AMENDMENT, dated December 9, 1997 to the amended and restated agreement
("Agreement"), dated February 21, 1997 between Xxxxxxxxx Emerging Fixed Income
Markets Series, a series of Xxxxxxxxx Institutional Funds, Inc. ("Fund"), having
its principal place of business at 000 Xxxxxxx Xxxxxx, Xx. Xxxxxxxxxx, XX 00000,
and The Chase Manhattan Bank ("Chase") having its principal place of business at
000 Xxxx Xxx., Xxx Xxxx, XX 00000-00000.
It is hereby agreed as follows:
Section 1. Unless otherwise provided herein, all terms and conditions of
the Agreement are expressly incorporated herein by reference and except as
modified hereby, the Agreement is confirmed in all respects. Capitalized terms
used herein without definition shall have the meanings ascribed to them in the
Agreement.
Section 2. Section 3 of the Agreement is amended as follows by adding the
appropriate alphabetic sequence the following:
(a) "CMBI" shall mean Chase Manhattan Bank international, an
indirect wholly-owned subsidiary of Chase, located in Moscow, Russia.
(b) "Direct Loss" shall mean a loss determined based on the
market value of the Russian 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.
(c) "International Financial Institution" shall mean any bank
in the top 1,000 (together with their affiliated companies) as measured by "Tier
1" capital or any broker/dealer in the top 100 as measured by capital.
(d) "Negligence" shall mean the failure to exercise reasonable
care under the applicable circumstances as measured by the custodial practices
prevailing in Russia of International Financial Institutions acting as
custodians for their institutional investor clients in Russia.
(e) "No-Action Letter" shall mean the response of the
Securities and Exchange Commission's Offic3e of Chief Counsel of Investment
Management, dated April 18, 1995, in respect to the Xxxxxxxxx Russia Fund, Inc.
(SEC Ref. No. 95-151-CC, File No. 811-8788) providing "no-action" relief under
ss. 17(f) of The Investment Company Act of 1940, as amended, and SEC Rule 17f-5
thereunder, in connection with custody of such Xxxxxxxxx Russia Fund, Inc.'s
investments in Russian Securities.
(f) "Registrar Company" shall mean any entity providing share
registration services to an issuer of Russian Securities.
(g) "Registrar Contract" shall mean a contract between CMBI
and a Registrar Company (and as the same may be amended from time to time)
containing, INTER ALIA the contractual provisions described at paragraphs (a)(e)
on pps 5-6 of the No-Action Letter.
(h) "Russian Security" shall mean a Security issued by a
Russian issuer.
(i) "Shares Extract" shall mean: (I) an extract of its share
registration books issued by a Registrar Company indicating an investor's
ownership of a security; and (ii) a form prepared by Chase Moscow or its agent
in those cases where a Registrar Company is unwilling to issue a Share Extract.
Section 3(a). Section 10 of the Agreement is amended by adding a new
subsection (d) on p. 12 follows: "Payment for Russian Securities shall not be
made prior to the issuance by the Registrar Company of the Share Extract
relating to such Russian Security.
Section 3(b). Section 10 of the Agreement is amended by adding a new
subsection (e) on p. 13 as follows: "Delivery of Securities may be made in
accordance with the customary or established securities trading or securities
processing practices' and procedures in Russia. Delivery of Securities may also
be made in any manner specifically required by instructions acceptable to the
Bank.
Section 3(c). Section 10 of the Agreement is further amended by adding a
new subsection (g) on p. 14 as follows: "It is understood and agreed that Chase
need only use its reasonable efforts with respect to performing functions
(a)-(f) immediately above with respect to Russian Securities."
Section 4(a). Section 14(a) of the Agreement is amended by inserting the
following at the end of the first sentence as follows: ": provided that, with
respect to Russian Securities, Chase's responsibility shall be limited to
safekeeping of relevant Share Extracts."
Section 4(b). Section 14(a) of the Agreement is further amended by
inserting the following after the first sentence thereof: "Delegation by Chase
to CMBI shall not relieve Chase of any responsibility to 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 CMBI 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 CMBI shall assume
responsibility for, and neither shall be liable for, any action or inaction of
any Registrar Company and no Registrar Company shall be, or shall be deemed to
be, Chase, CMBI, a Chase Branch, a Domestic Securities Depository, a Foreign
Bank, a Foreign Securities Depository or the employee, agent or personnel of any
the foregoing. Anything to the contrary contained in the Agreement
notwithstanding, with respect to custodian services for Russia Securities,
neither Chase nor CMBI shall be liable to Fund except for Direct Losses to the
extent caused by their respective negligence or willful misconduct. To the
extent that CMBI employs agents to perform any of the functions to be performed
by Chase or SMBI with respect to 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 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 (a)-(e) on pps. 5-8 of the No-Action Letter and to the extent
applicable to CMBI, the share registration functions described on pps. 2-3 of
the No-Action Letter, Chase and CMBI shall be liable to Fund as if CMBI was
responsible for performing such services itself."
Section 5. Add a new Section 25 to the Agreement as follows:
(a) Chase will advise Fund (and will update such advice from
time-to-time as changes occur) of those Registrar Companies with which CMBI has
entered into a Registrar Contract. Chase shall cause CMBI to monitor each
Registrar Company and Chase shall promptly advise Fund when CMBI has actual
knowledge of the occurrence of any one or more of the events described in
paragraphs (i)-(v) on pps. 8-9 of the No-Action Letter with respect to a
Registrar Company that serves in that capacity for any issuer the shares of
which are held by Fund.
(b) Where Fund is considering investing in the Russian
Securities of an issuer as to which CMBI does not have a Registrar Contract with
the issuer's Registrar Company, Fund may request that CMBI consider whether it
would be willing to attempt to enter into such a Registrar Contract and CMBI
shall advise Fund of its willingness to do so. Where CMBI has agreed to make
such an attempt. Chase will advise Fund of the occurrence of any one or more of
the events described in paragraphs (i)-(v) on pps. 8-9 of the No-Action Letter
of which CMBI has actual knowledge.
Section 6. Add a new Section 26 to the Agreement as follows: "Fund shall
pay for and hold Chase and CMBI harmless from any liability or loss resulting
from the imposition or assessment of any taxes or other governmental charges,
and any related expenses with respect to income from or Securities in the
Accounts."
Section 7. Add a new Section 27 to the Agreement as follows: "Fund
acknowledges that CMBI may not be able, in given cases and despite its
reasonable efforts, to obtain a Share Extract from a Registrar Company and CMBI
shall not be liable in any such event including with respect to any losses
resulting from such failure."
Section 8. Add a new Section 28 to the Agreement as follows: "Subject to
the cooperation of a Registrar Company, for at least the first two years
following CMBI's first use of a Registrar Company, 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 Fund's Board of
Directors, in consultation with CMBI, determines it to be appropriate."
Section 9. Add a new Section 29 to the Agreement as follows: "Chase shall
cause CMBI to prepare for distribution to Fund's Board of Directors a quarterly
report identifying: (i) any concerns it has regarding the Russian share
registration system that should be brought to the attention of Board of
Directors; and (ii) the steps CMBI has taken during the reporting period to
ensure that Fund's interests continue to be appropriately recorded."
Section 10. Add a new Section 30 to the Agreement as follows: "Fund
acknowledges that it has received, reviewed and understands Chase's market
report dated May 1996 for Russia, including, but not limited to, the risks
described therein."
Section 11. Add a new Section 31 to the Agreement as follows: "Except as
provided in new ss.ss.25(b) and (c), the services to be provided by Chase
hereunder will be provided only in relation to Russian Securities for which CMBI
has entered into a Registrar Contract with the relevant Registrar Company."
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
XXXXXXXXX ERMERGING FIXED THE CHASE MANHHATTAN BANK
INCOME MARKETS SERIES
(a series of Xxxxxxxxx Institutional
Funds, Inc.)
BY: /s/XXXX X. XXX By: /s/ XXXXXX XXXXXXX
------------------ ------------------------
Name: Xxxx X. Xxx Name: Xxxxxx Xxxxxxx
Title: Vice President Title: Second Vice President
Date: December 16, 1997 Date: December 9, 1997
