INVESTORS
--------------------------------------------------------------------------------
BANK & TRUST
Xxxxxxx Xxxxxx
Xxxxxxxx Advisors
00000 XX 00xx Xxxxxx
Xxxxx, XX 00000
Re: The Custodian Contract (as amended, the "Custodian Contract")
between Investors Bank & Trust Company ("CuIstodian) and The
Xxxxxxxx Caribbean Basin Fund, Inc. (the Client")
Dear Xxxxxxx:
As you know, Rule 17f-4 under the Investment Company Act of 1940 ("Rule
17f-4") has been amended, and such amendments will become effective on March 28,
2003. In order for you to be in compliance with amended Rule 17f-4, we agree to
the terms and conditions below effective March 28, 2003.
In addition to any other duties of the Custodian set forth in the
Custodian Contract, the Custodian agrees that, in connection with placing and
maintaining financial assets, corresponding to the Trust's security
entitlements, with a securities depository or intermediary custodian:
1. The Custodian will, at a minimum, exercise due care in accordance
with reasonable commercial standards in discharging its duty as a
securities intermediary to obtain and thereafter maintain such
financial assets;
2. The Custodian shall provide, promptly upon request by the Client,
such reports as are generally made available to its clients
concerning the internal accounting controls and financial strength
of the Custodian; and
3. The Custodian shall use its best efforts to require any intermediary
custodian at a minimum to exercise due care in accordance with
reasonable commercial standards in discharging its duty as a
securities intermediary to obtain and thereafter maintain financial
assets corresponding to the security entitlements of its entitlement
holders.
Except as set forth in the preceding paragraphs, the terms and provisions
of the Custodian Contract shall remain in full force and effect. Please note
that this letter shall be governed by and construed in accordance with the laws
of the same jurisdiction named in the Custodian Contract, if any. Terms not
defined herein have the meanings set forth in Rule l7f-4.
Very truly yours,
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000. (000) 000-0000.
xxx.xxxxx.xxx
CUSTODIAN AGREEMENT
Between
THE XXXXXXXX CARIBBEAN BASIN FUND, INC.
and
INVESTORS BANK & TRUST COMPANY
TABLE OF CONTENTS
Page
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1. Bank Appointed Custodian 1
2. Definitions 1
2.1 Authorized Person 1
2.2 Security 1
2.3 Portfolio Security 1
2.4 Officers' Certificate 1
2.5 Book-Entry System 2
2.6 Depository 2
2.7 Proper Instructions 2
2.8 Foreign Securities 2
2.9 Eligible Foreign Custodian 2
3. Separate Accounts 2
4. Certification as to Authorized Persons 2
5. Custody of Cash 3
5.1 Purchase of Securities 3
5.2 Distributions and Expenses of Fund 3
5.3 Payment in Respect of Securities 3
5.4 Repayment of Loans 3
5.5 Repayment of Cash 3
5.6 Foreign Exchange Transactions 3
5.7 Other Authorized Payments 4
5.8 Termination 4
6. Securities 4
6.1 Segregation and Registration 4
6.2 Voting and Proxies 4
6.3 Book-Entry System 5
6.4 Use of a Depository 6
6.5 Use of a Book-Entry System for Commercial Paper 7
6.6 Use of Immobilization Programs 8
6.7 Eurodollar CDs 8
Page
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6.8 Options and Future Transactions
(a) Puts and Calls Traded on Securities Exchanges,
NASDAQ or Over-the-Counter 8
(b) Puts, Calls and Futures Traded on Commodities
Exchanges 9
6.9 Segregated Account 9
6.10 Interest Bearing Call or Time Deposits 11
6.11 Transfer of Securities 11
7. Merger, Dissolution, etc. of Fund 13
8. Actions of Bank Without Prior Authorization 13
9. Collection, Defaults 14
10. Maintenance of Records; Accounting Services 14
11. Fund Evaluation 14
12. Concerning the Bank 15
12.1 Performance of Duties; Standard of Care 15
12.2 Agents and Subcustodians 16
12.3 Insurance 16
12.4 Fees and Expenses of Bank 17
12.5 Advances by Bank 17
13. Termination 17
14. Notices 18
15. Amendments 18
16. Parties 19
17. Governing Law 19
18. Use of Name 19
CUSTODIAN AGREEMENT
AGREEMENT made as of this 30th day of December, 1993 between THE XXXXXXXX
CARIBBEAN BASIN FUND, INC. a Maryland corporation (the "Fund") and INVESTORS
BANK & TRUST COMPANY (the "Bank").
The Fund, a closed-end management investment company, desires to place and
maintain all of its portfolio securities and cash in the custody of the Bank.
The Bank has at least the minimum qualifications required by Section 17(f)(l) of
the Investment Company Act of 1940 (the "Act") to act as custodian of the
portfolio securities and cash of the Fund, and has indicated its willingness to
so act, subject to the terms and conditions this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Fund hereby appoints the Bank as
custodian of its portfolio securities and cash delivered to the Bank as
hereinafter described and the Bank agrees to act as such upon the terms and
conditions hereinafter set forth.
2. Definitions. Whenever used herein, the terms listed below will have the
following meaning:
2.1. Authorized Person. Authorized Person will mean any of the
persons duly authorized to give Proper Instructions or otherwise act on behalf
of the Fund by appropriate resolution of its Board of Directors (the `Board"),
and set forth in a certificate as required by Section 4 hereof.
2.2. Security. The term security as used herein will have the same
meaning as when such term is used in the Securities Act of 1933 as amended,
including, without limitation, any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any profit
sharing agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option, or privilege on
any security, certificate of deposit, or group or index of securities (including
any interest therein or based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national securities exchange relating to
a foreign currency, or, in general, any interest or instrument commonly known as
a "security", or any certificate of interest or participation in, temporary or
interim certificate for, receipt for, guarantee of, or warrant or right to
subscribe to, or option contract to purchase or sell any of the foregoing and
futures, forward contracts and options thereon.
2.3. Portfolio Security. Portfolio Security will mean any Security
owned by the Fund.
2.4. Officers' Certificate. Officers' Certificate will mean, unless
otherwise indicated, any request, direction, instruction, or certification in
writing signed by any two Authorized Persons of the Fund.
2.5. Book-Entry System. Book-Entry System shall mean the Federal
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.
2.6. Depository. Depository shall mean any clearing agency
registered with the Securities and Exchange Commission under Section 17A of the
Securities Exchange Act of 1934 which acts as a securities depository, and its
nominee or nominees.
2.7. Proper Instructions. Proper Instructions shall mean (i)
instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized Person,
such instructions to be given in such form and manner as the Bank and the Fund
shall agree upon from time to time, and (ii) instructions (which may be
continuing instructions) regarding other matters signed or initialed by such one
or more Authorized Persons. Oral instructions will be considered Proper
Instructions if the Bank reasonably believes them to have been given by a person
authorized to give such instructions with respect to the transaction involved.
The Fund shall cause all oral instructions to be promptly confirmed in writing.
The Bank shall act upon and comply with any subsequent Proper Instruction which
modifies a prior instruction and the sole obligation of the Bank with respect to
any follow-up or confirmatory instruction shall be to make reasonable efforts to
detect any discrepancy between the original instruction and such confirmation
and to report such discrepancy to the Fund. The Fund shall be responsible, at
the Fund's expense, for taking any action, including any reprocessing, necessary
to correct any such discrepancy or error, and to the extent such action requires
the Bank to act the Fund shall give the Bank specific Proper Instructions as to
the action required. Upon receipt of an Officers' Certificate as to the
authorization by the Board accompanied by a detailed description of procedures
approved by the Fund, Proper Instructions may include communication effected
directly between electro-mechanical or electronic devices provided that the
Board and the Bank are satisfied that such procedures afford adequate safeguards
for the Fund's assets.
2.8. Foreign Securities. Foreign Securities shall have the meaning
ascribed to the term in Rule 17f-5 of the Act.
2.9. Eligible Foreign Custodian. Eligible Foreign Custodian shall
have the meaning ascribed to the term in Rule 17f-5 of the Act.
3. Separate Accounts. If the Fund has more than one series or portfolio,
the Bank will segregate the assets of each series or portfolio to which this
Agreement relates into a separate account for each such series or portfolio
containing the assets of such series or portfolio (and all investment earnings
thereon).
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4. Certification as to Authorized Person. The Secretary or Assistant
Secretary of the Fund will at all times maintain on file with the Bank his
certification to the Bank, in such form as may be acceptable to the Bank, of (i)
the names and signatures of the Authorized Persons and (ii) the names of the
members of the Board, it being understood that upon the occurrence of any change
in the information set forth in the most recent certification on file (including
without limitation any person named in the most recent certification who is no
longer an Authorized Person as designated therein), the Secretary or Assistant
Secretary of the Fund will sign a new or amended certification setting forth the
change and the new, additional or omitted names or signatures. The Bank will be
entitled to rely and act upon any Officers' Certificate or Proper Instructions
given to it by Authorized Persons named in the most recent certification.
5. Custody of Cash. As custodian for the Fund, the Bank will open and
maintain a separate account or accounts in the name of the Fund or in the name
of the Bank, as Custodian of the Fund, and will deposit to the account of the
Fund all of the cash of the Fund, except for cash held by a subcustodian
appointed pursuant to Section 12.2 hereof, including borrowed funds, delivered
to the Bank, subject only to draft or order by the Bank acting pursuant to the
terms of this Agreement. Upon receipt by the Bank of Proper Instructions (which
may be continuing instructions) requesting such payment, designating the payee
or the account or accounts to which the Bank will release funds for deposit, and
stating that it is for a purpose permitted under the terms of this Section 5,
specifying the applicable subsection, or describing such purpose with sufficient
particularity to permit the Bank to ascertain the applicable subsection, the
Bank will make payments of cash held for the accounts of the Fund, insofar as
funds are available for that purpose, only as permitted in subsections 5.1-5.8
below.
5.1. Purchase of Securities. Upon the purchase of Portfolio
Securities for the Fund, against contemporaneous receipt of such Portfolio
Securities by the Bank registered in the name of the Fund or in the name of, or
properly endorsed and in form for transfer to, the Bank, or a nominee of the
Bank, or receipt for the account of the Bank pursuant to the provisions of
Section 6 below, each such payment to be made at the purchase price shown in the
Proper Instructions received by the Bank before such payment is made;
5.2. Distributions and Expenses of Fund. For the payment on the
account of the Fund of dividends or other distributions to shareholders as may
from time to time be declared by the Board, interest, taxes, management or
supervisory fees, fees of the Bank for its services hereunder and reimbursement
of the expenses and liabilities of the Bank as provided hereunder, fees of any
transfer agent, fees for legal, accounting, and auditing services, or other
operating expenses of the Fund;
5.3. Payment in Respect of Securities. For payments in connection
with the conversion, exchange or surrender of Portfolio Securities or Portfolio
Securities subscribed to by the Fund held by or to be delivered to the Bank;
5.4. Repayment of Loans. To repay loans of money made to the Fund,
but, in the case of final payment, only upon redelivery to the Bank of any
Portfolio Securities pledged or hypothecated therefor and upon surrender of
documents evidencing the loan;
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5.5. Repayment of Cash. To repay the cash delivered to the Fund for
the purpose of collateralizing the obligation to return to the Fund certificates
borrowed from the Fund representing Portfolio Securities, but only upon
redelivery to the Bank of such borrowed Portfolio Securities;
5.6. Foreign Exchange Transactions. For payments in connection with
foreign exchange contracts or options to purchase and sell foreign currencies
for spot and future delivery which may be entered into by the Bank on behalf of
the Fund upon the receipt of Proper Instructions, such Proper Instructions to
specify the currency broker or banking institution (which may be the Bank, or
any other subcustodian or agent hereunder, acting as principal) with which the
contract or option is made, and the Bank shall have no duty with respect to the
selection of such currency brokers or banking institutions with which the Fund
deals or for their failure to comply with the terms of any contract or option;
5.7. Other Authorized Payments. For other authorized transactions of
the Fund, or other obligations of the Fund incurred for proper Fund purposes;
provided that before making any such payment the Bank will also receive a
certified copy of a resolution of the Board signed by an Authorized Person
(other than the Person certifying such resolution) and certified by its
Secretary or Assistant Secretary, naming the person or persons to whom such
payment is to be made, and either describing the transaction for which payment
is to be made and declaring it to be an authorized transaction of the Fund, or
specifying the amount of the obligation for which payment is to be made, setting
forth the purpose for which such obligation was incurred and declaring such
purpose to be a proper corporate purpose; and
5.8. Termination. Upon the termination of this Agreement as
hereinafter set forth pursuant to Section 7 and Section 13 of this Agreement.
6. Securities.
6.1. Segregation and Registration. Except as otherwise provided
herein, and except for Portfolio Securities to be delivered to any subcustodian
appointed pursuant to Section 12.2 hereof, the Bank as custodian, will receive
and hold pursuant to the provisions hereof, in a separate account or accounts
and physically segregated at all times from those of other persons, any and all
Portfolio Securities which may now or hereafter be delivered to it by or for the
account of the Fund. All such Portfolio Securities will be held or disposed of
by the Bank for, and subject at all times to, the instructions of the Fund
pursuant to the terms of this Agreement. Subject to the specific provisions
herein relating to Portfolio Securities that are not physically held by the
Bank, the Bank will register all Portfolio Securities (unless otherwise directed
by Proper Instructions or an Officers' Certificate), in the name of a registered
nominee of the Bank as defined in the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder, and will execute and deliver all
such certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state. The Bank will use its best efforts
to the end that the specific Portfolio Securities held by it hereunder will be
at all times identifiable.
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The Fund will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee, any Portfolio Securities which
may from time to time be registered in the name of the Fund.
6.2. Voting and Proxies. Neither the Bank nor any nominee of the
Bank will vote any of the Portfolio Securities held hereunder, except in
accordance with Proper Instructions or an Officers' Certificate. The Bank will
execute and deliver, or cause to be executed and delivered, to the Fund all
notices, proxies and proxy soliciting materials with respect to such Securities,
such proxies to be executed by the registered holder of such Securities (if
registered otherwise than in the name of the Fund), but without indicating the
manner in which such proxies are to be voted.
6.3. Book-Entry System. Provided the Bank has received a certified
copy of a resolution of the Board specifically approving deposits of Fund assets
in the Book-Entry System, and the Bank has not received an Officer's Certificate
indicating that the Board has withdrawn its approval:
(a) The Bank may keep Portfolio Securities in the Book-Entry System
provided that such Portfolio Securities are represented in an account
("Account") of the Bank (or its agent) in such System which shall not
include any assets of the Bank (or such agent) other than assets held as a
fiduciary, custodian, or otherwise for customers.
(b) The records of the Bank (and any such agent) with respect to the
Fund's participation in the Book-Entry System through the Bank (or any
such agent) will identify by book entry Portfolio Securities which are
included with other securities deposited in the Account and shall at all
times during the regular business hours of the Bank (or such agent) be
open for inspection by duly authorized officers, employees or agents of
the Fund. Where Portfolio Securities are transferred to the Fund's
account, the Bank shall also, by book entry or otherwise, identify as
belonging to the Fund a quantity of Portfolio Securities in fungible bulk
of securities (i) registered in the name of the Bank or its nominee, or
(ii) shown on the Bank's account on the books of the Federal Reserve Bank.
(c) The Bank (or its agent) shall pay for Portfolio Securities
purchased for the account of the Fund or shall pay cash collateral against
the return of Portfolio Securities loaned by the Fund upon (i) receipt of
advice from the Book-Entry System that such Securities have been
transferred to the Account, and (ii) the making of an entry on the records
of the Bank (or its agent) to reflect such payment and transfer for the
account of the Fund. The Bank (or its agent) shall transfer Portfolio
Securities sold or loaned for the account of the Fund upon
(i) receipt of advice from the Book-Entry System that payment
for Portfolio Securities sold or payment of the initial cash collateral
against the delivery of Portfolio Securities loaned by the Fund has been
transferred to the Account, and
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(ii) the making of an entry on the records of the Bank (or its
agent) to reflect such transfer and payment for the account of the Fund.
Copies of all advices from the Book-Entry System of transfers of Portfolio
Securities for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Bank and shall be provided to the Fund at
its request. The Bank shall send the Fund a confirmation, as defined by
Rule 17f-4 of the Act, of any transfers to or from the account of the
Fund.
(d) The Bank will promptly provide the Fund with any report obtained
by the Bank or its agent on the Book-Entry System's accounting system,
internal accounting control and procedures for safeguarding Portfolio
Securities deposited in the Book-Entry System.
(e) The Bank shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Book-Entry System by reason of any
gross negligence, willful misfeasance or bad faith of the Bank or any of
its agents or of any of its or their employees or from any reckless
disregard by the Bank or any such agent of its duty to use its best
efforts to enforce such rights as it may have against the Book-Entry
System; at the election of the Fund, it shall be entitled to be subrogated
for the Bank in any claim against the Book-Entry System or any other
person which the Bank or its agent 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 loss or damage.
6.4. Use of a Depository. Provided the Bank has received a certified
copy of a resolution o the Board specifically approving deposits in a Depository
and the Bank has not received an Officer's Certificate indicating that the Board
has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive, exchange,
release, lend, deliver and otherwise deal with Portfolio Securities
including stock dividends, rights and other items of like nature, and to
receive and remit to the Bank on behalf of the Fund all income and other
payments thereon and to take all steps necessary and proper in connection
with the collection thereof.
(b) Registration of Portfolio Securities may be made in the name of
any nominee or nominees used by such Depository.
(c) Payment for Portfolio Securities purchased and sold may be made
through the clearing medium employed by such Depository for transactions
of participants acting through it. Upon any purchase of Portfolio
Securities, payment will be made only upon delivery of the Portfolio
Securities to or for the account of the Fund and the Fund shall pay cash
collateral against the return of Portfolio Securities loaned by the Fund
only upon delivery of the Securities to or for the account of the Fund;
and upon any sale of Portfolio Securities, delivery of the Securities will
be made only against payment thereof or, in the event Portfolio Securities
are loaned, delivery of Securities will be made only against receipt of
the initial cash collateral to or for the account of the Fund.
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(d) The Bank shall be liable to the Fund for any loss or damage to
the Fund resulting from use of a Depository by reason of any gross
negligence, wilful misfeasance or bad faith of the Bank or its employees
or from any reckless disregard by the Bank of its duty to use its best
efforts to enforce such rights as it may have against a Depository. In
this connection, the Bank shall use its best efforts to ensure that:
(i) The Depository obtains replacement of any certificated
Portfolio Security deposited with it in the event such Security is
lost, destroyed, wrongfully taken or otherwise not available to be
returned to the Bank upon its request;
(ii) Any proxy materials received by a Depository with respect
to Portfolio Securities deposited with such Depository are forwarded
immediately to the Bank for prompt transmittal to the Fund;
(iii) Such Depository immediately forwards to the Bank
confirmation of any purchase or sale of Portfolio Securities and of
the appropriate book entry made by such Depository to the Fund's
account;
(iv) Such Depository prepares and delivers to the Bank such
records with respect to the performance of the Bank's obligations
and duties hereunder as may be necessary for the Fund to comply with
the recordkeeping requirements of Section 31(a) of the Act and Rule
31a thereunder; and
(v) Such Depository delivers to the Bank and the Fund all
internal accounting control reports, whether or not audited by an
independent public accountant, as well as such other reports as the
Fund may reasonably request in order to verify the Portfolio
Securities held by such Depository.
6.5. Use of Book-Entry System for Commercial Paper. Provided the
Bank has received a certified copy of a resolution of the Board specifically
approving participation in a system maintained by the Bank for the holding of
commercial paper in book-entry form ("Book Entry Paper") and the Bank has not
received an Officer's Certificate withdrawing such approval, upon receipt of
Proper Instructions and upon receipt of confirmation from an Issuer (as defined
below) that the Fund has purchased such Issuer's Book Entry Paper, the Bank
shall issue and hold in book-entry form, on behalf of the Fund, commercial paper
issued by issuers with whom the Bank has entered into a book-entry agreement
(the "Issuers"). In maintaining its Book Entry Paper System, the Bank agrees
that:
(a) the Bank will maintain all Book Entry Paper held by the Fund in
an account of the Bank that includes only assets held by it for customers;
(b) the records of the Bank with respect to the Fund's purchase of
Book Entry Paper through the Bank will identify, by book entry, Commercial
Paper belonging to the Fund which is included in the Book Entry Paper
System and shall at all times during the regular business hours of the
Bank be open for inspection by duly authorized officers, employees or
agents of the Fund.
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(c) The Bank shall pay for Book Entry Paper purchased for the
account of the Fund upon contemporaneous (i) receipt of advice from the
Issuer that such sale of Book Entry Paper has been effected, and (ii) the
making of an entry on the records of the Bank to reflect such payment and
transfer for the account of the Fund.
(d) The Bank shall cancel such Book Entry Paper obligation upon the
maturity thereof upon contemporaneous (i) receipt of advice that payment
for such Book Entry Paper has been transferred to the Fund, and (ii) the
making of an entry on the records of the Bank to reflect such payment for
the account of the Fund.
(e) the Bank shall transmit to the Fund a transaction journal
confirming each transaction in Book Entry Paper for the account of the
Fund on the next business day following the transaction; and
(f) the Bank will send to the Fund such reports on its system of
internal accounting control with respect to the Book Entry Paper System as
the Fund may reasonably request from time to time.
6.6. Use of Immobilization Programs. Provided the Bank has received
a certified copy of a resolution of the Board specifically approving the
maintenance of Portfolio Securities in an immobilization program operated by a
bank which meets the requirements of Section 26(a)(1) of the Act, and the Bank
has not received an Officer's Certificate indicating that the Board has
withdrawn its approval, the Bank shall enter into such immobilization program
with such bank acting as a subcustodian hereunder.
6.7. Eurodollar CDs. Any Portfolio Securities which are Eurodollar
CDs may be physically held by the European branch of the U.S. banking
institution that is the issuer of such Eurodollar CD (a "European Branch"),
provided that such Securities are identified on the books of the Bank as
belonging to the Fund and that the books of the Bank identify the European
Branch holding such Securities. Notwithstanding any other provision of this
Agreement to the contrary, except as stated in the first sentence of this
subsection 6.7, the Bank shall be under no other duty with respect to such
Eurodollar CDs belonging to the Fund, and shall have no liability to the Fund or
its shareholders with respect to the actions, inactions, whether negligent or
otherwise of such European Branch in connection with such Eurodollar CDs, except
for any loss or damage to the Fund resulting from the Bank's own gross
negligence, wilful misfeasance or bad faith in the performance of its duties
hereunder.
6.8. Options and Futures Transactions.
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ or
Over-the-Counter.
1. The Bank shall take action as to put options ("puts") and
call options ("calls") purchased or sold (written) by the Fund
regarding escrow or other arrangements in accordance with the
provisions of any agreement entered into upon receipt of Proper
Instructions between the Bank, any broker-dealer registered under
8
the Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. (the "NASD"), and, if
necessary, the Fund relating to the compliance with the rules of the
Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations.
2. Unless another agreement requires it to do so, the Bank
shall be under no duty or obligation to see that the Fund has
deposited or is maintaining adequate margin, if required, with any
broker in connection with any option, nor shall the Bank be under
duty or obligation to present such option to the broker for exercise
unless it receives Proper Instructions from the Fund. The Bank shall
have no responsibility for the legality of any put or call purchased
or sold on behalf of the Fund, the propriety of any such purchase or
sale, or the adequacy of any collateral delivered to a broker in
connection with an option or deposited to or withdrawn from a
Segregated Account (as defined in subsection 6.9 below). The Bank
specifically, but not by way of limitation, shall not be under any
duty or obligation to: (i) periodically check or notify the Fund
that the amount of such collateral held by a broker or held in a
Segregated Account is sufficient to protect such broker of the Fund
against any loss; (ii) effect the return of any collateral delivered
to a broker; or (iii) advise the Fund that any option it holds, has
or is about to expire. Such duties or obligations shall be the sole
responsibility of the Fund.
(b) Puts, Calls and Futures Traded on Commodities Exchanges.
1. The Bank shall take action as to puts, calls and futures
contracts ("Futures") purchased or sold by the Fund in accordance
with the provisions of any agreement among the Fund, the Bank and a
Futures Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Fund.
2. The responsibilities and liabilities of the Bank as to
Futures, puts and calls traded on commodities exchanges, any Futures
Commission Merchant account and the Segregated Account shall be
limited as set forth in subparagraph (a)(2) of this Section 6.8 as
if such subparagraph referred to Futures Commission Merchants rather
than brokers, and Futures and puts and calls thereon instead of
options.
6.9. Segregated Account. The Bank shall upon receipt of Proper
Instructions establish and maintain a Segregated Account or Accounts for and on
behalf of the Fund, into which Account or Accounts may be transferred upon
receipt of Proper Instructions cash and/or Portfolio Securities:
(a) in accordance with the provisions of any agreement among the
Fund, the Bank and a broker-dealer registered under the Exchange Act and a
member of the NASD 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
9
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 Fund;
(b) for the purpose of segregating cash or Portfolio Securities in
connection with options purchased, or written by the Fund or commodity
futures purchased or written by the Fund;
(c) for the deposit of liquid assets, such as cash, U.S. Government
securities or other high grade debt obligations, having a market value
(marked to the market on a daily basis) at all times equal to not less
than the aggregate purchase price due on the settlement dates of all the
Fund's then outstanding forward commitment or "when-issued" agreements
relating to the purchase of Portfolio Securities and all the Fund's then
outstanding commitments under reverse repurchase agreements entered into
with broker-dealer firms;
(d) for the deposit of any Portfolio Securities which the Fund has
agreed to sell on a forward commitment basis, all in accordance with
Investment Company Act Release No. 10666;
(e) 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;
(f) for other proper corporate purposes, but only, in the case of
the clause (f), upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board, or of the Executive Committee
signed by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, setting forth the purpose or purposes of such
Segregated Account and declaring such purposes to be proper corporate
purposes.
(g) Assets may be withdrawn from the Segregated Account pursuant to
Proper Instructions only
(i) in accordance with the provisions of any agreements
referenced in (a) or (b) above;
(ii) for sale or delivery to meet the Fund's obligations under
outstanding firm commitment or when-issued agreements for the
purchase of Portfolio Securities and under reverse repurchase
agreements;
(iii) for exchange for other liquid assets of equal or greater
value deposited in the Segregated Account;
(iv) to the extent that the Fund's outstanding forward
commitment or when-issued agreements for the purchase of portfolio
securities or reverse repurchase agreements are sold to other
parties or the Fund's obligations thereunder are met from assets of
the Fund other than those in the Segregated Account; or
10
(v) for delivery upon settlement of a forward commitment
agreement for the sale of Portfolio Securities.
6.10. Interest Bearing Call or Time Deposits. The Bank shall, upon
receipt of Proper Instructions relating to the purchase by the Fund of interest
bearing fixed term and call deposits, transfer cash, by wire or otherwise, in
such amounts and to such bank or banks as shall be indicated in such Proper
Instructions. The Bank shall include in its records with respect to the assets
of the Fund appropriate notation as to the amount of each such deposit, the
banking institution with which such deposit is made (the "Deposit Bank"), and
shall retain such forms of advice or receipt evidencing the deposit, if any, as
may be forwarded to the Bank by the Deposit Bank. Such deposits shall be deemed
Portfolio Securities of the Fund and the responsibility of the Bank therefore
shall be the same as and no greater than the Bank's responsibility in respect of
other Portfolio Securities of the Fund.
6.11. Transfer of Securities. The Bank will transfer, exchange,
deliver or release Portfolio Securities held by it hereunder, insofar as such
Securities are available for such purpose, provided that before making any
transfer, exchange, delivery or release under this Section the Bank will receive
Proper Instructions requesting such transfer, exchange or delivery stating that
it is for a purpose permitted under the terms of this Section 6.11, specifying
the applicable subsection, or describing the purpose of the transaction with
sufficient particularity to permit the Bank to ascertain the applicable
subsection, only
(a) upon sales of Portfolio Securities for the account of the Fund,
against contemporaneous receipt by the Bank of payment therefor in full,
each such payment to be in the amount of the sale price shown in Proper
Instructions received by the Bank before such payment is made;
(b) in exchange for or upon conversion into other securities alone
or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise, upon exercise of
subscription, purchase or sale or other similar rights represented by such
Portfolio Securities, or for the purpose of tendering shares in the event
of a tender offer therefor, provided however that in the event of an offer
of exchange, tender offer, or other exercise of rights requiring the
physical tender or delivery of Portfolio Securities, the Bank shall have
no liability for failure to so tender in a timely manner unless such
Proper Instructions are received by the Bank at least two business days
prior to the date required for tender, and unless the Bank (or its agent
or subcustodian hereunder) has actual possession of such Portfolio
Security at least two business days prior to the date of tender;
(c) upon conversion of Portfolio Securities pursuant to their terms
into other securities;
(d) in the case of option contracts owned by the Fund, for
presentation to the endorsing broker;
11
(e) when such Portfolio Securities are called, redeemed or retired
or otherwise become payable;
(f) for the purpose of effectuating the pledge of Portfolio
Securities held by the Bank in order to collateralize loans made to the
Fund by any bank, including the Bank; provided, however, that such
Portfolio Securities will be released only upon payment to the Bank for
the account of the Fund of the moneys borrowed, except that in cases where
additional collateral is required to secure a borrowing already made, and
such fact is made to appear in the Proper instructions, further Portfolio
Securities may be released for that purpose without any such payment. In
the event that any such pledged Portfolio Securities are held by the Bank,
they will be so held for the account of the lender, and after notice to
the Fund from the lender in accordance with the normal procedures of the
lender, that an event of deficiency or default on the loan has occurred,
the Bank may deliver such pledged Portfolio Securities to or for the
account of the lender;
(g) for the purpose of releasing certificates representing Portfolio
Securities, against contemporaneous receipt by the Bank of the fair market
value of such security, as set forth in Proper Instructions received by
the Bank before such payment is made;
(h) for the purpose of delivering Portfolio Securities lent by the
Fund to a bank or broker dealer, but only against receipt in accordance
with street delivery custom except as otherwise provided herein, of
adequate collateral as agreed upon from time to time by the Fund and the
Bank, and upon receipt of payment in connection with any repurchase
agreement relating to such Portfolio Securities entered into by the Fund;
(i) for other authorized transactions of the Fund or for other
proper corporate purposes; provided that before making such transfer, the
Bank will also receive a certified copy of resolutions of the Board,
signed by an authorized officer of the Fund (other than the officer
certifying such resolution) and certified by its Secretary or Assistant
Secretary, specifying the Portfolio Securities to be delivered, setting
forth the transaction in or purpose for which such delivery is to be made,
declaring such transaction to be an authorized transaction of the Fund or
such purpose to be a proper corporate purpose, and naming the person or
persons to whom delivery of such Portfolio Securities shall be made; and
(j) upon termination of this Agreement as hereinafter set forth
pursuant to Section 7 and Section 13 of this Agreement.
As to any deliveries made by the Bank pursuant to subsections (a), (b),
(c), (d), (e), (f), (g) and (h) Portfolio Securities or cash receivable in
exchange therefor shall be delivered to the Bank.
12
7. Merger, Dissolution, etc. of Fund. In the case of the following
transactions, not in the ordinary course of business, namely, the merger of the
Fund into or the consolidation of the Fund with another investment company, the
sale by the Fund of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, the Bank will deliver the Portfolio Securities held
by it under this Agreement and disburse cash only upon the order of the Fund set
forth in an Officers' Certificate, accompanied by a certified copy of a
resolution of the Board authorizing any of the foregoing transactions. Upon
completion of such delivery and disbursement and the payment of the fees,
disbursements and expenses of the Bank, this Agreement will terminate.
8. Actions of Bank Without Prior Authorization. Notwithstanding anything
herein to the contrary, unless and until the Bank receives an Officers'
Certificate to the contrary, it will without prior authorization or instruction
of the Fund or the transfer agent:
8.1. Endorse for collection and collect on behalf of and in the
name of the Fund all checks, drafts, or other negotiable or transferable
instruments or other orders for the payment of money received by it for the
account of the Fund and hold for the account of the Fund all income, dividends,
interest and other payments or distribution of cash with respect to the
Portfolio Securities held thereunder;
8.2. Present for payment all coupons and other income items held by
it for the account of the Fund which call for payment upon presentation and hold
the cash received by it upon such payment for the account of the Fund;
8.3. Receive and hold for the account of the Fund all Securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar Securities
issued with respect to any Portfolio Securities held by it hereunder.
8.4. Execute as agent on behalf of the Fund all necessary ownership
and other certificates and affidavits required by the Internal Revenue Code or
the regulations of the Treasury Department issued thereunder, or by the laws of
any state, now or hereafter in effect, inserting the Fund's name on such
certificates as the owner of the Portfolio Securities covered thereby, to the
extent it may lawfully do so and as may be required to obtain payment in respect
thereof. The Bank will execute and deliver such certificates in connection with
Portfolio Securities delivered to it or by it under this Agreement as may be
required under the provisions of the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder, or under the laws of any State;
8.5. Present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by it upon
payment for the account of the Fund; and
8.6. Exchange interim receipts or temporary Portfolio Securities for
definitive Portfolio Securities.
13
9. Collection; Defaults. The Bank will use all reasonable effort to
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Fund notice actually received by it of any call for redemption,
offer of exchange, right of subscription, reorganization or other proceedings
affecting such Securities.
If Portfolio Securities upon which such income is payable are in default
or payment is refused after due demand or presentation, the Bank will notify the
Fund in writing of any default or refusal to pay within two business days from
the day on which it receives knowledge of such default or refusal. In addition,
the Bank will send the Fund a written report once each, month showing any income
on any Portfolio Security held by it which is more than ten days overdue on the
date of such report and which has not previously been reported.
10. Maintenance of Records: Accounting Services. The Bank will maintain
records with respect to transactions for which the Bank is responsible pursuant
to the terms and conditions of this Agreement, and in compliance with the
applicable rules and regulations of the Act and will furnish the Fund daily with
a statement of condition of the Fund. The Bank will furnish to the Fund at the
end of every month, and at the close of each quarter of the Fund's fiscal year,
a list of the Portfolio Securities and the aggregate amount of cash held by it
for the Fund. The books and records of the Bank pertaining to its actions under
this Agreement and reports by the Bank or its independent accountants concerning
its accounting system, procedures for safeguarding Portfolio Securities and
internal accounting controls will be open to inspection and audit at reasonable
times by officers of or auditors employed by the Fund and will be preserved by
the Bank in the manner and in accordance with the applicable rules and
regulations under the Act.
The Bank shall keep the books of account and render statements or copies
from time to time as reasonably requested by the Treasurer or any executive
officer of the Fund.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters of
like nature.
11. Fund Evaluation. The Bank shall compute and, unless otherwise directed
by the Board, determine as of the close of business on the New York Stock
Exchange ("NYSE") on the last day of each week on which said Exchange is open
for unrestricted trading and as of such other days and hours, if any, as may be
authorized by the Board, the net asset value of a share of capital stock of the
Fund, such determination to be made in accordance with the provisions of the
Articles and By-laws of the Fund and Prospectus and Statement of Additional
Information relating to the Fund, as they may from time to time be amended, and
any applicable resolutions of the Board at the time in force and applicable; and
promptly to notify the Fund, the NYSE, and the National Association of
Securities Dealers ("NASD") or such other persons as the Fund may request of the
results of such computation and determination. In computing the net asset value
hereunder, the Bank may rely in good faith upon information furnished to it by
any Authorized Person in respect of (i) the manner of accrual of the liabilities
of the Fund and in respect of liabilities of the Fund not appearing on its books
of account kept by the Bank, (ii) reserves, if any, authorized by the Board or
that no such reserves have been authorized, (iii) the source of the
14
quotations to be used in computing the net asset value, and (iv) the value to be
assigned to any security for which no price quotations are available, and the
Bank shall not be responsible for any loss occasioned by such reliance or for
any good faith reliance on any quotations received from a source pursuant to
(iii) above.
12. Concerning the Bank.
12.1. Performance of Duties; Standard of Care. In performing its
duties hereunder and any other duties listed on any Schedule hereto, if any, the
Bank will be entitled to receive and act upon the advice of independent counsel
of its own selection, which may be counsel for the Fund, and will he without
liability for any action taken or thing done or omitted to be done in accordance
with this Agreement in good faith in conformity with such advice. In the
performance of its duties hereunder, the Bank will be protected and not be
liable, and will be indemnified and saved harmless for any action taken or
omitted to be taken by it in good faith reliance upon the terms of this
Agreement, any Officers' Certificate, Proper Instructions, resolution of the
Board, telegram, notice, request, certificate or other instrument reasonably
believed by the flank to be genuine and for any other loss to the Fund except in
the case of its gross negligence, wilful misfeasance or bad faith in the
performance of its duties or reckless disregard of its obligations and duties
hereunder.
The Bank will be under no duty or obligation to inquire into and
will not be liable for:
(a) the validity of the issue of any Portfolio Securities purchased
by or for the Fund, the legality of the purchases thereof or the propriety
of the price incurred therefor;
(b) the legality of any sale of any Portfolio Securities by or for
the Fund or the propriety of the amount for which the same are sold;
(c) the legality of an issue or sale of any common shares of the
Fund or the sufficiency of the amount to be received therefor;
(d) the legality of the repurchase of any common shares of the Fund
or the propriety of the amount to be paid therefor;
(e) the legality of the declaration of any dividend by the Fund or
the legality of the distribution of any Portfolio Securities as payment in
kind of such dividend; or
(f) any property or moneys of the Fund unless and until received by
it, and any such property or moneys delivered or paid by it pursuant to
the terms hereof.
Moreover, the Bank will not be under any duty or obligation to ascertain
whether any Portfolio Securities at any time delivered to or held by it for the
account of the Fund are such as may properly be held by the Fund under the
provisions of its Articles, By-laws, any federal or state statutes or any rule
or regulation of any governmental agency.
15
Notwithstanding anything in this Agreement to the contrary, in no event
shall the Bank be liable hereunder or to any third party:
(a) for any losses or damages of any kind resulting from acts of
God, earthquakes, fires, floods, storms or other disturbances of nature,
epidemics, strikes, riots, nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, nuclear
fusion, fission or radiation, the interruption, loss or malfunction of
utilities, transportation, or computers (hardware or software). and
computer facilities, the unavailability of energy sources and other
similar happenings or events except as results from the Bank's own gross
negligence; or
(b) for special, punitive or consequential damages arising from the
provision of services hereunder, even if the Bank has been advised of the
possibility of such damages.
12.2. Agents and Subcustodians. The Bank may employ agents in the
performance of its duties hereunder and shall be responsible for the acts and
omissions of such agents as if performed by the Bank hereunder.
Upon receipt of Proper Instructions, the Bank may employ subcustodians
with respect to domestic Portfolio Securities, provided that any such
subcustodian meets at least the minimum qualifications required by Section
17(f)(1) of the Act to act as a custodian of the Fund's assets. Provided the
Bank has received a certified copy of a resolution of the Board specifically
approving the appointment of an Eligible Foreign Custodian and the depositing of
Portfolio Securities which are Foreign Securities therewith and the Bank has not
received an Officer's Certificate indicating that such approval has been
withdrawn, the Bank may deposit such Foreign Securities and cash with such
Eligible Foreign Custodian, as a subcustodian hereunder, in accordance with
Schedule A hereto. The Bank shall have the same liability to the Fund on account
of any actions or omissions of any sub-custodian so employed as any such
sub-custodian has to the Bank. The Fund shall indemnify the Bank and hold it
harmless from and against any and all actions, suits and claims, arising
directly or indirectly out of the performance of any subcustodian. Upon request
of the Bank, the Fund shall assume the entire defense of any action, suit, or
claim subject to the foregoing indemnity. The Fund shall pay all fees and
expenses of any subcustodian.
The Bank shall use its best efforts to provide the Fund with information
described in the "NOTES" to Rule 17f-5 and such other similar information as the
Fund may reasonably request to assist its Board of Directors to satisfy their
obligation under such Rule. In addition, the Bank shall use its best efforts to
provide the Fund with prompt notice of any material change in information
previously provided to the Fund pursuant to this Section 12-2 or any material
changes in the facts or circumstances upon which such information is based.
12.3. Insurance. The Bank shall use the same care with respect to
the safekeeping of Portfolio Securities and cash of the Fund held by it as it
uses in respect of its own similar property but it need not maintain any special
insurance for the benefit of the Fund.
16
12.4. Fees and Expenses of Bank. The Fund will pay or reimburse the
Bank from time to time for any transfer taxes payable upon transfer of Portfolio
Securities made hereunder, and for all necessary proper disbursements, expenses
and charges made or incurred by the Bank in the performance of this Agreement
(including any duties listed on any Schedule hereto, if any) including any
indemnities for any loss, liabilities or expense to the Bank as provided above.
For the services rendered by the Bank hereunder, the Fund will pay to the Bank
such compensation or fees at such rate and at such times as shall be agreed upon
in writing by the parties from time to time. The Bank will also be entitled to
reimbursement by the Fund for all reasonable expenses incurred in conjunction
with termination of this Agreement by the Fund.
12.5. Advances by Bank. The Bank may, in its sole discretion,
advance funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this Agreement
for such payments by the Fund. Should such a payment or payments, with advanced
funds, result in an overdraft (due to insufficiencies of the Fund's account with
the Bank, or for any other reason) this Agreement deems any such overdraft or
related indebtedness, a loan made by the Bank to the Fund payable on demand and
bearing interest at the current rate charged by the Bank for such loans unless
the Fund shall provide the Bank with agreed upon compensating balances. The Fund
agrees that the Bank shall have a continuing lien and security interest to the
extent of any overdraft or indebtedness, in and to any property at any time held
by it for the Fund's benefit or in which the Fund has an interest and which is
then in the Bank's possession or control (or in the possession or control of any
third party acting on the Bank's behalf). The Fund authorizes the Bank, in its
sole discretion, at any time to charge any overdraft or indebtedness, together
with interest due thereon against any balance of account standing to the credit
of the Fund on the Bank's books.
13. Termination.
13.1. This Agreement may be terminated at any time without penalty
upon sixty days written notice delivered by either party to the other by means
of registered mail, and upon the expiration of such sixty days this Agreement
will terminate; provided, however, that the effective date of such termination
may be postponed to a date not more than ninety days from the date of delivery
of such notice (i) by the Bank in order to prepare for the transfer by the Bank
of all of the assets of the Fund held hereunder, and (ii) by the Fund in order
to give the Fund an opportunity to make suitable arrangements for a successor
custodian. At any time after the termination of this Agreement, the Fund will,
at its request, have access to the records of the Bank relating to the
performance of its duties as custodian.
13.2. In the event of the termination of this Agreement, the Bank
will immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of all
cash and the delivery of all Portfolio Securities duly endorsed and all records
maintained under Section 11 to the successor custodian when appointed by the
Fund. The obligation of the Bank to deliver and transfer over the assets of the
Fund held by it directly to such successor custodian will commence as soon as
such successor is appointed and will continue until completed as aforesaid. If
the Fund does not select a successor custodian within ninety (90) days from the
date of delivery of notice of termination the Bank may, subject to the
provisions of subsection (13.3), deliver the Portfolio Securities and cash of
the Fund held by
17
the Bank to a bank or trust company of its own selection which meets the
requirements of Section 17(f)(1) of the Act and has a reported capital, surplus
and undivided profits aggregating not less than $2,000,000, to be held as the
property of the Fund under terms similar to those on which they were held by the
Bank, whereupon such bank or trust company so selected by the Bank will become
the successor custodian of such assets of the Fund with the same effect as
though selected by the Board.
13.3. Prior to the expiration of ninety (90) days after notice of
termination has been given, the Fund may furnish the Bank with an order of the
Fund advising that a successor custodian cannot be found willing and able to act
upon reasonable and customary terms and that there has been submitted to the
shareholders of the Fund the question of whether the Fund will be liquidated or
will function without a custodian for the assets of the Fund held by the Bank.
In that event the Bank will deliver the Portfolio Securities and cash of the
Fund held by it, subject as aforesaid, in accordance with one of such
alternatives which may be approved by the requisite vote of shareholders, upon
receipt by the Bank of a copy of the minutes of the meeting of shareholders at
which action was taken, certified by the Fund's Secretary and an opinion of
counsel to the Fund in form and content satisfactory to the Bank.
14. Notices. Any notice or other instrument in writing authorized or
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and mailed or delivered to it at
its office at the address set forth below; namely:
(a) In the case of notices sent to the Fund to:
The Xxxxxxxx Caribbean Basin Fund, Inc.
Xxxxxx X. Xxxxxxxx & Co., Inc.
00000 Xxxxxxxxx 00 Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
or at such other place as such party may from time to time designate in
writing.
15. Amendments. This Agreement may not be altered or amended, except by an
instrument in writing, executed by both parties, and in the case of the Fund,
such alteration or amendment will be authorized and approved by its Board.
18
16. Parties. This Agreement will be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank or by the Bank without the written
consent of the Fund, authorized and approved by its Board; and provided further
that termination proceedings pursuant to Section 14 hereof will not be deemed to
be an assignment within the meaning of this provision.
17. Governing Law. This Agreement and all performance hereunder will be
governed by the laws of the Commonwealth of Massachusetts.
18. Use of Name. The Fund shall not use the name of the Bank or any of its
affiliates in any prospectus, sales literature or other material relating to the
Fund in a manner not approved by the Bank prior thereto in writing; provided,
however, that the approval of the Bank shall not be required for any use of its
name which merely refers in accurate and factual terms to its appointment
hereunder or which is required by the Securities and Exchange Commission or any
state securities authority or any other appropriate regulatory, governmental or
judicial authority; provided, further, that in no event shall such approval be
unreasonably withheld or delayed.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate and their respective corporate seals to be affixed hereto
as of the date first above written by their respective officers thereunto duly
authorized.
THE XXXXXXXX CARIBBEAN BASIN FUND, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
ATTEST:
____________________
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
ATTEST:
X X Xxxxxx
DATED:_______
19
SCHEDULE A
INVESTORS BANK AND TRUST
SUBCUSTODIAN RELATIONSHIPS
AUGUST, 1994
Meet Equity Debt Physical
Country 171-5 Subcustodian Subcustodian Subcustodian Depository
-------------------- ----- ------------------ ------------------ ----------------------- ---------------------------------
Argentina Yes Citibank Citibank Citibank Branch CA
Australia Yes NAB Euroclear NAB AUSTRACLEAR/RITS
Austria Yes Euroclear Euroclear Citibank Subsidiary CESTERECHSCHE
Bangladesh Yes Standard Chartered Standard Chartered Standard Chartered
Belgium Yes Euroclear Euroclear General de Banque CIK, BNB
Brazil Yes Bank of Boston Bank of Boston Bank of Boston Branch BOVESPA-CALISPA
Canada* Yes Euroclear Euroclear Royal Trust COS
Chile Yes Bank of Boston Bank of Boston Bank of Boston Branch
China-Shanghai Yes Standard Chartered Standard Chartered Standard Chartered SECCRC
China-Shanzen Yes Standard Chartered Standard Chartered Standard Chartered HONG KONG SHANGHAI BANK,
CITIBANK, STD. CHARTERED BANK
Colombia Yes Citibank Citibank Citibank Subsidiary BANCE DE LA REPUBLICA
Czech Republic Yes Xxxxx Xxxxx CSCB SCP
Denmark Yes Euroclear Euroclear Den Danske Bank VASERDIPAPIRCENTRALEN
Finland Yes Euroclear Euroclear Kansailis-Osake-Pankki CSR
France Yes Euroclear Euroclear Citibank Subsidiary SICOVAM, BANQUE DE FRANCE
Germany Yes Euroclear Euroclear Citibank subsidiary DKV
Greece Yes Citibank Citibank Citibank Branch CSD
Hong Kong Yes Standard Chartered Standard Chartered Standard Chartered CCASS
Hungary Yes Citibank Citibank Citibank Subsidiary STOCK EXCHANGE
India Yes Std. Chartered/SBI Std. Chartered/SBI Std. Chartered/SBI
Indonesia Yes Standard Chartered Standard Chartered Standard Chartered
Ireland Yes Citibank Citibank Citibank Branch GSO
Israel Yes Xxxxx Xxxxx Bank Leumi STOCK EXCHANGE CLEARING HOUSE
LTD.
Italy Yes Euroclear Euroclear Citibank Branch MONTI TITOLI, BANK OF ITALY
Japan Yes Euroclear Standard Chartered Standard Chartered JASDEC/BANK OF JAPAN
Jordan Yes Xxxxx Xxxxx Arab Bank
Korea Yes Standard Chartered Standard Chartered Standard Chartered KSSC
Luxembourg Yes Euroclear Euroclear Xxxxx XXXXX
Malaysia Yes Euroclear Standard Chartered Standard Chartered MALAYSIAN CENT DEP
Mexico Yes Citibank Citibank Citibank Branch INDEVAL
Netherlands Yes Euroclear Euroclear Citibank Branch NEGIGEF, DUTCH CENTRAL BANK
New Zealand Yes NAB Euroclear National Nominee Ltd. AUSTRACLEAR
Norway Yes Euroclear Euroclear Christiania Bank VPS
Pakistan Yes Standard Chartered Standard Chartered Standard Chartered
Papua New Guinea Yes NAB Euroclear NAB AUSTRACLEAR
Peru Yes Citibank Citibank Citibank Branch CAVAL
Philippines Yes Standard Chartered Standard Chartered Standard Chartered
Poland Yes Citibank Citibank Citibank Subsidiary NATL DEP OF SEC, BK OF POLAND
Portugal Yes Euroclear Citibank Citibank Subsidiary CENTRAL DE REGISTOE VALORES
Singapore Yes Euroclear Standard Chartered Standard Chartered CENTRAL DEPOSITORY PTE
South Africa Yes Xxxxx Xxxxx Xxxxxxxx Xxxx xx Xxxxx
Xxxxxx
Xxxxx Yes Euroclear Euroclear Citibank Branch SCLV
Sri Lanka Yes Standard Chartered Standard Chartered Standard Chartered CENTRAL DEPOSITORY SYS
Sweden Yes Euroclear Euroclear Skandinaviska VARDEPAPPERCENTRALEN
Switzerland Yes Euroclear Euroclear Citibank Subsidiary SCHETZERSCHEFFECTEN
Taiwan Yes Standard Chartered Standard Chartered Standard Chartered TAIWAN SEC DEPOSITORY
Thailand Yes Standard Chartered Standard Chartered Standard Chartered SDC
Turkey Yes Chase/Citibank Chase/Citibank Chase/Citibank Branches VAKIBANK
United Kingdom Yes Royal Trust Royal Trust Royal Trust CGOCMO
United Kingdom (ST)* Yes n/a First Chicago CGOCMO CGOCMO
Uruguay Yes Citibank Citibank Citibank Branch
Venezuela Yes Citibank Citibank Citibank Branch
Notes: * Preferred custodian is euroclear it asset is eligible.
* Eurobonds of any country settle at Euroclear if eligible.
* Physical location used only for an ineligible Euroclear asset
when the asset type is Euroclear eligible.
* All 17F-5 Eligible Standard Chartered operations are Branches
Xxxxxx X. Herzfe1d & Co., Inc.
The Xxxxxxxx Caribbean Basin Fund
Fee Schedule
December 30, 1993
FUND ACCOUNTING (including Calculation of N.A.V.), DOMESTIC CUSTODY,
GLOBAL CUSTODY, and TRANSFER AGENCY
A. Fund Accounting (includes Calculation of N.A.V.) and Domestic Custody
The funds will be charged either Basis Point Fees or Minimum Fees.
o The Basis Points are exclusive of transaction costs and
out-of-pocket expenses.
Annual Fee
-----------------
First $50 MM of net assets 10.0 Basis Points
Next $50 MM of net assets 2.0 Basis Points
Net assets in excess of $100 MM 1.0 Basis Point
o There will be a monthly minimum fee for The Xxxxxxxx Caribbean Basin
Fund according to the following schedule:
Monthly Fee
-----------
Month 1-6 2,000
Months 6-12 4,000
Every month thereafter 4,500
o Custody Transaction Costs
o DT~/Fed Book Entry 12
o Non-DTC, Boston Settlement 20*
o Non-DTC, New York Settlement 35
o Non-DTC, New York Maturities 10
o Government Paydown $ 5
o GNMA Securities 35
o Options 25
o Futures 18
o Incoming/Outgoing Wires 7
*There is no charge for maturities of these items.
* This fee schedule will be reviewed after an escrow period plus the first six
months of the fund's operation.
B. Global Custody
Country Annual Fee Transaction Costs Per Trade
---------------------- -------------- ---------------------------
U.S. 2 Basis Points Standard Trans. Costs (B)
Euroclear 4 Basis Points $20; 50 (Cross Border)
Argentina 26 80
Brazil* 28 125
Chile* 00 00
Xxxxxxxx* 00 000
Mexico Equities 00 00
Xxxxxxxxx* 00 00
Barbados**
Belize**
Costa Rica**
Guatemala**
Guyana**
Honduras**
Jamaica**
Netherlands Antilles**
Panama**
Tabago**
Trinidad**
* Local Exchange and Administration costs are passed through.
** To our knowledge, none of these countries have a bank meeting 17f-5
approval. As soon as a bank in these countries meets 17f-5 approval, we
will have a subcustodial agreement in place with that bank.
C. Institutional and Retail Transfer Agency (Full Service)
This fee schedule was developed based on the following assumptions:
o Transfer Agency Services are offered when combined with Custody and
Fund Accounting Services.
The annual fee for the first 300 retail shareholders will be $17,500. For
every retail shareholder in excess of 300, the annual fee is the
following:
Service Annual Fee.
---------------------- -----------
Annual Per Account Fee $14.00
D. Out of Pocket Expenses
o These charges consist of:
o Micro Rental o Telephone
o Pricing & Verification Services o Forms& Supplies
o Printing, Delivery & Postage o Support Equipment Rental
o Travel and Legal fees are o Initial Offering Certificates
billed by mutual agreement
o Third Party Audit
o Legal fees for substantial
changes to Investors Bank's
Contracts
E. Balance Credit
We allow balance credit against fees (excluding out-of-pocket charges) for
collected fund balances arising out of the custody and transfer agency
relationships. The monthly earnings allowance is equal to 75% of the
90-day T-xxxx rate.
