GLOBAL CUSTODY AGREEMENT
BETWEEN
XXXXXXXX CAPITAL FUNDS (DELAWARE)
AND
THE CHASE MANHATTAN BANK
CONTENTS
INTENTION OF THE PARTIES........................................................................................3
WHAT CHASE IS REQUIRED TO DO....................................................................................3
INSTRUCTIONS AND AUTHORISED PERSONS............................................................................10
BORROWINGS AND FOREIGN EXCHANGE................................................................................13
FEES EXPENSES AND OTHER AMOUNTS OWING TO CHASE.................................................................13
ELIGIBLE FOREIGN CUSTODIANS AND ELIGIBLE SECURITIES DEPOSITORIES...............................................14
BROKERS AND OTHER THIRD PARTIES................................................................................18
OMNIBUS ACCOUNTS...............................................................................................19
ABOUT THE PARTIES..............................................................................................19
CONFLICTS OF INTEREST..........................................................................................20
STANDARD OF CARE - HOW CHASE IS TO PERFORM ITS DUTIES UNDER THIS AGREEMENT.....................................21
WHEN CHASE IS NOT LIABLE.......................................................................................21
INDEMNITY......................................................................................................22
TERMINATION....................................................................................................23
RUSSIA.........................................................................................................24
UKRAINE........................................................................................................25
MISCELLANEOUS..................................................................................................27
DEFINITIONS....................................................................................................29
SCHEDULE 1: LIST OF ELIGIBLE FOREIGN CUSTODIANS AND MARKETS USED BY CHASE 26
SCHEDULE 2: TAIWAN RIDER 30
SCHEDULE 3: LETTER OF INSTRUCTION FOR THE TAIWAN MARKET 32
SCHEDULE 4: APPROVED BROKER LIST 34
SCHEDULE 5: TAIWANESE BROKER UNDERTAKING 35
SCHEDULE 6: INFORMATION REGARDING COUNTRY RISK 44
SCHEDULE 7: ELIGIBLE SECURITIES DEPOSITORIES 45
EXHIBIT A PERSONS AUTHORISED BY THE COMPANY TO GIVE INSTRUCTIONS 36
EXHIBIT B PORTFOLIOS OF THE FUND
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This Custody Agreement is made on the 5th day of November, 2001 between THE
CHASE MANHATTAN BANK ("Chase"), with a place of business at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx and XXXXXXXX CAPITAL FUNDS (DELAWARE) (the "Fund"), on behalf of
each separate series of the Fund listed on Exhibit B hereto (each such series, a
"Portfolio") whose registered office/principal place of business is 000 Xxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
1. INTENTION OF THE PARTIES
This Custody Agreement sets out the terms governing custody, settlement and
other associated services to be provided by Chase to the Fund on behalf of each
Portfolio.
2. WHAT CHASE IS REQUIRED TO DO
SET UP ACCOUNTS A. (i) Subject to the receipt of such documentation as
Chase may require (including, but not limited to,
mandates and certified copies of the Fund's
constitutional documents), Chase shall open in its
books and records separately in the name of each
Portfolio, or, at the Fund's reasonable request,
in any other name (together the "ACCOUNTS"):
(a) one or more securities accounts (the
"SECURITIES ACCOUNTS") evidencing any shares,
stocks, debentures, bonds, notes, mortgages
or other like obligations and any
certificates, receipts, warrants or other
instruments representing rights to receive,
purchase or subscribe for the same
("SECURITIES") held by Chase or any branch of
Chase on behalf of such Portfolio or held, as
described and defined in Clause 6, by a
Eligible Foreign Custodian or Eligible
Securities Depository for Chase on behalf of
such Portfolio; and
(b) one or more cash accounts (the "CASH
ACCOUNTS") for all cash in any currency
received by Chase or any Eligible Foreign
Custodian or Eligible Securities Depository
or other agents for the account of such
Portfolio.
(ii) At the request of the Fund, further Accounts may
be opened in the future, which will be subject to
the terms of this Agreement, unless agreed in
writing otherwise at the time the further Account
is opened.
MAINTENANCE OF B. (i) Unless Instructions (as detailed in Clause 3)
SECURITIES AND require another location acceptable to Chase:
CASH AT BANK AND
SUB- LOCATIONS (a) Financial Assets will be held in the country
or jurisdiction in which the principal
trading market for the relevant Securities is
located, where such Financial Assets may be
presented for payment, where such Financial
Assets were acquired, or where such Financial
Assets are held; and
(b) cash will be held on the books of Chase or be
credited to accounts of institutions chosen
by Chase in the country or jurisdiction where
such cash is the legal currency for payment
of public or private debts.
(ii) Chase reserves the right to refuse to accept
delivery of Financial Assets or
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cash in countries and jurisdictions other than
those referred to in Schedule 1 to this Agreement,
which may be amended by Chase from time to time,
prior notice being given to the Fund where
practicable.
SETTLEMENT C. (i) When Chase receives an Instruction which includes
OF TRADES all information required by Chase requesting
settlement of a trade in Financial Assets, Chase
shall use reasonable endeavours to effect such
settlement as instructed, save where Chase
reasonably believes that such settlement would be
contrary to applicable law, regulation or market
practice.
(ii) With respect to Russia, payment for Local Russian
Securities shall not be made prior to the issuance
by the Russian Registrar Company of the Share
Extract relating to such Local Russian Securities.
Delivery of Local Russian Securities may be made
in accordance with the customary or established
securities trading or securities processing
practices and procedures in Russia. Delivery of
Local Russian Securities may also be made in any
manner specifically required by Instructions
acceptable to Chase. The Fund shall promptly
supply such transaction and settlement information
as may be required by Chase or CMBI in connection
with particular transactions.
(iii) Delivery of Financial Assets may be made in
accordance with the customary or established
securities trading or securities processing
practices and procedures in the Ukraine (and the
Fund expressly acknowledge that delivery versus
payment is not typically available in the Ukraine
market). Delivery of Financial Assets may also be
made in any manner specifically required by
Instructions acceptable to Chase. The Fund shall
promptly supply such transaction and settlement
information as may be requested by Chase or the
Ukrainian Eligible Foreign Custodian in connection
with particular transactions.
SEGREGATION D. (i) Chase will identify separately in its books the
OF ASSETS Financial Assets that belong to each Portfolio in
the name of such Portfolio (save as otherwise
agreed by Chase and the Fund).
(ii) Chase will require that Eligible Foreign
Custodians identify in their own books that the
Financial Assets belong to customers of Chase (to
the extent permitted by applicable law,
regulation or market practice).
CONTRACTUAL E. (i) Chase may, at its discretion, effect the
SETTLEMENT DATE following book entries with respect to the
ACCOUNTING settlement of trades:
(a) ON SALES: on the settlement day for the sale,
credit the Cash Account of the Fund with the
sale proceeds of the sale and transfer the
relevant Financial Assets to an account
pending settlement of the trade if not
already delivered.
(b) ON PURCHASES: on or before the settlement day
for the purchase, debit the Cash Account of
the Fund with the settlement monies and
credit a separate account in the name of the
Fund. At the same time Chase will post the
Securities Account of the Fund with the
expected Financial Assets with a note to the
effect that Chase is awaiting
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receipt, pending actual receipt of such
Financial Assets. The Fund shall not be
entitled to the delivery of Financial Assets
which are awaiting receipt until they have
actually been received by Chase or a Eligible
Foreign Custodian.
(ii) Chase may (in its absolute discretion) reverse any
debit or credit made pursuant to paragraph (i) and
the Fund shall be responsible for any direct or
indirect costs or liabilities resulting from such
reversal in the absence of negligence, willful
default, bad faith or fraud on the part of Chase,
its Eligible Foreign Custodians (as described in
Clause 6H(i)(b) hereof) or their respective
officers, employees or agents. The Fund
acknowledges that the procedures described in this
sub-clause are of an administrative nature and do
not amount to an agreement by Chase to make loans
and/or Financial Assets available to the Fund.
ACTUAL F. With respect to any transaction for which the Fund's Cash
SETTLEMENT Account is not credited on the contractual settlement
DATE date as referred to in sub-clause E, Chase shall credit
ACCOUNTING the Fund's Cash Account with the proceeds of any sale or
exchange of Securities on the date on which such proceeds
or Securities are received by Chase.
INCOME G. (i) Chase will credit the Fund's Cash Account with
COLLECTION/ income and redemption proceeds on Financial
AUTOCREDIT Assets in accordance with the times notified by
Chase from time to time on or after the
anticipated payment date, net of any taxes which
are required to be withheld by Chase or any third
party. Where no time is specified for a particular
market, income and redemption proceeds on
Financial Assets will only be credited as soon as
reasonably practical after actual receipt and
reconciliation.
(ii) Chase may reverse such entries upon oral or
written notification to the Fund that Chase
reasonably believes that such amount will not be
received by Chase within a reasonable period.
(iii) Neither Chase nor its Eligible Foreign Custodians
shall be obliged to institute legal proceedings,
file a claim or proof of claim in any insolvency
proceeding or take any action with respect to
collection of interest, dividends or redemption
proceeds. If Chase or its Eligible Foreign
Custodian does not take any such action with
respect to the filing of a claim or proof of claim
in any insolvency proceeding or the collection of
interest, dividends or redemption proceeds, Chase
will, so far as reasonably practicable, take such
steps as are available to it to enable the Fund to
take appropriate action.
PRESENTA-TION OF H. Until Chase receives Instructions to the contrary, Chase
COUPONS/ is authorised to and shall:
ISSUE OF
STATEMENTS ETC (i) present, upon notice to Chase, all Financial
Assets called for redemption or otherwise matured,
and all income and interest coupons and other
income items which call for payment upon
presentation;
(ii) execute in the name of the Fund such ownership and
other certificates as may be required to obtain
payment in respect of Financial Assets;
(iii) exchange interim or temporary documents of title
held in the Securities
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Account for definitive ones; and
(iv) issue statements to the Fund monthly or at such
other times as are mutually agreed identifying the
Financial Assets in the Accounts.
CORPORATE ACTIONS I. (i) When Chase receives information or other material
intended to be transmitted to Financial Asset
holders or information is generally available in
New York or the market where the relevant
Financial Assets are held or traded concerning the
Financial Assets which requires or may require
discretionary action by the beneficial owner of
the Financial Assets (other than a proxy - see
clause 2J, including but not limited to stock
dividend, stock split, fractional interest
resulting from a rights issue, subscription
rights, bonus issues, stock repurchase plans,
warrant exercise notices, rights offerings, or
legal notices ("CORPORATE ACTIONS"), Chase will
make all reasonable endeavours to give the Fund
notice in English of such Corporate Actions within
two Business Days of such information becoming
generally available. For the purposes of these
terms, "BUSINESS DAY" means a day on which both
New York and the relevant local market are open.
Further, so far as it is within Chase's reasonable
control Chase shall allow the Fund at least two
Business Days in which to give Instructions.
Notwithstanding the generality of the foregoing,
if for reasons outside Chase's reasonable control
in setting the deadline for Instructions from the
Fund, Chase is unable to give at least two
Business Days notice to the Fund, Chase will use
all reasonable endeavours to inform the Fund of
the Corporate Action and obtain and act on the
Fund's Instructions.
(ii) Without limiting the generality of the foregoing,
where Chase receives an Instruction prior to its
stated deadline for receiving Instructions from
the Fund, which shall be in compliance with the
terms of clause 2I(i) of this Agreement, it shall
act upon that Instruction. If Chase does not
receive an Instruction from the Fund within a
reasonable time prior to such stated deadline, it
will use all reasonable endeavours to notify the
Fund that it has yet to receive an Instruction and
will endeavour to obtain such Instruction in time
for Chase to take timely action including
telephoning the Fund prior to such stated deadline
for receiving Instructions in an attempt to obtain
an oral Instruction. If the Fund still does not
provide an oral or other Instruction then Chase
shall contact the Fund, in accordance with
escalation procedures agreed between the Fund and
Chase (which may be amended from time to time), to
notify the Fund (a) that an Instruction is
outstanding and (b) what action Chase will take if
the Instruction remains outstanding and Chase is
authorised to take such action if an Instruction
is then not received within the required time
period. If an Instruction from the Fund is
received after Chase's stated deadline but prior
to the deadline for responses imposed on Financial
Asset holders by the issuer of such Financial
Assets or other relevant party, Chase will make
all reasonable endeavours to act on the Fund's
Instruction.
(iii) It is understood and agreed that Chase need only
use its reasonable efforts with respect to
performing the functions described in this Clause
2I with respect to Local Russian Securities and
Ukraine Securities.
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PROXY VOTING J. (i) Subject to and upon the terms of this sub-clause,
Chase will provide the Fund, or such other person
as the Fund may reasonably require, with
information in English which it receives on
resolutions to be voted upon at meetings of
holders of Financial Assets ("NOTIFICATIONS"), and
Chase will act in accordance with the Fund's
Instructions, or the Instructions of such other
person as the Fund may reasonably require, in
relation to such Notifications (the "ACTIVE PROXY
VOTING SERVICE").
(ii) Chase will act upon Instructions to vote on
resolutions referred to in a Notification,
provided Instructions are received by Chase at its
proxy voting department by the deadline referred
to in the relevant Notification. Further notice
will not be given, nor will Chase solicit
Instructions from the Fund. It is the recipient's
obligation to monitor the agreed means of
providing Notifications to determine if new
Notifications have been received. The Fund
acknowledges that in some cases the time to
respond to Notifications may be very limited. If
information is received by Chase at its proxy
voting department too late to permit timely voting
by the Fund, or such other person as the Fund may
reasonably require, Chase's only obligation is to
provide, so far as reasonably practicable, a
Notification (or summary information concerning a
Notification) on an "information only" basis.
(iii) Upon request by the Fund, so far as the same is
available to Chase, back-up information relating
to Notifications (such as annual reports,
explanatory material concerning resolutions,
management recommendations or other material
relevant to the exercise of proxy voting rights)
will be provided to the Fund or such other person
as the Fund may reasonably require, but without
translation.
(iv) The Fund acknowledges that Notifications and other
information furnished pursuant to the Active Proxy
Voting Service ("INFORMATION") are proprietary and
may be subject to various copyrights.
(v) In markets where the active proxy voting service
is not available or where Chase has not received
relevant documentation, Chase will not provide
Notifications to the Fund but will endeavour to
act upon Instructions to vote on resolutions at
meetings of holders of Financial Assets where it
is reasonably practicable for Chase (or its
correspondent banks or nominees as the case may
be) to do so and where such Instructions are
received in time for Chase to take timely action
(the "PASSIVE PROXY VOTING SERVICE").
(vi) The Fund acknowledges that the provision of any
proxy voting service (whether active or passive)
may be precluded or restricted under a variety of
circumstances, including the following:
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a. Financial Assets are out for registration;
b. Financial Assets conversion or another
corporate action is pending;
c. local market regulations or practices or
restrictions by the issuer;
d. Financial Assets are held in a margin or
e. in certain countries Chase may be unable to
vote proxies except on a net basis (i.e. a net
yes or no vote based on voting instructions
received from all its clients). Chase will
inform the Fund where this is the case.
TAX RECLAIMS K. (i) Subject to the provisions of this sub-clause,
Chase will apply for a reduction of withholding
tax and any refund of any tax paid or tax credits
which apply in each market in respect of income
payments on Securities for the benefit of the Fund
which Chase believes may be available to the Fund.
(ii) The provision of a tax reclaim service by Chase in
accordance with this sub-clause is conditional
upon Chase receiving from the beneficial owner of
the Financial Assets (a) a declaration on its
identity and place of residence and (b) certain
other documentation (pro forma copies of which are
available from Chase). The Fund shall provide to
Chase such documentation and information as it may
require in connection with taxation, and warrant
that, when given, this information is true and
correct in every respect, not misleading in any
way, and contains all material information. The
Fund undertakes to notify Chase promptly if any
information requires updating or correcting.
(iii) Chase shall not be liable for any tax, fines or
penalties payable by the Fund relating to the
Accounts of the Fund, and shall be indemnified by
the Fund, as for such taxes, fines or penalties,
whether these result from the inaccurate
completion of documents by any person acting on
behalf of the Fund, or as a result of the
provision to Chase or any third party of
inaccurate or misleading information or the
withholding of material information by the Fund or
any other person acting on behalf of the Fund, or
as a result of any delay of any revenue authority
or any other matter beyond the control of Chase,
except to the extent such taxes, fines or
penalties are caused by Chase's own negligence,
willful default, bad faith or fraud.
(iv) The Fund confirms that Chase is authorised to
deduct from any cash received or credited to the
Cash Account of the Fund any taxes or levies
legally required by any revenue or governmental
authority for whatever reason in respect of the
Fund's Securities or Cash Accounts.
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(v) Chase shall perform the services set out in this
sub-clause only with respect to taxation levied by
the revenue authorities of the countries notified
by Chase to the Fund from time to time and Chase
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,
Chase shall have no responsibility with regard to
the tax position or status in any jurisdiction of
the Fund.
(vi) The Fund confirms that Chase is authorised to
disclose any information required by any relevant
revenue authority or any governmental body having
jurisdiction over the Fund, or the Financial
Assets and/or Cash held for the Fund.
CLAIM OVER X. Xxxxx or any of its Eligible Foreign Custodians shall as
SECURITIES soon as reasonably practicable provide the Fund with
notice of any attempt by any party to assert any claim
over the Financial Assets or any right or interest in the
Financial Assets provided that the notice gives
sufficient information to link the claim to an account of
the Fund.
INCOME/ M. When Chase becomes aware of any dividend or redemption
REDEMPTION announcement concerning the Fund's Financial Assets or
EVENTS such information is generally available in New York or
the market in which the Financial Assets are held or
traded Chase shall promptly notify the Fund, or such
other person as the Fund may reasonably require, of the
same.
CONTROL OVER X. Xxxxx shall not release any Financial Assets into the
SECURITIES possession or control of a third party except on the
Instructions of the Fund in accordance with the duties
and responsibilities of Chase as stipulated in this
Agreement.
TIME DEPOSITS O. The Fund may direct that Chase establish time deposits in
such other banking institutions as may be agreed from
time to time between the Fund and Chase and in such
amounts as Chase shall be instructed by the Fund. In such
event, whether or not instruments representing such time
deposits are to be issued and delivered to Chase, Chase
shall maintain with respect to such time deposits
appropriate records as to the amounts of each such time
deposit with each such bank and the maturity rate and
interest rate relating to each such time deposit. In
connection with such time deposits with other banking
institutions, Chase shall be obligated to credit to the
Fund only such amount as it shall be able to recover from
such other banking institutions. Chase shall have no
other responsibility with respect to such time deposits
or the selection of the relevant banking institution.
P. In the event of the Fund placing monies belonging to the
Fund on time deposits with Chase, Chase shall pay
interest on any such deposit in accordance with normal
banking practice for a deposit of that term at a rate in
such currencies as notified to the Fund from time to time
SEGREGATED X. Xxxxx shall upon receipt of Instructions establish and
ACCOUNTS maintain a segregated account or accounts for and on
behalf of each Portfolio, into which account or accounts
may be transferred cash and/or Securities of such
Portfolio (i) in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio,
Chase and a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. (or
9
any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the
Rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity
Futures Trading Commission or any registered contract
market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by the Portfolio, (ii) for the purposes of
segregating cash or government securities in connection
with options purchased, sold or written by the Portfolio
or commodity futures contracts or options thereon
purchased or sold by the Portfolio, (iii) for the
purposes of compliance by the Portfolio with the
procedures required by The Investment Company Act of
1940, as amended (the "1940 ACT") Release No. 10666, or
any subsequent release of the Securities and Exchange
Commission ("SEC"), or interpretative opinion of the
staff of the SEC, relating to the maintenance of
segregated accounts by registered investment companies,
and (iv) for any other purpose upon receipt of
Instructions from the Fund on behalf of the applicable
Portfolio.
RECORDS X. Xxxxx shall with respect to each Portfolio create and
maintain all records relating to its activities and
obligations under this Agreement in such manner with
particular attention to Section 31 of the 1940 Act and
Rules 31a-1 and 31a-2 thereunder. All such records shall
be the property of the Fund and shall at all times during
regular business hours of Chase be open for inspection by
duly authorized officers, employees or agents of the Fund
and, upon notice to the Fund, by employees and agents of
the Securities and Exchange Commission. Chase shall, at
the Fund's request, supply the Fund with a tabulation of
securities owned by each Portfolio and held by Chase and
shall, when requested to do so by the Fund and for such
reasonable compensation as shall be agreed upon between
the Fund and Chase, include certificate numbers in such
tabulations.
REPORTS TO FUND X. Xxxxx shall provide the Fund, on behalf of each of the
BY INDEPENDENT Portfolios, at such times as the Fund may reasonably
PUBLIC ACCOUNTS require, with reports by independent public accountants
on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts
and options on futures contracts, including securities
deposited and/or maintained pursuant to this Agreement;
such reports shall be of sufficient scope and in
sufficient detail as may reasonably be required by the
Fund to provide reasonable assurance that any material
inadequacies would be disclosed by such examination, and,
if there are no such inadequacies, the reports shall so
state.
3. INSTRUCTIONS AND AUTHORISED PERSONS
AUTHORISED A. As used in this Agreement:
PERSONS AND
INSTRUCTIONS (i) the term "AUTHORISED PERSONS" means the
individuals designated in Exhibit A by the Fund,
or the individuals designated by the fund managers
or advisers (the "INVESTMENT MANAGERS") using a
mandate acceptable to Chase to act on behalf of
the Fund. The Fund confirms that the Investment
Manager may designate individuals to act on behalf
of the Fund for any Fund under this Agreement as
if such individuals had been designated by the
Fund. Chase shall continue to treat as Authorised
Persons persons designated as such in accordance
with this clause until such time as Chase receives
Instructions from the Fund that any such
individual is no longer an Authorised Person. The
Fund confirms that, unless specified otherwise in
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Exhibit A or the mandate from the Investment
Manager, each Authorised Person shall be
authorised to give any Instructions (as defined in
paragraph (ii) below) in relation to all
Securities and Cash Accounts and in relation to
foreign exchange transactions and shall be
authorised to give Instructions notwithstanding
that they may result in an overdraft on any Cash
Account. The Investment Manager shall provide the
Fund with such information regarding the
Authorised Persons designated by the Investment
Manager, in accordance with this clause, as the
Fund may reasonably require upon request; and
(ii) the term "INSTRUCTIONS" means instructions
containing all necessary information required by
Chase to enable Chase to carry out the
Instructions received by Chase via telephone,
telex, TWX, bank wire, SWIFT or other teleprocess
or electronic instruction or trade information
system acceptable to Chase which Chase reasonably
believes in good faith to have been given by
Authorised Persons or which are transmitted with
proper testing or authentication pursuant to terms
and conditions which Chase may specify. Unless
otherwise expressly provided, all Instructions
shall continue in full force and effect until
cancelled or superseded.
B. (i) The Fund acknowledges that under Taiwanese
applicable law and regulations, settlement must be
completed on a "Trade date plus one" basis and
agree that it shall be the Fund's sole
responsibility to ensure that Instructions are
timely received by Chase and that Chase shall have
no responsibility in the event that Instructions
are not so timely received. In respect of custody
services carried out by Chase's local Taiwanese
Eligible Foreign Custodian in the Republic of
China ("ROC") Schedule 3 applies. In respect only
of Financial Assets held locally in Taiwan on
behalf of the Fund, a letter substantially in the
form of Schedule 4, as amended from time to time,
must be provided by the Fund to Chase and Chase
shall be required to ensure that Chase and its
local Eligible Foreign Custodian comply with the
operating provisions stated therein. In the event
that Chase or such Eligible Foreign Custodian does
not follow such provisions, Chase shall be liable
to the Fund. Chase and the Fund agree that Chase's
liability to the Fund pursuant to this Clause
shall be determined upon the direct and
foreseeable consequences of the acts and/or
omissions of Chase or its local Taiwanese Eligible
Foreign Custodian.
(ii) The Fund agrees to deliver or cause to be
delivered to Chase, upon request, copies of all
its agreements with the brokers listed in Schedule
5.
(iii) The Fund acknowledges that Instructions should
contain all necessary information required by
Chase to enable Chase to carry out the
Instructions in question.
CONFIRMA-TION C. Any Instructions delivered to Chase by telephone shall
OF ORAL promptly thereafter be confirmed in writing by an
INSTRUCTIONS/ Authorised Person (which confirmation may bear the
SECURITY DEVICES facsimile signature of such person). Chase is authorised
to reasonably follow such Instructions notwithstanding
the failure of the Authorised Person to send such
confirmation in writing or the failure of such
confirmation to conform to the telephone Instructions
received. Either party may electronically record any
Instructions given by telephone, and any other telephone
discussions. The Fund
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shall be responsible for safeguarding any test keys,
identification codes or other security devices which
Chase shall make available to the Fund or any Authorised
Person.
ACTING ON D. The Fund authorises Chase to accept and reasonably act
INSTRUC-TIONS/ upon any Instructions received by it in accordance with
UNLCEAR this Agreement without inquiry. Chase may (without
INSTRUCTIONS prejudice to the foregoing) seek clarification or
confirmation of an Instruction from an Authorised Person
and in the event that it does so shall seek such
clarification or confirmation as soon as reasonably
practicable. Chase may decline to act upon an Instruction
if it reasonably and timely requests clarification or
confirmation with respect to such Instruction and does
not receive clarification or confirmation reasonably
satisfactory to it. In the event that Chase does seek
clarification or confirmation as soon as reasonably
practical Chase shall not be liable for any loss arising
from any delay whilst it obtains such clarification or
confirmation from an Authorised Person or from exercising
its right to decline to act in the absence of such
clarification or confirmation, to the extent such
liability or loss is not caused by Chase's own
negligence, willful default, bad faith or fraud.
INSTRUCTIONS X. Xxxxx need not act upon Instructions which it reasonably
CONTRARY TO LAW/ believes to be contrary to law, regulation or market
MARKET PRACTICE practice but is under no duty to investigate whether any
Instructions comply with any applicable law, regulation
or market practice. Chase shall be entitled (but not
bound), if it deems possible to do so to amend an
Instruction (but only in an administrative respect and
not by way of exercising any investment decision in
respect of that Instruction) in such a manner to comply
with what Chase reasonably believes to be applicable law,
regulation or market practice. Chase shall immediately
notify the Fund in the event that it determines not to
act on an Instruction.
OTHER MATTERS F. If Chase receives an Instruction that it cannot
reasonably process (including, without limitation, an
Instruction to deliver a security which is not held in
the relevant Account or is not held in a deliverable
form; Instructions to purchase a security in a market
where Chase is not able to process trades for the Fund or
an Instruction which Chase, acting reasonably, declines
to act upon), Chase will notify the Fund or such person
as the Fund may designate, of the fact that Chase
believes an Instruction to be unprocessable. Such
notification shall be given within 24 hours of the time
that Chase received the Instruction that it believes to
be unprocessable. If such Instruction is received by
Chase after its cut-off time (as advised to the Fund from
time to time) on any day, it shall be deemed to have been
received, for the purposes of this paragraph, as of the
start of business in New York on the next Business Day
following receipt. If the 24 hour period following
receipt would expire on a day that is not a Business Day,
it shall be deemed to expire at the same time of day on
the next Business Day.
G. If Chase is advised that a counterparty has instructions
to settle a trade with Chase, or any of its Eligible
Foreign Custodians, which Chase has identified as being
for the account of the Fund and Chase does not have
corresponding Instructions from the relevant Authorised
Person (a "BROKER ALLEGED TRADE"), Chase will notify the
relevant Authorised Person of the Broker Alleged Trade
within 24 hours of Chase becoming aware of such Broker
Alleged Trade. If such 24 hour period would expire on a
day that is not a Business Day, it shall be deemed to
expire at the same time of day on the next Business Day.
12
H. For the purposes of Clause 2I, Clause 3F and 3G above
"BUSINESS DAY" shall mean a day (other than a Saturday)
on which banks are open in New York for the transaction
of business of the nature contemplated herein.
STATEMENTS AND I. (a) Chase will at any time at the Fund's request d
ADVICES eliver to the Fund as soon as reasonably
practicable a statement of the Securities held by
it or to its order on behalf of the Fund.
(b) A certificate or statement by Chase as to any
Liabilities or any Financial Assets or cash held
in any account for the Fund shall be conclusive in
the absence of error. Prices and other information
contained in any statement sent to the Fund will
be obtained from sources Chase believes to be
reliable. Chase does not, however, make any
representation as to the accuracy of such
information, nor that the prices specified
necessarily reflect the proceeds that would be
received on a disposal of the relevant Financial
Assets. References in this Agreement to statements
include any statements in electronic form.
4. BORROWINGS AND FOREIGN EXCHANGE
OVERDRAFTS BEAR A. Overdrafts
INTEREST AT
NORMAL RATES If a debit to any currency in the Cash Account of the
Fund results in a debit balance in that currency then
Chase may, at its discretion, advance an amount equal to
the overdraft and such an advance shall be deemed a loan
to the Fund, payable on demand, bearing interest at the
rate charged by Chase for similar overdrafts from time to
time from the date of such advance to the date of payment
(both after as well as before judgement) and otherwise on
the terms on which Chase makes similar overdrafts
available from time to time.
FX FACILITIES B. Foreign Exchange Transactions
MAY BE
GIVEN AT CHASE'S To facilitate the administration of the Fund's trading
DISCRETION and investment activity, Chase is authorised at its
discretion to enter into spot or forward foreign exchange
contracts with the Fund in connection with the Fund and
may also provide foreign exchange contracts and
facilities through its affiliates or Eligible Foreign
Custodians provided that the Fund shall always receive a
market rate reasonably prevailing on the date of the
transaction for transactions of similar size.
Instructions, including standing instructions, may be
issued with respect to such contracts but Chase may
establish Rules or limitations concerning any foreign
exchange facility made available. In all cases where
Chase, its affiliates or Eligible Foreign Custodians
enter into a foreign exchange contract related to any
Account, the terms and conditions then current for
foreign exchange contracts of Chase, its affiliates or
Eligible Foreign Custodians and, to the extent not
inconsistent, this Agreement, shall apply to such
transaction.
5. FEES EXPENSES AND OTHER AMOUNTS OWING TO CHASE
FEES - CHASE A. The Fund will pay Chase for its services under this
AUTHOR-ISED TO Agreement. The Fee shall be such amount as may be agreed
upon in writing, together with Chase's reasonable
out-of-pocket or incidental expenses, including, but not
limited to, legal fees.
13
DEDUCT FEES Chase may increase such fees only with the written
consent of the Fund. If authorized in writing by an
officer of the Fund, Chase may deduct such amounts owing
to it by the Fund from the Fund's Cash Account monthly
in arrears.
B. In the event of termination of this Agreement, Chase
shall be entitled to receive a proportionate amount of
fees due to it calculated on a pro-rata basis up to and
including the date of termination.
CHASE'S RIGHTS X. Xxxxx agrees that it waives its rights to any liens or
OVER SECURITIES other security interest over any Financial Assets held
for the Fund that may arise under applicable law save for
the limited right of sale specified in Clause 14.
CHASE HAS A D. Following a reasonable period of notice, Chase may set
RIGHT OF SET OFF off against any amount owing by the Fund under this
Agreement in respect of the account of the Fund any
currency standing to the credit of any of the Fund's
accounts whether current, deposit or otherwise. For this
purpose, Chase shall be entitled to accelerate the
maturity of any fixed term deposits and to effect such
currency conversions as may be necessary at its current
rates for the sale and purchase of the relevant
currencies.
6. ELIGIBLE FOREIGN CUSTODIANS AND SECURITIES DEPOSITORIES
DELEGATION A. The Fund's Board of Trustees (hereinafter "BOARD") hereby
PURSUANT TO delegates to Chase, and, except as to the country or
RULE 17F-5 countries as to which Chase may, from time to time,
advise the Fund that it does not accept such delegation,
Chase hereby accepts the delegation to it, of the
obligation to perform as the Fund's "Foreign Custody
Manager" (as that term is defined in SEC Rule 17f-5(a)(3)
as promulgated under the 1940 Act, including for the
purposes of: (I) selecting "Eligible Foreign Custodians"
(as the term is defined in SEC Rule 17f-5(a)(I), as
amended from time to time, or that have otherwise been
exempted pursuant to an SEC exemptive order) to hold the
Fund's "Foreign Assets" (as that term is defined in SEC
Rule 17f-5(a)(1)), (ii) evaluating the contractual
arrangements with such Eligible Foreign Custodians (in
accordance with SEC Rule 17f-5(c)(2)), and (iii)
monitoring such foreign custody arrangements (in
accordance with SEC Rule 17f-5(c)(3)).
DUTIES OF B. In connection with the foregoing, Chase shall:
FOREIGN
CUSTODY (i) provide written reports notifying the Fund's Board
MANAGER of the placement of the Fund's Foreign Assets with
particular Eligible Foreign Custodians and of any
material change in the arrangements with such
Eligible Foreign Custodians, with such reports to
be provided to the Fund's Board at such times as
the Board deems reasonable and appropriate based
on the circumstances of the Fund's foreign custody
arrangements (and until further notice from the
Fund such reports shall be provide not less than
quarterly with respect to the placement of the
Fund's Foreign Assets with particular Eligible
Foreign Custodians and with reasonable promptness
upon the occurrence of any material change in the
arrangements with such Eligible
14
Foreign Custodians);
(ii) exercise reasonable care, prudence and diligence
in performing as the Fund's Foreign Custody
Manager as a person having responsibility for the
safekeeping of the Fund's Foreign Assets would
exercise;
(iii) in selecting an Eligible Foreign Custodian, first
have determined that the Fund's Foreign Assets
placed and maintained in the care of such Eligible
Foreign Custodian will be subject to reasonable
care, based on the standards applicable to
custodians in the relevant market, after having
considered all factors relevant to the safekeeping
of the Fund's Foreign Assets, including, without
limitation, those factors set forth in SEC Rule
17f-5(c)(1)(i)-(iv);
(iv) ensure that the Fund's arrangement with each
Eligible Foreign Custodian is governed by a
written contract that Chase has determined will
provide reasonable care for the Fund's Foreign
Assets based on the standards specified in SEC
Rule 17f-5(c)(1) and contains at least the
provisions required by SEC Rule 17f-5(c)(2); and
(v) has established a system to monitor the continued
appropriateness of maintaining the Fund's Foreign
Assets with particular Eligible Foreign Custodians
under SEC Rule 17f-5(c)(1) and of the governing
contractual arrangements under SEC Rule
17f-5(c)(2); it being understood, however, that
Chase shall promptly advise the Fund if the Fund's
arrangements with an Eligible Foreign Custodian no
longer meet the requirements of SEC Rule 17f-5 and
shall then act in accordance with the Instructions
of the Fund with respect to the disposition of the
affected Foreign Assets.
Subject to subclause B(i)-(v) above, Chase is hereby
authorized to place and maintain the Fund's Foreign
Assets with Eligible Foreign Custodians pursuant to a
written contract deemed appropriate by Chase.
C. Except as expressly provided herein, the Fund shall be
solely responsible to assure that the maintenance of the
Fund's Foreign Assets hereunder complies with the Rules,
regulations, interpretations and exemptive orders as
promulgated by or under the authority of the SEC.
X. Xxxxx represents to the Fund that it is a "U.S. BANK" as
defined in SEC Rule 17f-5(a)(7) and will promptly notify
the Fund in the event that it is no longer a U.S. Bank.
The Fund represents to Chase that: (a) its Foreign Assets
being placed and maintained in Chase's custody are
subject to the 1940 Act; and (b) its Board has determined
that it is reasonable to rely on Chase to perform as the
Fund's Foreign Custody Manager. Nothing contained herein
shall require Chase to make any selection or to engage in
any monitoring on behalf of the Fund that would entail
consideration of Country Risk.
X. Xxxxx shall provide to the Fund such information relating
to Country Risk as is specified in Schedule 6 hereto. The
Fund hereby acknowledges that: (a) such information is
solely designed to inform the Fund of market conditions
and procedures and is not intended as a recommendation to
invest or not invest in particular markets; and (b) Chase
has gathered the information from sources it considers
reliable, but that Chase shall have no responsibility for
inaccuracies or incomplete information.
15
U.S. SECURITIES X. Xxxxx and each Eligible Foreign Custodian may deposit
DEPOSITORIES Securities with, and hold Securities in, any Eligible
Securities Depository, settlement system, dematerialized
book entry system or similar system (together a "U.S.
ELIGIBLE SECURITIES DEPOSITORY") on such terms as such
systems customarily operate. Chase will provide the Fund
with market information containing details of such U.S.
Securities Depositories from time to time.
USE OF ELIGIBLE G. (i) Chase shall provide to the Fund and its investment
SECURITIES advisers an analysis of the custody risks
DEPOSITORIES associated with maintaining the Fund's Foreign
PURSUANT TO RULE Assets with each Eligible Securities Depository
17F-7 (as defined in SEC Rule 17f-7(b)(1)(i)-(vi) of the
1940 Act, or that has otherwise been made exempt
pursuant to an SEC order) used by Chase as of the
date hereof (or, in the case of an Eligible
Securities Depository not used by Chase as of the
date hereof, prior to the initial placement of the
Fund's Foreign Assets at such depository) and at
which any Foreign Assets of the Fund are held or
are expected to be held. The foregoing analysis
will be provided to the Fund and its investment
adviser at Chase's Website (xxx.Xxxxx.xxx.) In
connection with the foregoing, the Fund shall
notify Chase of any Eligible Securities
Depositories at which it does not choose to have
its Foreign Assets held. Chase shall monitor the
custody risks associated with maintaining the
Fund's Foreign Assets at each such Eligible
Eligible Securities Depository on a continuing
basis and shall promptly notify the Fund or its
investment adviser of any material changes to such
risks.
(ii) Chase shall exercise reasonable care, prudence and
diligence in performing the requirements set forth
in Subclause B(i) above.
(iii) Based on the information available to it in the
exercise of diligence, Chase shall determine the
eligibility under SEC Rule 17f-7 of each
depository before including it as an Eligible
Securities Depository on Schedule 7 hereto and
Chase shall ensure that the Fund (or its
duly-authorized investment manager or investment
adviser) receives prompt and sufficient
information hereunder if and when a custody
arrangement with an Eligible Securities Depository
no longer meets the requirements of Rule 17f-7, so
that the Foreign Assets may be withdrawn from the
depository as soon as reasonably practicable
thereafter in accordance with section (a)(2) of
Rule 17f-7. (Eligible Securities Depositories used
by Chase as of the date hereof are set forth in
Schedule 7 hereto, and as the same may be amended
on notice to the Fund from time to time.)
(iv) At the request of the Fund, Chase may, but need
not, add to Schedule 1 an Eligible Foreign
Custodian where Chase has not acted as Foreign
Custody Manager with respect to the selection
thereof. Chase shall notify the Fund in the event
that it elects to add any such entity.
16
LIABILITY FOR X. Xxxxx shall not be liable for any loss resulting from:
EIGIBLE FOREIGN
CUSTODIANS AND (i) the insolvency of any Eligible Foreign Custodian
U.S. SECURITIES which is not a branch or affiliate of Chase; or
DEPOSITORIES
(ii) any act of any Eligible Foreign Custodian, save
where such loss results from an error or omission
by the Eligible Foreign Custodian or the failure
by the Eligible Foreign Custodian to use
reasonable care in the provision of custodial
services by it in accordance with the standards
prevailing in the relevant market or from the
fraud, willful default or negligence (measured in
accordance with the standards prevailing in the
relevant market) of such Eligible Foreign
Custodian in the provision of custodial services
by it; or
(iii) any act, omission or insolvency of any U.S.
Eligible Securities Depository or Eligible
Securities Depository.
HOLDING OF I. (i) Chase is authorised to hold:
REGISTERED AND
BEARER SECURITIES (a) in bearer form, such Securities as are
customarily held in bearer form; and
(b) subject to subsection (ii) below, registered
in the name of (at Chase's discretion) the
Fund, Chase, a Eligible Foreign Custodian or
any nominee of Chase or a Eligible Foreign
Custodian, such Financial Assets as are
customarily held in registered form.
(ii) although Securities will ordinarily be registered
in the name of a nominee, Chase may from time to
time (due to the nature of law or market practice,
where it is in the Fund's best interest or it is
not feasible to do otherwise) register or record
securities in the name of an Eligible Foreign
Custodian or Chase itself with prior notice to the
Fund of such registration or recordings, other
than where in Chase's reasonable opinion the
giving of such prior notice may result in a delay
which could jeopardise the protection of the
assets of the Fund, in which case notice will be
given as soon as reasonably practical following
such registration or recording (provided however,
that any registration of Securities in the name of
an Eligible Foreign Custodian or Chase indicates
such Financial Assets are held for the benefit of
customers and not, in any event, for the benefit
of Chase or any Eligible Foreign Custodian or
foreign securities system or any nominee thereof).
If Securities are registered in Chase's name the
Securities in question may not be segregated from
assets of Chase and in the event of default by
Chase, customers' assets may not be as well
protected. Arrangements with the Eligible Foreign
Custodians are such that Chase's customer
securities with them must be in a separate account
containing assets belonging only to the customers
of Chase and not Chase's proprietary assets. In
any event, Chase will notify the Fund of the
registration name used in respect of Securities.
(iii) in the absence of negligence, wilful default or
fraud on its part Chase shall not be liable for
any loss suffered howsoever caused as a result of
an Instruction to hold Securities with, or have
them registered in the name of, any person not
chosen by Chase.
17
J. Neither Chase nor CMBI shall assume responsibility for,
and neither shall be liable for, any action or inaction
of any Russian Registrar Company and no Russian Registrar
Company shall be, or shall be deemed to be, Chase, CMBI,
a Eligible Foreign Custodian, a Eligible Securities
Depository or the employee, agent or personnel of any of
the foregoing. To the extent that CMBI employs agents to
perform any of the functions to be performed by Chase or
CMBI with respect to Local Russian Securities, neither
Chase nor CMBI shall be responsible for any act,
omission, default or for the solvency of any such agent
unless the appointment of such agent was made with
Russian/Ukraine Negligence or in bad faith except that
where Chase or CMBI uses (i) an affiliated nominee or
(ii) an agent to perform the share registration or share
confirmation functions described at paragraphs (a)-(e) on
pages 5-6 of the No-Action Letter, and, to the extent
applicable to CMBI, the share registration functions
described on pages 2-3 of the No-Action Letter, Chase and
CMBI shall be liable to the Fund as if CMBI were
responsible for performing such services itself.
K Delegation by Chase to the Ukrainian Eligible Foreign
Custodian shall not relieve Chase of any responsibility
to the Fund for any loss due to such delegation, and
Chase shall be liable for any loss or claim arising out
of or in connection with the performance by the Ukrainian
Eligible Foreign Custodian of such delegated duties to
the same extent as if Chase had itself provided the
custody services hereunder. In connection with the
foregoing, neither Chase nor the Ukrainian Eligible
Foreign Custodian shall assume responsibility for, and
neither shall be liable for, any action or inaction of
any Registrar Company or Ukrainian Eligible Securities
Depository and no Registrar Company or Ukrainian
depository shall be, or shall be deemed to be, Chase, the
Ukrainian Eligible Foreign Custodian, a Eligible Foreign
Custodian, or the employee, agent or personnel of any of
the foregoing. In addition, no Registrar Company shall be
deemed to be a Eligible Securities Depository. To the
extent that the Ukrainian Eligible Foreign Custodian
employs agents to perform any of the functions to be
performed by Chase or the Ukrainian Eligible Foreign
Custodian with respect to Ukrainian Securities, neither
Chase nor the Ukrainian Eligible Foreign Custodian shall
be responsible for any act, omission, default or for the
solvency of any such agent unless the appointment of such
agent was made with Russian/Ukraine Negligence or in bad
faith, except that where Chase or the Ukrainian Eligible
Foreign Custodian uses (i) an affiliated nominee or (ii)
an agent to perform the share registration or share
confirmation functions described in paragraphs (a)-(e) on
pages 5-6 of the No-Action Letter, and, to the extent
applicable by extension to the Ukrainian Eligible Foreign
Custodian, the share registration functions described on
pages 2-3 of the No-Action Letter, Chase and the
Ukrainian Eligible Foreign Custodian shall be liable to
the Fund as if the Ukrainian Eligible Foreign Custodian
were responsible for performing such services itself.
7. BROKERS AND OTHER THIRD PARTIES
BROKER/ X. Xxxxx shall not be responsible for any loss solely
THIRD PARTY resulting from a failure by any broker or any other third
DEFAULT party beyond the control of Chase. In particular, if a
broker or any third party defaults on any obligation to
deliver Securities or pay
18
cash, Chase shall have no liability to the Fund for such
non-delivery or payment in the absence of Chase's own
negligence, willful default, bad faith or fraud. Payments
of income and settlement proceeds are at the risk of the
account. If Chase, at the request of the Fund, appoints a
broker or agent to effect any transaction on behalf of
the Fund, Chase shall have no liability whatsoever in
respect of such broker's duties or its actions, omissions
or solvency unless, if Chase selects such broker or
agent, Chase fails to exercise reasonable care in such
selection.
DELIVERY TO B. Absent Chase's own negligence, willful default, bad faith
BROKERS or fraud, Chase shall not be liable for losses arising
from a proper Instruction to deliver Securities or cash
to a broker, even if Chase might have information tending
to show that this course of action, or the choice of a
particular broker for a transaction, was unwise.
8. OMNIBUS ACCOUNTS
The Fund authorises Chase or its Eligible Foreign Custodian to hold
Financial Assets in fungible accounts and will accept delivery of Financial
Assets of the same class and denomination as those deposited with Chase or
its Eligible Foreign Custodian.
9. ABOUT THE PARTIES
THE PARTIES A. The Fund represents and warrants that:
STATE THAT THEY
HAVE FULL (i) it has full authority and power, and has obtained
AUTHORITY TO all necessary authorisations and consents, to
PERFORM UNDER deposit and control the Financial Assets and cash
THIS AGREEMENT in the Accounts, to appoint and to use Chase as
custodian in accordance with the terms of this
Agreement and to borrow money and enter into
foreign exchange transactions provided always that
it shall be the duty of the Fund and not Chase to
ensure that there is no breach of any limit
imposed on the Fund;
(ii) this Agreement is its legal, valid and binding
obligation, enforceable in accordance with its
terms and it has full power and authority to enter
into and has taken all necessary action to
authorise the execution of this Agreement;
(iii) it has not relied on any oral or written
representation made by Chase or any person on its
behalf except as contained in this Agreement and
acknowledges that this Agreement sets out to the
fullest extent the duties of Chase;
(iv) the Financial Assets and cash deposited in the
Accounts are not subject to any encumbrances or
security interest whatsoever, other than a
security interest that may be created in favor of
Chase, and the Fund undertakes that, so long as
Liabilities are outstanding, it will not create or
permit to subsist any such encumbrance or security
interest over Financial Assets or cash, without
prior notification to Chase of the same, and in
any event, Chase shall not be liable if
performance of its obligations under this
Agreement is prevented or impeded because of the
existence of any such encumbrance or security.
19
X. Xxxxx represents and warrants that:
(i) it has full authority and power, and has obtained
all necessary authorisations and consents, to act
as custodian in accordance with the terms of this
Agreement;
(ii) this Agreement is its legal, valid and binding
obligation, enforceable in accordance with its
terms and it has full power and authority to enter
into and has taken all necessary action to
authorise the execution of this Agreement;
(iii) it has not relied on any oral or written
representation made by the Fund or any person on
its behalf except as contained in this Agreement
and acknowledges that this Agreement sets out to
the fullest extent the duties of the Fund;
(iv) as specified in Clause 5C, Chase waives its rights
to any liens or other security interest over any
Securities held for the Fund that may arise under
the applicable law, save for the limited right of
sale specified in Clause 14.
10. CONFLICTS OF INTEREST
CHASE PROVIDES Provided that nothing in this Clause herein shall be
DIVERSE FINANCIAL taken as authorising Chase to contravene any and all
SERVICES AND applicable laws, the Fund hereby authorises Chase to act
MAY GENERATE hereunder notwithstanding that:
PROFITS AS A RESULT
(i) Chase or any of its divisions, branches or
affiliates may have a material interest in the
transaction or that circumstances are such that
Chase may have a potential conflict of duty or
interest including the fact that Chase or any of
its affiliates may:
(a) act as a market maker in the Financial Assets
to which the Instructions relate;
(b) provide broking services to other clients;
(c) act as financial adviser to the issuer of
such Financial Assets;
(d) act in the same transaction as agent for more
than one client;
(e) have a material interest in the issue of the
Financial Assets; or
(f) earn profits from any of the activities
listed herein.
CHASE NO DUTY TO (ii) Chase or any of its divisions, branches or
ADVISE IF IT IS affiliates may be in possession of information
AWARE THAT tending to show that the Instructions received may
INSTRUCTIONS MAY not be in the best interests of the Fund. Chase is
BE UNWISE not under any duty to disclose any such
information.
20
11. STANDARD OF CARE - HOW CHASE IS TO PERFORM ITS DUTIES UNDER THIS AGREEMENT
REASONABLE CARE A. Except to the extent that a higher standard of care
applies pursuant to Clause 6 of this Agreement, Chase
will use reasonable care in performing its obligations
under this Agreement and Chase will look after assets
with the same degree of care as it does for its own
similar assets in the relevant market provided that Chase
shall exercise at least the degree of skill and care of a
prudent professional custodian for hire. It is understood
and agreed, however, that for Local Russian Securities
Chase's safekeeping responsibilities shall be limited to
safekeeping of relevant Share Extracts. It is understood
and agreed that for Ukraine Securities Chase's
responsibility shall be limited to the safekeeping of the
relevant Share Extracts and Depository Extracts.
CHASE CAN TAKE X. Xxxxx shall be entitled to rely on, and may act upon the
ADVICE advice of external professional advisers in relation to
matters of law, regulation or market practice (which may
be the external professional advisers of the Fund), and
shall not be liable to the Fund for any action reasonably
taken or omitted pursuant to such advice, save to the
extent that Chase is able to recover from such external
professional advisers in respect of negligent advice
given.
INSURANCE X. Xxxxx need not maintain any insurance cover for the
benefit of the Fund but, at the request of the Fund,
Chase will confirm to the Fund details of the insurance
policy(ies) (commonly referred to as a "FINANCIAL
INSTITUTIONAL BOND") between Chase and its insurers
providing in the aggregate coverage in an amount not less
than US$140,000,000 and insurance policy(ies) providing
at least S$140,000,000 cover for securities in transit in
the custody of any employee or designated messenger of
Chase.
12. WHEN CHASE IS NOT LIABLE
MARKET AND A. Investing in foreign markets may be a risky enterprise.
COUNTRY RISK The holding of assets and cash in foreign jurisdictions
may involve risks of loss or other special features.
Chase accepts no liability whatsoever for any loss which
results solely from:
(i) the general risks of investing; or
(ii) Country Risk.
FORCE MAJEURE X. Xxxxx shall have no liability for any damage, loss,
expense or liability of any nature which the Fund may
suffer or incur, caused by an act of God, fire, flood,
civil or labour disturbance (save where the labour
disturbance occurs within Chase or any Eligible Foreign
Custodian which is a branch or affiliate of Chase in
circumstances which are within its reasonable control),
act of any governmental authority or other act or threat
of any authority (de jure or de facto), legal constraint,
fraud or forgery (other than by Chase or its Eligible
Foreign Custodian), malfunction of equipment (including,
without limitation any computer or related software other
than Chase's own computers or software or those of its
Eligible Foreign Custodians), failure of or the effect of
Rules or operations of any funds transfer system,
inability to obtain or interruption of communications
facilities, or any cause beyond the reasonable control of
Chase (including without limitation, the non-availability
of appropriate foreign exchange).
21
ACTING REASONABLY X. Xxxxx shall not be liable for acting on what it
AND IN GOOD FAITH reasonably and in good faith believes to be Instructions
or in relation to notices, requests, waivers, consents,
receipts, corporate actions or other documents which
Chase reasonably and in good faith believes to be genuine
and to have been given or signed by the appropriate
parties. In respect of the undertaking given by brokers
for Taiwanese Securities as detailed in Schedule 3 Chase
shall not be liable for acting on an undertaking which it
reasonably and in good faith believes to be genuine and
to have been given or signed by the appropriate parties.
INVALID D. In the absence of negligence, wilful default, fraud or
SECURITIES bad faith on its part, Chase shall not be liable to the
Fund for the collection, deposit or credit of invalid,
fraudulent or forged Securities.
DELIVERIES X. Xxxxx shall effect all transactions for each account on a
delivery versus payment basis except that, in the absence
of negligence, wilful default, fraud or bad faith on its
part, Chase shall not be liable for losses arising out of
effecting Instructions for delivery or payment against an
expectation of receipt, save where such delivery or
payment was contrary to local market practice or with
respect to Local Russian Securities, where it is agreed
that payment shall not be made prior to the issuance of
the Share Extract relating to such Local Russian
Securities. Notwithstanding the foregoing, if the Fund
wishes to give Instructions to Chase to settle a trade
other than in accordance with local market practice, the
Fund will signify this to Chase in the manner agreed from
time to time in which case Chase may decline to accept
such Instructions to the extent provided for in Clauses
3D and 3E. Chase shall use all reasonable endeavours to
comply with such Instructions.
CASES WHEN CHASE F. Except as provided in Clause 6, Chase shall only be
IS NOT LIABLE liable to the Fund to the extent Chase or its officers,
employees or agents have been fraudulent, negligent, or
are in wilful default, of its or their duties as set out
in this Agreement and to the extent provided for in
Clause 6H. Chase and the Fund agree that Chase's
liability to the Fund shall be determined based upon the
direct and foreseeable consequences of Chase's
fraudulence, negligence, wilful default or bad faith or
Chase's liability for Eligible Foreign Custodians as
described in Clause 6H.
13. INDEMNITY
THE FUND TO A. Save in respect of fraud, negligence, willful default or
INDEMNIFY CHASE bad faith of Chase or its officers, employees or agents,
and save in respect of any action of any Eligible Foreign
Custodian for which Chase is liable pursuant to Clause
6H, the Fund undertakes to indemnify Chase and its
nominees, and to keep them indemnified, from
(i) any costs, calls, losses, taxes and other matters
for which Chase or any of its agents, Eligible
Foreign Custodians or nominees becomes liable or
arising as a direct or indirect result of their
status as a holder of record of Financial Assets
on behalf of the Fund; and
(ii) any other claims, losses, liabilities, costs and
expenses arising under or in connection with this
Agreement.
22
14. TERMINATION
This Agreement shall continue in effect until termination as provided
herein, and may be amended at any time by a written instrument signed by
both parties.
A. (i) Either of the Fund or Chase may terminate this Agreement on 90 days'
notice in writing to the other party, PROVIDED THAT all applicable
legal and regulatory requirements are satisfied, namely that a
replacement custodian be appointed within 90 days of such
termination and that until such replacement is appointed, Chase
shall take all necessary steps to ensure the good preservation of
the interests of the Fund.
(ii) In the case of termination by Chase, the Fund shall use its best
endeavours to appoint a new custodian as set forth in Clause 14A(i)
above within the 90-day period specified in such clause. Chase
shall, in the event of such termination, deliver or cause to be
delivered to any succeeding custodian, the Fund's Financial Assets
and cash.
B. In the event of notice of termination of this Agreement being given under
sub-clause A above, the following shall apply:
(i) Chase shall be entitled to deduct any amounts owing to it by the
Fund prior to delivery of the Financial Assets and cash to the
replacement custodian (and accordingly, Chase shall, with the prior
written consent of the Fund, such consent not to be unreasonably
withheld be entitled to sell Financial Assets pertaining to the Fund
and apply the sale proceeds in satisfaction of such amounts owing to
it); and
(ii) if the Fund does not appoint a replacement custodian within the
90-day period anticipated by sub-clause A above, Chase shall,
following expiry of one further month, be entitled to exercise the
rights conferred by Clause 14B(i) above; and
(iii) termination shall not affect any of the liabilities any party owes
to the other arising under this Agreement prior to such termination.
C. This Agreement may be terminated by the Fund, forthwith, if at any time:
(a) Chase shall go into liquidation (except voluntary liquidation for
the purposes of reconstruction or amalgamation upon terms previously
agreed in writing by the Company), or commit any other act of
bankruptcy, or if a receiver is appointed over any of the assets of
Chase;
(b) Chase shall commit any material breach of its obligations under this
Agreement and, if capable of remedy, Chase fails to make good such
breach within 45 days of receipt of notice from the Fund requiring
it to do so:
(c) Chase's supervisory authority shall, as a result of a wrongful act
or omission by Chase, withdraw or fail to renew Chase's
authorisation to act as a bank or as a custodian of assets such that
Chase is no longer permitted to act as custodian hereunder and it is
mandatory that the Fund appoints a new custodian; or
(d) Chase is no longer eligible to serve as the Fund's Foreign Custody
Manager under SEC Rule 17f-5 or to perform its delegated
responsibilities under SEC Rule 17f-7.
23
15. RUSSIA
A. (i) Chase will advise the Fund (and will update such
advice from time to time as changes occur) of
those Russian Registrar Companies with which CMBI
has entered into a Registrar Contract. Chase shall
cause CMBI to monitor each Russian Registrar
Company and to promptly advise the Fund when CMBI
has actual knowledge of the occurrence of any one
or more of the events described in paragraphs
(i)-(v) on pages 8-9 of the No-Action Letter with
respect to a Russian Registrar Company that serves
in that capacity for any issuer the shares of
which are held by the Fund.
(ii) Where the Fund is considering investing on behalf
of the Fund in the Local Russian Securities of an
issuer as to which CMBI does not have a Registrar
Contract with the issuer's Russian Registrar
Company, the Fund may request that CMBI consider
whether it would be willing to attempt to enter
into such a Registrar Contract and CMBI shall
advise the Fund of its willingness to do so. Where
CMBI has agreed to make such an attempt, Chase
will advise the Fund of the occurrence of any one
or more of the events described in paragraphs
(i)-(iv) on pages 8-9 of the No-Action Letter of
which CMBI has actual knowledge.
(iii) Where the Fund is considering investing on behalf
of the Fund in the Local Russian Securities of an
issuer as to which CMBI has a Registrar Contract
with the issuer's Russian Registrar Company, the
Fund may advise Chase of its interest in investing
in such issuer and, in such event, Chase will
endeavour to, so far as reasonably practicable
advise the Fund of the occurrence of any one or
more of the events described in paragraphs (i)-(v)
on pages 8 and 9 of the No-Action Letter of which
CMBI has actual knowledge.
B. The Fund shall pay for and hold Chase and CMBI harmless
from any liability or loss resulting from the imposition
or assessment of any taxes (including but not limited to
state, stamp and other duties) or other governmental
charges, and any related expenses incurred by Chase, CMBI
or their respective agents with respect to income on that
Fund's Local Russian Securities.
C. The Fund acknowledges and agrees that CMBI may not be
able, in given cases and despite its reasonable efforts,
to obtain a Share Extract from a Russian Registrar
Company and CMBI shall not be liable in any such event
including with respect to any losses resulting from such
failure. For the avoidance of doubt, this Clause shall
not limit Chase's liability for breach of its obligations
under Clause 2C above.
D. Subject to the co-operation of a Russian Registrar
Company for at least the first two years following CMBI's
first use of such Russian Registrar Company, Chase shall
cause CMBI to conduct share confirmations on at least a
quarterly basis, although thereafter confirmations may be
conducted on a less frequent basis if the Fund, in
consultation with CMBI, determines it to be appropriate.
X. Xxxxx shall cause CMBI to prepare for distribution to the
Fund a quarterly report identifying: (i) any concerns it
has regarding the Local Russian share registration system
that should be brought to the attention of the Fund and
(ii) the steps CMBI
24
has taken during the reporting period to ensure that the
Fund's interests continue to be appropriately recorded.
F. The services to be provided by Chase hereunder will be
provided only in relation to Local Russian Securities for
which CMBI has entered into a Registrar Contract with the
relevant Russian Registrar Company.
X. Xxxxx shall be entitled to disclose any information
relating to the Fund or the Local Russian Securities
and/or cash held for the Fund as is required by any law,
court, legal process, or banking or other regulatory or
examining authorities (whether governmental or
otherwise).
H. The Fund acknowledges that it has received, reviewed and
understands the Chase market report for Russia,
including, but not limited to, the risks described
therein. The Fund recognises that these risks currently
are inherent in investments in Local Russian Securities
and that they should be assessed by the Fund as an
element of the Fund's decision that it is appropriate for
the Fund to invest in Local Russian Securities. Chase is
not responsible for the Fund's decision that it is
appropriate for the Fund to hold Local Russian Securities
despite the custodial risks associated with the Russian
market. Chase will promptly provide the Fund with updated
market reports in accordance with Chase's normal
practice.
16 UKRAINE
A. (i) Chase shall advise the Fund (and shall update such
advice from time to time as changes occur) of
those Registrar Companies with which the Ukrainian
Eligible Foreign Custodian has entered into a
Registrar Contract and the identity of those
Ukrainian Securities Depositories, if any, of
which it is a member. In the case of Ukrainian
Securities which are held for the accounts through
a Registrar Company, but not through a Ukrainian
Eligible Securities Depository, Chase shall
procure the Ukrainian Eligible Foreign Custodian's
agreement both to monitor each Registrar Company
and to promptly advise Chase (which shall then
promptly advise the Fund) when the Ukrainian
Eligible Foreign Custodian has actual knowledge of
the occurrence of any one or more of the events
described in paragraphs (i)-(v) on pages 8-9 of
the No-Action Letter with respect to a Registrar
Company that serves in that capacity for any
issuer the shares of which are held by the Fund.
(ii) Where the Fund is considering investing in the
Ukrainian Securities of an issuer as to which the
Ukrainian Eligible Foreign Custodian does not have
a Registrar Contract with the issuer's Registrar
Company which Ukrainian Securities either are held
though a Ukrainian Eligible Securities Depository
or are held in a Ukrainian Eligible Securities
Depository of which the Ukrainian Eligible Foreign
Custodian is not a member, the Fund may request
that Chase request the Ukrainian Eligible Foreign
Custodian both to consider whether it would be
willing to attempt to enter into such a Registrar
Contract or become a member of such a Ukrainian
Eligible Securities Depository and to advise the
Fund of its willingness to do so. Where the
Ukrainian Eligible Foreign Custodian has agreed to
make such an attempt, Chase shall advise the Fund
of the occurrence of any one or more of the events
described in paragraphs (i)-(iv) on pages 8-9 of
the No-
25
Action Letter of which the Ukrainian Eligible
Foreign Custodian has actual knowledge and has
advised Chase.
(iii) Where the Fund is considering investing in the
Ukrainian Securities of an issuer as to which the
Ukrainian Eligible Foreign Custodian has a
Registrar Contract with the issuer's Registrar
Company, the Fund may advise Chase of its interest
in investing in such issuer and, in such event,
Chase will advise the Fund of the occurrence of
any one or more of the events described in
paragraphs (i)-(v) on pages 8-9 of the No-Action
Letter of which the Ukrainian Eligible Foreign
Custodian has actual knowledge and has advised
Chase.
B. The Fund shall pay for and hold Chase and the Ukrainian
Eligible Foreign Custodian 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 on the that Fund's
Ukrainian Securities.
C. The Fund acknowledges that the Ukrainian Eligible Foreign
Custodian may not be able, in given cases and despite its
reasonable efforts, to obtain a Share Extract from a
Registrar Company or a Depository Extract from a
Ukrainian Eligible Securities Depository, and neither
Chase nor the Ukrainian Eligible Foreign Custodian shall
be liable in any such event including with respect to any
losses resulting from such failure.
D. Subject to the co-operation of a Registrar Company, for
at least the first two years following the Ukrainian
Eligible Foreign Custodian's first use of a Registrar
Company, Chase shall procure the Ukrainian Eligible
Foreign Custodian's agreement to conduct share
confirmations with that Registrar Company on at least a
quarterly basis, although thereafter confirmations may be
conducted on a less frequent basis if the Fund, in
consultation with Chase, determines it to be appropriate.
X. Xxxxx shall prepare for distribution to the Fund a
quarterly report identifying: (i) any concerns the
Ukrainian Eligible Foreign Custodian has regarding the
Ukrainian share registration system that should be
brought to the attention of the Fund; and (ii) the steps
the Ukrainian Eligible Foreign Custodian has taken during
the reporting period to help assure that the Fund's
interests continue to be appropriately recorded.
F. The Fund acknowledges that it has received, reviewed and
understands Chase's market report for the Ukraine,
including, but not limited to, the risks described
therein.
G. Except as provided in Clause 15C above, the services to
be provided hereunder will be provided only in relation
to Ukrainian Securities for which the Ukrainian Eligible
Foreign Custodian has entered into a Registrar Contract
with the relevant Registrar Company or which are held
through a Ukrainian Eligible Securities Depository of
which the Ukrainian Eligible Foreign Custodian is a
member.
26
17. MISCELLANEOUS
NOTICES A. Notices (other than Instructions) shall be served by
registered mail or hand delivery to the address of the
respective parties as set out on the first page of this
Agreement, unless notice of a new address is given to the
other party in writing. Notice shall not be deemed to be
given unless it has been received.
SUCCESSORS B. This Agreement shall be binding on each of the parties'
AND ASSIGNS successors and assigns, but the parties agree that
neither party can assign its rights and obligations under
this Agreement without the prior written consent of the
other party, which consent shall not be unreasonably
withheld.
INTERPRETATION C. Headings, marginal notes and paragraphs are for
convenience only and are not intended to affect
interpretation. References to clauses are to clauses of
this Agreement and references to sub-clauses and
paragraphs are to sub-clauses of the clauses and
paragraphs of the sub-clauses in which they appear.
INTER-PLEADER D. In the event of any dispute between or conflicting claims
CLAUSE. WHAT by any person or persons with respect to Financial Assets
HAPPENS IF THERE held in a Securities Account or cash in a Cash Account,
IS A DISPUTE IN Chase shall be entitled to apply to a court of law to
RELATION TO determine the rights of such persons and meanwhile at its
THE ASSETS HELD option to refuse to comply with any and all claims,
IN THE ACCOUNT demands or Instructions with respect to such Financial
Assets or cash and other property related thereto so long
as such dispute or conflict shall continue. Chase shall
not be liable or become liable in any way for its refusal
to comply with such conflicting claims, or demands or
Instructions. Chase shall be entitled to refuse to act
until either:
(i) such conflicting or adverse claims or demands
shall have been:
a) finally determined in a court of competent
jurisdiction; or
b) settled by agreement between the conflicting
parties and Chase shall have received
evidence in writing satisfactory to Chase of
such agreement; or
(ii) Chase shall have received an indemnity and/or
security satisfactory to Chase sufficient to save
it harmless from and against any or all loss,
liability or expense which Chase may incur by
reason of its actions.
ENTIRE AGREEMENT E. This Agreement, including the Schedules and the Exhibits
hereto, sets out the entire Agreement between the parties
and this Agreement supersedes any other agreement
relating to custody, whether oral or written with respect
to the Fund. Amendments must be in writing and signed by
all parties.
FRACTIONS/ F. The Fund shall not be entitled to any fraction or other
REDEMPTIONS entitlement arising as a result of Chase holding
BY LOT Financial Assets in omnibus accounts, as described in
Clause 8, which is not directly referable solely to the
holding of the Fund, and such fractions or entitlements
shall be at the disposal of Chase, provided that Chase
shall have paid to the Fund the market value of such
fraction. On partial redemptions, Chase shall use
whatever method it deems fair to determine how shares
will be redeemed.
27
ACCESS TO CHASE'S X. Xxxxx shall, on written request allow the auditors of the
RECORDS Fund such reasonable access to its records relating to
the Accounts as such auditors may reasonably require in
connection with the audit of the Fund. Further Chase's
books and records pertaining to the services to be
provided by Chase under this Agreement, shall be open to
examination and review at reasonable times by the Fund.
In addition Chase agrees to comply with any other
reasonable due diligence checks that the Fund may wish to
carry out from time to time in relation to the Accounts.
GLOBAL CUSTODY H. If and to the extent that there is any inconsistency
AGREEMENT AND between the provisions of any mandate between Chase and
MANDATE any Authorised Person and/or the Fund and/or the
Investment Manager and the provisions of this Agreement,
the provisions of this Agreement shall prevail.
STOCK LENDING X. Xxxxx unconditionally and irrevocably agrees that it
shall not lend to, or deposit by way of collateral with a
third party any part or whole of the Financial Assets
held by it under this Agreement without the prior written
consent of the Fund.
GOVERNING LAW AND J. This Agreement shall be governed by and construed in
JURISDICTION accordance with the laws of the United States or State of
New York, as applicable, without regard to New York's
principles regarding conflict of laws. The United States
District Court for the Southern District of New York will
have the sole and exclusive jurisdiction over any lawsuit
or other judicial proceeding relating to or arising from
this Agreement. If that court lacks federal subject
matter jurisdiction, the Supreme Court of the State of
New York, New York County will have sole and exclusive
jurisdiction. Either of these courts will have proper
venue for any such lawsuit or judicial proceeding, and
the parties waive any objection to venue or their
convenience as a forum. The parties agree to submit to
the jurisdiction of any of the courts specified and to
accept service of process to vest personal jurisdiction
over them in any of these courts. The parties further
hereby knowingly, voluntarily and intentionally waive, to
the fullest extent permitted by applicable law, any right
to a trial by jury with respect to any such lawsuit or
judicial proceeding arising or relating to this Agreement
or the transactions contemplated hereby.
TRUSTEE SHARE- K. A copy of the Agreement and Declaration of Trust of the
HOLDER Fund is on file with the Secretary of State of the
LIABILITY, ETC Commonwealth of Massachusetts and notice is hereby given
that this Agreement is not binding upon any of the
trustees, officers or shareholders of the Fund
individually, but is binding only upon the assets and
property of the Fund. Chase agrees that no trustee,
officer or shareholder of the Fund may be held personally
liable or responsible for any obligations of the Fund
arising out of this Agreement.
INDIVIDUAL L. The parties intend, acknowledge and agree that this
ARRANGEMENTS Agreement shall constitute a separate and discrete
OF EACH PORTFOLIO; contractual arrangement between Chase and the Fund on
ADDITIONAL behalf of each Portfolio separately, and shall be
PORTFOLIOS construed in all respects so as to give effect to this
intention to the same extent as if the Agreement between
Chase and the Fund on behalf of each Portfolio were set
out in a separate writing. In this regard, unless the
context clearly indicates otherwise, references to the
"Fund" under this Agreement shall be interpreted to mean
and refer to each Portfolio, taken separately (for
example, references to the Financial Assets of or
belonging to the "Fund" hereunder shall mean the
Financial Assets of or belonging to a
28
particular Portfolio). Without limiting the generality of
the foregoing, the parties acknowledge and agree that
each Portfolio's obligations and duties under this
Agreement are individual and are neither joint nor joint
and several, and that no Portfolio shall be liable or
responsible for the acts, omissions, or liabilities of
any other Portfolio or of the Fund on behalf of or in
respect of any other Portfolio. In the event that the
Fund establishes one or more series in addition to the
Portfolios listed on Exhibit B hereto with respect to
which it desires to have Chase render services as
custodian under the terms hereof, the Fund shall notify
Chase in writing, and if Chase agrees in writing to
provide such services, Exhibit B shall be amended to add
such series and such series shall become a Portfolio
hereunder for all purposes.
18. DEFINITIONS
(A) "ACCOUNT" has the meaning set forth in Section 2A(i) of
this Agreement.
(B)"AFFILIATE" of a person shall mean an "affiliated person"
of such person as that term is used in the 1940 Act.
(C) "AUTHORIZED PERSON" has the meaning set forth in Section
3A(i) of this Agreement.
(D)"CASH ACCOUNT" has the meaning set forth in Section
2A(i)(b) of this Agreement.
(e)"CMBI" shall mean Chase Manhattan Bank International, an
indirect wholly-owned subsidiary of Chase, located in Moscow,
Russia, and any nominee companies appointed by it.
(F)"CORPORATE ACTION" has the meaning set forth in Section
2I(i) of this Agreement.
(G)"COUNTRY RISK" means the risks of investing or holding
assets in a particular country, including, but not limited
to, risks arising from nationalization, expropriation or
other governmental actions; the country's financial
infrastructure, including prevailing custody and settlement
practices; laws applicable to the safekeeping and recovery of
Financial Assets and cash held in custody in that country;
the country's regulation of the banking and securities
industries, including changes in market Rules; currency
restrictions, devaluations and fluctuations in that country;
and market conditions affecting the orderly execution of
securities transactions or the value of assets in that
country.
(h)"DEPOSITORY EXTRACT" shall mean an extract issued by a
Ukraine Eligible Securities Depository.
(i)"DIRECT LOSS" shall mean a loss determined based on the
market value of the Ukraine Security that is the subject of
the loss at the date of discovery of such loss and without
reference to any consequential damages, special conditions or
circumstances.
(J)"ENTITLEMENT HOLDER" means the person named on the records
of a Securities Intermediary as the person having a
Securities Entitlement against the Securities Intermediary.
29
(K)"FINANCIAL ASSET" means, as the context requires, either
the asset itself or the means by which a person's claim to it
is evidenced, including a Security, a security certificate,
or a Securities Entitlement. "FINANCIAL ASSET" does not
include cash.
(L)"INSTRUCTIONS" has the meaning set forth in Section 3A(ii)
of this Agreement.
(m)"LIABILITIES" means any liabilities, losses, claims,
costs, damages, penalties, obligations or expenses of any
kind whatsoever (including, without limitation, reasonable
attorneys', accountants', consultants' or experts' fees and
reasonable disbursements).
(N) "RUSSIAN/UKRAINE NEGLIGENCE" with respect to Local
Russian Securities and Ukraine Securities shall mean the
failure to exercise Reasonable Care.
(o)"NO-ACTION LETTER" shall mean the response of the
Securities and Exchange Commission's Office of Chief Counsel
of Investment Management, dated April 18, 1995, in respect of
the Xxxxxxxxx Russia Company, Inc. (SEC Ref. No. 95-141-CC,
File No. 811-8788) providing "no-action" relief under Section
17(f) of The Investment Company Act of 1940, as amended, and
SEC Rule 17f-5 thereunder, in connection with custody of such
Fund's Local Russian Securities investment.
(p)"REASONABLE CARE" with respect to Local Russian Securities
and Ukraine Securities shall mean the use of reasonable
custodial practices under the applicable circumstances as
measured by the custodial practices then prevailing in Russia
or the Ukraine (respectively) of International Financial
Institutions acting as custodians for their institutional
investor clients in Russia or the Ukraine (respectively).
(q)"REGISTRAR COMPANY" shall mean any entity providing share
registration services to an issuer of Ukraine Securities.
(r)"RUSSIAN REGISTRAR COMPANY" shall mean any entity
providing share registration services to an issuer of Local
Russian Securities.
(s)"REGISTRAR CONTRACT" shall mean a contract between CMBI or
for Ukraine Securities the Ukraine Eligible Foreign Custodian
and a Registrar Company (and as the same may be amended from
time to time) containing, inter alia, the contractual
provisions described in paragraphs (a)-(e) on pages 5 and 6
of the No-Action Letter with the following modifications in
relation to Ukraine Securities: (1) reregistration by a
registrar is to take place within five Ukrainian business
days (rather than within 72 hours) after satisfactory
documentation has been submitted to the registrar, (2) it is
anticipated that all Ukrainian Securities shall be held in
the name of a Ukrainian Eligible Foreign Custodian nominee
(rather than certain securities being held in beneficial
owner name) in the registration books, and (3) the Ukrainian
Eligible Foreign Custodian will itself obtain audit rights
(rather than obtaining rights for the Fund's own auditors)
with respect to the share registration books .
(t)"LOCAL RUSSIAN SECURITY" shall mean a Security issued by a
Russian issuer and held in the local market by CMBI but shall
not include Depository Receipts.
(u)"DEPOSITORY RECEIPTS" with respect to Russian Securities
shall mean global, international and American depository
receipts or other such instruments which it is
30
not market practice to settle and hold through a Russian
Eligible Foreign Custodian.
(V)"SECURITIES" has the meaning set forth in Section 2A(i)(a)
of this Agreement.
(w)"SECURITIES ACCOUNT" has the meaning set forth in Section
2A(i)(a) of this Agreement.
(X)"SECURITIES ENTITLEMENT" means the rights and property
interest of an Entitlement Holder with respect to a Financial
Asset as set forth in Part 5 of Article 8 of the Uniform
Commercial Code of the State of New York, as the same may be
amended from time to time.
(Y)"SECURITIES INTERMEDIARY" means Chase, a Eligible Foreign
Custodian, a Eligible Securities Depository, and any other
financial institution which in the ordinary course of
business maintains custody accounts for others and acts in
that capacity.
(z)(aa) "SHARE EXTRACT" shall mean: (1) an extract of its
share registration books issued by a Registrar Company or
Ukrainian Eligible Securities Depository indicating an
investor's ownership of a security; and (2) a form prepared
by the Ukrainian Eligible Foreign Custodian or its agent in
those cases where a Registrar Company or Ukrainian Eligible
Securities Depository, as the case may be, is unwilling to
issue a Share Extract.
(bb)"UKRAINIAN ELIGIBLE SECURITIES DEPOSITORY" shall mean any
entity both: (1) which is licensed under Ukrainian law to
carry out, as a depository, registration of rights to
Ukrainian Securities, which, in turn, the Ukrainian Eligible
Securities Depository has registered on an omnibus basis with
Registrar Companies; and (2) in which the Ukrainian Eligible
Foreign Custodian participates. (There are no Ukrainian
Securities Depositories as of the date hereof.)
(cc)"UKRAINIAN SECURITY" shall mean an equity Security issued
by a Ukrainian issuer.
(dd)"UKRAINIAN ELIGIBLE FOREIGN CUSTODIAN" shall mean ING
Bank Ukraine, an indirect wholly-owned subsidiary of ING
Bank, N.V., located in Kiev, Ukraine, and any nominee
companies appointed by it (and shall also mean any additional
or successor Eligible Foreign Custodian used by Chase in the
Ukraine and any nominee companies appointed by it or them).
AS WITNESS the hand of the duly authorised officers of the parties hereto:
PLEASE TURN TO PAGE 48 TO SIGN
31
SCHEDULE 1
LIST OF ELIGIBLE FOREIGN CUSTODIANS AND MARKETS USED BY CHASE
--------------------------------------------------------------------------------
COUNTRIES/MARKETS ELIGIBLE FOREIGN CUSTODIANS
--------------------------------------------------------------------------------
Argentina The Chase Manhattan Bank
Buenos Aires; and
Citibank N.A.
Buenos Aires
--------------------------------------------------------------------------------
Australia The Chase Manhattan Bank
Sydney
--------------------------------------------------------------------------------
Austria Bank Austria AG
Vienna
--------------------------------------------------------------------------------
Bahrain HSBC Bank Middle East
Manama
--------------------------------------------------------------------------------
Bangladesh Standard Chartered Bank
Dhaka
--------------------------------------------------------------------------------
Belgium Fortis Bank N.V.
Brussels
--------------------------------------------------------------------------------
Bermuda The Bank of Bermuda Ltd
Xxxxxxxx
--------------------------------------------------------------------------------
Botswana Barclays Bank of Botswana Limited
Gaborone
--------------------------------------------------------------------------------
Brazil Citibank N.A.
Sao Paulo; and
BankBoston, N.A.
Sao Paulo
--------------------------------------------------------------------------------
Bulgaria ING Bank N.V.
Sofia
--------------------------------------------------------------------------------
Canada Canadian Imperial Bank of Commerce
Toronto; and
Royal Bank of Canada
Toronto
--------------------------------------------------------------------------------
Chile Citibank X.X.
Xxxxxxxx
--------------------------------------------------------------------------------
China The Hongkong and Shanghai Banking Corporation Ltd
(Shenzhen and Shanghai)
--------------------------------------------------------------------------------
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria
Santa Fe de Bogota
--------------------------------------------------------------------------------
Croatia Privredna Banka Zagreb d.d.
Zagreb
--------------------------------------------------------------------------------
Cyprus The Cyprus Popular Bank Ltd.
Nicosia
--------------------------------------------------------------------------------
Czech Republic Ceskoslovenska Obchodni Banka, A.S.
Prague
--------------------------------------------------------------------------------
Denmark Danske Bank A/S
Copenhagen
--------------------------------------------------------------------------------
Ecuador Citibank N.A.
Quito
--------------------------------------------------------------------------------
Egypt Citibank N.A.
Cairo
--------------------------------------------------------------------------------
32
--------------------------------------------------------------------------------
COUNTRIES/MARKETS ELIGIBLE FOREIGN CUSTODIANS
--------------------------------------------------------------------------------
Estonia Hansabank
Tallinn
--------------------------------------------------------------------------------
Finland Xxxxxx Bank Ltd.
Helsinki
--------------------------------------------------------------------------------
France BNP Paribas S.A.
Paris; and
Societe Generale
Paris; and
Credit Agricole Indosuez
Paris
--------------------------------------------------------------------------------
Germany Dresdner Bank A.G.
Frankfurt
--------------------------------------------------------------------------------
Ghana Barclays Bank of Ghana Limited
Accra
--------------------------------------------------------------------------------
Greece Barclays Bank plc
Athens
--------------------------------------------------------------------------------
Hong Kong The Chase Manhattan Bank
Hong Kong
The Hongkong and Shanghai Banking Corporation
Limited
--------------------------------------------------------------------------------
Hungary Citibank Rt.
Budapest
--------------------------------------------------------------------------------
India The Hong Kong and Shanghai Banking Corporation
Limited
Mumbai; and
Deutsche Bank AG,
Bombay; and
Standard Chartered Bank
Mumbai
--------------------------------------------------------------------------------
Indonesia The Hongkong and Shanghai Banking Corporation
Limited
Jakarta; and
Standard Chartered Bank
Jakarta
--------------------------------------------------------------------------------
Ireland Bank of Ireland
Dublin; and
Allied Irish Banks, plc
Dublin
--------------------------------------------------------------------------------
Israel Bank Leumi le-Israel B.M.
Tel Aviv
--------------------------------------------------------------------------------
Italy BNP Paribas S.A.
Milan
--------------------------------------------------------------------------------
Ivory Coast Societe Generale de Banques en Cote d'Ivoire
Abidjan
--------------------------------------------------------------------------------
Jamaica CIBC Trust and Merchant Bank Jamaica Limited
Kingston
--------------------------------------------------------------------------------
Japan The Fuji Bank Limited
Tokyo
The Bank of Tokyo-Mitsubishi, Limited
Tokyo
--------------------------------------------------------------------------------
Jordan Arab Bank Plc
Amman
--------------------------------------------------------------------------------
33
--------------------------------------------------------------------------------
COUNTRIES/MARKETS ELIGIBLE FOREIGN CUSTODIANS
--------------------------------------------------------------------------------
Kazakhstan ABN AMRO Bank Kazakhstan
Almaty
--------------------------------------------------------------------------------
Kenya Barclays Bank of Kenya Limited
Nairobi
--------------------------------------------------------------------------------
Latvia A/S Hansabanka
Riga
--------------------------------------------------------------------------------
Lebanon HSBC Bank Middle East
Ras-Beirut
--------------------------------------------------------------------------------
Lithuania Vilniaus Bankas AB
Vilnius
--------------------------------------------------------------------------------
Luxembourg Banque Generale du Luxembourg S.A.
Luxembourg
--------------------------------------------------------------------------------
Malaysia The Chase Manhattan Bank (M) Berhad
Kuala Lumpur; and
HSBC Bank Malaysia Berhad
Kuala Lumpur
--------------------------------------------------------------------------------
Mauritius The Hongkong & Shanghai Banking Corporation
Limited
Mauritius
--------------------------------------------------------------------------------
Mexico Chase Manhattan Xxxx Xxxxxx S.A.
Mexico, D.F.; and
Citibank Mexico, S.A.
Mexico, D.F.
--------------------------------------------------------------------------------
Morocco Banque Commerciale du Maroc S.A.
Casablanca
--------------------------------------------------------------------------------
Namibia Standard Bank Namibia Limited
Windhoek
--------------------------------------------------------------------------------
Netherlands ABN AMRO N.V.
De Breda; and
Fortis Bank (Nederland) N.V.
Amsterdam
--------------------------------------------------------------------------------
New Zealand National Nominees Limited
Auckland
--------------------------------------------------------------------------------
*Nigeria Stanbic Merchant Bank Nigeria Limited
Lagos
--------------------------------------------------------------------------------
Norway Den norske Bank ASA
Oslo
--------------------------------------------------------------------------------
Oman HSBC Bank Middle East
Muscat
--------------------------------------------------------------------------------
Pakistan Citibank, N.A.,
Karachi; and
Deutsche Bank AG,
Karachi; and
Standard Chartered Bank
Karachi
--------------------------------------------------------------------------------
Peru Citibank, N.A.
Lima
--------------------------------------------------------------------------------
Philippines The Hongkong and Shanghai Banking Corporation
Limited
Pasig City
--------------------------------------------------------------------------------
Poland Bank Handlowy w. Warszawie S.A.
Warsaw; and
--------------------------------------------------------------------------------
34
--------------------------------------------------------------------------------
COUNTRIES/MARKETS ELIGIBLE FOREIGN CUSTODIANS
--------------------------------------------------------------------------------
Bank Polska Kasa Opieki S.A.
Warsaw; and
Citibank (Poland) S.A.
Warsaw
--------------------------------------------------------------------------------
Portugal Banco Espirito Santo e Commercial de Lisboa, S.A.
Lisbon
Banco Comercial Portugues, S.A.
Lisbon
--------------------------------------------------------------------------------
Romania ABN-AMRO Bank (Romania) S.A.
Bucharest; and
ING Bank
Bucharest
--------------------------------------------------------------------------------
*Russia Chase Manhattan Bank International
Moscow; and
Credit Suisse First Boston Bank AO
Moscow
--------------------------------------------------------------------------------
Singapore Standard Chartered Bank
Singapore
--------------------------------------------------------------------------------
Slovak Republic Ceskoslovenska Obchodni Banka, A.S.
Bratislava
--------------------------------------------------------------------------------
Slovenia Bank Austria Creditanstalt d.d. Ljubljana
Ljubljana
--------------------------------------------------------------------------------
South Africa The Standard Bank of South Africa Limited
Johannesburg
--------------------------------------------------------------------------------
South Korea The Hongkong and Shanghai Banking Corporation
Limited
Seoul; and
Standard Chartered Bank
Seoul
--------------------------------------------------------------------------------
Spain Chase Manhattan Bank CMB, X.X.
Xxxxxx
--------------------------------------------------------------------------------
Sri Lanka The Hongkong and Shanghai Banking Corporation
Limited
Colombo
--------------------------------------------------------------------------------
Sweden Skandinaviska Enskilda Banken
Stockholm
--------------------------------------------------------------------------------
Switzerland UBS AG
Zurich
--------------------------------------------------------------------------------
Taiwan The Chase Manhattan Bank
Taipei
The Hongkong and Shanghai Banking Corporation
Limited
Taipei
--------------------------------------------------------------------------------
Thailand The Chase Manhattan Bank
Bangkok; and
Standard Chartered Bank
Bangkok
--------------------------------------------------------------------------------
Tunisia Banque Internationale Arabe de Tunisie
Tunis
--------------------------------------------------------------------------------
Turkey The Chase Manhattan Bank
Istanbul
--------------------------------------------------------------------------------
*Ukraine ING Bank Ukraine
Kiev
--------------------------------------------------------------------------------
35
--------------------------------------------------------------------------------
COUNTRIES/MARKETS ELIGIBLE FOREIGN CUSTODIANS
--------------------------------------------------------------------------------
United Kingdom The Chase Manhattan Bank
London
--------------------------------------------------------------------------------
Uruguay BankBoston, N.A.
Montevideo
--------------------------------------------------------------------------------
United States The Chase Manhattan Bank
New York
--------------------------------------------------------------------------------
Venezuela Citibank, N.A.
Caracas
--------------------------------------------------------------------------------
Zambia Barclays Bank of Zambia Limited
Lusaka
--------------------------------------------------------------------------------
Zimbabwe Barclays Bank of Zimbabwe Limited
Harare
--------------------------------------------------------------------------------
* RESTRICTED SERVICE ONLY. PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR
FURTHER INFORMATION.
N.B. ADDITIONAL OPERATIONAL/LEGAL DOCUMENTATION MAY BE REQUIRED IN
CERTAIN MARKETS. PLEASE REFER TO YOUR RELATIONSHIP MANAGER.
36
SCHEDULE 2
TAIWAN RIDER
All defined terms used in this Rider shall, unless otherwise defined herein,
have the meanings ascribed thereto in the Custody Agreement. Save as expressly
provided in this Rider, all terms of the Custody Agreement shall apply to
services performed with respect to investments in the Republic of China ("R.O.C.
Services") provided that, as regards to R.O.C. Services, in the event of any
conflict between this Rider and the Custody Agreement, this Rider shall prevail.
The parties agree as follows as regards the R.O.C. Services:
1. INVESTMENT REGULATIONS, FILING OF REPORTS
The Fund acknowledges that the services rendered hereunder are being
rendered in connection with the Fund's investments in the R.O.C. ("R.O.C.
Investments") under the Regulations Governing Securities Investment by
Overseas Chinese and Foreign Investors and Procedures for Remittances and
related laws, regulations, guidelines, orders and policies (collectively,
as amended and supplemented from time to time, "R.O.C. Investment
Regulations") and represents and warrants to, and agrees with, Chase as
follows with respect thereto:
(i) The Fund is permitted under the R.O.C. Investment Regulations to
make the investments contemplated herein and as a condition to the
performance of Chase's obligations hereunder, the Adviser shall
obtain or complete, as applicable, and provide evidence to Chase
that it has obtained or completed as applicable, all required R.O.C.
government approvals or procedures necessary for the making of
R.O.C. Investments on behalf of the Fund.
(ii) Notwithstanding anything to the contrary contained in the Custody
Agreement, (a) Chase shall not be obliged to do any act which would,
in Chase's reasonable judgement, violate the R.O.C. Investment
Regulations including, but not limited to, any advance of funds with
respect to R.O.C. Investments and (b) the Fund authorises Chase to
do all reasonable acts, including disclosure of information, filing
of reports and countersigning of broker confirmations as is required
by the R.O.C. Investment Regulations including, if section 2 (ii)
below applies, the relevant Agency Functions (defined below).
(iii) If legally required, the Fund shall ensure that the relevant Fund
duly appoints a tax guarantor as contemplated by the R.O.C.
Investment Regulations ("Tax Guarantor") and in such case, shall at
all times during the term hereof ensure that the Fund continues to
have a Tax Guarantor, which the Fund acknowledges is not Chase's
Taipei Branch.
2. AGENCY FUNCTIONS
(i) The Fund acknowledges that the R.O.C. Investment Regulations require
the Fund to appoint an agent or agents to carry out the agency
functions contemplated thereby ("Agency Functions").
(ii) If the Fund elects or is required to appoint Chase to perform any of
such Agency
37
Functions, the Fund shall execute all such powers of attorney and
other documents as the Chase may reasonably require to perform such
functions and the provisions of the Custody Agreement shall apply
thereto.
(iii) If the Fund does not so appoint Chase, Chase shall not,
notwithstanding anything to the contrary contained in the Custody
Agreement, be required to perform the Agency Functions and the
agent(s) so appointed by the Fund shall be authorised to give
Instructions with respect to the R.O.C. Investments of the Fund.
38
SCHEDULE 0
Xxx Xxxxx Xxxxxxxxx Xxxx
Xxxxxx & Xxxxxx Xxxxxxxx
000 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Dear Sirs
Please accept this letter as an Instruction pursuant to the Global Custody
Agreement dated 2001 between The Chase Manhattan Bank ("Chase") and Xxxxxxxx
Capital Funds (Delaware) (the "Fund"). This Instruction relates solely to
transactions in securities to be settled by Chase's Eligible Foreign Custodian
in Taiwan ("Taiwanese Trades").
In light of the fact that the penalties under Taiwanese law for failing a
Taiwanese Trade may exceed the risk to the Fund of Chase Taipei not settling
such trade due to incomplete, miss-matching or missing instructions, the Parties
agree to the following operating procedures.
In the normal course of events, the Fund will report Taiwanese Trades to Chase
in Bournemouth ("Chase Bournemouth"), giving notice either to deliver or to
receive shares to or from a specified broker account against payment. Chase
Bournemouth will pass these instructions to Chase's Eligible Foreign Custodian
in Taiwan ("Chase Taipei"). Chase Taipei will then settle the transaction on the
specified settlement date.
In the event that Chase Taipei has not received valid instructions from Chase
Bournemouth or there is a discrepancy with respect to a trade which appears to
be for the account of the Fund which has been advised to Chase Taipei either:
1. by way of a broker confirmation from a broker or the Taiwanese Agent of a
broker appearing on the Approved Broker List ("an Approved Broker")
attached hereto as Schedule 4, as may be amended from time to time by the
Fund or
2. through the list of pending trades provided by the Taiwan Securities
Central Depository ("the TSCD") as being a trade by an Approved Broker for
the account of the Fund,
it is hereby agreed that Chase Taipei will, in the first instance attempt to
contact the broker to ascertain the details of the alleged trades. In the event
of a discrepancy between the trade details shown by the TSCD and those provided
by the Approved Broker when contacted by Chase Taipei, the details provided by
the Approved Broker shall prevail. Chase Taipei shall then as soon as reasonably
practicable contact Chase Bournemouth to obtain instructions matching the
details provided by the Approved Broker or to resolve any discrepancy between
such details and the instructions provided by Chase Bournemouth. If Chase
Bournemouth is unable to provide the instructions or to resolve the discrepancy,
Chase Bournemouth will as soon as reasonably practicable contact SIMNA to obtain
instructions and will pass such instructions promptly to Chase Taipei for
action.
If Chase Taipei has not obtained valid instructions from Chase Bournemouth prior
to the point at which Chase Taipei must act if the trade is to be prevented from
failing, Chase Taipei shall, provided that the Broker is on the approved list in
Schedule 4 request the local Taiwanese broker to give a written undertaking
addressed to Chase Taipei, substantially in the form annexed here as Schedule 5.
The Fund agrees, however, that Chase may then act upon such undertaking, which
it reasonably believes is on the Approved Broker's headed paper and signed by a
person representing to be an authorised signature of the Approved Broker,
without further enquiry. If, however, for any reason whatsoever the Approved
Broker refuses to give such undertaking, Chase Taipei is hereby
39
authorised to settle any such trade without further investigation or
confirmation from Chase Bournemouth or the Fund on the basis of the information
that it has from an Approved Broker. Where such action is taken, Chase Taipei
will as soon as reasonably practicable inform Chase Bournemouth. Chase
Bournemouth will in turn as soon as reasonably practicable inform the Fund.
The Fund hereby agrees to indemnify Chase Taipei against all liabilities,
losses, damages, claims, costs, demands and actions, which it may suffer or
incur directly or indirectly in any way in connection with following these
procedures and instructions with respect to the Taiwanese Trades of the Fund
other than those arising from the negligence, wilful default, bad faith or
failure by Chase to follow the aforesaid procedures and instructions.
By:
---------------------------------------------
For and on behalf of The Chase Manhattan Bank
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
For and on behalf of Xxxxxxxx Capital Funds (Delaware)
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
40
SCHEDULE 4
APPROVED BROKER LIST
--------------------------------------------------------------------------------
APPROVED BROKER BROKER'S TAIWANESE AGENT
--------------------------------------------------------------------------------
Capital Securities Corporation
--------------------------------------------------------------------------------
China Securities Corporation
--------------------------------------------------------------------------------
Grand Cathay Securities Corporation
--------------------------------------------------------------------------------
Jardine Xxxxxxx Taiwan Securities Ltd.
--------------------------------------------------------------------------------
Masterlink Securities Corporation
--------------------------------------------------------------------------------
National Securities Corporation
--------------------------------------------------------------------------------
SBC Warburg Securities Ltd.
--------------------------------------------------------------------------------
ABN AMRO Hoare Govett Asia Limited
--------------------------------------------------------------------------------
HSBC Xxxxx Xxxxx Taiwan Limited
--------------------------------------------------------------------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated Taiwan
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx International Limited
--------------------------------------------------------------------------------
41
SCHEDULE 5
MISMATCHED TRADE SETTLEMENT UNDERTAKING FROM THE BROKER TO THE CLIENT'S
TAIWANESE ELIGIBLE FOREIGN CUSTODIAN
[ON BROKERS HEADED PAPER]
-------------------------
TO: CHASE TAIPEI
-----------------
We, [name of broker] hereby confirm that all trades made on [insert date]
for [insert official name of client] ("the Client") are valid trades
executed by us on the instructions of Xxxxxxxx Capital Funds (Delaware).
In order to protect the Client from failed settlement penalties, please
settle the trades in the designated settlement date. To enable Chase
Taipei to proceed with settlement notwithstanding mismatched or missing
instructions from Xxxxxxxx Capital Funds (Delaware), we hereby
irrevocably undertake to bear all costs, losses and expenses incurred in
reversing the settlement of a mismatched trade should it subsequently be
determined that the trade was not duly authorised and validly executed
for the account of Xxxxxxxx Capital Funds (Delaware).
-----------------------------------------
AUTHORISED SIGNATORY
42
SCHEDULE 6
INFORMATION REGARDING COUNTRY RISK
1. To aid the Fund in its determinations regarding Country Risk, Chase shall
furnish annually and upon the initial placing of Financial Assets and cash
into a country the following information:
A. Opinions of local counsel concerning:
1. Whether applicable foreign law would restrict the access afforded
the Fund's independent public accountants to books and records
kept by an Eligible Foreign Custodian located in that country.
2. Whether applicable foreign law would restrict the Fund's ability
to recover its Foreign Assets in the event of the bankruptcy of an
Eligible Foreign Custodian located in that country.
3. Whether applicable foreign law would restrict the Fund's ability
to recover Foreign Assets that are lost while under the control of
an Eligible Foreign Custodian located in the country.
B. Written information concerning:
1. The foreseeability of expropriation, nationalization, freezes, or
confiscation of the Fund's Foreign Assets.
2. Whether difficulties in converting the Fund's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.
C. A market report with respect to the following topics:
(1) securities regulatory environment, (2) foreign ownership
restrictions, (3) foreign exchange, (4) securities settlement and
registration, (5) taxation and (6) depositories (including
depository evaluation), if any.
2. To aid the Fund in monitoring Country Risk, Chase shall furnish Board
additionally with market flashes, including with respect to changes in the
information in market reports.
43
SCHEDULE 7
ELIGIBLE SECURITIES DEPOSITORIES
44
EXHIBIT A
---------
PERSONS AUTHORISED BY THE FUND TO GIVE INSTRUCTIONS
IN THE UNITED STATES:
Xxxx Xxxxxx
Xxxxx Xxxxxxxxx
Xxxx Xxxxxxxx
Xxxxx xx Xxxxxxx
IN THE UNITED KINGDOM:
Provided via separate written mandate
45
EXHIBIT B
---------
PORTFOLIOS OF THE FUND
Xxxxxxxx Ultra Fund
Xxxxxxxx U.S. Large Cap Equity Fund
Xxxxxxxx U.S. Smaller Companies Fund
Xxxxxxxx International Fund
Xxxxxxxx International Smaller Companies Fund
46
SIGNED by
For and on behalf of
THE CHASE MANHATTAN BANK
By:
Name:
Title:
For and on behalf of
XXXXXXXX CAPITAL FUNDS (DELAWARE), SEPARATELY ON BEHALF OF EACH PORTFOLIO LISTED
ON EXHIBIT B HERETO.
By:
Name:
Title:
47
