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