The Bank shall, or shall instruct any other entity authorized to hold
Property in accordance with Section 6 or 7 hereof to, receive or deliver
Securities and credit or debit the Fund's account, in accordance with
properly authorized Instructions from the Fund. The Bank or such entity
shall also receive in custody all stock dividends, rights and similar
securities issued in connection with Securities held hereunder, shall
surrender for payment, in a timely manner, all items maturing or called for
redemption and shall take such other action as the Fund may direct in
properly authorized Instructions.
(C) Registration
------------
Securities held hereunder may be registered in the name of the Bank, any
entity authorized to hold Property in accordance with Section 6 or 7 hereof,
or a nominee of the Bank or any such authorized entity, and the Fund shall
be informed upon request of all such registrations. Securities in registered
form will be transferred upon request of the Fund into such names or
registrations as it may specify in properly authorized Instructions.
(D) Cash Accounts
-------------
(i) All cash received or held by the Bank or by any entity authorized
to hold Property in accordance with Section 7 hereof as interest, dividends,
proceeds from transfer, and other payments for or with respect to the
Securities shall be (x) held in a cash account in accordance with properly'
authorized Instructions received by the Bank or such entity, or (y) if
specified in the Fund's Instructions, converted to or from U.S. dollars and
remitted to the Fund. The Fund shall bear any foreign exchange risk in
connection with any such conversion. In effecting any currency conversions
hereunder, the Bank or such entity may use any methods or agencies as it may
see fit including the Bank's or such entity's facilities at customary rates.
3
(ii) The Fund agrees, with respect to all payments for purchases of
Securities to be deposited in the Custody Account, that funds for settlement
will be on deposit by the settlement date at the location of settlement, in
good available funds and in the currency of settlement. The Fund acknowledges
that nothing in this Agreement shall obligate the Bank to extend credit,
grant financial accommodation or otherwise advance moneys to the Fund for the
purpose of making any payments for purchases or part thereof or otherwise
carrying out any Instructions.
(iii) The Fund authorizes the Bank from time to time to cause the branch
of the Bank located in London, England ("Citibank London") to establish a
multicurrency cash account reflecting cash received by any Eligible Foreign
Custodian on the Fund's behalf. Citibank London will maintain such cash
account in accordance with the requirements of Section 7 hereof applicable to
an entity authorized to hold Property hereunder.
(E) Reports
-------
(i) If the Bank has in place a system for providing telecommunication
access or other means of electronic access by customers to the Bank's
reporting system for Property in the Custody Account, then, at the Fund's
election, the Bank shall provide the Fund with such instructions and
passwords as may be necessary in order for the Fund to have such electronic
access through the Fund's terminal device. Such electronic access shall be
restricted to information relating to the Custody Account. If electronic
access to such reporting system is requested by the Fund, the Fund agrees to
assume full responsibility for the consequences of such use, including any
misuse or unauthorized use of the terminal device, instructions or passwords
referred to above, and agrees to defend and indemnify the Bank and hold the
Bank harmless from and against any and all liabilities, losses, damages,
costs, counsel fees, and other expenses of every nature suffered or incurred
by the Bank by reason of or in connection with such use by the Fund or others
of such terminal device, unless such liabilities, losses, damages, costs,
counsel fees and other expenses can be shown to be the result of negligent or
wrongful acts of the Bank, the Bank's employees or the Bank's agents.
Further, in the event the Fund elects to have electronic access, the Bank
shall provide the Fund on each business day a report of the preceding
business day's transactions relating to the Custody Account and of the
closing or net balances of each business day. If the Fund does not choose to
have electronic access, the Bank shall provide the Fund with such reports of
transactions in the Custody' Account by such means as may' be mutually agreed
upon.
(ii) The Bank agrees to use reasonable efforts to furnish the Fund with
such information regarding Property held hereunder as the Fund may reasonably
request in connection with its complying with requests of any regulatory
authorities having jurisdiction over the Fund.
(iii) The Bank shall also, subject to restrictions under applicable law,
seek to obtain from any entity with which the Bank maintains the physical
possession of any of the Property in the Custody Account records of such
entity relating to the Property in the Custody Account as may be required by'
the Fund or its agents in connection with an internal examination by the Fund
of its own affairs. Upon a reasonable request from the Fund, the Bank shall
use its best efforts to furnish to the Fund reports (or portions thereof) of
the external auditors of each such entity relating directly to such entity's
system of internal accounting controls applicable to its duties under its
agreement with the Bank.
4
(F) Access
------
During the Bank's regular banking hours and upon receipt of reasonable notice
from the Fund, any officer or employee of the Fund, any independent
accountant(s) selected by the Fund and any person designated by' any
regulatory authority having jurisdiction over the Fund shall be entitled to
examine on the Bank's premises, Property held by the Bank on its premises and
the Bank's records regarding Property held hereunder deposited with entities
authorized to hold Property in accordance with Section 6 or 7 hereof, but
only upon the Fund's furnishing the Bank with properly authorized
Instructions to that effect, provided, that such examination shall be
--------
consistent with the Bank's obligations of confidentiality to other parties.
The Bank's costs and expenses in facilitating such examinations shall be
borne by the Fund, provided that such costs and expenses shall not be deemed
--------
to include the Bank's costs in providing to the Fund: (i) the "single audit
report" of the independent certified public accountants engaged by the Bank
and (ii) such reports and documents as this Agreement contemplates that the
Bank shall furnish routinely to the Fund.
(G) Voting and other Action
-----------------------
(i) The Bank will transmit to the Fund upon receipt, and will instruct
any entities authorized to hold Property in accordance with Section 6 of 7
hereof to transmit to the Fund upon receipt, all financial reports,
stockholder communications, notices, proxies and proxy soliciting materials
received from issuers of the Securities, and all information relating to
exchange or tender offers received from offers with respect to the
Securities. Such proxies will be executed by the registered holder if other
than the Fund, but the manner in which Securities are to be voted will not be
indicated. Neither the Bank nor any' other entity holding Property hereunder
shall vote any of the Securities or authorize the voting of any Securities or
give any consent or take any other action with respect thereto, except as
otherwise provided herein.
(ii) In the event of tender offers, the Fund will hand deliver or
telecopy Instructions to the Bank as to the action to be taken with respect
thereto, designating such Instructions as being related to a tender offer.
The Fund shall hold the Bank harmless from any adverse consequences of the
Fund's use of any other method of transmitting Instructions relating to a
tender offer.
(iii) The Fund agrees that if it gives an Instruction for the
performance of an act on the last permissible date of a period established by
a tender offer or on the last permissible date for the performance of such
act, the Fund shall hold the Bank harmless from any adverse consequences in
connection with acting upon or failing to act upon such Instructions.
(iv) The Bank is authorized to accept and open on the Fund's behalf all
mail or communications relating to the Property received by the Bank or
directed in its care.
6. AUTHORIZED USE OF U.S. DEPOSITORIES
The Fund authorizes the Bank, for any Securities held hereunder, to use the
services of any United States securities depository permitted to perform
such services for registered investment companies and their custodians under
Rule 17f-4 promulgated under the Investment Company Act, including but not
limited to, The Depository Trust Company, the Federal Reserve Book Entry
System and Participants Trust Company ("U.S. Depositories"). The Bank will
deposit Securities held hereunder with a U.S. Depository only in an account
which holds assets of customers of the Bank.
5
7. USE OF FOREIGN CUSTODIANS
(A) Authorization
-------------
(i) The Bank may cause Securities which are foreign securities within
the meaning of Rule 17f-5(c)(1) promulgated under the Investment Company Act
("Foreign Securities") and amounts of cash and cash equivalents reasonably
required to effect the Fund's Foreign Securities transactions ("Cash") in
the Custody Account to be held in such country or other jurisdiction as the
Fund shall direct in properly authorized Instructions.
(ii) Subject to prior approval by the Fund, the Bank may hold such
Foreign Securities and Cash in subcustody accounts, which shall be deemed
part of the Custody Account and which have been established by the Bank with
(x) branches of "Qualified U.S. Banks", as defined in Rule 17f-5(c)(3)
promulgated under the Investment Company Act ("Branches"), or (y) foreign
custodians which satisfy the provisions of Rule 17f-5(c)(2)(i) or (ii)
promulgated under the Investment Company Act, or Exempt Subsidiaries or
other foreign custodians ("Exempt Foreign Custodians") which are exempt from
such provisions under an Exemptive Order or any other order or release
issued by the Securities and Exchange Commission, respectively (such
Branches, Exempt Foreign Custodians and Exempt Subsidiaries, collectively,
the "Eligible Foreign Custodians").
(iii) Subject to prior approval by the Fund, the Bank or an Eligible
Foreign Custodian is authorized to hold Foreign Securities or the Fund in an
account with any foreign securities depository or foreign clearing agency
which in the Bank's judgment satisfies the provisions of Rule 17f-5(c)(iii)
or (iv) promulgated under the Investment Company Act, or which is exempt
from such provisions under an order, no-action letter or release issued by
the Securities and Exchange Commission ("Eligible Foreign Securities
Depository").
(iv) Any Foreign Securities or Cash held by an Eligible Foreign
Custodian or an Eligible Foreign Securities Depository, shall be subject to
applicable laws, regulations, restrictions, customs, procedures, and market
practices (i) to which such Eligible Foreign Custodian or Eligible Foreign
Securities Depository is subject, (ii) as exist in the country in which such
Foreign Securities and Cash is held, and (iii) of the country of the
currency in which the Property is denominated. In the event that local laws
or regulations to which an Eligible Foreign Custodian or Eligible Foreign
Securities Depository is subject change in a way that would prevent or limit
the performance of duties and obligations by the Eligible Foreign Custodian
or Foreign Securities Depository, such duties and obligations shall be
superseded and neither the Bank nor any other member of the Citicorp
organization shall be liable therefor or for any damages in any way
resulting from such prevented or limited performance. The Fund acknowledges
that, as is normally the case with respect to the deposits outside the
United States, deposits with Citibank London and any other entity authorized
to hold Property pursuant to the Agreement are not insured by the Federal
Deposit Insurance Corporation.
(B) Provision of Information Regarding Foreign Custodians and Securities
--------------------------------------------------------------------
Depositories
------------
(i) The Bank shall use its best efforts to assist the Fund in obtaining
the following:
(a) As to each country in which Property is held, information concerning
whether, and to what extent, applicable foreign law would restrict the
access afforded the Fund's independent public accountants to books and
records kept by a foreign custodian or foreign securities depository
used in that country;
6
(b) As to each country in which Property is held, information concerning
whether, and to what extent, applicable foreign law would restrict the
Fund's ability to recover its assets in the event of the bankruptcy' of a
foreign custodian or foreign securities depository used in that country;
(c) As to each country in which Property is held, information concerning
whether, and to what extent, applicable foreign law would restrict the
Fund's ability to recover assets that are lost while under the control of
a foreign custodian or foreign securities depository used in that
country;
(d) As to each country in which Property is held, information concerning
whether under applicable foreign currency exchange regulations the Fund's
cash and cash equivalents held in that country are readily convertible to
U.S. dollars;
(e) Information relating to whether each foreign custodian or foreign
securities depository used would provide a level of safeguards for
maintaining the Fund's Securities not materially different from that
provided by the Bank in maintaining the Securities in the United States;
(f) Information concerning whether each foreign custodian or foreign
securities depository used has offices in the United States in order to
facilitate the assertion of jurisdiction over and enforcement of
judgments against such custodian or depository; and
(g) As to each foreign securities depository used, information concerning
the number of participants in, and operating history of, such depository.
(ii) During the term of this Agreement, the Bank shall use its best
efforts to provide the Fund with prompt notice of any material changes in
the facts or circumstances upon which any' of the foregoing information or
statements were based.
(iii) Notwithstanding any of the foregoing provisions of this subsection
(b) of this Section 7, the Bank's undertaking to assist the Fund in
obtaining the information referred to in this subsection (b) of the this
Section 7 shall neither increase the Bank's duty of care nor reduce the
Fund's responsibility to determine for itself the prudence of entrusting
its assets to any particular foreign custodian or foreign securities
depository.
(C) Segregation and Identification of Assets
----------------------------------------
The Bank will deposit Property of the Fund with an Eligible Foreign Custodian
only in an account which holds exclusively assets of customers of the Bank. In
the event that an Eligible Foreign Custodian is authorized to hold any of the
Foreign Securities placed in its care in an Eligible Foreign Securities
Depository pursuant to the provisions of subsection (A) of this Section 7, the
Bank will direct such Eligible Foreign Custodian to identify such Foreign
Securities on its books as being held for the account of the Bank as custodian
for its customers.
(D) Instructions to Eligible Foreign Custodians; Instructions to Eligible
---------------------------------------------------------------------
Foreign Securities Depositories
-------------------------------
Any Property in the Custody Account held by an Eligible Foreign Custodian will
be subject only to the instructions of the Bank or its agents; and any'
Foreign Securities held in an Eligible Foreign Securities
7
Depository for the account of an Eligible Foreign Custodian will be subject
only to the instructions of such Eligible Foreign Custodian, as subcustodian
for the Bank.
(E) Contracts between the Bank and Exempt Subsidiaries.
--------------------------------------------------
The Bank's contract with each Exempt Subsidiary provides:
(i) an acknowledgment by such Exempt Subsidiary that it is acting as a
foreign custodian for U.S. Investment Companies or their custodians
pursuant to the terms of the applicable Exemptive Order; and
(ii) that the Fund is entitled to enforce the terms of the subcustodian
agreement between the Bank and the Exempt Subsidiary and is entitled to
seek relief directly against the Exempt Subsidiary.
(F) Contracts between the Bank and Exempt Foreign Custodians.
--------------------------------------------------------
The Bank's contract with each Exempt Foreign Custodian provides:
(i) an acknowledgment by such Exemptive Foreign Custodian that it is
acting as a foreign custodian for U.S. Investment Companies or their
custodians pursuant to the terms of the applicable order or release issued
by the Securities and Exchange Commission; and
(ii) a representation by such Exempt Foreign Custodian that it is, and
during the term of the contract will continue to be, in compliance with
the terms of the applicable order or release issued by the Securities and
Exchange Commission.
8. CITICORP GUARANTEE
Citicorp agrees that it shall be liable, in accordance with the terms of a
guarantee issued by it in compliance with the conditions of the Exemptive
Orders, for losses of Foreign Securities and cash incurred by the Fund
resulting from bankruptcy or insolvency of Exempt Subsidiaries operating
pursuant to the terms of the Exemptive Orders. Citicorp's obligations
hereunder, and under the guarantee shall terminate automatically with
respect to an Exempt Subsidiary at such time as such obligations are no
longer required by the conditions of the Exemptive Order. Obligations
arising prior to the date of such termination shall survive the termination.
8
9. USE OF AGENTS
The Bank may, subject to applicable laws, rules and regulations, appoint
agents, whether in its own name or that of the Fund, to perform any of the
duties of the Bank hereunder, and the Bank may delegate to any such agent so
appointed any of its functions under this Agreement.
10. INSTRUCTIONS
(A) The Bank is authorized to rely and act upon instructions
("Instructions") in writing which are signed by persons ("Authorized
Persons") named in a list provided to the Bank from time to time, which list
must be certified by the Fund's Secretary or Assistant Secretary and include
authenticated specimen signatures of all Authorized Persons. Such list shall
separately designate those Authorized Persons who may authorize the
withdrawal of the Securities free of payment, those Authorized Persons who
may authorize the unconditional transfer of funds, and those Authorized
Persons who may give Instructions by electronic access.
(B) The Fund agrees that the Bank is authorized to rely and act upon such
Instructions in accordance with this Section 10 and the Funds Transfer
Procedures attached hereto and incorporated herein by reference (including
each Schedule A) to this Agreement and to debit or credit the applicable
account(s) of the Fund accordingly and that such Funds Transfer Procedures
and method(s) of transmission are commercially' reasonable.
(C) The Bank shall be entitled to rely upon the continued authority of any
Authorized Person to give Instructions until the Bank receives notice from
the Fund to the contrary; and the Bank shall be entitled to rely upon any
Instructions it believes in good faith to have been given by an Authorized
Person.
(D) The Bank is further authorized to rely upon any Instructions received
by' any other means and identified as having been given or authorized by'
any' Authorized Person, regardless of whether such Instructions shall in
fact have been authorized or given by any of such Authorized Persons,
provided that the Bank and the Fund shall have agreed upon the means of
--------
transmission and the method of identification for such Instructions.
Instructions received by any other means shall include but not be limited to
verbal Instructions only in connection with delivery against payment or
receipt against payment transactions and transfer from one account with the
Bank to another with the Bank and provided that such verbal Instructions are
promptly confirmed in writing by the Fund. Notwithstanding the foregoing, in
the event any such verbal Instructions are not subsequently confirmed in
writing, as provided above, the Fund agrees to hold the Bank harmless and
without liability for any claims or losses in connection with such verbal
Instructions.
(E) The Fund agrees to be bound by any Instruction, whether or not
authorized, given to the Bank in its name and accepted by the Bank in
accordance with the provisions hereof (including but not limited to the
Funds Transfer Procedures and Schedule A thereto) and further agrees to
indemnify and hold the Bank harmless from and against any loss, liability,
claim or expense (including legal fees and expenses) associated with the
Bank's acting upon such Instructions as provided herein, except such as may
arise from the Bank's own negligence, bad faith or willful misconduct.
(F) The Fund may appoint one or more investment managers ("Investment
Managers") with respect to the Custody Account. The Bank is authorized to
act upon Instructions received from any Investment Manager to
9
the same extent that the Bank would act upon the Instructions of an
Authorized Person, provided that the Bank has received written evidence of
--------
the Investment Manager's appointment and written confirmation from the
Investment Manager evidencing acceptance of such appointment. The Investment
Manager shall provide to the Bank from time to time a list of persons
authorized to give Instructions on behalf of the Investment Manager. The
list must be certified by the Investment Manager's Secretary or Assistant
Secretary and include authenticated specimen signatures of such persons.
(G) If the Fund should choose to have telecommunication or other means of
electronic access to the Bank's reporting system for Property in the Custody
Account, pursuant to paragraph (E) of Section 5, the Bank is also authorized
to rely and act upon any Instructions received by it through a terminal
device, provided that such Instructions are accompanied by code words which
--------
the Bank has furnished to the Fund, or an Authorized Person, by any method
mutually agreed to by the Bank and the Fund, provided that the Bank has not
been notified by the Fund, or any such Authorized Person to cease to
recognize such code words, regardless of whether such Instructions shall in
fact have been given or authorized by the Fund or any such Authorized
Person..
11. THE FUND
(A) The Fund agrees that no printed material or other matter in any language
(including without limitation, prospectuses, statements of additional
information, notices to shareholders, annual reports and promotional
material) which mention the Bank's or Citicorp's name or the rights, powers
or duties of the custodian of the Fund shall be issued by the Fund or of
Citicorp or on the Fund's behalf unless the Bank shall first have given its
specific written consent thereto; provided, however, that no prior consent
shall be required if the only reference to the Bank's or Citicorp's name is
in identifying the Bank as the Fund's custodian.
(B) The Fund shall give prior notice to the Bank of any change in its place
of incorporation or organization, mailing address, or sponsors, or any
significant change in management, investment objectives, fees or redemption
rights.
(C) The Fund confirms that it is, and agrees that in the future it will be,
audited at least annually by an independent accounting firm and that it
mails, and in the future will mail, an audited financial report of the Fund
to its shareholders at least annually.
12. FEES AND EXPENSES
Fees and expenses for the services rendered under this Agreement shall be
mutually agreed upon by the parties in writing. The Bank shall be entitled
to debit the Custody Account for such fees and expenses.
10
13. LIENS
The Bank shall have a lien on the Property in the Custody Account to secure
payment of fees and expenses for the services rendered under this Agreement.
If the Bank advances cash or securities to the Fund for any purpose or in
the event that the Bank or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with the
performance of its duties hereunder, except such as may arise from its or
its nominee s negligent action, negligent failure to act or willful
misconduct, any Property at any time held for the Custody Account shall be
security therefor and the Fund hereby grants a security interest therein to
the Bank. The Fund shall promptly reimburse the Bank for any such advance of
cash or securities or any such taxes, charges, expenses, assessments, claims
or liabilities upon request for payment, but should the Fund fail to so
reimburse the Bank, the Bank shall be entitled to dispose of such Property
to the extent necessary to obtain reimbursement. The Bank shall be entitled
to debit any account of the Fund with the Bank including, without
limitation, the Custody Account, in connection with any such advance and any
interest on such advance as the Bank deems reasonable.
14. TAX STATUS/WITHOLDING TAXES.
(A) The Fund's U.S. Tax Identification Number is: see attached. If the Fund
------------
does not have a U.S. Tax Identification Number, it will provide the Bank
with information as to its tax status as reasonably requested by the Bank
from time to time.
(B) The Fund may be required from time to time to file such proof of
taxpayer status or residence, to execute such certificates and to make such
representations and warranties, or to provide any other information or
documents, as the Bank and/or Eligible Foreign Custodian may deem necessary
or proper to fulfill the Bank's and/or Eligible Foreign Custodian's
obligations under applicable law. The Fund shall provide the Bank and/or
Eligible Foreign Custodian in a timely manner, with copies of originals if
necessary and appropriate, or any such proofs of residence, taxpayer status,
beneficial ownership and any other information or documents which the Bank
and/or a Eligible Foreign Custodian may reasonably request.
(C) If any tax or other governmental charge or assessment shall become
payable with respect to any payment due to the Fund ("Taxes"), such Taxes
shall be withheld from such payment in accordance with applicable law. The
Bank and/or the Eligible Foreign Custodian may withhold any interest, any
dividends or other distributions or securities receivable in respect of
Securities, proceeds from the sale or distributions of Securities
("Payments"), or may sell for the account of the Fund any part thereof or
all of the Securities, and may apply such Payment in satisfaction of such
Taxes, the Fund remaining liable for any deficiency. If any Taxes shall
become payable with respect to any payment made to the Fund by the Bank or a
Eligible Foreign Custodian in a prior year, the Bank and the Eligible
Foreign Custodian may withhold Payments in satisfaction of such prior year's
Taxes. The Fund shall indemnify and hold harmless the Bank and the Eligible
Foreign Custodian, its officers, employees, agents and affiliated companies
against any Taxes, penalties, additions to tax, and interest, and costs and
expenses related thereto, arising out of claims against the Bank and/or the
Eligible Foreign Custodian by any governmental authority for failure to
withhold Taxes or arising out of any reclaim or refund of taxes or other tax
benefit obtained by the Bank or the Eligible Foreign Custodian for the Fund.
(D) This section 14 shall survive the termination of this Agreement and
continue in force until the time for assessment of all Taxes expires.
11
15. AMENDMENT
This Agreement may not be amended except by a written agreement among the
parties hereto.
16. TERMINATION
Either the Bank or the Fund may terminate this Agreement upon sixty (60)
days' written notice to the other parties.
17. CONFIDENTIALITY
Subject to the foregoing provisions of this Agreement and subject to any
applicable law, the Fund and the Bank shall each use best efforts to
maintain the confidentiality of matters concerning Property in the Custody
Account.
18. NOTICES
All notices and other communications hereunder, except for Instructions and
reports relating to the Property which are transmitted through the Bank's
electronic reporting system for Property in the Custody Account, shall be in
writing, telex or telecopy or, if verbal, shall be promptly confirmed in
writing, and shall be hand-delivered, telexed, telecopied or mailed by
prepaid first class mail (except that notice of termination, if mailed,
shall be by prepaid registered or certified mail) to each party at its
address set forth above, if to the Fund, marked "Attention see attached" and
------------
if to the Bank, marked "Citibank as Custodian for see attached", and if to
------------
Citicorp, marked "Attention of Office of Corporate Finance, Xxxxxxx X.
Xxxxx, Vice President", or at such other address as either party may give
notice of to the other.
19. ASSIGNMENT
No party may assign, transfer or charge all or any of its rights and
benefits hereunder without the written consent of the other parties. Any
purported assignments made in contravention of this Section shall be null
and void and of no effect whatsoever.
20. GOVERNING LAW
This Agreement shall be governed by and construed according to the laws of
the State of New York and the parties agree that the courts of the State of
New York shall have jurisdiction to hear and determine any suit, action or
proceeding and to settle any disputes which may arise out to or in
connection with this Agreement, and, for such purposes, each irrevocably
submits to the non-exclusive jurisdiction of such courts.
21. MISCELLANEOUS
(A) This Agreement may be executed in several counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
12
(B) This Agreement contains the entire agreement among the parties relating
to custody of Property and supersedes all prior agreements on this subject.
(C) The captions of the various sections and subsections of this Agreement
have been inserted only for the purposes of convenience and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized.
CITIBANK, N.A. CITICORP
BY: _____________________________________ BY:__________________________________
NAME: ___________________________________ TITLE:_______________________________
TITLE: __________________________________ TITLE:_______________________________
CHUBB AMERICA FUNDS
BY: _____________________________________
NAME: ___________________________________
TITLE: __________________________________
00
Xxxxx Xxxxxxx Fund, Inc.
ATTACHMENT
----------
NAME TAX ID# (EIN)
---- -------------
Chubb America Fund, Inc. - High Yield Portfolio 00-0000000
Chubb America Fund, Inc. - Growth Portfolio 00-0000000
Chubb America Fund, Inc. - International Portfolio 00-0000000
14
