FORM OF
CUSTODY AGREEMENT
This Custody Agreement is dated ______________, 1996 between XXXXXX
XXXXXXX TRUST COMPANY, a New York State chartered trust company (the
"Custodian"), and FOREIGN FUND, INC., a Maryland corporation registered as an
open-end management investment company under the Investment Company Act of 1940,
as amended (the "Client"). The Client issues its shares in different Index
Series (each, an "Index Series").
1. APPOINTMENT AND ACCEPTANCE; ACCOUNTS. (a) The Client, on behalf
of its Index Series (each an "Index Series") hereby appoints the Custodian as a
custodian of Property (as defined below) owned or under the control of the
Client's Index Series, that is delivered to the Custodian, or any Subcustodian
as appointed below, from time to time to be held in custody for the benefit of
the Client's Index Series. The Custodian agrees to act as such Custodian upon
the terms and conditions hereinafter provided.
(b) Prior to the delivery of any Property by the Client, on behalf of
its Index Series, to the Custodian, the Client shall deliver to the Custodian
each document and other item listed in Appendix 1. In addition, the Client
shall deliver to the Custodian any additional documents or items as the
Custodian may reasonably deem necessary for the performance of its duties under
this Agreement.
(c) The Client instructs the Custodian to establish on the books and
records of the Custodian the accounts listed in Appendix 2 (the "Accounts") in
the name of the Client, on behalf of its Index Series. Upon receipt of
Authorized Instructions (as defined below) and appropriate documentation, the
Custodian shall open additional Accounts for the Client. Upon the Custodian's
confirmation to the Client of the opening of such additional Accounts, or of the
closing of Accounts, Appendix 2 shall be deemed automatically amended or
supplemented accordingly. The Custodian shall record in the Accounts and shall
have general responsibility for the safekeeping of all securities
("Securities"), cash, cash equivalents and other property (all such Securities,
cash, cash equivalents and other property being collectively called the
"Property") of the Client's Index Series that are delivered to the Custodian for
custody.
(d) The procedures the Custodian and the Client will use in
performing activities in connection with this Agreement are set forth in a
client services guide provided to the Client by the Custodian, as such guide may
be amended from time to time by the Custodian by written notice to the Client
(the "Client Services Guide").
2. SUBCUSTODIANS. The Property may be held in custody and deposit
accounts that have been established by the Custodian with one or more domestic
or foreign banks or other institutions as listed on Exhibit A (the
"Subcustodians"), as such Exhibit may be amended from time to time by the
Custodian upon sixty (60) days prior written notice to the Client, or through
the facilities of one or more securities depositories or clearing agencies. The
Custodian shall hold Property through a Subcustodian, securities depository or
clearing agency only if (a) such Subcustodian and any securities depository or
clearing agency in which such Subcustodian or the Custodian holds Property, or
any of their creditors, may not assert any right, charge, security interest,
lien, encumbrance or other claim of any kind to such Property except a claim of
payment for its safe custody or administration and (b) beneficial ownership of
such Property may be freely transferred without the payment of money or value
other than for safe custody or administration. Any Subcustodian may hold
Property in a securities depository and may utilize a clearing agency.
3. RECORDS. With respect to Property held by a Subcustodian:
(a) The Custodian may hold Property for all of its customers with a
Subcustodian in a single account identified as belonging to the Custodian
for the benefit of its customers;
(b) The Custodian shall identify on its books as belonging to the
Client's Index Series any Property held by a Subcustodian for the
Custodian's account;
(c) The Custodian shall require that Property held by the
Subcustodian for the Custodian's account be identified on the
Subcustodian's books as separate from any other property held by the
Subcustodian other than property of the Custodian's customers held solely
for the benefit of customers of the Custodian; and
(d) In the event the Subcustodian holds Property in a securities
depository or clearing agency, such Subcustodian shall be required by its
agreement with the Custodian to identify on its books such Property as
being held for the account of the Custodian as custodian for its customers
or in such other manner as is required by local law or market practice.
4. ACCESS TO RECORDS. The Custodian shall allow the Client's
accountants reasonable access to the Custodian's records relating to the
Property held by the Custodian as such accountants may reasonably require in
connection with their examination of the Client's affairs. The Custodian shall
also obtain from any Subcustodian (and shall require each Subcustodian to use
reasonable efforts to obtain from any securities depository or clearing agency
in which it deposits Property) an undertaking, to the extent consistent with
local practice and the laws of the jurisdiction or jurisdictions to which such
Subcustodian, securities depository or clearing agency is subject, to permit
independent public accountants such reasonable access to the records of such
Subcustodian, securities depository or clearing agency as may be reasonably
required in connection with the examination of the Client's affairs or to take
such other action as the Custodian in its judgment may deem sufficient to ensure
such reasonable access.
5. REPORTS. The Custodian shall provide such reports and other
information to the Client, on behalf of its Index Series, and to such persons as
the Client directs, as the Custodian and the Client may agree from time to time.
6. PAYMENT OF MONIES. The Custodian shall make, or cause any
Subcustodian to make, payments from monies being held in the Accounts only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
The Custodian may act as the Client's agent in foreign exchange
transactions at such rates as are agreed from time to time between the Client,
on behalf of its Index Series, and the Custodian.
7. TRANSFER OF SECURITIES. The Custodian shall make, or cause any
Subcustodian to make, transfers, exchanges or deliveries of Securities only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
8. CORPORATE ACTIONS. (a) The Custodian shall notify the Client of
details of all corporate actions affecting the Securities of the Client's Index
Series promptly upon its receipt of such information.
(b) The Custodian shall take, or cause any Subcustodian to take, any
action in respect of such corporate actions only in accordance with Authorized
Instructions or as provided in this Section 8 or Section 9.
(c) In the event the Client, on behalf of its Index Series, does not
provide timely Authorized Instructions to the Custodian, the Custodian shall act
in accordance with the default option provided by local market practice and/or
the issuer of the Securities.
(d) Unless the Custodian receives Authorized Instructions to the
contrary, fractional shares resulting from corporate action activity shall be
treated in accordance with local market practices.
9. GENERAL AUTHORITY. In the absence of Authorized Instructions to
the contrary, the Custodian may, and may authorize any Subcustodian to:
(a) make payments to itself or others for expenses of handling
Property or other similar items relating to its duties under this
Agreement, provided that all such payments shall be accounted for to the
Client;
(b) receive and collect all income and principal with respect to
Securities and to credit cash receipts to the Accounts;
(c) exchange Securities when the exchange is purely ministerial
(including, without limitation, the exchange of interim receipts or
temporary securities for securities in definitive form and the exchange of
warrants, or other documents of entitlement to securities, for the
securities themselves);
(d) surrender Securities at maturity or when called for redemption
upon receiving payment therefor;
(e) execute in the Client's name such ownership and other
certificates as may be required to obtain the payment of income from
Securities;
(f) pay or cause to be paid, from the Accounts, any and all taxes and
levies in the nature of taxes imposed on Property by any governmental
authority in connection with custody of and transactions in such Property;
(g) endorse for collection, in the name of the Client, checks, drafts
and other negotiable instruments;
(h) take non-discretionary action on mandatory corporate actions; and
(i) in general, attend to all nondiscretionary details in connection
with the custody, sale, purchase, transfer and other dealings with the
Property.
10. AUTHORIZED INSTRUCTIONS; AUTHORIZED PERSONS. (a) Except as
otherwise provided in Sections 6 through 9, 13 and 17, all payments of monies,
all transfers, exchanges or deliveries of Property and all responses to
corporate actions shall be made or taken only upon receipt by the Custodian of
Authorized Instructions; PROVIDED that such Authorized Instructions are timely
received by the Custodian. "AUTHORIZED INSTRUCTIONS" of the Client means
instructions from an Authorized Person received by telecopy, tested telex,
electronic link or other electronic means or by such other means as may be
agreed in writing between the Client and the Custodian.
(b) "AUTHORIZED PERSON" means each of the persons or entities
identified on Appendix 3 as amended from time to time by written notice from the
Client, on behalf of its Index Series, to the Custodian. The Client represents
and warrants to the Custodian that each Authorized Person listed in Appendix 3,
as amended from time to time, is authorized to issue Authorized Instructions on
behalf of the Client's specific Index Series, as indicated on such Appendix 3.
Prior to the delivery of the Property to the Custodian, the Custodian shall
provide a list of designated system user ID numbers and passwords that the
Client shall be responsible for assigning to Authorized Persons. The Custodian
shall assume that an electronic transmission received and identified by a system
user ID number and password was sent by an Authorized Person. The Custodian
agrees to provide additional designated system user ID numbers and passwords as
needed by the Client. The Client authorizes the Custodian to issue new system
user ID numbers upon the request of a previously existing Authorized Person.
Upon the issuance of additional system user ID numbers by the Custodian to the
Client, Appendix 3 shall be deemed automatically amended accordingly. The
Client authorizes the Custodian to receive, act and rely upon any Authorized
Instructions received by the Custodian which have been issued, or which are
reasonably believed to have been issued, by an Authorized Person.
(c) Any Authorized Person may cancel/correct or otherwise amend any
Authorized Instruction received by the Custodian, but the Client agrees to
indemnify the Custodian for any liability, loss or expense incurred by the
Custodian and its Subcustodians as a result of their having relied upon or acted
on any prior Authorized Instruction. An amendment or
cancellation of an Authorized Instruction to deliver or receive any security or
funds in connection with a trade will not be processed once the trade has
settled.
11. REGISTRATION OF SECURITIES. (a) In the absence of Authorized
Instructions to the contrary, Securities which must be held in registered form
shall be registered in the name of the Custodian or the Custodian's nominee or,
in the case of Securities in the custody of an entity other than the Custodian,
in the name of the Custodian, its Subcustodian or any such entity's nominee.
The Custodian may, without notice to the Client, cause any Securities to be
registered or re-registered in the name of the Client.
(b) Where the Custodian has been instructed by the Client, on behalf
of its Index Series, to hold any Securities in the name of any person or entity
other than the Custodian, its Subcustodian or any such entity's nominee, the
Custodian shall not be responsible for any failure to collect dividends or other
income or participate in any corporate action with respect to such Securities.
The foregoing shall not relieve the Custodian of its obligation to hold in
safekeeping all Property of the Client's Index Series delivered to the Custodian
or any Subcustodian in accordance with Section 1 hereof or to notify the Client
of any corporate action of which it receives notice as provided in Section 8
hereof.
12. DEPOSIT ACCOUNTS. Unless the Client and the Custodian otherwise
agree, all cash received by the Custodian for the Accounts shall be held by the
Custodian as a short-term credit balance in favor of the Client's Index Series
and if the Custodian and the Client have agreed in writing in advance that such
balances shall bear interest, the Client shall earn interest at the rates and
times as agreed between the Client and the Custodian. The Client acknowledges
that any such credit balances shall not be accompanied by the benefit of any
governmental insurance.
13. SHORT-TERM CREDIT EXTENSIONS. (a) From time to time, if agreed
between the Custodian and the Client, the Custodian may extend or arrange short-
term credit for the Client which is (i) necessary in connection with payment and
clearance of securities and foreign exchange transactions or (ii) pursuant to an
agreed schedule, as and if set forth in the Client Services Guide, of credits
for dividends and interest payments on Securities. All such extensions of
credit shall be repayable by the Client on demand.
(b) The Custodian shall be entitled to charge the Client interest for
any such credit extension at rates to be agreed upon from time to time or, if
such credit is arranged by the Custodian with a third party on behalf of the
Client, the Client shall reimburse the Custodian for any interest charge. In
addition to any other remedies available, the Custodian shall be entitled to a
right of set-off against the Property to satisfy the repayment of such credit
extensions and the payment of, or reimbursement for, accrued interest thereon.
14. REPRESENTATIONS AND WARRANTIES. (a) The Client, on behalf of
its Index Series, represents and warrants that (i) the execution, delivery and
performance of this Agreement (including, without limitation, the ability to
obtain the short-term extensions of credit in accordance with Section 13) are
within the Client's power and authority and have been duly
authorized by all requisite action (corporate or otherwise) of the Client, on
behalf of its Index Series, and of the beneficial owner of the Property, if
other than the Client's Index Series, and (ii) this Agreement and each extension
of short-term credit extended to or arranged for the benefit of the Client in
accordance with Section 13 shall at all times constitute a legal, valid and
binding obligation of the Client enforceable against the Client in accordance
with its terms, except as may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights in general and
subject to the effect of general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
(b) The Custodian represents and warrants that (i) the execution,
delivery and performance of this Agreement are within the Custodian's power and
authority and have been duly authorized by all requisite action (corporate or
otherwise) of the Custodian and (ii) this Agreement constitutes the legal, valid
and binding obligation of the Custodian enforceable against the Custodian in
accordance with its terms, except as may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights in general and
subject to the effect of general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
15. STANDARD OF CARE; INDEMNIFICATION. (a) The Custodian shall be
responsible for the performance of only such duties as are set forth in this
Agreement or contained in Authorized Instructions given to the Custodian which
are not contrary to the provisions of any relevant law or regulation. The
Custodian shall be liable to the Client for any loss, liability or expense
incurred by the Client's Index Series in connection with this Agreement to the
extent that any such loss, liability or expense results from the negligence or
willful misconduct of the Custodian or any Subcustodian.
(b) The Client acknowledges that the Property may be physically held
outside the United States. The Custodian shall not be liable for any loss,
liability or expense resulting from events beyond the reasonable control of the
Custodian, including, but not limited to, FORCE MAJEURE, provided the Custodian
or Subcustodian has otherwise fulfilled its obligations under this Agreement and
has acted in accordance with the standard of care set forth in this Section 15.
(c) In addition, the Client shall indemnify the Custodian and
Subcustodians and any nominee for such persons, and hold each of them harmless
from, any liability, loss or expense (including attorneys' fees and
disbursements) incurred in connection with this Agreement, including without
limitation, (i) as a result of the Custodian having acted or relied upon any
Authorized Instructions or (ii) arising out of any such person acting as a
nominee or holder of record of Securities, provided the Custodian or
Subcustodian has otherwise fulfilled its obligations under this Agreement and
has acted in accordance with the standard of care set forth in this Section 15.
16. FEES; LIENS. The Client, on behalf of its Index Series, shall
pay to the Custodian from time to time such compensation for its services
pursuant to this Agreement as may be mutually agreed upon as well as the
Custodian's out-of-pocket and incidental expenses. The Client shall hold the
Custodian harmless from any liability or loss resulting from any taxes
or other governmental charges, and any expenses related thereto, which may be
imposed or assessed with respect to the Accounts or any Property held therein.
The Custodian is, and any Subcustodians are, authorized to charge the Accounts
for such items and the Custodian shall have a lien, charge and security interest
on any and all Property for any amount owing to the Custodian from time to time
under this Agreement.
17. TERMINATION. This Agreement may be terminated by the Client in
respect of any Index Series or the Custodian by 60 days written notice to the
other, sent by registered mail. If notice of termination is given, the Client
shall, within 30 days following the giving of such notice, deliver to the
Custodian a statement in writing specifying the successor custodian or other
person to whom the Custodian shall transfer the Property. In either event, the
Custodian, subject to the satisfaction of any lien it may have, shall transfer
the Property to the person so specified. If the Custodian does not receive such
statement the Custodian, at its election, may transfer the Property to a bank or
trust company established under the laws of the United States or any state
thereof to be held and disposed of pursuant to the provisions of this Agreement
or may continue to hold the Property until such a statement is delivered to the
Custodian. In such event the Custodian shall be entitled to fair compensation
for its services during such period as the Custodian remains in possession of
any Property and the provisions of this Agreement relating to the duties and
obligations of the Custodian shall remain in full force and effect; provided,
however, that the Custodian shall have no obligation to settle any transactions
in Securities for the Accounts. The provisions of Sections 15 and 16 shall
survive termination of this Agreement.
18. INVESTMENT ADVICE. The Custodian shall not supervise,
recommend or advise the Client's Index Series relative to the investment,
purchase, sale, retention or other disposition of any Property held under this
Agreement.
19. CONFIDENTIALITY. (a) The Custodian, its agents and employees
shall maintain the confidentiality of information concerning the Property held
in the Client's account, including in dealings with affiliates of the Custodian.
In the event the Custodian or any Subcustodian is requested or required to
disclose any confidential information concerning the Property, the Custodian
shall, to the extent practicable and legally permissible, promptly notify the
Client of such request or requirement so that the Client, on behalf of its Index
Series, may seek a protective order or waive any objection to the Custodian's or
such Subcustodian's compliance with this Section 19. In the absence of such a
waiver, if the Custodian or such Subcustodian is compelled, in the opinion of
its counsel, to disclose any confidential information, the Custodian or such
Subcustodian may disclose such information to such persons as, in the opinion of
counsel, is so required.
(b) The Client shall maintain the confidentiality of, and not provide
to any third parties absent the written permission of the Custodian, any
computer software, hardware or communications facilities made available to the
Client or its agents by the Custodian.
20. NOTICES. Any notice or other communication from the Client to
the Custodian, unless otherwise provided by this Agreement or the Client
Services Guide, shall be sent by certified or registered mail to Xxxxxx Xxxxxxx
Trust Company, Xxx Xxxxxxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxx, 00000, Attention: President, and any notice from the
Custodian to the Client is to be mailed postage prepaid, addressed to the Client
at the address appearing below, or as it may hereafter be changed on the
Custodian's records in accordance with written notice from the Client.
21. ASSIGNMENT. This contract may not be assigned by either party
without the prior written approval of the other.
22. MISCELLANEOUS. (a) This Agreement shall bind the successors and
assigns of the Client and the Custodian.
(b) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York without regard to its conflicts
of law rules and to the extent not preempted by federal law. The Custodian and
the Client, on behalf of its Index Series, hereby irrevocably submit to the
exclusive jurisdiction of any New York State court or any United States District
Court located in the State of New York in any action or proceeding arising out
of this Agreement and hereby irrevocably waive any objection to the venue of any
such action or proceeding brought in any such court or any defense of an
inconvenient forum.
In witness whereof, the parties hereto have set their hands as of the
date first above written.
FOREIGN FUND, INC.
By______________________
Name:
Title:
Address for record: ______________________
______________________
______________________
Accepted:
XXXXXX XXXXXXX TRUST COMPANY
By___________________________
Authorized Signature
APPENDIX 1
Account Documentation
REQUIRED DOCUMENTATION FOR CORE CUSTODIAL SERVICES (INCLUDING TAX
RECLAIMS):
CUSTODY AGREEMENT
CLIENT SERVICES GUIDE (INCLUDING APPENDICES)
FEE SCHEDULE / BILLING GUIDE
GENERAL ACCOUNT INFORMATION
US TAX AUTHORITY DOCUMENTATION
LOCAL TAX OFFICE LETTER / APPLICATION LETTER
(NON-UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
FORM 6166 / REQUEST FOR FOREIGN CERTIFICATION FORM
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
CERTIFICATION OF BENEFICIAL OWNERSHIP, LEGAL NAME, LEGAL RESIDENCY, TAX
STATUS AND TAX IDS
TAX RECLAIM POWER OF ATTORNEY
PREVIOUS TAX RECLAIM FILING INFORMATION
(PREVIOUS FILERS, ONLY)
UK TAX AUTHORITY DOCUMENTATION
SOPHISTICATED INVESTOR (ACCREDITED INVESTOR) LETTER
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
DOCUMENTATION THAT IS REQUIRED FROM AN ENTITY CLASSIFIED AS TAX-EXEMPT BY
ITS LOCAL TAX AUTHORITY:
UK FORM 4338
(EXEMPT NON-UNITED KINGDOM-RESIDENT BENEFICIAL OWNERS, ONLY)
UK FORM 309A
(EXEMPT UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
FOREIGN EXEMPTION LETTERS / APPLICATION FOR AUSTRALIAN EXEMPTION LETTER
(EXEMPT BENEFICIAL OWNERS, ONLY)
DOCUMENTATION THAT IS REQUIRED ONLY IF YOU WILL USE THE PROXY VOTING
SERVICE:
VOTING POWER OF ATTORNEY
DOCUMENTATION THAT IS REQUIRED ONLY IF YOU WILL DEAL IN CERTAIN SECURITIES:
JGB INDEMNIFICATION LETTER
KOREAN SECURITIES POWER OF ATTORNEY
NEW ZEALAND 'APPROVED ISSUER LEVY' LETTER
SPANISH POWER OF ATTORNEY WITH APOSTILE
APPENDIX 2
Client Accounts
Account Name Account Number Account Mnemonic
------------ -------------- ----------------
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
APPENDIX 3
Part I - Authorized Signatures
The Custodian is directed to accept and act upon Authorized Instructions
received from any of the following persons or entities:
Telephone/ Authorized
Name Organization Title Fax Signature
---- ------------ ----- ---------- ----------
Authorized by: ___________________________
Part II - System User ID numbers
The Custodian is directed to accept and act upon Authorized Instructions
transmitted electronically and identified with the following mnemonics and
system user ID numbers for the following activities:
Work Station Account Workstation Sessions
User I.D. Mnemonic Number TE TCC SL FE CM MA TD
--------- -------- ------ -- --- -- -- -- -- --
WORKSTATION SESSION CODES
TE Trade Entry
TCC Trade Cancel/Correct
SL Securities Lending
FE Foreign Exchange
CM Cash Movement
MA Mass Authorization
TD Time Deposit
EXHIBIT A
Subcustodians
