Exhibit 8(a)(2)
CUSTODIAN AGREEMENT
AGREEMENT made this 25th day of November, 1992, between XXXXXXX LATIN
AMERICA FUND (the "Fund") and Xxxxx Brothers Xxxxxxxx & Co. (the "Custodian").
WITNESSETH: That in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. The Fund hereby employs and appoints the Custodian as a custodian for
the term and subject to the provisions of this Agreement. The Fund agrees to
deliver to the Custodian all securities and cash owned by it, and all payments
of income, payments of principal or capital distributions received by it with
respect to all securities owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares of capital stock of
the Fund as may be issued or sold from time to time.
The Custodian shall not be under any duty or obligation to require the
Fund to deliver to it any securities or funds owned by the Fund and shall have
no responsibility or liability for or on account of securities or funds not so
delivered. The Fund will deposit with the Custodian copies of the Certificate of
Incorporation and By-Laws (or comparable documents) of the Fund and all
amendments thereto, and copies of such votes and other proceedings of the Fund
as may be necessary for or convenient to the Custodian in the performance of its
duties.
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It is understood that as used in this Agreement, the term "securities"
shall include futures contracts and options.
2. Except for securities and funds held by subcustodians appointed
pursuant to the provisions of Section 3 hereof, the Custodian shall have and
perform the following powers and duties:
A. Safekeeping - To keep safely the securities of the Fund that have been
delivered to the Custodian and from time to time to receive delivery of
securities for safekeeping.
B. Manner of Holding Securities - To hold securities of the Fund (1) by
physical possession of the share certificates or other instruments representing
such securities in registered or bearer form or of the broker's receipts or
confirmations for futures contracts, options and similar securities, or (2) in
book-entry form by a Securities System (as said term is defined in Section 2V).
C. Registered Name; Nominee - To hold registered securities of the Fund
(1) in the name or any nominee name of the Custodian or the Fund, or in the name
or any nominee name of any agent appointed pursuant to Section 6E, or (2) in
street certificate form, so-called, and in any case with or without any
indication of fiduciary capacity.
D. Purchases - Upon receipt of proper instructions, as defined in Section
2Y, insofar as funds are available for the purpose, to pay for and receive
securities purchased for the account of the Fund, payment being made only upon
receipt of the
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securities; provided, however, that the Custodian may make payment, which may be
prior to receipt of securities, and may accept delivery of securities, including
the form of securities received, in accordance with governmental regulations,
the rules of Securities Systems or other U.S. securities depositories and
clearing agencies, or generally accepted trade practice in the applicable U.S.
market. Receipt of securities on behalf of the Fund shall be by the Custodian or
a Subcustodian or by credit to an account which one of them may have with a
bank, Securities System, other U.S. securities depositary or clearing agency, or
other financial institution approved by the Fund.
E. Exchanges - Upon receipt of proper instructions, to exchange securities
held by it for the account of the Fund for other securities in connection with
any reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event, and to deposit any such securities in accordance with
the terms of any reorganization or protective plan. Without such instructions,
the Custodian may surrender securities in temporary form for definitive
securities, may surrender securities for transfer into a name or nominee name as
permitted in Section 2C, and may surrender securities for a different number of
certificates or instruments representing the same number of shares or same
principal amount of indebtedness, provided the securities to be issued are to be
delivered to the Custodian.
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F. Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund but only
against payment therefor; provided, however, that the Custodian may make
delivery, which may be prior to receipt of payment, and may accept payment,
including the form of payment received, in accordance with governmental
regulations, the rules of Securities Systems or other U.S. securities
depositories and clearing agencies, or generally accepted trade practice in the
applicable U.S. market. Receipt of payment on behalf of the Fund shall be by the
Custodian or a Subcustodian or by credit to an account which one of them may
have with a bank, Securities System, other U.S. securities depositary or
clearing agency, or other financial institution approved by the Fund.
G. Depositary Receipts - Upon receipt of proper instructions, to instruct
a subcustodian appointed pursuant to Section 3 hereof (a "Subcustodian") or an
agent of the Custodian appointed pursuant to Section 6E hereof (an "Agent") to
surrender securities to the depositary used by an issuer of American Depositary
Receipts or International Depositary Receipts (hereinafter collectively referred
to as "ADRs") for such securities against a written receipt therefor adequately
describing such securities and written evidence satisfactory to the Subcustodian
or Agent that the depositary has acknowledged receipt of instructions to issue
with respect to such securities
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ADRs in the name of the Custodian, or a nominee of the Custodian, for delivery
to the Custodian in Boston, Massachusetts, or at such other place as the
Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon receipt of proper
instructions, to deliver to the issuer or Director thereof, or to the agent of
either, warrants, puts, calls, futures contracts, options, rights or similar
securities for the purpose of being exercised or sold, provided that the new
securities and cash, if any, acquired by such action are to be delivered to the
Custodian, and, upon receipt of proper instructions, to deposit securities upon
invitations for tenders of securities, provided that the consideration is to be
paid or delivered or the tendered securities are to be returned to the
Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive and retain
confirmations or other documents evidencing the
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purchase or writing of an option on a security or securities index by the Fund;
to deposit and maintain in a segregated account, either physically or by
book-entry in a Securities System, securities subject to a covered call option
written by the Fund; and to release and/or transfer such securities or other
assets only in accordance with a notice or other communication evidencing the
expiration, termination or exercise of such covered option furnished by The
Options Clearing Corporation, the securities or options exchange on which such
covered option is traded or such other organization as may be responsible for
handling such options transactions.
K. Futures Contracts - Upon receipt of proper instructions, to receive and
retain confirmations evidencing the purchase or sale of a futures contract or an
option on a futures contract by the Fund; to deposit and maintain in a
segregated account, for the benefit of any futures commission merchant, assets
designated by the Fund as initial, maintenance or variation "margin" deposits
intended to secure the Fund's performance of its obligations under any futures
contracts purchased or sold or any options on futures contracts written by the
Fund, in accordance with the provisions of any agreement or agreements among any
of the Fund, the Custodian and such futures commission merchant, designed to
comply with the rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or organizations, regarding such
margin deposits; and to release and/or transfer
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assets in such margin accounts only in accordance with any such agreements or
rules.
L. Borrowings - Upon receipt of proper instructions, to deliver securities
of the Fund to lenders or their agents as collateral for borrowings effected by
the Fund, but only against receipt of the amounts borrowed, provided that if
such collateral is held in book-entry form by a Securities System (as defined in
Section 2V), such collateral may be transferred by book-entry to such lender or
its agent against receipt by the Custodian of an undertaking by such lender to
pay such borrowed money to or upon the Custodian's order on the next business
day following such transfer of collateral.
M. Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of the Fund on the Custodian's books subject only to draft
or order by the Custodian. All funds received by the Custodian from or for the
account of the Fund shall be deposited in said account(s). The responsibilities
of the Custodian to the Fund for deposits accepted on the Custodian's books
shall be that of a U.S. bank for a similar deposit.
If and when authorized by proper instructions, the Custodian may open and
operate an additional account(s) in such other banks or trust companies as may
be designated by the Fund in such instructions (any such bank or trust company
so designated by the Fund being referred to hereafter as a "Banking
Institution"), provided that such account(s) shall be in the name of the
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Custodian for account of the Fund and subject only to the Custodian's draft or
order. Such accounts may be opened with Banking Institutions in the United
States and in other countries and may be denominated in either U.S. Dollars or
other currencies as the Fund may determine. All such deposits shall be deemed to
be portfolio securities of the Fund and accordingly the responsibility of the
Custodian therefor shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of the Fund.
N. Interest Bearing Call or Time Deposits - To place interest bearing
fixed term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other Banking Institutions as the Fund may
determine. Deposits may be denominated in U. 5. Dollars or other currencies and
need not be evidenced by the issuance or delivery of a certificate to the
Custodian, provided that the Custodian shall include in its records with respect
to the assets of the Fund, appropriate notation as to the amount and currency
of each such deposit, the accepting Banking Institution and other appropriate
details. Such deposits, other than those placed with the Custodian, shall be
deemed portfolio securities of the Fund and the responsibilities of the
Custodian therefor shall be the same as those for demand deposit bank accounts
placed with other banks, as described in the second paragraph of Section 2M of
this
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Agreement. The responsibility of the Custodian for such deposits accepted on the
Custodian's books shall be that of a U. S. bank for a similar deposit.
O. Foreign Exchange Transactions - Pursuant to proper instructions, to
enter into foreign exchange contracts to purchase and sell foreign currencies
for spot and future delivery on behalf and for the account of the Fund, and in
connection therewith to receive and retain receipts, confirmations or other
documents evidencing such contracts and to deposit and maintain cash or
designated securities in a segregated account and to release and/or transfer
assets held in such account only in accordance with such proper instructions.
Such transactions may be undertaken by the Custodian with such Banking
Institutions, including the Custodian and Subcustodian(s) as principals, as
approved and authorized by the Fund. Foreign exchange contracts, other than
those executed with the Custodian, shall be deemed to be portfolio securities of
the Fund and the responsibilities of the Custodian therefor shall be the same as
those for demand deposit bank accounts placed with other banks as described in
the second paragraph of Section 2M of this Agreement.
P. Stock Loans - Upon receipt of proper instructions, to deliver
securities of the Fund, in connection with loans of securities by the Fund, to
the borrower thereof but only against receipt of such collateral as the Fund
shall instruct; except that in connection with any loans for which collateral is
to be
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credited to the Custodian's Account in a book-entry system referred to in
Section 2V(ii) hereof, the Custodian may deliver securities prior to the credit
of such collateral, provided that the Custodian shall promptly notify the Fund
if such collateral is not credited.
Q. Collections - (i) To collect and receive all income, payments of
principal and other payments with respect to the securities held hereunder, and
in connection therewith to deliver the certificates or other instruments
representing the securities to the issuer thereof or its agent when securities
are called, redeemed, retired, mature or otherwise become payable; provided that
the payment is to be made in such form and at such time as is in accordance with
the terms of the agreement relating to the security, or such proper instructions
as the Custodian may receive, or governmental regulations, the rules of
Securities Systems or other U.S. securities depositories and clearing agencies,
or generally accepted trade practice in the applicable U.S. market; (ii) to
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income, principal or other
payments with respect to securities of the Fund or in connection with transfer
of securities; and (iii) pursuant to proper instructions to take such other
actions with respect to the collection or receipt of funds or transfer of
securities which involve an investment decision.
R. Dividends, Distributions and Redemptions - Upon receipt
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of proper instructions from the Fund, or upon receipt of instructions from the
Fund's shareholder servicing agent or agent with comparable duties (the
"Shareholder Servicing Agent") (given by such person or persons and in such
manner on behalf of the Shareholder Servicing Agent as the Fund shall have
authorized), the Custodian shall release funds or securities to the Shareholder
Servicing Agent or otherwise apply funds or securities, insofar as available,
for the payment of dividends or other distributions to Fund shareholders. Upon
receipt of proper instructions from the Fund, or upon receipt of instructions
from the Shareholder Servicing Agent (given by such person or persons and in
such manner on behalf of the Shareholder Servicing Agent as the Fund shall have
authorized), the Custodian shall release funds or securities, insofar as
available, to the Shareholder Servicing Agent or as such Agent shall otherwise
instruct for payment to the Fund shareholders who have delivered to such Agent a
request for repurchase or redemption of their shares of capital stock of the
Fund.
S. Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all
forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of proper instructions, to execute
and deliver or cause its nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor its
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nominee shall vote upon any of such securities or execute any proxy to vote
thereon or give any consent or take any other action with respect thereto
(except as otherwise herein provided) unless ordered to do so by proper
instructions.
T. Bills - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements, or
other obligations of the Fund.
U. Nondiscretionary Details - Without the necessity of express
authorization from the Fund (1) to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Fund held by the
Custodian except as otherwise directed from time to time by the Board of
Directors of the Fund, and (2) to make payments to itself or others for minor
expenses of handling securities or other similar items relating to the
Custodian's duties under this Agreement, provided that all such payments shall
be accounted for to the Fund.
V. Deposit of Fund Assets in Securities Systems - The Custodian may
deposit and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart O of Treasury
Circular Xx. 000, 00 XXX 000, Xxxxxxx X of 31 CRF Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart O, or (iii)
any other domestic clearing agency registered with the Securities
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and Exchange Commission under Section 17A of the Securities Exchange Act of 1934
which acts as a securities depository and whose use the Fund has previously
approved in writing (each of the foregoing being referred to in this Agreement
as a "Securities System"). Utilization of a Securities System shall be in
accordance with applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and subject to the following
provisions:
(1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian
(provided that any such Agent shall be qualified to act as a
custodian of the Fund pursuant to the Investment Company Act of 1940
and the rules and regulations thereunder), in a Securities System
provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System
which shall not include any assets of the Custodian or Agent other
than assets held as a fiduciary, custodian, or otherwise for
customers;
(2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund;
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(3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The Custodian
shall transfer securities sold for the account of the Fund upon (i)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the making
of an entry on the records of the Custodian to reflect such transfer
and payment for the account of the Fund. Copies of all advices from
the Securities System of transfers of securities for the account of
the Fund shall identify the Fund, be maintained for the Fund by the
Custodian or an Agent as referred to above, and be provided to the
Fund at its request. The Custodian shall furnish the Fund
confirmation of each transfer to or from the account of the Fund in
the form of a written advice or notice and shall furnish to the Fund
copies of daily transaction sheets reflecting
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each day's transactions in the Securities System for the account of
the Fund on the next business day;
(4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities
System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the Securities
System; and the Custodian and such Agents shall send to the Fund
such reports on their own systems of internal accounting control as
the Fund may reasonably request from time to time.
(5) At the written request of the Fund, the Custodian will terminate the
use of any such Securities System on behalf of the Fund as promptly
as practicable.
W. Other Transfers - To deliver securities, funds and other property of
the Fund to a Subcustodian or another custodian of the Fund; and, upon receipt
of proper instructions, to make such other disposition of securities, funds or
other property of the Fund in a manner other than or for purposes other than as
enumerated elsewhere in this Agreement, provided that the instructions relating
to such disposition shall include a statement of the purpose for which the
delivery is to be made, the amount of
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securities to be delivered and the name of the person or persons to whom
delivery is to be made.
X. Investment Limitations - In performing its duties generally, and more
particularly in connection with the purchase, sale and exchange of securities
made by or for the Fund, the Custodian may assume unless and until notified in
writing to the contrary that proper instructions received by it are not in
conflict with or in any way contrary to any provisions of the Fund's Certificate
of Incorporation or By-Laws (or comparable documents) or votes or proceedings of
the shareholders or Directors of the Fund. The Custodian shall in no event be
liable to the Fund and shall be indemnified by the Fund for any violation of any
investment limitations to which the Fund is subject or other limitations with
respect to the Fund's powers to make expenditures, encumber securities, borrow
or take similar actions affecting its portfolio.
Y. Proper Instructions - Proper instructions shall mean a tested telex
from the Fund or a written request, direction, instruction or certification
signed or initialled on behalf of the Fund by one or more person or persons as
the Board of Directors of the Fund shall have from time to time authorized,
provided, however, that no such instructions directing the delivery of
securities or the payment of funds to an authorized signatory of the Fund shall
be signed by such person. Those persons authorized to give proper instructions
may be identified by the Board of
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Directors by name, title or position and will include at least one officer
empowered by the Board to name other individuals who are authorized to give
proper instructions on behalf of the Fund. Telephonic or other oral
instructions given by any one of the above persons will be considered proper
instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. Oral instructions will be confirmed by tested telex or in writing in
the manner set forth above but the lack of such confirmation shall in no way
affect any action taken by the Custodian in reliance upon such oral
instructions. Proper instructions may relate to specific transactions or to
types or classes of transactions, and may be in the form of standing
instructions.
Proper instructions may include communications effected directly between
electro-mechanical or electronic devices or systems, in addition to tested
telex, provided that the Fund and the Custodian agree in writing to the use of
such device or system.
Z. Segregated Account - The Custodian shall upon receipt of Proper
Instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Custodian pursuant to Section 2V hereof, (i) in accordance with
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the provisions of any agreement among the Fund, the Custodian and a
broker-dealer registered under the Securities Exchange Act of 1934 and a member
of the National Association of Securities Dealers, Inc. (or 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 any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Fund, (ii) for purposes of segregating cash or securities in
connection with options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the Fund, (iii) for
the purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies, and (iv) as mutually
agreed from time to time between the Fund and the Custodian.
3. Securities, funds and other property of the Fund may be held by
subcustodians appointed pursuant to the provisions of this Section 3 (a
"Subcustodian"). The Custodian may, at any time and from time to time, appoint
any bank or trust company (meeting the requirements of a custodian or a foreign
custodian under the Investment Company Act of 1940 and the rules and regulations
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thereunder) to act as a Subcustodian for the Fund, provided that the Fund shall
have approved in writing (1) any such bank or trust company and the subcustodian
agreement to be entered into between such bank or trust company and the
Custodian, and (2) the Subcustodian's offices or branches at which the
Subcustodian is authorized to hold securities, cash and other property of the
Fund. Upon such approval by the Fund, the Custodian is authorized on behalf of
the Fund to notify each Subcustodian of its appointment as such. The Custodian
may, at any time in its discretion, remove any bank or trust company that has
been appointed as a Subcustodian.
Those Subcustodians, their offices or branches which the Fund has approved
to date are set forth on Appendix A hereto. Such Appendix shall be amended from
time to time as Subcustodians, branches or offices are changed, added or
deleted. The Fund shall be responsible for informing the Custodian sufficiently
in advance of a proposed investment which is to be held at a location not listed
on Appendix A, in order that there shall be sufficient time for the Fund to give
the approval required by the preceding paragraph and for the Custodian to put
the appropriate arrangements in place with such Subcustodian pursuant to such
subcustodian agreement.
If the Fund shall have invested in a security to be held in a location
before the foregoing procedures have been completed, such security shall be held
by such agent as the Custodian may appoint
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unless and until the Fund shall instruct the Custodian to move the security into
the possessions of the Custodian or a Subcustodian. In any event, the Custodian
shall be liable to the Fund for the actions of such agent if and only to the
extent the Custodian shall have recovered from such agent for any damages caused
the Fund by such agent.
With respect to the securities and funds held by a Subcustodian, either
directly or indirectly, including demand and interest bearing deposits,
currencies or other deposits and foreign exchange contracts as referred to in
Sections 2M, 2N or 20, the Custodian shall be liable to the Fund if and only to
the extent that such Subcustodian is liable to the Custodian and the Custodian
recovers under the applicable subcustodian agreement. The Custodian shall
nevertheless be liable to the Fund for its own negligence in transmitting any
instructions received by it from the Fund and for its own negligence in
connection with the delivery of any securities or funds held by it to any such
Subcustodian.
In the event that any Subcustodian appointed pursuant to the provisions of
this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall
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forthwith upon the Fund's request terminate such Subcustodian and, if necessary
or desirable, appoint another subcustodian in accordance with the provisions of
this Section 3. At the election of the Fund, it shall have the right to enforce,
to the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
At the written request of the Fund, the Custodian will terminate any
Subcustodian appointed pursuant to the provisions of this Section 3 in
accordance with the termination provisions under the applicable subcustodian
agreement. The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
In the event the Custodian intends to make any payment to a Subcustodian
under the indemnification provisions of any subcustodian agreement, the
Custodian shall give the Fund written notice of such intention no less than
thirty (30) days prior to the date such payment is to be made. The Fund shall be
obligated promptly to reimburse the Custodian the amount of such payment, unless
the Fund shall, within thirty (30) days of receipt of the Custodian's notice,
object in writing to such payment to the Subcustodian or to reimbursement of the
Custodian (i) because the fund disputes the right of the Subcustodian to be so
indemnified or (ii) because the Fund believes that the Custodian was or might
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have been responsible by reason of the Custodian's negligence or misconduct for
the event or occurance giving rise to the Subcustodian's demand for
indemnification. In the event the Fund, at the direction of its Board of
Directors or any Executive Committee thereof, shall give written notice of such
objection and the reasons therefor, the Custodian may nevertheless make such
payment to the Subcustodian, but without prejudice to the Fund's right to refuse
to reimburse the Custodian if the Fund's objection under clause (i) or (ii)
above shall be upheld in an appropriate judicial or other proceeding; or in the
alternative, the Custodian may refuse to pay the indemnification demanded by the
Subcustodian and the Custodian shall in such event defend against any judicial
or other proceeding brought against the Custodian by the Subcustodian to obtain
such indemnification. Such defense shall be conducted by counsel reasonably
satisfactory to both the Fund and the Custodian. The Fund shall be entitled to
participate in any such proceeding with separate counsel of its own choice if it
believes its position might otherwise be compromised and, if the Fund or the
Custodian believes there may be a conflict in the respective positions of the
Fund and the Custodian, then each may retain separate counsel of its own choice.
The Fund shall bear the costs and expenses of defending against the
Subcustodian's claim, and the Fund shall indemnify the Custodian and hold it
harmless from all claims, liabilities, judgments, costs and expenses (including
counsel fees) and settlements of such claim
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(provided that such settlement shall have been effected with the Fund's written
consent) incurred or assesssed against the Custodian. Notwithstanding the
foregoing, if it shall be determined in an appropriate proceeding, including in
a proceeding as aforesaid brought by the Subcustodian, that, although the
Subcustodian was entitled to indemnification the Custodian was not entitled to
reimbursement by the Fund because the Custodian was responsible by reason of its
negligence or misconduct for the occurance or event giving rise to the
Subcustodian's right to indemnification, then in such event the Fund shall not
be obligated to indemnify the Custodian as aforesaid and the Custodian shall
reimburse the Fund for any amounts paid by the Fund to Custodian in respect of
the costs and expenses of defending against the Subcustodian's claim.
4. The Custodian may assist generally in the preparation of reports to
Fund shareholders, regulatory authorities and others, audits of accounts, and
other ministerial matters of like nature.
5. The Fund hereby also appoints the Custodian as its financial agent.
With respect to the appointment as financial agent, the Custodian shall have and
perform the following powers and duties:
A. Records - To create, maintain and retain such records relating to its
activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and
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Rules 31a-l and 31a-2 thereunder) and under applicable Federal and State tax
laws and administrative regulations. All such records will be the property of
the Fund and in the event of termination of this Agreement shall be delivered to
the successor custodian.
B. Accounts - To keep books of account and render statements, including
interim monthly and complete quarterly financial statements, or copies thereof,
from time to time as reasonably requested by proper instructions.
C. Access to Records - Subject to security requirements of the Custodian
applicable to its own employees having access to similar records within the
Custodian and such regulations as may be reasonably imposed by the Custodian,
the books and records maintained by the Custodian pursuant to Sections 5A and 5B
shall be open to inspection and audit at reasonable times by officers of,
attorneys for, and auditors employed by, the Fund.
D. Calculation of Net Asset Value - To compute and determine the net asset
value per share of capital stock of the Fund as of the close of business on the
New York Stock Exchange on each day on which such Exchange is open, unless
otherwise directed by proper instructions. Such computation and determination
shall be made in accordance with (1) the provisions of the Fund's Certificate of
Incorporation or By-Laws of the Fund, as they may from time to time be amended
and delivered to the Custodian, (2) the votes of the Board of Directors of the
Fund at the time in force and applicable, as they may from time to time be
delivered
- 24 -
to the Custodian, and (3) proper instructions from such officers of the Fund or
other persons as are from time to time authorized by the Board of Directors of
the Fund to give instructions with respect to computation and determination of
the net asset value. On each day that the Custodian shall compute the net asset
value per share of the Fund, the Custodian shall provide the Fund with written
reports which permit the Fund to verify that portfolio transactions have been
recorded in accordance with the Fund's instructions.
In computing the net asset value, the Custodian may rely upon any
information furnished by proper instructions, including without limitation any
information (1) as to accrual of liabilities of the Fund and as to liabilities
of the Fund not appearing on the books of account kept by the custodian, (2) as
to the existence, status and proper treatment of reserves, if any, authorized by
the fund, (3) as to the sources of quotations to be used in computing the net
asset value, including those listed in Appendix B, (4) as to the fair value to
be assigned to any securities or other property for which price quotations are
not readily available, and (5) as to the sources of information with respect to
"corporate actions" affecting portfolio securities of the fund, including those
listed in Appendix B. (Information as to "corporate actions" shall include
information as to dividends, distributions, stock splits, stock dividends,
rights offerings, conversions, exchanges, recapitalizations, mergers,
redemptions,
- 25 -
calls, maturity dates and similar transactions, including the ex- and record
dates and the amounts or other terms thereof.)
In like manner, the Custodian shall compute and determine the net asset
value as of such other times as the Board of Directors of the Fund from time to
time may reasonably request.
Notwithstanding any other provisions of this Agreement, including Section
6C, the following provisions shall apply with respect to the Custodian's
foregoing responsibilities in this Section 5D: The Custodian shall be held to
the exercise of reasonable care in computing and determining net asset value as
provided in this Section 5D, but shall not be held accountable or liable for any
losses, damages or expenses the Fund or any shareholder or former shareholder of
the Fund may suffer or incur arising from or based upon errors or delays in the
determination of such net asset value unless such error or delay was due to the
Custodian's negligence, gross negligence or reckless or willful misconduct in
determination of such net asset value. (The parties hereto acknowledge, however,
that the Custodian's causing an error or delay in the determination of net asset
value may, but does not in and of itself, constitute negligence, gross
negligence or reckless or willful misconduct.) In no event shall the Custodian
be liable or responsible to the Fund, any present or former shareholder of the
fund or any other party for any error or delay which continued or was undetected
after the date of an audit performed by the certified public accountants
employed by the Fund
- 26 -
if, in the exercise of reasonable care in accordance with generally accepted
accounting standards, such accountants should have become aware of such error or
delay in the course of performing such audit. The Custodian's liability for any
such negligence, gross negligence or reckless or willful misconduct which
results in an error in determination of such net asset value shall be limited to
the direct, out-of-pocket loss the Fund, shareholder or former shareholder shall
actually incur, measured by the difference between the actual and the
erroneously computed net asset value, and any expenses the fund shall incur in
connection with correcting the records of the Fund affected by such error
(including charges made by the Fund's registrar and transfer agent for making
such corrections) or communicating with shareholders or former shareholders of
the Fund affected by such error.
Without limiting the foregoing, the Custodian shall not be held
accountable or liable to the Fund, any shareholder or former shareholder thereof
or any other person for any delays or losses, damages or expenses any of them
may suffer or incur resulting from (1) the Custodian's failure to receive timely
and suitable notification concerning quotations or corporate actions relating to
or affecting portfolio securities of the fund or (2) any errors in the
computation of the net asset value based upon or arising out of quotations or
information as to corporate actions if received by the Custodian either (i) from
a source which the
- 27 -
Custodian was authorized pursuant to the second paragraph of this Section 5D to
rely upon, or (ii) from a source which in the Custodian's reasonable judgment
was as reliable a source for such quotations or information as the sources
authorized pursuant to that paragraph. Nevertheless, the Custodian will use its
best judgment in determining whether to verify through other sources any
information it has received as to quotations or corporate actions if the
Custodian has reason to believe that any such information might be incorrect.
In the event of any error or delay in the determination of such net asset
value for which the Custodian may be liable, the Fund and the Custodian will
consult and make good faith efforts to reach agreement on what actions should be
taken in order to mitigate any loss suffered by the Fund or its present or
former shareholders, in order that the custodian's exposure to liability shall
be reduced to the extent possible after taking into account all relevant factors
and alternatives. Such actions might include the Fund or the custodian taking
reasonable steps to collect from any shareholder or former shareholder who has
received any overpayment upon redemption of shares such overpaid amount or to
collect from any shareholder who has underpaid upon a purchase of shares the
amount of such underpayment or to reduce the number of shares issued to such
shareholder. It is understood that in attempting to reach agreement on the
actions to be taken or the amount of the loss which should appropriately be
borne by the
- 28 -
Custodian, the Fund and the Custodian will consider such relevant factors as the
amount of the loss involved, the Fund's desire to avoid loss of shareholder good
will, the fact that other persons or entitles could have been reasonably
expected to have detected the error sooner than the time it was actually
discovered, the appropriateness of limiting or eliminating the benefit which
shareholders or former shareholders might have obtained by reason of the error,
and the possibility that other parties providing services to the fund might be
induced to absorb a portion of the loss incurred.
E. Disbursements - Upon receipt of proper instructions, to pay or cause to
be paid, insofar as funds are avilable for the purpose, bills, statements and
other obligations of the Fund (including but not limited to interest charges,
taxes, advisory fees, compensation to Fund officers and employees, and other
operating expenses of the Fund).
6. A. The Custodian shall not be liable for any action taken or omitted in
reliance upon proper instructions reasonably believed by it to be genuine or
upon any other written notice, request, direction, instruction, certificate or
other instrument believed by it to be genuine and signed by the proper party or
parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or
- 29 -
any other such notice, request, direction, instructions, certificate or
instrument on behalf of the Fund, the names and signatures of the officers of
the Fund, the name and address of the Shareholder Servicing Agent, and any
resolutions, votes, instructions or directions of the Fund's Board of Directors
or shareholders. Such certificate may be accepted and relied upon by the
Custodian as conclusive evidence of the facts set forth therein and may be
considered in full force and effect until receipt of a similar certificate to
the contrary.
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive
and act upon advice of counsel (who may be counsel for the Fund) on all matters,
and the Custodian shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
B. With respect to the portfolio securities, cash and other property of
the Fund held by a Securities System, the Custodian shall be liable to the Fund
for any loss or damage to the Fund resulting from use of the Securities System
if caused by any negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees or from any failure
- 30 -
of the Custodian or any such agent to enforce effectively such rights as it may
have against the Securities System. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to any
claim against the Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the extent that the
Fund has not been made whole for any such loss or damage. The Custodian shall be
subject to the same responsibility with respect to all securities of the Fund,
and all cash, stock dividends, rights and items of like nature to which the Fund
is entitlted, held or received by such Securities System, as if the same where
held or received by the Custodian at its own office.
C. Except as may otherwise be set forth in this Agreement with respect to
particular matters, the Custodian shall be held only to the exercise of
reasonable care and diligence in carrying out the provisions of this Agreement,
provided that the Custodian shall not thereby be required to take any action
which is in contravention of any applicable law. The Fund agrees to indemnify
and hold harmless the Custodian and its nominees from all claims and liabilities
(including counsel fees) incurred or assessed against it or its nominees in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's breach of the relevant standard of conduct set forth in
this Agreement. Without limiting the foregoing indemnification obligation of the
Fund, the Fund agrees to indemnify the Custodian
- 31 -
and its nominees against any liability the Custodian or such nominee may incur
by reason of taxes assessed to the Custodian or such nominee or other costs,
liability or expense incurred by the Custodian or such nominee resulting
directly or indirectly from the fact that portfolio securities or other property
of the Fund are registered in the name of the Custodian or such nominee.
It is also understood that the Custodian shall not be liable for any loss
involving any securities, currencies, deposits or other property of the Fund,
whether maintained by it, a Subcustodian, an agent of the Custodian or a
Subcustodian, a Securities System or a Banking Institution, or a loss arising
from a foreign currency transaction or contract, resulting from a Sovereign
Risk. A "Sovereign Risk" shall mean nationalization, expropriation, devaluation,
revaluation, confiscation, seizure, cancellation, destruction or similar action
by any governmental authority, de facto or de jure; or enactment, promulgation,
imposition or enforcement by any such governmental authority of currency
restrictions, exchange controls, taxes, levies or other charges affecting the
Fund's property; or acts of war, terrorism, insurrection or revolution; or any
other similar act or event beyond the Custodian's control.
D. The Custodian shall be entitled to receive reimbursement from the Fund
on demand, in the manner provided in Section 7, for its cash disbursements,
expenses and charges (including the fees and expenses of any Subcustodian or any
Agent) in connection with
- 32 -
this Agreement, but excluding salaries and usual overhead expenses
E. The Custodian may at any time or times in its discretion appoint (and
may at any time remove) any other bank or trust company as its agent (an
"Agent") to carry out such of the provisions of this Agreement as the Custodian
may from time to time direct, provided, however, that the appointment of such
Agent (other than an Agent appointed pursuant to the third paragraph of Section
3) shall not relieve the Custodian of any of its responsibilities under this
Agreement.
F. Upon request, the Fund shall deliver to the Custodian such proxies,
power of attorney or other instruments as may be reasonable and necessary or
desirable in connection with the performance by the Custodian or any
Subcustodian of their respective obligations under this Agreement or any
applicable subcustodian agreement.
7. The Fund shall pay the Custodian a custody fee based on such fee
schedule as may from time to time be agreed upon in writing by the Custodian and
the Fund. Such fee, together with all amounts for which the Custodian is to be
reimbursed in accordance with Section 6D, shall be billed to the Fund in such a
manner as to permit payment either by a direct cash payment to the Custodian or
by placing Fund portfolio transactions with the Custodian resulting in an
agreed-upon amount of commissions being paid to the Custodian within an
agreed-upon period of time.
- 33 -
8. This Agreement shall continue in full force and effect until terminated
by either party by an instrument in writing delivered or mailed, postage
prepaid, to the other party, such termination to take effect not sooner than
sixty (60) days after the date of such delivery or mailing. In the event of
termination the Custodian shall be entitled to receive prior to delivery of the
securities, funds and other property held by it all accrued fees and
unreimbursed expenses the payment of which is contemplated by Sections 6D and 7,
upon receipt by the Fund of a statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed
that the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
9. This Agreement constitutes the entire understanding and agreement of
the parties hereto with respect to the subject matter hereof. No provision of
this Agreement may be amended or terminated except by a statement in writing
signed by the party against which enforcement of the amendment or termination is
sought.
In connection with the operation of this Agreement, the Custodian and the
Fund may agree in writing from time to time on
- 34 -
such provisions interpretative of or in addition to the provisions of this
Agreement as may in their joint opinion be consistent with the general tenor of
this Agreement. No interpretative or additional provisions made as provided in
the preceding sentence shall be deemed to be an amendment of this Agreement.
10. This instrument is executed and delivered in The Commonwealth of
Massachusetts and shall be governed by and construed according to the laws of
said Commonwealth.
11. Notices and other writings delivered or mailed postage prepaid to the
fund addressed to the Fund at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or
to such other address as the Fund may have designated to the Custodian in
writing, or to the Custodian at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Manager, Securities Department, or to such other address as the
Custodian may have designated to the Fund in writing, shall be deemed to have
been properly delivered or given hereunder to the respective addressee.
12. This Agreement shall be binding on and shall inure to the benefit of
the Fund and the Custodian and their respective successors and assigns, provided
that neither party hereto may assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of the other party.
13. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original. This Agreement shall become effective when
one or more counterparts have been signed and delivered by each of the parties.
- 35 -
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
XXXXXXX LATIN AMERICA FUND XXXXX BROTHERS XXXXXXXX & CO.
By /s/ Xxxxx X. Xxx per pro /s/ [illegible]
-------------------------- --------------------------
- 36 -
XXXXX BROTHERS XXXXXXXX & CO - GLOBAL CUSTODY NETWORK
XXXXXXX LATIN AMERICA FUND
APPENDIX A
CENTRAL
COUNTRY SUBCUSTODIAN DEPOSITORY
------- ------------ ----------
ARGENTINA CITIBANK N A, BUENOS AIRES AGMT 07/16/81* CDV
BRAZIL THE FIRST NATIONAL BANK OF BOSTON NONE
XXX XX XXXXXXX XXX XXX XXXXX XXXX 00/0/00
XXXXX CITIBANK N A, SANTIAGO AGMT 07/16/81* NONE
MEXICO CITIBANK N A, MEXICO CITY AGMT 07/16/81* INDEVAL
TRANSNATIONAL XXXXX BROTHERS XXXXXXXX & CO EUROCEAR
CEDEL
URUGUAY CITIBANK N A, MONTEVIDEO AGMT 07/16/81* NONE
VENEZUELA CITIBANK N A, CARACAS AGMT 07/16/81* NONE
* CITIBANK N A AGREEMENT AMENDMENT DATED 8/31/90
I HEREBY CERTIFY THAT AT ITS MEETING ON SEPTEMBER 17, 1992 THE BOARD APPROVED
THE COUNTRIES, SUBCUSTODIANS, AGREEMENTS, AND CENTRAL DEPOSITORIES LISTED ON
THIS APPENDIX.
/s/ Xxxxx X. Xxx November 25, 1992
--------------------------- ----------------------------
(SIGNATURE) (DATE)
Vice President
---------------------------
(TITLE)
APPENDIX B
XXXXXXX LATIN AMERICA FUND
--------------------------
THE FOLLOWING AUTHORIZED SOURCES ARE TO BE USED FOR PRICING AND FOREIGN EXCHANGE
QUOTATIONS, CORPORATE ACTIONS, DIVIDENDS AND RIGHTS OFFERINGS.
AUTHORIZED SOURCES
------------------
QUOTRON
REUTERS
INTERACTIVE DATA CORPORATION
VALORINOFORM (GENEVA)
TELEKURS
SUBSCRIPTION BANKS
FUND MANAGERS
EXTEL (LONDON)
REPUTABLE FOREIGN BROKERS
APPROVED: /s/ Xxxxx X. Xxx 11/25/92
----------------------------------
DATE
