CUSTODY AGREEMENT
AGREEMENT dated December 31, 1986, between THE CHASE
MANHATTAN BANK, N.A. ("Chase"), having its principal place of
business at 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and
XXXXXXXXX GROWTH FUND, INC. (the "Fund"), an investment company
registered under the Investment Company Act of 1940
("Act of 1940"), having its principal place of business at
000 Xxxxxxx Xxxxxx, P. O. Xxx 00000, Xx. Xxxxxxxxxx,
Xxxxxxx 00000-0000.
WHEREAS, the Fund wishes to appoint Chase as custodian of its
securities and assets and Chase is willing to act as custodian under the terms
and conditions hereinafter set forth;
NOW, THEREFORE, the Fund and its successors and assigns and
Chase and its successors and assigns, hereby agree as follows:
1. APPOINTMENT AS CUSTODIAN. Chase agrees to act as custodian
for the Fund, as provided herein, in connection with (a) cash ("Cash") received
from time to time from, or for the account of, the Fund for credit to the Fund's
deposit account or accounts administered by Chase, Chase Branches and Domestic
Securities Depositories (as hereinafter defined), and/or Foreign Banks and
Foreign Securities Depositories (as hereinafter defined) (the "Deposit
Account"); (b) all stocks, shares, bonds, debentures, notes, mortgages, or other
obligations for the payment of money and any certificates, receipts, warrants,
or other instruments representing rights to receive, purchase, or subscribe for
the same or evidencing or representing any other rights or interests therein and
other similar property ("Securities") from time to time
- 2 -
received by Chase and/or any Chase Branch, Domestic Securities Depository,
Foreign Bank or Foreign Securities Depository for the account of the Fund (the
"Custody Account"); and (c) original margin and variation margin payments in a
segregated account for futures contracts, and U.S. and Canadian government
obligations purchased with a simultaneous agreement by the seller to repurchase
them within 7 days plus accrued interest deposited in a separate segregated
account (the "Segregated Accounts").
All cash held in the Deposit Account or in the Segregated
Accounts in connection with which Chase agrees to act as custodian is hereby
denominated as a special deposit which shall be held in trust for the benefit of
the Fund and to which Chase, Chase Branches and Domestic Securities Depositories
and/or Foreign Banks and Foreign Securities Depositories shall have no ownership
rights, and Chase will so indicate on its books and records pertaining to the
Deposit Account and the Segregated Account. All cash held in auxiliary accounts
that may be carried for the Fund with Chase (including a Money Market Account,
Redemption Account, Distribution Account and Imprest Account) is not so
denominated as a special deposit and title thereto is held by Chase subject to
the claims of creditors.
- 3 -
2. (AUTHORIZATION TO USE BOOK ENTRY SYSTEM, DOMESTIC
SECURITIES DEPOSITORIES, BRANCH OFFICES, FOREIGN BANKS AND FOREIGN
SECURITIES DEPOSITORIES. Chase is hereby authorized to appoint and
utilize, subject to the provisions of Section 4 hereof:
(a) The Book Entry System and The Depository Trust
Company; and also such other Domestic Securities Depositories
selected by Chase and as to which Chase has received a
certified copy of a resolution of the Fund's Board of
Directors authorizing deposits therein;
(b) Chase's foreign branch offices in the United
Kingdom, Hong Kong, Singapore, and Tokyo, and such other
foreign branch offices of Chase located in countries approved
by the Board of Directors of the Fund as to which Chase shall
have given prior notice to the Fund;
(c) Foreign Banks which Chase shall have selected,
which are located in countries approved by the Board of
Trustees of the Fund, and as to which banks Chase shall have
given prior notice to the Fund; and
(d) Foreign Securities Depositories which Chase shall
have selected and as to which Chase has received a certified
copy of a resolution of the Fund's Board of Trustees
authorizing deposits therein;
to hold Securities and Cash at any time owned by the Fund, it being understood
that no such appointment or utilization shall in any way relieve Chase of its
responsibilities as provided for in this Agreement. Foreign branch offices of
Chase appointed and utilized
- 4 -
by Chase are herein referred to as "Chase Branches." Unless otherwise agreed to
in writing, (a) each Chase Branch, each Foreign Bank and each Foreign Securities
Depository shall be selected by Chase to hold only Securities as to which the
principal trading market or principal location as to which such Securities are
to be presented for payment is located outside the United States; and (b) Chase
and each Chase Branch, Foreign Bank and Foreign Securities Depository will
promptly transfer or cause to be transferred to Chase, to be held in the United
States, Securities and/or Cash that are then being held outside the United
States upon request of the Fund and/or of the Securities and Exchange
Commission. Utilization by Chase of Chase Branches, Domestic Securities
Depositories, Foreign Banks and Foreign Securities Depositories shall be in
accordance with provisions as from time to time amended, of an operating
agreement to be entered into between Chase and the Fund (the "Operating
Agreement").
3. DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings:
(a) "Authorized Persons of the Fund" shall mean such
officers or employees of the Fund or any other person or
persons as shall have been designated by a resolution of the
Board of Directors of the Fund, a certified copy of which has
been filed with Chase, to act as Authorized Persons hereunder.
Such persons shall continue to be Authorized Persons of the
Fund, authorized to act either singly or together with one or
more other
- 5 -
of such persons as provided in such resolution, until such
time as the Fund shall have filed with Chase a written notice
of the Fund supplementing, amending, or revoking the authority
of such persons.
(b) "Book-Entry system" shall mean the Federal
Reserve/Treasury book-entry system for United States and
federal agency securities, its successor or successors and its
nominee or nominees.
(c) "Domestic Securities Depository" shall mean The
Depository Trust Company, a clearing agency registered with
the Securities and Exchange Commission, its successor or
successors and its nominee or nominees; and (subject to the
receipt by Chase of a certified copy of a resolution of the
Fund's Board of Directors specifically approving deposits
therein as provided in Section 2(a) of this Agreement) any
other person authorized to act as a depository under the Act
of 1940, its successor or successors and its nominee or
nominees.
(d) "Foreign Bank" shall mean any banking institution
organized under the laws of a jurisdiction other than the
United States or of any state thereof.
(e) A "Foreign Securities Depository" shall mean any
system for the central handling of securities abroad where all
securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping
- 6 -
without physical deliver of the securities by any Chase
Branch or Foreign Bank.
(f) "Written Instructions" shall mean instructions
in writing signed by Authorized Persons of the Fund
giving such instructions, and/or such other forms of
communications as from time to time shall be agreed upon
in writing between the Fund and Chase.
4. SELECTION OF COUNTRIES IN WHICH SECURITIES MAY BE
HELD. Chase shall not cause Securities and Cash to be held in any country
outside the United States until the Fund has directed the holding of its assets
in such country. Chase represents that it has been advised by the Fund that in
giving such a direction the Fund may consider, among other factors, the
following:
(a) comparative operational efficiencies of
custody;
(b) clearance and settlement and the costs thereof;
and
(c) political and other risks, other than those
risks specifically assumed by Chase.
5. RESPONSIBILITY OF CHASE TO SELECT CUSTODIANS IN INDIVIDUAL
FOREIGN COUNTRIES. The responsibility for selecting the Chase Branch, Foreign
Bank or Foreign Securities Depository to hold the Fund's Securities and Cash in
individual countries authorized by the Fund shall be that of Chase. Chase
generally shall utilize Chase Branches where available. In locations where there
are no Chase Branches providing custodial services, Chase shall select as
- 7 -
its agent a Foreign Bank, which may be an affiliate or subsidiary of Chase. To
facilitate the clearance and settlement of securities transactions, Chase
represents that, subject to the approval of the Fund, it may deposit Securities
in a Foreign Securities Depository in which Chase is a participant. In
situations in which Chase is not a participant in a Foreign Securities
Depository, Chase may, subject to the approval of the Fund, authorize a Foreign
Bank acting as its subcustodian to deposit the Securities in a Foreign
Securities Depository in which the Foreign Bank is a participant.
Notwithstanding the foregoing, such selection by Chase of a Foreign Bank or
Foreign Securities Depository shall not become effective until Chase has been
advised by the Fund that a majority of its Board of Directors:
(a) Has approved Chase's selection of the particular
Foreign Bank or Foreign Securities Depository, as the case may
be, as consistent with the best interests of the Fund and its
Shareholders;
(b) Has approved as consistent with the best
interests of the Fund and its Shareholders a written contract
prepared by Chase which will govern the manner in which such
Foreign Bank will maintain the Fund's assets.
- 8 -
6. CONDITIONS ON SELECTION OF FOREIGN BANK OR FOREIGN
SECURITIES DEPOSITORY. Chase shall authorize the holding of
Securities and Cash by a Chase Branch, Foreign Bank or Foreign
Securities Depository only:
(a) to the extent that the Securities and Cash are
not subject to any right, charge, security interest, lien or
claim of any kind in favor of any such Foreign Bank or Foreign
Securities Depository, except for their safe custody or
administration, and
(b) to the extent that the beneficial ownership of
Securities is freely transferable without the payment of
money or value other than for safe custody or
administration.
7. CHASE BRANCHES AND FOREIGN BANKS NOT AGENTS OF THE
FUND. Chase Branches, Foreign Banks and Foreign Securities Depositories shall be
subject to the instructions of Chase and/or the Foreign Bank, and not to those
of the Fund. Chase warrants and represents that all such instructions shall
afford protection to the Fund at least equal to that afforded for Securities
held directly by Chase. Any Chase Branch, Foreign Bank or Foreign Securities
Depository shall act solely as agent of Chase or of such Foreign Bank.
8. CUSTODY ACCOUNT. Securities held in the Custody
Account shall be physically segregated at all times from those of
any other person or persons except that (a) with respect to
Securities held by Chase Branches, such Securities may be placed in
- 9 -
an omnibus account for the customers of Chase, and Chase shall maintain separate
book entry records for each such omnibus account, and such Securities shall be
deemed for the purpose of this Agreement to be held by Chase in the Custody
Account; (b) with respect to Securities deposited by Chase with a Foreign Bank,
a Domestic Securities Depository or a Foreign Securities Depository, Chase shall
identify on its books as belonging to the Fund the Securities shown on Chase's
account on the books of the Foreign Bank, Domestic Securities Depository or
Foreign Securities Depository; and (c) with respect to Securities deposited by a
Foreign Bank with a Foreign Securities Depository, Chase shall cause the Foreign
Bank to identify on its books as belonging to Chase, as agent, the Securities
shown on the Foreign Bank's account on the books of the Foreign Securities
Depository. All Securities of the Fund maintained by Chase pursuant to this
Agreement shall be subject only to the instructions of Chase, Chase Branches or
their agents. Chase shall only deposit Securities with a Foreign Bank in
accounts that include only assets held by Chase for its customers.
8a. SEGREGATED ACCOUNT FOR FUTURES CONTRACTS. With
respect to every futures contract purchased, sold or cleared for
the Custody Account, Chase agrees, pursuant to Written
Instructions, to:
(a) deposit original margin and variation margin
payments in a segregated account maintained by Chase; and
- 10 -
(b) perform all other obligations attendant to
transactions or positions in such futures contracts, as
such payments or performance may be required by law or
the executing broker.
8b. SEGREGATED ACCOUNT FOR REPURCHASE AGREEMENTS.
With respect to purchases for the Custody Account from banks (including Chase)
or broker-dealers of United States or Canadian government obligations with a
simultaneous agreement by the seller to repurchase them within no more than 7
days at the original purchase price plus accrued interest, Chase agrees,
pursuant to Written Instructions, to:
(a) deposit such securities and repurchase
agreements in a segregated account maintained by Chase;
and
(b) promptly show on Chase's records that such
securities and repurchase agreements are being held on
behalf of the Fund and deliver to the Fund a written
confirmation to that effect.
9. DEPOSIT ACCOUNT. Subject to the provisions of this
Agreement, the Fund authorizes Chase to establish and maintain in
each country or other jurisdiction in which the principal trading
market for any Securities is located or in which any Securities are
to be presented for payment, an account or accounts, which may
include nostro accounts with Chase Branches and omnibus accounts of
Chase at Foreign Banks, for receipt of cash in the Deposit Account,
in such currencies as directed by Written Instructions. For
- 11 -
purposes of this Agreement, cash so held in any such account shall be evidenced
by separate book entries maintained by Chase at its office in London and shall
be deemed to be Cash held by Chase in the Deposit Account. Unless Chase receives
Written Instructions to the contrary, cash received or credited by Chase or any
other Chase Branch, Foreign Bank or Foreign Securities Depository for the
Deposit Account in a currency other than United States dollars shall be
converted promptly into United States dollars whenever it is practicable to do
so through customary banking channels (including without limitation the
effecting of such conversions at Chase's preferred rates through Chase, its
affiliates or Chase Branches), and shall be automatically transmitted back to
Chase in the United States.
10. SETTLEMENT PROCEDURES. Settlement procedures for transactions
in Securities delivered to, held in, or to be delivered from the Custody Account
in Chase Branches, Domestic Securities Depositories, Foreign Banks and Foreign
Securities Depositories, including receipts and payments of cash held in any
nostro account or omnibus account for the Deposit Account as described in
Section 9, shall be carried out in accordance with the provisions of the
Operating Agreement. It is understood that such settlement procedures may vary,
as provided in the Operating Agreement, from securities market to securities
market, to reflect particular settlement practices in such markets.
- 12 -
Chase shall make or cause the appropriate Chase Branch or
Foreign Bank to move payments of Cash held in the Deposit Account only:
(a) in connection with the purchase of Securities for
the account of the Fund and only against the receipt of such
Securities by Chase or by another appropriate Chase Branch,
Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository, or otherwise as provided in the
Operating Agreement, each such payment to be made at prices
confirmed by Written Instructions, or
(b) in connection with any dividend, interim
dividend or other distribution declared by the Fund, or
(c) as directed by the Fund by Written Instructions
setting forth the name and address of the person to whom
the payment is to be made and the purpose for which the
payment is to be made.
Upon the receipt by Chase of Written Instructions
specifying the Securities to be so transferred or delivered, which instructions
shall name the person or persons to whom transfers or deliveries of such
Securities shall be made and shall indicate the time(s) for such transfers or
deliveries, Securities held in the Custody Account shall be transferred,
exchanged, or delivered by Chase, any Chase Branch, Domestic Securities
Depository, Foreign Bank, or Foreign Securities Depository, as the case may be,
against payment in Cash or Securities, or otherwise as provided in the Operating
Agreement, only:
- 13 -
(a) upon sale of such Securities for the account of
the Fund and receipt of such payment in the amount shown in a
broker's confirmation of sale of the Securities or other
proper authorization received by Chase before such payment is
made, as confirmed by Written Instructions;
(b) in exchange for or upon conversion into other
Securities alone or other Securities and Cash pursuant to any
plan of merger, consolidation, reorganization,
recapitalization, readjustment, or tender offer;
(c) upon exercise of conversion, subscription,
purchase, or other similar rights represented by such
Securities; or
(d) otherwise as directed by the Fund by Written
Instructions which shall set forth the amount and purpose
of such transfer or delivery.
Until Chase receives Written Instructions to the contrary,
Chase shall and shall cause each Chase Branch, Domestic Securities Depository,
Foreign Bank and Foreign Securities Depository holding Securities or Cash to
take the following actions in accordance with procedures established in the
Operating
Agreement:
(a) collect and timely deposit in the Deposit Account
all income due or payable with respect to any Securities and
take any action which may be necessary and proper in
connection with the collection and receipt of such income;
- 14 -
(b) present timely for payment all Securities in the
Custody Account which are called, redeemed or retired or
otherwise become payable and all coupons and other income
items which call for payment upon presentation and to receive
and credit to the Deposit Account Cash so paid for the account
of the Fund except that, if such Securities are convertible,
such Securities shall not be presented for payment until two
business days preceding the date on which such conversion
rights would expire unless Chase previously shall have
received Written Instructions with respect thereto;
(c) present for exchange all Securities in the
Custody Account converted pursuant to their terms into
other Securities;
(d) in respect of securities in the Custody Account,
execute in the name of the Fund such ownership and other
certificates as may be required to obtain payments in respect
thereto, provided that Chase shall have requested and the Fund
shall have furnished to Chase any information necessary in
connection with such certificates;
(e) exchange interim receipts or temporary
Securities in the Custody Account for definitive
Securities; and
(f) receive and hold in the Custody Account all
Securities received as a distribution on Securities held
- 15 -
in the Custody Account as a result of a stock dividend, share
split-up or reorganization, recapitalization, readjustment or
other rearrangement or distribution of rights or similar
Securities issued with respect to any Securities held in the
Custody Account.
11. RECORDS. Chase hereby agrees that Chase and any Chase Branch or
Foreign Bank shall create, maintain, and retain all records relating to their
activities and obligations as custodian for the Fund under this Agreement in
such manner as will meet the obligations of the Fund under the Act of 1940,
particularly Section 31 thereof and Rules 31a-1 and 31a-2 thereunder, and
Federal, state and foreign tax laws and other legal or administrative rules or
procedures, in each case as currently in effect and applicable to the Fund. All
records so maintained in connection with the performance of its duties under
this Agreement shall remain the property of the Fund and, in the event of
termination of this Agreement, shall be delivered in accordance with the
provisions of Section 19.
Chase hereby agrees, subject to restrictions under applicable
laws, that the books and records of Chase and any Chase Branch pertaining to
their actions under this Agreement shall be open to the physical, on-premises
inspection and audit at reasonable times by the independent accountants
("Accountants") employed by, or other representatives of, the Fund. Chase hereby
agrees that, subject to restrictions under applicable laws, access shall be
afforded to the Accountants to such of the books and
- 16 -
records of any Foreign Bank, Domestic Securities Depository or Foreign
Securities Depository with respect to Securities and Cash as shall be required
by the Accountants in connection with their examination of the books and records
pertaining to the affairs of the Fund. Chase also agrees that as the Fund may
reasonably request from time to time, Chase shall provide the Accountants with
information with respect to Chase's and Chase Branches' systems of internal
accounting controls as they relate to the services provided under this
Agreement, and Chase shall use its best efforts to obtain and furnish similar
information with respect to each Domestic Securities Depository, Foreign Bank
and Foreign Securities Depository holding Securities and Cash.
12. REPORTS. Chase shall supply periodically, upon the reasonable
request of the Fund, such statements, reports, and advices with respect to Cash
in the Deposit Account and the Securities in the Custody Account and
transactions in Securities from time to time received and/or delivered for or
from the Custody Account, as the case may be, as the Fund shall require. Such
statements, reports and advices shall include an identification of the Chase
Branch, Domestic Securities Depository, Foreign Bank and Foreign Securities
Depository having custody of the Securities and Cash, and descriptions thereof.
- 17 -
13. REGISTRATION OF SECURITIES. Securities in the Custody Account
which are issued or issuable only in bearer form (except such securities as are
held in the Book-Entry System) shall be held by Chase, Chase Branches, Domestic
Securities Depositories, Foreign Banks or Foreign Securities Depositories in
that form. All other Securities in the Custody Account shall be held in
registered form in the name of Chase, or any Chase Branch, the Book-Entry
System, Domestic Securities Depository, Foreign Bank or Foreign Securities
Depository and their nominees, as custodian or nominee.
14. STANDARD OF CARE.
(a) GENERAL. Chase shall assume entire
responsi-bility for all Securities held in the Custody
Account, Cash held in the Deposit Account, Cash or Securities
held in the Segregated Accounts and any of the Securities and
Cash while in the possession of Chase or any Chase Branch,
Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository, or in the possession or control of any
employees, agents or other personnel of Chase or any Chase
Branch, Domestic Securities Depository, Foreign Bank or
Foreign Securities Depository; and shall be liable to the Fund
for any loss to the Fund occasioned by any destruction of the
Securities or Cash so held or while in such possession, by any
robbery, burglary, larceny, theft or embezzlement by any
employees, agents or personnel of Chase or any Chase Branch,
Domestic Securities Depository, Foreign
- 18 -
Bank or Foreign Securities Depository, and/or by virtue of the
disappearance of any of the Securities or Cash so held or
while in such possession, with or without any fault
attributable to Chase ("fault attributable to Chase" for the
purposes of this Agreement being deemed to mean any negligent
act or omission, robbery, burglary, larceny, theft or
embezzlement by any employees or agents of Chase or any Chase
Branch, Domestic Securities Depository, Foreign Bank or
Foreign Securities Depository). In the event of Chase's
discovery or notification of any such loss of Securities or
Cash, Chase shall promptly notify the Fund and shall reimburse
the Fund to the extent of the market value of the missing
Securities or Cash as at the date of the discovery of such
loss. The Fund shall not be obligated to establish any
negligence, misfeasance or malfeasance on Chase's part from
which such loss resulted, but Chase shall be obligated
hereunder to make such reimbursement to the Fund after the
discovery or notice of such loss, destruction or theft of such
Securities or Cash. Chase may at its option insure itself
against loss from any cause but shall be under no obligation
to insure for the benefit of the Fund.
(b) COLLECTIONS. All collections of funds or other
property paid or distributed in respect of Securities
held in the Custody Account shall be made at the risk of
- 19 -
the Fund. Chase shall have no liability for any loss
occasioned by delay in the actual receipt of notice by Chase
(or by any Chase Branch or Foreign Bank in the case of
Securities or Cash held outside of the United States) of any
payment, redemption or other transaction regarding Securities
held in the Custody Account or Cash held in the Deposit
Account in respect of which Chase has agreed to take action in
the absence of Written Instructions to the contrary as
provided in Section 10 of this Agreement, which does not
appear in any of the publications referred to in Section 16 of
this Agreement.
(c) EXCLUSIONS. Notwithstanding any other provision
in this Agreement to the contrary, Chase shall not be
responsible for (i) losses resulting from war or from the
imposition of exchange control restrictions, confiscation,
expropriation, or nationalization of any securities or assets
of the issuer of such securities, or (ii) losses resulting
from any negligent act or omission of the Fund or any of its
affiliates, or any robbery, theft, embezzlement or fraudulent
act by any employee or agent of the Fund or any of its
affiliates. Chase shall not be liable for any action taken in
good faith upon Written Instructions of Authorized Persons of
the Fund or upon any certified copy of any resolution of the
Board of Directors of the Fund, and may rely on the
genuineness of any such documents which it may in good faith
believe to
- 20 -
be validly executed.
(d) LIMITATION ON LIABILITY UNDER SECTION 14(A).
Notwithstanding any other provision in this Agreement to the
contrary, it is agreed that the extent of Chase's liability to
the Fund under Section 14(a) shall not exceed the amount of
the limitation provided for in Section 14(e), it being
understood and agreed that the amount of such limitation
applies on an aggregated basis to all losses under Section
14(a) incurred by the Fund and is subject to annual adjustment
as set forth in Section 14(e). The Fund agrees that Chase's
sole responsibility with respect to losses under Section 14(a)
shall be to pay the Fund the amount of any such loss as
provided in Section 14(a) subject to the limitation provided
in Section 14(e). This limitation does not apply to any
liability of Chase under Section 14(f) of this Agreement.
(e) ANNUAL ADJUSTMENT OF LIMITATION OF LIABILITY. As
soon as practicable after June 1 of every year (or such other
date in any particular year agreed to by all of the Xxxxxxxxx
Funds), the Fund shall provide Chase with the amount of its
total net assets as of the close of business on such date (or
if the New York Stock Exchange is closed on such date, then in
that event as of the close of business on the next day on
which the New York Stock Exchange is open for business).
- 21 -
It is understood by the parties to this Agreement
that Chase has entered into substantially similar custody
agreements as follows: agreements with Xxxxxxxxx Funds, Inc.
on behalf of Xxxxxxxxx World Fund and on behalf of Xxxxxxxxx
Foreign Fund; agreements with Xxxxxxxxx Global Funds, Inc. on
behalf of Xxxxxxxxx Global I and on behalf of Xxxxxxxxx Global
II; an agreement with Xxxxxxxxx Income Fund; and an agreement
with Xxxxxxxxx Growth Fund, Ltd., all of which Funds have as
their investment advisers companies which are the same as, or
affiliated with, the Investment Manager of the Fund; and that
Chase may enter into any substantially similar custody
agreements with additional mutual funds under Xxxxxxxxx
management which may hereafter be organized. Each of such
custody agreements with each of such other Xxxxxxxxx Funds
contains (or will contain) a "Standard of Care" section
similar to this Section 14, except that the limit of Chase's
liability is in varying amounts for each Fund, with the
aggregate limits of liability in all of such agreements,
including this Agreement, amounting to $150,000,000.
On each June 1 (or other date agreed on for any
particular year), Chase will total the net assets reported by
each one of the Xxxxxxxxx Funds, and will calculate the
percentage of the aggregate net assets of all the Xxxxxxxxx
Funds that is represented by the net
- 22 -
asset value of this Fund. Thereupon Chase shall allocate to
this Agreement with this Fund that proportion of its total of
$150,000,000 responsibility undertaking which is substantially
equal to the proportion which this Fund's net assets bears to
the total net assets of all such Xxxxxxxxx Funds, subject to
adjustments for claims paid as follows: all claims previously
paid to this Fund shall first be deducted from its
proportionate allocable share of the $150,000,000 Chase
responsibility, and if the claims paid to this Fund amount to
more than its allocable share of the Chase responsibility,
then the excess of such claims paid to this Fund shall
diminish the balance of the $150,000,000 Chase responsibility
available for the proportionate shares of all of the other
Xxxxxxxxx Funds having similar custody agreements with Chase.
Based on such calculation, and on such adjustment for claims
paid, if any, Chase thereupon shall notify the Fund of such
limit of liability under Section 14(a) which will be available
to the Fund with respect to (1) losses in excess of payment
allocations for previous years and (2) losses discovered
during the next year this Agreement remains in effect and
until a new determination of such limit of responsibility is
made on the next succeeding June 1 (or other agreed date).
(f) OTHER LIABILITY. Independently of Chase's
liability to the Fund as provided in Section 14(a) above
- 23 -
(it being understood that the limitations in Sections 14(d)
and 14(e) do not apply to the provisions of this Section
14(f)), Chase shall be responsible for the performance of only
such duties as are set forth in this Agreement or contained in
express instructions given to Chase which are not contrary to
the provisions of this Agreement. Chase will use and require
the same care with respect to the safekeeping of all
Securities held in the Custody Account, Cash held in the
Deposit Account, and Securities or Cash held in the Segregated
Accounts as it uses in respect of its own similar property,
but it need not maintain any insurance for the benefit of the
Fund. With respect to Securities and Cash held outside of the
United States, Chase will be liable to the Fund for any loss
to the Fund resulting from any disappearance or destruction of
such Securities or Cash while in the possession of Chase or
any Chase Branch, Foreign Bank or Foreign Securities
Depository, to the same extent it would be liable to the Fund
if Chase had retained physical possession of such Securities
and Cash in New York. It is specifically agreed that Chase's
liability under this Section 14(f) is entirely independent of
Chase's liability under Section 14(a). Notwithstanding any
other provision in this Agreement to the contrary, in the
event of any loss giving rise to liability under this Section
14(f) that would also give rise to liability
- 24 -
under Section 14(a), the amount of such liability shall not be
charged against the amount of the limitation on liability
provided in Sections 14(d) and 14(e).
(g) COUNSEL; LEGAL EXPENSES. Chase shall be entitled
to the advice of counsel (who may be counsel for the Fund) at
the expense of the Fund in connection with carrying out
Chase's duties hereunder and in no event shall Chase be liable
for any action taken or omitted to be taken by it in good
faith pursuant to advice of such counsel. If, in the absence
of fault attributable to Chase and in the course of or in
connection with carrying out its duties and obligations
hereunder, any claims or legal proceedings are instituted
against Chase or any Chase Branch by third parties, the Fund
will hold Chase harmless against any claims, liabilities,
costs, damages or expenses incurred in connection therewith
and, if the Fund so elects, the Fund may assume the defense
thereof with counsel satisfactory to Chase, and thereafter
shall not be responsible for any further legal fees that may
be incurred by Chase, provided, however, that all of the
foregoing is conditioned upon the Fund's receipt from Chase of
prompt and due notice of any such claim or proceeding.
15. EXPROPRIATION INSURANCE. Chase represents that it
does not intend to obtain any insurance for the benefit of the Fund
which protects against the imposition of exchange control
- 25 -
restrictions on the transfer from any foreign jurisdiction of the proceeds of
sale of any Securities or against confiscation, expropriation or nationalization
of any securities or the assets of the issuer of such securities by a government
of any foreign country in which the issuer of such securities is organized or in
which securities are held for safekeeping either by Chase, or any Chase Branch,
Foreign Bank or Foreign Securities Depository in such country. Chase has
discussed the availability of expropriation insurance with the Fund, and has
advised the Fund as to its understanding of the position of the staff of the
Securities and Exchange Commission that any investment company investing in
securities of foreign issuers has the responsibility for reviewing the
possibility of the imposition of exchange control restrictions which would
affect the liquidity of such investment company's assets and the possibility of
exposure to political risk, including the appropriateness of insuring against
such risk. The Fund has acknowledged that it has the responsibility to review
the possibility of such risks and what, if any, action should be taken.
16. PROXY, NOTICES, REPORTS, ETC. Chase shall watch for
the dates of expiration of (a) all purchase or sale rights
(including warrants, puts, calls and the like) attached to or
inherent in any of the Securities held in the Custody Account and
(b) conversion rights and conversion price changes for each
convertible Security held in the Custody Account as published in
Telstat Services, Inc., Standard & Poor's Financial Inc. and/or any
other publications listed in the Operating Agreement (it being
- 26 -
understood that Chase may give notice to the Fund as provided in Section 21 as
to any change, addition and/or omission in the publications watched by Chase for
these purposes). If Chase or any Chase Branch, Foreign Bank or Foreign
Securities Depository shall receive any proxies, notices, reports, or other
communications relative to any of the Securities held in the Custody Account,
Chase shall, on its behalf or on behalf of a Chase Branch, Foreign Bank or
Foreign Securities Depository, promptly transmit in writing any such
communication to the Fund. In addition, Chase shall notify the Fund by
person-to-person collect telephone concerning any such notices relating to any
matters specified in the first sentence of this Section 16.
As specifically requested by the Fund, Chase shall execute or
deliver or shall cause the nominee in whose name Securities are registered to
execute and deliver to such person as may be designated by the Fund proxies,
consents, authorizations and any other instruments whereby the authority of the
Fund as owner of any Securities in the Custody Account registered in the name of
Chase or such nominee, as the case may be, may be exercised. Chase shall vote
Securities in accordance with Written Instructions timely received by Chase, or
such other person or persons as designated in or pursuant to the Operating
Agreement.
Chase and any Chase Branch shall have no liability for any
loss or liability occasioned by delay in the actual receipt by them or any
Foreign Bank or Foreign Securities Depository of notice of any payment or
redemption which does not appear in any of the
- 27 -
publications referred to in the first sentence of this Section 16.
17. COMPENSATION. The Fund agrees to pay to Chase from
time to time such compensation for its services pursuant to this Agreement as
may be mutually agreed upon in writing from time to time and Chase's
out-of-pocket or incidental expenses, as from time to time shall be mutually
agreed upon by Chase and the Fund. The Fund shall have no responsibility for the
payment of services provided by any Domestic Securities Depository, Chase
Branch, Foreign Bank or Foreign Securities Depository, such fees being paid
directly by Chase. In the event of any advance of Cash for any purpose made by
Chase pursuant to any Written Instruction, or in the event that Chase or any
nominee of Chase shall incur or be assessed any taxes in connection with the
performance of this Agreement, the Fund shall indemnify and reimburse Chase
therefor, except such assessment of taxes as results from the negligence, fraud,
or willful misconduct of Chase, any Domestic Securities Depository, Chase
Branch, Foreign Bank or Foreign Securities Depository, or as constitutes a tax
on income, gross receipts or the like of any one or more of them. Chase shall
have a lien on Securities in the Custody Account and on Cash in the Deposit
Account for any amount owing to Chase from time to time under this Agreement
upon due notice to the Fund.
18. AGREEMENT SUBJECT TO APPROVAL OF THE FUND. It is
understood that this Agreement and any amendments shall be subject
to the approval of the Fund.
19. TERM. This Agreement shall remain in effect until
- 28 -
June 1, 1987 and shall thereafter remain in effect until terminated by either
party upon 60 days' written notice to the other, sent by registered mail.
Notwithstanding the preceding sentence, however, if at any time after the
execution of this Agreement Chase shall provide written notice to the Fund, by
registered mail, of the amount needed to meet a substantial increase in the cost
of maintaining its present type and level of bonding and insurance coverage in
connection with Chase's undertakings in Section 14(a), (d) and (e) of this
Agreement, said Section 14(a), (d) and (e) of this Agreement shall cease to
apply 60 days after the providing of such notice by Chase, unless prior to the
expiration of such 60 days the Fund agrees in writing to assume the amount
needed for such purpose. Chase, upon the date this Agreement terminates pursuant
to notice which has been given in a timely fashion, shall, and/or shall cause
each Domestic Securities Depository, Chase Branch, Foreign Bank and Foreign
Securities Depository to deliver the Securities in the Custody Account, to pay
the Cash in the Deposit Account, and to deliver and pay Securities and Cash in
the Segregated Accounts to the Fund, unless Chase has received from the Fund 60
days prior to the date on which this Agreement is to be terminated Written
Instructions specifying the name(s) of the person(s) to whom the Securities in
the Custody Account shall be delivered, the Cash in the Deposit Account shall be
paid, and Securities and Cash in the Segregated Accounts shall be delivered and
paid. Concurrently with the delivery of such Securities, Chase shall deliver to
the Fund, or such other person as the Fund shall
- 29 -
instruct, the records referred to in Section 11 which are in the possession or
control of Chase, any Chase Branch, or any Domestic Securities Depository, or
any Foreign Bank or Foreign Securities Depository, or in the event that Chase is
unable to obtain such records in their original form Chase shall deliver true
copies of
such records.
20. AUTHORIZATION OF CHASE TO EXECUTE NECESSARY DOCUMENTS. In
connection with the performance of its duties hereunder, the Fund hereby
authorizes and directs Chase and each Chase Branch acting on behalf of Chase,
and Chase hereby agrees, to execute and deliver in the name of the Fund, or
cause such other Chase Branch to execute and deliver in the name of the Fund,
such certificates, instruments, and other documents as shall be reasonably
necessary in connection with such performance, provided that the Fund shall have
furnished to Chase any information necessary in connection therewith.
21. NOTICES. Any notice or other communication
authorized or required by this Agreement to be given to the parties
shall be sufficiently given (except to the extent otherwise
specifically provided) if addressed and mailed postage prepaid or
delivered to it at its office at the address set forth below:
- 30 -
If to the Fund, then to
Xxxxxxxxx Growth Fund, Inc.
000 Xxxxxxx Xxxxxx, X.X. Xxx 00000
Xx. Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxx Xx. Xxxxxxxxx, Treasurer
If to Chase, then to
The Chase Manhattan Bank, N.A.
1211 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, V.P.
or such other person or such other address as any party shall have furnished to
the other party in writing.
22. NON-ASSIGNABILITY OF AGREEMENT. This Agreement shall not be
assignable by either party hereto; provided, however, that any corporation into
which the Fund or Chase, as the case may be, may be merged or converted or with
which it may be consolidated, or any corporation succeeding to all or
substantially all of the trust business of Chase, shall succeed to the
respective rights and shall assume the respective duties of the Fund or of
Chase, as the case may be, hereunder.
- 31 -
23. GOVERNING LAW. This Agreement shall be governed by
the laws of the State of New York.
THE CHASE MANHATTAN BANK, N.A.
By:_____________________________
Vice President
XXXXXXXXX GROWTH FUND, INC.
By:/s/XXXX XX. XXXXXXXXX
Xxxx Wm. Xxxxxxxxx
Secretary
