Exhibit 7
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective _____________, and is between THE CHASE
MANHATTAN BANK, (the "Bank") and Xxxxxx Xxxxxxx Xxxx Xxxxxx International Value
Equity Fund____ (the "Customer").
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer ("Custody Account")
for any and all stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin 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 whether certificated or
uncertificated as may be received by the Bank or its Subcustodian (as defined in
Section 3) for the account of the Customer ("Securities"); and
(b) A deposit account in the name of the Customer ("Deposit Account")
for any and all cash in any currency received by the Bank or its Subcustodian
for the account of the Customer, which cash shall not be subject to withdrawal
by draft or check.
The Customer warrants its authority to: 1) deposit the cash and
Securities ("Assets") received in the Accounts and 2) give Instructions (as
defined in Section 11) concerning the Accounts. The Bank may deliver securities
of the same class in place of those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to
the Bank:
(a) Securities will be held in the country or other jurisdiction in
which the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash will be credited to an account in a country or other
jurisdiction in which such cash may be legally deposited or is the legal
currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
To the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the custody of
an institution other than the established Subcustodians as defined in Section 3
(or their securities depositories), such arrangement must be authorized by a
written agreement, signed by the Bank and the Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
The Bank may act under this Agreement through the subcustodians listed
in Schedule A of this Agreement with which the Bank has entered into
subcustodial agreements ("Subcustodians"). The Customer authorizes the Bank to
hold Assets in the Accounts in accounts which the Bank has established with one
or more of its branches or Subcustodians. The Bank and Subcustodians are
authorized to hold any of the Securities in their account with any securities
depository in which they participate.
The Bank reserves the right to add new, replace or remove
Subcustodians. The Customer will be given reasonable notice by the Bank of any
amendment to Schedule A. Upon request by the Customer, the Bank will identify
the name, address and principal place of business of any Subcustodian of the
Customer's Assets and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) The Bank will identify the Assets on its books as belonging to the
Customer.
(b) A Subcustodian will hold such Assets together with assets belonging
to other customers of the Bank in accounts identified on such Subcustodian's
books as special custody accounts for the exclusive benefit of customers of the
Bank.
(c) Any Assets in the Accounts held by a Subcustodian will be subject
only to the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject only to
the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding
its customer's assets shall provide that such assets will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets will be freely transferable without the payment of
money or value other than for safe custody or administration. The foregoing
shall not apply to the extent of any special agreement or arrangement made by
the Customer with any particular Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) The Bank or its Subcustodians will make payments from the Deposit
Account upon receipt of Instructions which include all information required by
the Bank.
(b) In the event that any payment to be made under this Section 5
exceeds the funds available in the Deposit Account, the Bank, in its discretion,
may advance the Customer such excess amount which shall be deemed a loan payable
on demand, bearing interest at the rate customarily charged by the Bank on
similar loans.
(c) If the Bank credits the Deposit Account on a payable date, or at
any time prior to actual collection and reconciliation to the Deposit Account,
with interest, dividends, redemptions or any other amount due, the Customer will
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If the Customer does not promptly return
any amount upon such notification, the Bank shall be entitled, upon oral or
written notification to the Customer, to reverse such credit by debiting the
Deposit Account for the amount previously credited. The Bank or its Subcustodian
shall have no duty or obligation to institute legal proceedings, file a claim or
a proof of claim in
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any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for the Customer upon Instructions after
consultation with the Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank
or its Subcustodian upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for Securities received
for, and delivery of Securities out of, the Custody Account may be made 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, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the expectation of
receiving later payment and free delivery. Delivery of Securities out of the
Custody Account may also be made in any manner specifically required by
Instructions acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any sale,
exchange or purchase of Securities. Otherwise, such transactions will be
credited or debited to the Accounts on the date cash or Securities are actually
received by the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a
reasonable period, determined by the Bank in its discretion, after the
contractual settlement date for the related transaction.
(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, the Bank may reverse the credits and
debits of the particular transaction at any time.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in
the Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities 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 actually aware of such opportunities.
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or any
Subcustodian.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any
transfers of Assets to or from the Accounts. Such statements, advices or
notifications shall indicate the identity of the entity having custody of the
Assets. Unless the Customer sends the Bank a written exception or objection to
any Bank statement within sixty (60) days of receipt, the Customer shall be
deemed to have approved such statement. In such event, or where the Customer has
otherwise approved any such statement, the Bank shall, to the extent permitted
by law, be released,
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relieved and discharged with respect to all matters set forth in such statement
or reasonably implied therefrom as though it had been settled by the decree of a
court of competent jurisdiction in an action where the Customer and all persons
having or claiming an interest in the Customer or the Customer's Accounts were
parties.
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
Customer. The Bank shall have no liability for any loss occasioned by delay in
the actual receipt of notice by the Bank or by its Subcustodians of any payment,
redemption or other transaction regarding Securities in the Custody Account in
respect of which the Bank has agreed to take any action under this Agreement.
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
a. Corporate Actions. Whenever the Bank receives information concerning
the Securities which requires discretionary action by the beneficial owner of
the Securities (other than a proxy), such as subscription rights, bonus issues,
stock repurchase plans and rights offerings, or legal notices or other material
intended to be transmitted to securities holders ("Corporate Actions"), the Bank
will give the Customer notice of such Corporate Actions to the extent that the
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank will endeavor to obtain
Instructions from the Customer or its Authorized Person, but if Instructions are
not received in time for the Bank to take timely action, or actual notice of
such Corporate Action was received too late to seek Instructions, the Bank is
authorized to sell such rights entitlement or fractional interest and to credit
the Deposit Account with the proceeds or take any other action it deems, in good
faith, to be appropriate in which case it shall be held harmless for any such
action.
b. Proxy Voting. The Bank will deliver proxies to the Customer or its
designated agent pursuant to special arrangements which may have been agreed to
in writing. Such proxies shall be executed in the appropriate nominee name
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;
and where bearer Securities are involved, proxies will be delivered in
accordance with Instructions. Proxy voting services may be provided by the Bank
or, in whole or in part, by one or more third parties appointed by the Bank
(which may be affiliates of the Bank); provided that the Bank shall be liable
for the performance of any such third party to the same extent as the Bank would
have been if it performed such services itself.
c. Tax Reclaims. (i) Subject to the provisions hereof, the Bank will
apply for a reduction of withholding tax and any refund of any tax paid or tax
credits which apply in each applicable market in respect of income payments on
Securities for the benefit of the Customer which the Bank believes may be
available to such Customer.
(ii) The provision of tax reclaim services by the Bank is conditional
upon the Bank receiving from the beneficial owner of Securities (A) a
declaration of its identity and place of residence and (B) certain other
documentation (pro forma copies of which are available from the Bank). The
Customer acknowledges that, if the Bank does not receive such declarations,
documentation and information, additional United Kingdom taxation will be
deducted from all income received in respect of Securities issued outside the
United Kingdom and that U.S. non-resident alien tax or U.S. backup withholding
tax will be deducted from U.S. source income. The Customer shall provide to the
Bank such documentation and information as it may require in connection with
taxation, and warrants that, when given, this information shall be true and
correct in every respect, not misleading in any way, and contain all material
information. The Customer undertakes to notify the Bank immediately if any such
information requires updating or amendment.
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(iii) The Bank shall not be liable to the Customer or any third party
for any tax, fines or penalties payable by the Bank or the Customer, and shall
be indemnified accordingly, whether these result from the inaccurate completion
of documents by the Customer or any third party, or as a result of the provision
to the Bank or any third party of inaccurate or misleading information or the
withholding of material information by the Customer or any other third party, or
as a result of any delay of any revenue authority or any other matter beyond the
control of the Bank.
(iv) The Customer confirms that the Bank is authorized to deduct from
any cash received or credited to the Cash Account any taxes or levies required
by any revenue or governmental authority for whatever reason in respect of the
Securities or Cash Accounts.
(v) The Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to the
Customer from time to time and the Bank may, by notification in writing, at its
absolute discretion, supplement or amend the markets in which the tax reclaim
services are offered. Other than as expressly provided in this sub-clause, the
Bank shall have no responsibility with regard to the Customer's tax position or
status in any jurisdiction.
(vi) The Customer confirms that the Bank is authorised to disclose any
information requested by any revenue authority or any governmental body in
relation to the Customer or the Securities and/or Cash held for the Customer.
(vii) Tax reclaim services may be provided by the Bank or, in whole or
in part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank); provided that the Bank shall be liable for the
performance of any such third party to the same extent as the Bank would have
been if it performed such services itself.
9. NOMINEES.
Securities which are ordinarily held in registered form may be
registered in a nominee name of the Bank, Subcustodian or securities depository,
as the case may be. The Bank may without notice to the Customer 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 Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Securities in the Custody Account.
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees
or agents including investment managers as have been designated by written
notice from the Customer or its designated agent to act on behalf of the
Customer under this Agreement. Such persons shall continue to be Authorized
Persons until such time as the Bank receives Instructions from the Customer or
its designated agent that any such employee or agent is no longer an Authorized
Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank 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
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specify. Unless otherwise expressly provided, all Instructions shall continue in
full force and effect until canceled or superseded.
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 Customer will hold the
Bank harmless for the failure of an Authorized Person to send such confirmation
in writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such
duties as are set forth in this Agreement or expressly contained in Instructions
which are consistent with the provisions of this Agreement as follows:
(i) The Bank will use reasonable care with respect to its obligations
under this Agreement and the safekeeping of Assets. The Bank shall be
liable to the Customer for any loss which shall occur as the result of
the failure of a Subcustodian to exercise reasonable care with respect
to the safekeeping of such Assets to the same extent that the Bank
would be liable to the Customer if the Bank were holding such Assets in
New York. In the event of any loss to the Customer by reason of the
failure of the Bank or its Subcustodian to utilize reasonable care, the
Bank shall be liable to the Customer only to the extent of the
Customer's direct 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 will not be responsible for the insolvency
of any Subcustodian which is not a branch or affiliate of Bank.
(ii) The Bank will not be responsible for any act, omission, default or
the solvency of any broker or agent which it or a Subcustodian appoints
unless such appointment was made negligently or in bad faith.
(iii) The Bank shall be indemnified by, and without liability to the
Customer for any action taken or omitted by the Bank whether pursuant
to Instructions or otherwise within the scope of this Agreement if such
act or omission was in good faith, without negligence. In performing
its obligations under this Agreement, the Bank may rely on the
genuineness of any document which it believes in good faith to have
been validly executed.
(iv) The Customer agrees to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment of any
taxes or other governmental charges, and any related expenses with
respect to income from or Assets in the Accounts.
(v) The Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for the Customer) on all matters and shall
be without liability for any action reasonably taken or omitted
pursuant to such advice.
(vi) The Bank need not maintain any insurance for the benefit of the
Customer.
(vii) Without limiting the foregoing, the Bank shall not be liable for
any loss which results from: 1) the general risk of investing, or 2)
investing or holding Assets in a particular country including, but not
limited to, losses resulting from nationalization, expropriation or
other
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governmental actions; regulation of the banking or securities industry;
currency restrictions, devaluations or fluctuations; and market
conditions which prevent the orderly execution of securities
transactions or affect the value of Assets.
(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or
work stoppages, acts of war or terrorism, insurrection, revolution,
nuclear fusion, fission or radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to the Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or
the retention of Securities;
(iii) advise the Customer or an Authorized Person regarding any default
in the payment of principal or income of any security other than as
provided in Section 5(c) of this Agreement;
(iv) evaluate or report to the Customer or an Authorized Person
regarding the financial condition of any broker, agent or other party
to which Securities are delivered or payments are made pursuant to this
Agreement;
(v) review or reconcile trade confirmations received from brokers. The
Customer or its Authorized Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may have a
material interest in a transaction, or circumstances are such that the Bank may
have a potential conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide brokerage services to other customers, act
as financial advisor to the issuer of Securities, act as a lender to the issuer
of Securities, act in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn profits from any of
the activities listed herein.
13. FEES AND EXPENSES.
The Customer agrees to pay the Bank for its services under this
Agreement such amount as may be agreed upon in writing, together with the Bank's
reasonable out-of-pocket or incidental expenses, including, but not limited to,
legal fees. The Bank shall have a lien on and is authorized to charge any
Accounts of the Customer for any amount owing to the Bank under any provision of
this Agreement.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the administration of
the Customer's trading and investment activity, the Bank is authorized to enter
into spot or forward foreign exchange contracts with the Customer or an
Authorized Person for the Customer and may also provide foreign exchange through
its subsidiaries, affiliates or Subcustodians. Instructions, including standing
instructions, may be issued with respect to such contracts but the Bank may
establish rules or limitations concerning any foreign exchange facility made
available. In all cases where the Bank, its subsidiaries, affiliates or
Subcustodians enter into a foreign exchange contract related to
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Accounts, the terms and conditions of the then current foreign exchange contract
of the Bank, its subsidiary, affiliate or Subcustodian and, to the extent not
inconsistent, this Agreement shall apply to such transaction.
(b) Certification of Residency, etc. The Customer certifies that it is
a resident of the United States and agrees to notify the Bank of any changes in
residency. The Bank may rely upon this certification or the certification of
such other facts as may be required to administer the Bank's obligations under
this Agreement. The Customer will indemnify the Bank against all losses,
liability, claims or demands arising directly or indirectly from any such
certifications.
(c) Access to Records. The Bank shall allow the Customer's independent
public accountant reasonable access to the records of the Bank relating to the
Assets as is required in connection with their examination of books and records
pertaining to the Customer's affairs. Subject to restrictions under applicable
law, the Bank shall also obtain an undertaking to permit the Customer's
independent public accountants reasonable access to the records of any
Subcustodian which has physical possession of any Assets as may be required in
connection with the examination of the Customer's books and records.
(d) Governing Law; Successors and Assigns. This Agreement shall be
governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.
(e) Entire Agreement; Applicable Riders. Customer represents that the
Assets deposited in the Accounts are (Check one):
Employee Benefit Plan or other assets subject to the Employee
--- Retirement Income Security Act of 1974, as amended ("ERISA");
x Mutual Fund assets subject to certain Securities and Exchange
--- Commission ("SEC") rules and regulations;
--- Neither of the above.
This Agreement consists exclusively of this document together with
Schedule A, and the following Rider:
ERISA
---
x MUTUAL FUND
---
SPECIAL TERMS AND CONDITIONS
---
There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions of this
Agreement are held invalid, illegal or enforceable in any respect on the basis
of any particular circumstances or in any jurisdiction, the validity, legality
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and enforceability of such provision or provisions under other circumstances or
in other jurisdictions and of the remaining provisions will not in any way be
affected or impaired.
(g) Waiver. Except as otherwise provided in this Agreement, no failure
or delay on the part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial exercise of any
power or right preclude any other or further exercise, or the exercise of any
other power or right. No waiver by a party of any provision of this Agreement,
or waiver of any breach or default, is effective unless in writing and signed by
the party against whom the waiver is to be enforced.
(h) Notices. All notices under this Agreement shall be effective when
actually received. Any notices or other communications which may be required
under this Agreement are to be sent to the parties at the following addresses or
such other addresses as may subsequently be given to the other party in writing:
Bank: The Chase Manhattan Bank
0 Xxxxx XxxxxXxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Global Custody Division
or telex:
Customer: Xxxxxx Xxxxxxx Xxxx Xxxxxx Advisors
----------------------------------------
2 World Trade Center, 72nd Floor
----------------------------------------
Xxx Xxxx, XX 00000
----------------------------------------
or telex:
(i) Termination. This Agreement may be terminated by the Customer or
the Bank by giving sixty (60) days written notice to the other, provided that
such notice to the Bank shall specify the names of the persons to whom the Bank
shall deliver the Assets in the Accounts. If notice of termination is given by
the Bank, the Customer shall, within sixty (60) days following receipt of the
notice, deliver to the Bank Instructions specifying the names of the persons to
whom the Bank shall deliver the Assets. In either case the Bank will deliver the
Assets to the persons so specified, after deducting any amounts which the Bank
determines in good faith to be owed to it under Section 13. If within sixty (60)
days following receipt of a notice of termination by the Bank, the Bank does not
receive Instructions from the Customer specifying the names of the persons to
whom the Bank shall deliver the Assets, the Bank, at its election, may deliver
the Assets to a bank or trust company doing business in the State of New York to
be held and disposed of pursuant to the provisions of this Agreement, or to
Authorized Persons, or may continue to hold the Assets until Instructions are
provided to the Bank.
CUSTOMER:
-------------------------------------
By:
--------------------------------------------
Title
THE CHASE MANHATTAN BANK
By:
--------------------------------------------
Title
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Mutual Fund Rider to Global Custody Agreement
Between The Chase Manhattan Bank and
Xxxxxx Xxxxxxx Xxxx Xxxxxx International Equity Fund , effective ______________.
Customer represents that the Assets being placed in the Bank's custody
are subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.
Except to the extent that the Bank has specifically agreed to comply
with a condition of a rule, regulation, interpretation promulgated by or under
the authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
Securities Exchange Commission.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in this
Agreement shall mean a branch of a qualified U.S. bank, an eligible
foreign custodian or an eligible foreign securities depository, which
are further defined as follows:
(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 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) (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; or (iv) any other entity that
shall have been so qualified by exemptive order, rule or other
appropriate action of the SEC; 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 securities or equivalent book-entries in
that country, or (ii) a transnational system for the central handling
of securities or equivalent book-entries.
The Customer represents that its Board of Directors has approved each
of the Subcustodians listed in Schedule A to this Agreement and the terms of the
subcustody agreements between the Bank and each Subcustodian, which are attached
as chedule A, and further represents that its Board has determined that the use
of each Subcustodian and the terms of each subcustody agreement are consistent
with the best interests of the Fund(s) and its (their) shareholders. The Bank
will supply the Customer with any amendment to Schedule A for approval. The
Customer has supplied or will supply the Bank with certified copies of its Board
of Directors resolution(s) with respect to the foregoing prior to placing Assets
with any Subcustodian so approved.
Section 11. Instructions.
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant
to Section 5 and 6 of this Agreement may be made only for the purposes
listed below. Instructions must specify the purpose for which any
transaction is to be made and Customer shall be solely responsible to
assure that Instructions are in accord with any limitations or
restrictions applicable to the Customer by law or as may be set forth
in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When 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;
2
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of, the
Bank, its Subcustodian or the Customer's transfer agent, such shares to
be purchased or redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer agent
of such shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement
among the Customer, the Bank and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and a member of
The National Association of Securities Dealers, Inc. ("NASD"), relating
to compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other arrangements
in connection with transactions by the Customer;
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only
upon payment to the Bank of monies for the premium due and a receipt
for the Securities which are to be held in escrow. Upon exercise of the
option, or at expiration, the Bank will receive from brokers the
Securities previously deposited. The Bank will act strictly in
accordance with Instructions in the delivery of Securities to be held
in escrow and will have no responsibility or liability for any such
Securities which are not returned promptly when due other than to make
proper request for such return;
3
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;
(n) For other proper purposes as may be specified in Instructions
issued by an officer of the Customer which shall include a statement of
the purpose for which the delivery or payment is to be made, the amount
of the payment or specific Securities to be delivered, the name of the
person or persons to whom delivery or payment is to be made, and a
certification that the purpose is a proper purpose under the
instruments governing the Customer; and
(o) Upon the termination of this Agreement as set forth in Section
14(i).
Section 12. Standard of Care; Liabilities.
Add the following subsection (c) to Section 12:
(c) The Bank hereby warrants to the Customer 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 the Customer's Securities
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.
Section 14. Access to Records.
Add the following language to the end of Section 14(c):
Upon reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of
internal accounting controls applicable to the Bank's duties under this
Agreement. The Bank shall endeavor to obtain and furnish the Customer
with such similar reports as it may reasonably request with respect to
each Subcustodian and securities depository holding the Customer's
assets.
4
--------------------------------------------------------------------------------
THE CHASE MANHATTAN BANK
FEE SCHEDULE
FOR
XXXXXX XXXXXXX XXXX XXXXXX ADVISORS INC.
1999
--------------------------------------------------------------------------------
Proposed 1999 Custody and Transaction Schedule for
Xxxxxx Xxxxxxx Xxxx Xxxxxx Advisors Inc.
-------------------------------------------------------------------
CUSTODY TRANSACTION
COUNTRY RATE RATE
-------------------------------------------------------------------
Argentina 25 bp $83
Australia 4 bp $38
Xxxxxxx 0 xx x00
Xxxxxxxxxx 00 xx $150
Xxxxxxx 0 xx x00
Xxxxxxx 00 xx $75
Botswana 60 bp $73
Brazil 15 bp $58
Bulgaria 35 bp $75
Canada 3.5 bp $23
Xxxxx 00.0 xx x00
Xxxxx 00 xx x00
Xxxxxxxx 42.5 bp $100
Cote d'Ivoire 3 bp $100
Cyprus 60 bp $150
Xxxxx Xxxxxxxx 00 xx x00
Xxxxxxx 4 bp $52
Ecuador 45 bp $90
Egypt 40 bp $75
Xxxxxxx 00 xx x00
Xxxxxxx 5 bp $50
France 3 bp $47
Germany 1.75 bp $27
Xxxxx 00 xx x00
Xxxxxx 40 bp $75
Hong Kong 4 bp $60
Xxxxxxx 00 xx x000
Xxxxx HKSB 00 xx 00 xx
Xxxxx SHCIL 36 bp (country 42.5b p(country
(Chase Branch for 17f-5) specific funds) specific funds)
00 xx (xxxxx) 00 xx (xxxxx)
Xxxxx SCB 00 xx 00.0 xx
Xxxxx (XXXX assets) 19 bp $100
Indonesia 10 bp $75
Ireland 7 bp $45
-------------------------------------------------------------------
Proposed 1999 Custody and Transaction Schedule for
Xxxxxx Xxxxxxx Xxxx Xxxxxx Advisors Inc.
-------------------------------------------------------------------
CUSTODY TRANSACTION
COUNTRY RATE RATE
-------------------------------------------------------------------
Israel 45 bp $65
Italy 5 bp $50
Jamaica 11bp $70
Japan 1.6 bp $23
Xxxxxx 00 xx x000
Xxxxx 00 xx x00
Xxxxxxxx 7.5 bp $75
Mauritius 60 bp $130
Mexico 5.5 bp $42
Morocco 50 bp $112
Netherlands 4 bp $35
New Zealand 2 bp $47
Nigeria 60 bp $175
Xxxxxx 0 xx x00
Xxxxxxxx 30 bp $112
Papua New Guinea 12 bp $100
Xxxx 00 bp $98
Philippines 15 bp $83
Poland 37.5 bp $87
Portugal 25 bp $83
Russia 22 bp $85
- GKOs 10 bp $25
Singapore 4 bp $63
Xxxxxx Xxxxxxxx 00 xx x000
Xxxxxxxx 35 bp $75
South Africa 4.5 bp $30
Xxxxx Xxxxx 00 xx x00
Xxxxx 6.5bp $50
Sri Xxxxx 00 xx x000
Xxxxxx 5 bp $45
Switzerland 4.5 bp $53
Xxxxxx 00 xx x00
Xxxxxxxx 15 bp $63
Turkey 12.5 bp $73
United Kingdom 1.5 bp $25
-------------------------------------------------------------------
Proposed 1999 Custody and Transaction Schedule for
Xxxxxx Xxxxxxx Xxxx Xxxxxx Advisors Inc.
-------------------------------------------------------------------
CUSTODY TRANSACTION
COUNTRY RATE RATE
-------------------------------------------------------------------
United States 0.7bp $8
Uruguay 50 bp $100
Xxxxxxxxx 00 xx x000
Xxxxxx 60 bp $80
Zimbabwe 60 bp $70
Euroclear 2 bp $23
Cedel 2 bp $23
LDC Loans 20 bp $250
-------------------------------------------------------------------
Proposed 1999 Custody and Transaction Schedule for
Xxxxxx Xxxxxxx Xxxx Xxxxxx Advisors Inc.
Fee Schedule Assumptions and
Out of Pocket and Other Charges
o Morgan Xxxxxxx Xxxx Xxxxxx Advisors Inc. (the "Adviser") agrees to propose
to the Board of Directors of each mutual fund for which it serves as
investment adviser (each, a "Fund" and collectively the "Funds") the
adoption of the foregoing custody and transaction fee schedule and
additional terms set forth below (collectively, "Fee Schedule"). Such Fee
Schedule shall not be effective with respect to any Fund unless and until
approved by the Board of Directors of such Fund, each of which acts
independently from the Adviser with respect to such matters, and upon
agreement to appropriate contractual terms between The Chase Manhattan Bank
("Chase") and the Fund. Adviser shall inform Chase in writing upon the
adoption by a given Fund of the Fee Schedule.
o Chase confirms that the Fee Schedule is the same as received by funds
advised by Xxxxxx, Xxxxxxxx & Xxxxxxxx, LLP or Xxxxxx Xxxxxxx Xxxx Xxxxxx
Investment Management Inc. or Xxx Xxxxxx Investment Advisory Corp.
o All markets except Uruguay indicate changes from 1998's custody and
transaction fee schedule.
o Chase will be the provider of choice for foreign exchange given best
execution.
o The Adviser will automate all trades in SWIFT/ISITC (particularly where
Xxxxxx Xxxxxxx Xxxx Xxxxxx Investment Management Inc. is not the advisor).
o SWIFT 592 messaging for trade amendments and cancels/corrections will be
implemented for the entire relationship.
o HKSB India transaction rate for physical segment of 45 bp is capped at $400
per transaction.
o NSDL India pass through charges for transactions will be recharged at cost
to the client.
o Cash movements will be charged at $8 for USD settlements and $15 for
non-USD settlements.
o Cash balances will not incur custodial charges.
o Foreign exchange transactions for the purchase and sale of Indian Rupees
through Barclay's Mauritius will be charged at $400 per transaction.
o Registration/Transfer fees will be recharged at cost where incurred by
Chase.
o Stamp taxes/duties will be recharged at cost where incurred by Chase.
Proposed 1999 Custody and Transaction Schedule for
Xxxxxx Xxxxxxx Xxxx Xxxxxx Advisors Inc.
o Fund Accounting and Fund Administration fees will be agreed to separately.
o All new business will be separately negotiated. The Adviser shall contact
its relationship manager if it plans to trade in new countries (i.e.
countries that are not on the Fee Schedule). If the Adviser's relationship
manager is not notified ahead of time, the relevant Fund will be charged at
the Chase generic rate for each respective new country.
o All fees are to be calculated and billed monthly in arrears.
o The Adviser shall receive a preferred schedule reflecting most competitive
pricing to be determined as follows. Chase has not committed to giving the
Funds advised by the Adviser the lowest fee in any one market, but instead
shall compare the Fee Schedule for such Funds against two other Chase
clients of similar scope, size and asset and country mix, taking into
consideration in making such comparison all the assets held by Chase for
funds advised by Xxxxxx, Xxxxxxxx & Xxxxxxxx, LLP, Xxxxxx Xxxxxxx Xxxx
Xxxxxx Investment Management Inc. and Xxx Xxxxxx Investment Advisory Corp.
and that are subject to the same Fee Schedule.
The comparison of custody fee schedules shall be conducted annually.
Annualized values for trades and assets by market for the respective funds
will be mutually agreed on by the Adviser and Chase before the comparison
is conducted. These annualized values will be applied to the two other
Chase clients' custody fee schedules.
If, as determined by Chase, application of the overall fee schedule for
either of such other clients to all the Fund would result in a lower
overall price to Funds than does the Fee Schedule, Funds shall be given the
benefit of such pricing in its entirety as and after the date such
determination is made for as long as such fee schedule is in effect for
such other client. The difference between the Funds' charges and the
comparison of other Chase clients must exceed $50,000 in annualized custody
charges for changes in the Fee Schedule to take effect.
In addition to the foregoing, Chase will address on a country by country
basis changes in pricing that could be offered as a result of a reduction
in Chase's costs where there has been a change in the overall securities
holding practices of a country (including, without limitation, a change
from the holding of securities in physical form to the holding of
securities in book-entry form).
o The Adviser shall recommend to the Board of Directors of each Fund that
such Board review and approve the revised Fee Schedule annually for the
next three years, effective October 1, 1999 through September 30, 2002,
subject to the Adviser's fiduciary duty to each such Fund. Chase
understands and acknowledges that under certain circumstances - including,
without limitation, a change in economic conditions that results in
equivalent services becoming available more cheaply elsewhere - the
Adviser's fiduciary duty to such mutual funds would prohibit its
recommending to the Boards of Directors the re-approval of the Fee Schedule
at its current level. Chase further understands and acknowledges that the
annual continuation of custody fees is subject to annual re-approval by the
Board of Directors of each Fund, each of which acts independently from the
Adviser with respect to such matters.
Proposed 1999 Custody and Transaction Schedule for
Xxxxxx Xxxxxxx Xxxx Xxxxxx Advisors Inc.
o This Fee Schedule will be in effect retroactive to October 1, 1999.
Xxxxxx Xxxxxxx Xxxx Xxxxxx Advisors Inc. The Chase Manhattan Bank
Signature Signature
----------------------------- -------------------------
Date Date
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