CUSTODY AGREEMENT
AGREEMENT dated as of May 3, 1993, as amended and restated
December 31, 1996 and , 1997, between THE CHASE MANHATTAN BANK ("Chase"), having
its principal place of business at 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, and XXXXXXXXX INSTITUTIONAL FUNDS, INC. (the "Company"), an investment
company registered under the Investment Company Act of 1940 ("Act of 1940"),
having its principal place of business at 000 Xxxxxxx Xxxxxx, Xx. Xxxxxxxxxx,
Xxxxxxx 00000, on behalf of Growth Series, Foreign Equity Series, Emerging
Markets Series, and Emerging Fixed Income Markets Series, (the "Funds"), series
of shares issued by the Company.
WHEREAS, the Company wishes to appoint Chase as custodian to
the securities and assets of the Funds and Chase is willing to act as custodian
under the terms and conditions hereinafter set forth;
NOW, THEREFORE, the Company and its successors and assigns and
Chase and its successors and assigns, hereby agree as follows:
1. APPOINTMENT AS CUSTODIAN. Chase agrees to act as custodian
for the Funds, as provided herein, in connection with (a) cash ("Cash") received
from time to time from, or for the account of, a Fund for credit to the Fund's
deposit account or accounts administered by Chase, Chase Branches and Domestic
Securities Depositories (as hereinafter defined), and/or Foreign Banks and
Foreign Securities Depositories (as hereinafter defined) ("Deposit Account");
(b) 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 ("Securities") from time to time received by Chase and/or
any Chase Branch, Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository for the account of a Fund ("Custody Account"); and (c)
original margin and variation margin payments in a segregated account for
futures contracts ("Segregated Account").
All Cash held in a Deposit Account or in a Segregated Account
in connection with which Chase agrees to act as custodian is hereby denominated
as a special deposit which shall be held in trust for the benefit of the
relevant Fund and to which Chase, Chase Branches and Domestic Securities
Depositories and/or Foreign Banks and Foreign Securities Depositories shall have
no ownership rights, and Chase will so indicate on its books and records
pertaining to the Deposit Account and the Segregated Account. All cash held in
auxiliary accounts that may be carried for a Fund with Chase (including a Money
Market Account, Redemption Account, Distribution Account and Imprest Account) is
not so denominated as a special deposit and title thereto is held by Chase
subject to the claims of creditors.
2. AUTHORIZATION TO USE BOOK-ENTRY SYSTEM, DOMESTIC
SECURITIES DEPOSITORIES, BRANCH OFFICES, FOREIGN BANKS AND FOREIGN SECURITIES
DEPOSITORIES. Chase is hereby authorized to appoint and utilize, subject to
the provisions of Sections 4 and 5 hereof:
A. The Book Entry System and The Depository
Trust Fund; and also such other Domestic Securities
Depositories selected by Chase and as to which Chase has
received a certified copy of a resolution of the Company's
Board of Directors authorizing deposits therein;
X. Xxxxx'x foreign branch offices in the
United Kingdom, Hong Kong, Singapore, and Tokyo, and such
other foreign branch offices of Chase located in countries
approved by the Board of Directors of the Company as to which
Chase shall have given prior notice to the Company;
C. Foreign Banks which Chase shall have
selected, which are located in countries approved by the
Board of Directors of the Company, and as to which banks
Chase shall have given prior notice to the Company; and
D. Foreign Securities Depositories which
Chase shall have selected and as to which Chase has received
a certified copy of a resolution of the Company's Board of
Directors authorizing deposits therein; to hold Securities
and Cash at any time owned by the Funds, it being understood
that no such appointment or utilization shall in any way
relieve Chase of its responsibilities as provided for in this
Agreement. Foreign branch offices of Chase appointed and
utilized by Chase are herein referred to as "Chase Branches."
Unless otherwise agreed to in writing, (a) each Chase Branch,
each Foreign Bank and each Foreign Securities Depository shall
be selected by Chase to hold only Securities as to which the
principal trading market or principal location as to which such
Securities are to be presented for payment is located outside
the United States; and (b) Chase and each Chase Branch,
Foreign Bank and Foreign Securities Depository will promptly
transfer or cause to be transferred to Chase, to be held in
the United States, Securities and/or Cash that are then
being held outside the United States upon request of the
Company and/or of the Securities and Exchange Commission
Utilization by Chase of Chase Branches, Domestic Securities
Depositories, Foreign Banks and Foreign Securities
Depositories shall be in accordance with provisions as from
time to time amended, of an operating agreement to be
entered into between Chase and the Company (the "Operating
Agreement").
3. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
(a) "Authorized Persons of the Company" shall mean
such officers or employees of the Company or any other person
or persons as shall have been designated by a resolution of
the Board of Directors of the Company, a certified copy of
which has been filed with Chase, to act as Authorized Persons
hereunder. Such persons shall continue to be Authorized
Persons of the Company, authorized to act either singly or
together with one or more other of such persons as provided in
such resolution, until such time as the Company shall have
filed with Chase a written notice of the Company
supplementing, amending, or revoking the authority of such
persons.
(b) "Book-Entry system" shall mean the Federal
Reserve/Treasury book-entry system for United States and
federal agency securities, its successor or successors and its
nominee or nominees.
(c) "Domestic Securities Depository" shall mean The
Depository Trust Fund, a clearing agency registered with the
Securities and Exchange Commission, its successor or
successors and its nominee or nominees; and (subject to the
receipt by Chase of a certified copy of a resolution of the
Company's Board of Directors specifically approving deposits
therein as provided in Section 2(a) of this Agreement) any
other person authorized to act as a depository under the Act
of 1940, its successor or successors and its nominee or
nominees.
(d) "Foreign Bank" shall mean any banking institution
organized under the laws of a jurisdiction other than the
United States or of any state thereof.
(e) A "Foreign Securities Depository" shall mean any
system for the central handling of securities abroad where all
securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping without physical
delivery of the securities by any Chase Branch or Foreign
Bank.
(f) "Written Instructions" shall mean instructions in
writing signed by Authorized Persons of the Company giving
such instructions, and/or such other forms of communications
as from time to time shall be agreed upon in writing between
the Company and Chase.
4. SELECTION OF COUNTRIES IN WHICH SECURITIES MAY BE HELD.
Chase shall not cause Securities and Cash to be held in any country outside
the United States until the Company has directed the holding of the Funds'
assets in such country. Chase will be provided with a copy of a resolution of
the Company's Board of Directors authorizing such custody in any country
outside of the United States, which resolution shall be based upon, among other
factors, the following:
(a) comparative operational efficiencies of custody;
(b) clearance and settlement and the costs thereof; and
(c) political and other risks, other than those risks
specifically assumed by Chase.
5. RESPONSIBILITY OF CHASE TO SELECT CUSTODIANS IN INDIVIDUAL
FOREIGN COUNTRIES. The responsibility for selecting the Chase Branch, Foreign
Bank or Foreign Securities Depository to hold the Funds' Securities and Cash in
individual countries authorized by the Company shall be that of Chase. Chase
generally shall utilize Chase Branches where available. In locations where there
are no Chase Branches providing custodial services, Chase shall select as its
agent a Foreign Bank, which may be an affiliate or subsidiary of Chase. To
facilitate the clearance and settlement of securities transactions, Chase
represents that, subject to the approval of the Company, it may deposit
Securities in a Foreign Securities Depository in which Chase is a participant.
In situations in which Chase is not a participant in a Foreign Securities
Depository, Chase may, subject to the approval of the Company, authorize a
Foreign Bank acting as its subcustodian to deposit the Securities in a Foreign
Securities Depository in which the Foreign Bank is a participant.
Notwithstanding the foregoing, such selection by Chase of a Foreign Bank or
Foreign Securities Depository shall not become effective until Chase has been
advised by the Company that a majority of its Board of Directors:
(a) Has approved Chase's selection of the particular
Foreign Bank or Foreign Securities Depository, as the case may
be, as consistent with the best interests of the Funds and
their Shareholders; and
(b) Has approved as consistent with the best
interests of the Funds and their Shareholders a written
contract prepared by Chase which will govern the manner in
which such Foreign Bank will maintain the Funds' assets.
6. CONDITIONS ON SELECTION OF FOREIGN BANK OR FOREIGN
SECURITIES DEPOSITORY. Chase shall authorize the holding of Securities and
Cash by a Chase Branch, Foreign Bank or Foreign Securities Depository only:
(a) to the extent that the Securities and Cash are
not subject to any right, charge, security interest, lien or
claim of any kind in favor of any such Foreign Bank or Foreign
Securities Depository, except for their safe custody or
administration; and
(b) to the extent that the beneficial ownership of
Securities is freely transferable without the payment of
money or value other than for safe custody or administration.
7. CHASE BRANCHES AND FOREIGN BANKS NOT AGENTS OF THE COMPANY
OR FUNDS. Chase Branches, Foreign Banks and Foreign Securities Depositories
shall be subject to the instructions of Chase and/or the Foreign Bank, and not
to those of the Company or the Funds. Chase warrants and represents that all
such instructions shall afford protection to the Funds at least equal to that
afforded for Securities held directly by Chase. Any Chase Branch, Foreign
Bank or Foreign Securities Depository shall act solely as agent of Chase or of
such Foreign Bank.
8. CUSTODY ACCOUNT. Securities held in a Custody Account shall
be physically segregated at all times from those of any other person or persons
except that (a) with respect to Securities held by Chase Branches, such
Securities may be placed in an omnibus account for the customers of Chase, and
Chase shall maintain separate book entry records for each such omnibus account,
and such Securities shall be deemed for the purpose of this Agreement to be held
by Chase in the Custody Account; (b) with respect to Securities deposited by
Chase with a Foreign Bank, a Domestic Securities Depository or a Foreign
Securities Depository, Chase shall identify on its books as belonging to the
relevant Fund the Securities shown on Chase's account on the books of the
Foreign Bank, Domestic Securities Depository or Foreign Securities Depository;
and (c) with respect to Securities deposited by a Foreign Bank with a Foreign
Securities Depository, Chase shall cause the Foreign Bank to identify on its
books as belonging to Chase, as agent, the Securities shown on the Foreign
Bank's account on the books of the Foreign Securities Depository. All Securities
of the Funds maintained by Chase pursuant to this Agreement shall be subject
only to the instructions of Chase, Chase Branches or their agents. Chase shall
only deposit Securities with a Foreign Bank in accounts that include only assets
held by Chase for its customers.
8a. SEGREGATED ACCOUNT FOR FUTURES CONTRACTS. With respect to
every futures contract purchased, sold or cleared for a Custody Account, Chase
agrees, pursuant to Written Instructions, to:
(a) deposit original margin and variation margin
payments in a segregated account maintained by Chase; and
(b) perform all other obligations attendant to
transactions or positions in such futures contracts, as such
payments or performance may be required by law or the
executing broker.
8b. SEGREGATED ACCOUNT FOR REPURCHASE AGREEMENTS.
With respect to purchases for a Custody Account from banks (including Chase) or
broker-dealers, of United States or foreign government obligations subject to
repurchase agreements, Chase agrees, pursuant to Written Instructions, to:
(a) deposit such securities and repurchase
agreements in a segregated account maintained by Chase; and
(b) promptly show on Chase's records that such
securities and repurchase agreements are being held on behalf
of the relevant Fund and deliver to the Company a written
confirmation to that effect.
8c. SEGREGATED ACCOUNTS FOR DEPOSITS OF COLLATERAL. Chase
agrees, with respect to (i) cash or high quality debt securities to secure a
Fund's commitments to purchase new issues of debt obligations offered on a
when-issued basis; (ii) cash, U.S. government securities, or irrevocable
letters of credit of borrowers of a Fund's portfolio securities to secure the
loan to them of such securities; and/or (iii) cash, securities or any other
property delivered to secure any other obligations; (all of such items being
hereinafter referred to as "collateral"), pursuant to Written Instructions, to:
(a) deposit the collateral for each such
obligation in a separate segregated account maintained by
Chase; and
(b) promptly to show on Chase's records that
such collateral is being held on behalf of the relevant Fund
and deliver to the Company a written confirmation to that
effect.
9. DEPOSIT ACCOUNT. Subject to the provisions of this
Agreement, the Company authorizes Chase to establish and maintain in each
country or other jurisdiction in which the principal trading market for
any Securities is located or in which any Securities are to be presented for
payment, an account or accounts, which may include nostro accounts with
Chase Branches and omnibus accounts of Chase at Foreign Banks, for receipt of
cash in a Deposit Account, in such currencies as directed by Written
Instructions. For purposes of this Agreement, cash so held in any such
account shall be evidenced by separate book entries maintained by
Chase at its office in London and shall be deemed to be Cash held by Chase in a
Deposit Account. Unless Chase receives Written Instructions to the contrary,
cash received or credited by Chase or any other Chase Branch, Foreign Bank or
Foreign Securities Depository for a Deposit Account in a currency other than
United States dollars shall be converted promptly into United States dollars
whenever it is practicable to do so through customary banking channels
(including without limitation the effecting of such conversions at Chase's
preferred rates through Chase, its affiliates or Chase Branches), and shall be
automatically transmitted back to Chase in the United States.
10. SETTLEMENT PROCEDURES. Settlement procedures for
transactions in Securities delivered to, held in, or to be delivered from a
Custody Account in Chase Branches, Domestic Securities Depositories, Foreign
Banks and Foreign Securities Depositories, including receipts and payments of
cash held in any nostro account or omnibus account for a Deposit Account as
described in Section 9, shall be carried out in accordance with the provisions
of the Operating Agreement. It is understood that such settlement procedures may
vary, as provided in the Operating Agreement, from securities market to
securities market, to reflect particular settlement practices in such markets.
Chase shall make or cause the appropriate Chase Branch or
Foreign Bank to move payments of Cash held in a Deposit Account only:
(a) in connection with the purchase of Securities for
the account of a Fund and only against the receipt of such
Securities by Chase or by another appropriate Chase Branch,
Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository, or otherwise as provided in the
Operating Agreement, each such payment to be made at prices
confirmed by Written Instructions, or
(b) in connection with any dividend, interim
dividend or other distribution declared by the Company, or
(c) as directed by the Company by Written
Instructions setting forth the name and address of the person
to whom the payment is to be made and the purpose for which
the payment is to be made.
Upon the receipt by Chase of Written Instructions specifying
the Securities to be so transferred or delivered, which instructions shall name
the person or persons to whom transfers or deliveries of such Securities shall
be made and shall indicate the time(s) for such transfers or deliveries,
Securities held in a Custody Account shall be transferred, exchanged, or
delivered by Chase, any Chase Branch, Domestic Securities Depository, Foreign
Bank, or Foreign Securities Depository, as the case may be, against payment in
Cash or Securities, or otherwise as provided in the Operating Agreement, only:
(a) upon sale of such Securities for the account of
the relevant Fund and receipt of such payment in the amount
shown in a broker's confirmation of sale of the Securities or
other proper authorization received by Chase before such
payment is made, as confirmed by Written Instructions;
(b) in exchange for or upon conversion into other
Securities alone or other Securities and Cash pursuant to any
plan of merger, consolidation, reorganization,
recapitalization, readjustment, or tender offer;
(c) upon exercise of conversion, subscription,
purchase, or other similar rights represented by such
Securities; or
(d) otherwise as directed by the Company by Written
Instructions which shall set forth the amount and purpose of
such transfer or delivery.
Until Chase receives Written Instructions to the contrary, Chase shall,
and shall cause each Chase Branch, Domestic Securities Depository, Foreign
Bank and Foreign Securities Depository holding Securities or Cash to, take the
following actions in accordance with procedures established in the Operating
Agreement:
(a) collect and timely deposit in the Deposit Account
all income due or payable with respect to any Securities and
take any action which may be necessary and proper in
connection with the collection and receipt of such income;
(b) present timely for payment all Securities in a
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 and to receive
and credit to the appropriate Deposit Account Cash so paid for
the account of a Fund except that, if such Securities are
convertible, such Securities shall not be presented for
payment until two business days preceding the date on which
such conversion rights would expire unless Chase previously
shall have received Written Instructions with respect thereto;
(c) present for exchange all Securities in a Custody
Account converted pursuant to their terms into other
Securities;
(d) in respect of securities in a Custody Account,
execute in the name of the relevant Fund such ownership and
other certificates as may be required to obtain payments in
respect thereto, provided that Chase shall have requested and
the Company shall have furnished to Chase any information
necessary in connection with such certificates;
(e) exchange interim receipts or temporary Securities
in a Custody Account for definitive Securities; and
(f) receive and hold in a Custody Account all
Securities received as a distribution on Securities held in
that Custody Account as a result of a stock dividend, share
split-up or reorganization, recapitalization, readjustment or
other rearrangement or distribution of rights or similar
Securities issued with respect to any Securities held in the
Custody Account.
11. RECORDS. Chase hereby agrees that Chase and any Chase
Branch or Foreign Bank shall create, maintain, and retain all records
relating to their activities and obligations as custodian for the Funds under
this Agreement in such manner as will meet the obligations of the Funds
under the Act of 1940, particularly Section 31 thereof and Rules 31a-1 and
31a-2 thereunder, and Federal, state and foreign tax laws and other legal or
administrative rules or procedures, in each case as currently in effect and
applicable to the Funds. All records so maintained in connection with the
performance of its duties under this Agreement shall, in the event of
termination of this Agreement, be preserved and maintained by Chase as required
by regulation, and shall be made available to the Company or its agent upon
request, in accordance with the provisions of Section 19.
Chase hereby agrees, subject to restrictions under applicable
laws, that the books and records of Chase and any Chase Branch pertaining to
their actions under this Agreement shall be open to the physical, on-premises
inspection and audit at reasonable times by the independent accountants
("Accountants") employed by, or other representatives of, the Company. Chase
hereby agrees that, subject to restrictions under applicable laws, access shall
be afforded to the Accountants to such of the books and records of any Foreign
Bank, Domestic Securities Depository or Foreign Securities Depository with
respect to Securities and Cash as shall be required by the Accountants in
connection with their examination of the books and records pertaining to the
affairs of the Funds. Chase also agrees that as the Company may reasonably
request from time to time, Chase shall provide the Accountants with information
with respect to Chase's and Chase Branches' systems of internal accounting
controls as they relate to the services provided under this Agreement, and Chase
shall use its best efforts to obtain and furnish similar information with
respect to each Domestic Securities Depository, Foreign Bank and Foreign
Securities Depository holding Securities and Cash.
12. REPORTS. Chase shall supply periodically, upon the
reasonable request of the Company, such statements, reports, and advices with
respect to Cash in the Deposit Accounts and the Securities in the Custody
Accounts and transactions in Securities from time to time received and/or
delivered for or from the Custody Accounts, as the case may be, as the Funds
shall require. Such statements, reports and advices shall include an
identification of the Chase Branch, Domestic Securities Depository, Foreign Bank
and Foreign Securities Depository having custody of the Securities and Cash, and
descriptions thereof.
13. REGISTRATION OF SECURITIES. Securities in a Custody
Account which are issued or issuable only in bearer form (except such securities
as are held in the Book-Entry System) shall be held by Chase, Chase Branches,
Domestic Securities Depositories, Foreign Banks or Foreign Securities
Depositories in that form. All other Securities in a Custody Account shall be
held in registered form in the name of Chase, or any Chase Branch, the
Book-Entry System, Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository and their nominees, as custodian or nominee.
14. STANDARD OF CARE.
(a) GENERAL. Chase shall assume entire responsibility
for all Securities held in the Custody Accounts, Cash held in
the Deposit Accounts, Cash or Securities held in the
Segregated Accounts and any of the Securities and Cash while
in the possession of Chase or any Chase Branch, Domestic
Securities Depository, Foreign Bank or Foreign Securities
Depository, or in the possession or control of any employees,
agents or other personnel of Chase or any Chase Branch,
Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository; and shall be liable to the relevant
Fund for any loss to the Fund occasioned by any destruction of
the Securities or Cash so held or while in such possession, by
any robbery, burglary, larceny, theft or embezzlement by any
employees, agents or personnel of Chase or any Chase Branch,
Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository, and/or by virtue of the disappearance
of any of the Securities or Cash so held or while in such
possession, with or without any fault attributable to Chase
("fault attributable to Chase" for the purposes of this
Agreement being deemed to mean any negligent act or omission,
robbery, burglary, larceny, theft or embezzlement by any
employees or agents of Chase or any Chase Branch, Domestic
Securities Depository, Foreign Bank or Foreign Securities
Depository). In the event of Chase's discovery or notification
of any such loss of Securities or Cash, Chase shall promptly
notify the Company and shall reimburse the relevant Fund to
the extent of the market value of the missing Securities or
Cash as at the date of the discovery of such loss. The Company
shall not be obligated to establish any negligence,
misfeasance or malfeasance on Chase's part from which such
loss resulted, but Chase shall be obligated hereunder to make
such reimbursement to a Fund after the discovery or notice of
such loss, destruction or theft of such Securities or Cash.
Chase may at its option insure itself against loss from any
cause but shall be under no obligation to insure for the
benefit of the Funds.
(b) COLLECTIONS. All collections of funds or other
property paid or distributed in respect of Securities held in
a Custody Account shall be made at the risk of the relevant
Fund. Chase shall have no liability for any loss occasioned by
delay in the actual receipt of notice by Chase (or by any
Chase Branch or Foreign Bank in the case of Securities or Cash
held outside of the United States) of any payment, redemption
or other transaction regarding Securities held in a Custody
Account or Cash held in a Deposit Account in respect of which
Chase has agreed to take action in the absence of Written
Instructions to the contrary as provided in Section 10 of this
Agreement, which does not appear in any of the publications
referred to in Section 16 of this Agreement.
(c) EXCLUSIONS. Notwithstanding any other provision
in this Agreement to the contrary, Chase shall not be
responsible for (i) losses resulting from war or from the
imposition of exchange control restrictions, confiscation,
expropriation, or nationalization of any securities or assets
of the issuer of such securities, or (ii) losses resulting
from any negligent act or omission of the Company or any of
its affiliates, or any robbery, theft, embezzlement or
fraudulent act by any employee or agent of the Company or any
of its affiliates. Chase shall not be liable for any action
taken in good faith upon Written Instructions of Authorized
Persons of the Company or upon any certified copy of any
resolution of the Board of Directors of the Company, and may
rely on the genuineness of any such documents which it may in
good faith believe to be validly executed.
(d) LIMITATION ON LIABILITY UNDER SECTION 14(A).
Notwithstanding any other provision in this Agreement to the
contrary, it is agreed that Chase's sole responsibility with
respect to losses under Section 14(a) shall be to pay a Fund
the amount of any such loss as provided in Section 14(a)
(subject to the limitation provided in Section 14(e) of this
Agreement). This limitation does not apply to any liability of
Chase under Section 14(f) of this Agreement.
(e) ANNUAL ADJUSTMENT OF LIMITATION OF LIABILITY. As
soon as practicable after June 1 of every year, the Company
shall provide Chase with the amount of each Fund's total net
assets as of the close of business on such date (or if the New
York Stock Exchange is closed on such date, then in that event
as of the close of business on the next day on which the New
York Stock Exchange is open for business).
It is understood by the parties to this Agreement (1)
that Chase has entered into substantially similar custody
agreements with other Xxxxxxxxx funds, all of which funds have
as their investment adviser either one of the Investment
Managers of the Funds or companies which are affiliated with
the Investment Managers; and (2) that Chase may enter into
substantially similar custody agreements with additional
mutual funds under Xxxxxxxxx management which may hereafter be
organized. Each of such custody agreements with each of such
other Xxxxxxxxx funds contains (or will contain) a "Standard
of Care" section similar to this Section 14, except that the
limit of Chase's liability is (or will be) in varying amounts
for each fund, with the aggregate limits of liability in all
of such agreements, including this Agreement, amounting to
$150,000,000.
On each June 1, Chase will total the net assets
reported by each one of the Xxxxxxxxx funds, and will
calculate the percentage of the aggregate net assets of all
the Xxxxxxxxx funds that is represented by the net asset value
of the Funds. Thereupon Chase shall allocate to this Agreement
with the Company that proportion of the Funds' total of
$150,000,000 responsibility undertaking which is substantially
equal to the proportion which the Funds' net assets bears to
the total net assets of all such Xxxxxxxxx funds subject to
adjustments for claims paid as follows: all claims previously
paid to the Funds shall first be deducted from their
proportionate allocable share of the $150,000,000 Chase
responsibility, and if the claims paid to the Funds amount to
more than their allocable share of the Chase responsibility,
then the excess of such claims paid to the Funds shall
diminish the balance of the $150,000,000 Chase responsibility
available for the proportionate shares of all of the other
Xxxxxxxxx funds having similar custody agreements with Chase.
Based on such calculation, and on such adjustment for claims
paid, if any, Chase thereupon shall notify the Company of such
limit of liability under this Section 14 which will be
available to the Funds with respect to (1) losses in excess of
payment allocations for previous years and (2) losses
discovered during the next year this Agreement remains in
effect and until a new determination of such limit of
responsibility is made on the next succeeding June 1.
(f) OTHER LIABILITY. Independently of Chase's
liability to the Funds as provided in Section 14(a) above (it
being understood that the limitations in Sections 14(d) and
14(e) do not apply to the provisions of this Section 14(f)),
Chase shall be responsible for the performance of only such
duties as are set forth in this Agreement or contained in
express instructions given to Chase which are not contrary to
the provisions of this Agreement. Chase will use and require
the same care with respect to the safekeeping of all
Securities held in the Custody Accounts, Cash held in the
Deposit Accounts, and Securities or Cash held in the
Segregated Accounts as it uses in respect of its own similar
property, but it need not maintain any insurance for the
benefit of the Funds. With respect to Securities and Cash held
outside of the United States, Chase will be liable to a Fund
for any loss to the Fund resulting from any disappearance or
destruction of such Securities or Cash while in the possession
of Chase or any Chase Branch, Foreign Bank or Foreign
Securities Depository, to the same extent it would be liable
to the Funds if Chase had retained physical possession of such
Securities and Cash in New York. It is specifically agreed
that Chase's liability under this Section 14(f) is entirely
independent of Chase's liability under Section 14(a).
Notwithstanding any other provision in this Agreement to the
contrary, in the event of any loss giving rise to liability
under this Section 14(f) that would also give rise to
liability under Section 14(a), the amount of such liability
shall not be charged against the amount of the limitation on
liability provided in Section 14(d).
(g) COUNSEL; LEGAL EXPENSES. Chase shall be entitled
to the advice of counsel (who may be counsel for the Company)
at the expense of the Company, in connection with carrying out
Chase's duties hereunder and in no event shall Chase be liable
for any action taken or omitted to be taken by it in good
faith pursuant to advice of such counsel. If, in the absence
of fault attributable to Chase and in the course of or in
connection with carrying out its duties and obligations
hereunder, any claims or legal proceedings are instituted
against Chase or any Chase Branch by third parties, the
Company will hold Chase harmless against any claims,
liabilities, costs, damages or expenses incurred in connection
therewith and, if the Company so elects, the Company may
assume the defense thereof with counsel satisfactory to Chase,
and thereafter shall not be responsible for any further legal
fees that may be incurred by Chase, provided, however, that
all of the foregoing is conditioned upon the Company's receipt
from Chase of prompt and due notice of any such claim or
proceeding.
15. EXPROPRIATION INSURANCE. Chase represents that it does not
intend to obtain any insurance for the benefit of the Funds which protects
against the imposition of exchange control restrictions on the transfer from
any foreign jurisdiction of the proceeds of sale of any Securities or against
confiscation, expropriation or nationalization of any securities or the assets
of the issuer of such securities by a government of any foreign country in which
the issuer of such securities is organized or in which securities are held for
safekeeping either by Chase, or any Chase Branch, Foreign Bank or Foreign
Securities Depository in such country. Chase has discussed the availability
of expropriation insurance with the Company, and has advised the Company as to
its understanding of the position of the staff of the Securities and Exchange
Commission that any investment company investing in securities of foreign
issuers has the responsibility for reviewing the possibility of the imposition
of exchange control restrictions which would affect the liquidity of such
investment company's assets and the possibility of exposure to political risk,
including the appropriateness of insuring against such risk. The Company has
acknowledged that it has the responsibility to review the possibility of such
risks and what, if any, action should be taken.
16. PROXY, NOTICES, REPORTS, ETC. Chase shall watch for the
dates of expiration of (a) all purchase or sale rights (including warrants,
puts, calls and the like) attached to or inherent in any of the Securities held
in a Custody Account and (b) conversion rights and conversion price changes for
each convertible Security held in a Custody Account as published in Telstat
Services, Inc., Standard & Poor's Financial Inc. and/or any other publications
listed in the Operating Agreement (it being understood that Chase may give
notice to the Company as provided in Section 21 as to any change, addition
and/or omission in the publications watched by Chase for these purposes). If
Chase or any Chase Branch, Foreign Bank or Foreign Securities Depository shall
receive any proxies, notices, reports, or other communications relative to any
of the Securities held in the Custody Account, Chase shall, on its behalf or on
behalf of a Chase Branch, Foreign Bank or Foreign Securities Depository,
promptly transmit in writing any such communication to the Company. In addition,
Chase shall notify the Company by person-to-person collect telephone concerning
any such notices relating to any matters specified in the first sentence of this
Section 16.
As specifically requested by the Company, Chase shall execute
or deliver or shall cause the nominee in whose name Securities are registered to
execute and deliver to such person as may be designated by the Company proxies,
consents, authorizations and any other instruments whereby the authority of a
Fund as owner of any Securities in the Custody Account registered in the name of
Chase or such nominee, as the case may be, may be exercised. Chase shall vote
Securities in accordance with Written Instructions timely received by Chase, or
such other person or persons as designated in or pursuant to the Operating
Agreement.
Chase and any Chase Branch shall have no liability for any
loss or liability occasioned by delay in the actual receipt by them or any
Foreign Bank or Foreign Securities Depository of notice of any payment or
redemption which does not appear in any of the publications referred to in the
first sentence of this Section 16.
17. COMPENSATION. The Company agrees to pay to Chase 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 Chase's out-of-pocket or
incidental expenses, as from time to time shall be mutually agreed upon by Chase
and the Company. The Company shall have no responsibility for the payment of
services provided by any Domestic Securities Depository, such fees being paid
directly by Chase. In the event of any advance of Cash for any purpose made by
Chase pursuant to any Written Instruction, or in the event that Chase or any
nominee of Chase shall incur or be assessed any taxes in connection with the
performance of this Agreement, the Company shall indemnify and reimburse Chase
therefor, except such assessment of taxes as results from the negligence, fraud,
or willful misconduct of Chase, any Domestic Securities Depository, Chase
Branch, Foreign Bank or Foreign Securities Depository, or as constitutes a tax
on income, gross receipts or the like of any one or more of them. Chase shall
have a lien on Securities in a Custody Account and on Cash in a Deposit Account
for any amount owing to Chase from time to time under this Agreement upon due
notice to the Company.
18. AGREEMENT SUBJECT TO APPROVAL OF THE COMPANY. It is
understood that this Agreement and any amendments shall be subject to the
approval of the Company.
19. TERM. This Agreement shall remain in effect until
terminated by either party upon 60 days' written notice to the other, sent by
registered mail. Notwithstanding the preceding sentence, however, if at any time
after the execution of this Agreement Chase shall provide written notice to the
Company, by registered mail, of the amount needed to meet a substantial increase
in the cost of maintaining its present type and level of bonding and insurance
coverage in connection with Chase's undertakings in Section 14(a), (d) and (e)
of this Agreement, said Section 14(a), (d) and (e) of this Agreement shall cease
to apply 60 days after the providing of such notice by Chase, unless prior to
the expiration of such 60 days the Company agrees in writing to assume the
amount needed for such purpose. Chase, upon the date this Agreement terminates
pursuant to notice which has been given in a timely fashion, shall, and/or shall
cause each Domestic Securities Depository to, deliver the Securities in a
Custody Account, pay the Cash in a Deposit Account, and deliver and pay
Securities and Cash in a Segregated Account to the Company unless Chase has
received from the Company 60 days prior to the date on which this Agreement is
to be terminated Written Instructions specifying the name(s) of the person(s) to
whom the Securities in a Custody Account shall be delivered, the Cash in a
Deposit Account shall be paid, and Securities and Cash in a Segregated Account
shall be delivered and paid. Concurrently with the delivery of such Securities,
Chase shall deliver to the Company, or such other person as the Company shall
instruct, the records referred to in Section 11 which are in the possession or
control of Chase, any Chase Branch, or any Domestic Securities Depository, or
any Foreign Bank or Foreign Securities Depository, or in the event that Chase is
unable to obtain such records in their original form Chase shall deliver true
copies of such records.
20. AUTHORIZATION OF CHASE TO EXECUTE NECESSARY DOCUMENTS. In
connection with the performance of its duties hereunder, the Company hereby
authorizes and directs Chase and each Chase Branch acting on behalf of Chase,
and Chase hereby agrees, to execute and deliver in the name of a Fund, or cause
such other Chase Branch to execute and deliver in the name of a Fund, such
certificates, instruments, and other documents as shall be reasonably necessary
in connection with such performance, provided that the Company shall have
furnished to Chase any information necessary in connection therewith.
21. NOTICES. Any notice or other communication
authorized or required by this Agreement to be given to the parties shall be
sufficiently given (except to the extent otherwise specifically provided) if
addressed and mailed postage prepaid or delivered to it at its office at the
address set forth below:
If to the Company, then to
Xxxxxxxxx Institutional Funds, Inc.
000 Xxxxxxx Xxxxxx, X.X. Xxx 00000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Secretary
If to Chase, then to
The Chase Manhattan Bank
MetroTech Center
Brooklyn, New York 11245
Attention: Global Custody Division Executive
or such other person or such other address as any party shall have furnished to
the other party in writing.
22. NON-ASSIGNABILITY OF AGREEMENT. This Agreement shall
not be assignable by either party hereto; provided, however, that any
corporation into which a Fund, the Company or Chase, as the case may be, may
be merged or converted or with which it may be consolidated, or any corporation
succeeding to all or substantially all of the trust business of Chase, shall
succeed to the respective rights and shall assume the respective duties of the
Company or of Chase, as the case may be, hereunder.
23. GOVERNING LAW. This Agreement shall be governed by the
laws of the State of New York.
THE CHASE MANHATTAN BANK
By:__________________________________
XXXXXXXXX INSTITUTIONAL FUNDS, INC.
By:__________________________________
