[LETTERHEAD OF CHASE APPEARS HERE]
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective August , 1996, and is between THE CHASE
MANHATTAN BANK (the "Bank") and XXX XXX FUNDS (the "Customer").
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer ("Custody Account") for
any and all stocks, shares, bonds, debentures, notes, mortgages or other
obligations for the payment of money, bullion, coin 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 whether certificated or
uncertificated as may be received by the Bank or its Subcustodian (as defined in
Section 3) for the account of the Customer ("Securities"); and
(b) A deposit account in the name of the Customer ("Deposit Account") for
any and all cash in any currency received by the Bank or its Subcustodian for
the account of the Customer, which cash shall not be subject to withdrawal by
draft or check.
The Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in
Section 11) concerning the Accounts. The Bank may deliver securities of the
same class in place of those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to the
Bank:
(a) Securities will be held in the country or other jurisdiction in which
the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash will be credited to an account in a country or other jurisdiction
in which such cash may be legally deposited or is the legal currency for the
payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or non-
interest bearing accounts as may be available for the particular currency. To
the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by the Bank and the Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
The Bank may act under this Agreement through the subcustodians listed in
Schedule A of this Agreement with which the Bank has entered into subcustodial
agreements ("Subcustodians"). The Customer authorizes the Bank to hold Assets
in the Accounts in accounts which the Bank has established with one or more of
its branches or Subcustodians. The Bank and Subcustodians are authorized to
hold any of the Securities in their account with any securities depository in
which they participate.
The Bank reserves the right to add new, replace or remove Subcustodians.
The Customer will be given reasonable notice by the Bank of any amendment to
Schedule A. Upon request by the Customer, the Bank will identify the name,
address and principal place of business of any Subcustodian of the Customer's
Assets and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) The Bank will identify the Assets on its books as belonging to the
Customer.
(b) Where permissible under local law and regulation, a Subcustodian will
hold such Assets together with assets belonging to other customers of the Bank
in accounts identified on such Subcustodian's books as special custody accounts
for the exclusive benefit of customers of the Bank. Where the foregoing method
of holding is not so permissible, then a Subcustodian will hold such Assets in a
manner consistent with local law and regulation and consistent with beneficial
title to such Assets not being held by the Subcustodian.
(c) Any Assets in the Accounts held by a Subcustodian will be subject only
to the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject only to
the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding its
customer's assets shall provide that such assets will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets will be freely transferable without the payment of
money or value other than for safe custody or administration. The foregoing
shall not apply to the extent of any special agreement or arrangement made by
the Customer with any particular Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) The Bank or its Subcustodians will make payments from the Deposit
Account upon receipt of Instructions which include all information required by
the Bank.
(b) In the event that any payment to be made under this Section 5 exceeds
the funds available in the Deposit Account, the Bank, in its discretion, may
advance the Customer such excess amount which shall be deemed a loan payable on
demand, bearing interest at the rate customarily charged by the Bank on similar
loans.
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(c) If the Bank credits the Deposit Account on a payable date, or at any
time prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due ("AutoCredit"), the
Customer will promptly return any such amount upon oral or written notification:
(i) that such amount has not been received in the ordinary course of business or
(ii) that such amount was incorrectly credited. If the Customer does not
promptly return any amount upon such notification, the Bank shall be entitled,
upon oral or written notification to the Customer, to reverse such credit by
debiting the Deposit Account for the amount previously credited. The Bank or its
Subcustodian shall have no duty or obligation to institute legal proceedings,
file a claim or a proof of claim in any insolvency proceeding or take any other
action with respect to the collection of such amount, but may act for the
Customer upon Instructions after consultation with the Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank or
its Subcustodian upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for Securities received
for, and delivery of Securities out of, the Custody Account shall, where
feasible, be made in such manner as set forth in Instructions form the Customer
it being understood, however, that settlement and payment shall be made in
accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of Securities to a
purchaser, dealer or their agents against a receipt with the expectation of
receiving later payment and free delivery. In connection with the foregoing,
where Customer specifies delivery versus payment in a settlement Instruction for
a given trade, the Bank shall promptly advise Customer in the event that such
method is unavailable and then shall settle such trade either in accordance with
local market practice or, if the Customer has made particular arrangements for
delivery versus payment of which the Customer shall advise the Bank and which
are acceptable to the Bank, in accordance with such arrangements. Delivery of
Securities out of the Custody Account may also be made in any manner
specifically required by Instructions acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any sale,
exchange or purchase of Securities. Otherwise, such transactions will be
credited or debited to the Accounts on the date cash or Securities are actually
received by the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a reasonable
period, determined by the Bank in its discretion, after the contractual
settlement date for the related transaction.
(ii) If any Securities delivered pursuant to this Section 6 are returned
by the recipient thereof, the Bank may reverse the credits and debits of the
particular transaction at any time.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in the
Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that the Bank or Subcustodian
is actually aware of such opportunities.
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(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or any
Subcustodian.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any transfers
of Assets to or from the Accounts. Such statements, advices or notifications
shall indicate the identity of the entity having custody of the Assets. Unless
the Customer sends the Bank a written exception or objection to any Bank
statement within the lesser of 60 days after its next semiannual audit covering
any period included in the statement or 180 days of receipt, the Customer shall
be deemed to have approved such statement. In such event, or where the Customer
has otherwise approved any such statement, the Bank shall, to the extent
permitted by law, be released, relieved and discharged with respect to all
matters set forth in such statement or reasonably implied therefrom as though it
had been settled by the decree of a court of competent jurisdiction in an action
where the Customer and all persons having or claiming an interest in the
Customer or the Customer's Accounts were parties.
All collections of funds or other property paid or distributed in respect
of Securities in the Custody Account shall be made at the risk of the Customer.
The Bank shall have no liability for any loss occasioned by delay in the actual
receipt of notice by the Bank or by its Subcustodians of any payment, redemption
or other transaction regarding Securities in the Custody Account in respect of
which the Bank has agreed to take any action under this Agreement. With respect
to income on Securities which is not subject to AutoCredit, the Bank shall
advise the Customer of a failure to receive such income in the ordinary course
of business, but a failure to provide such notice shall not render the Bank
liable for any such amount except to the extent such failure directly results in
Customer's inability to recover such income.
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
(a) Corporate Actions. Whenever the Bank receives information concerning
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the Securities which requires discretionary action by the beneficial owner of
the Securities (other than a proxy), such as subscription rights, bonus issues,
stock repurchase plans and rights offerings, or legal notices or other material
intended to be transmitted to securities holders ("Corporate Actions"), the Bank
will give the Customer notice of such Corporate Actions to the extent that the
Bank's central corporate actions department has actual knowledge of a Corporate
Action in time to notify its customers.
When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split or similar Corporate Action is received which
bears an expiration date, the Bank will endeavor to obtain Instructions from the
Customer or its Authorized Person, but if Instructions are not received in time
for the Bank to take timely action, or actual notice of such Corporate Action
was received too late to seek Instructions, the Bank is authorized to sell such
rights entitlement or fractional interest and to credit the Deposit Account with
the proceeds or take any other action it deems, in good faith, to be appropriate
in which case it shall be held harmless for any such action.
(b) Proxy Voting. The Bank shall provide proxy voting services, if elected
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by the Customer, in accordance with the terms of the proxy voting services rider
hereto. Proxy voting services may be provided by the Bank or, in whole or in
part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank).
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(c) Tax Reclaims.
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(i) Subject to the provisions hereof, the Bank will apply for a reduction
of withholding tax and any refund of any tax paid or tax credits which apply in
each applicable market in respect of income payments on Securities for the
benefit of the Customer which the Bank believes may be available to such
Customer.
(ii) The provision of tax reclaim services by the Bank is conditional
upon the Bank receiving from the beneficial owner of Securities (A) a
declaration of its identity and place of residence and (B) certain other
documentation reasonably requested by Bank (pro forma copies of which are
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available from the Bank). The Customer acknowledges that, if the Bank does not
receive such declarations, documentation and information, additional United
Kingdom taxation will be deducted from all income received in respect of
Securities issued outside the United Kingdom and that U.S. non-resident alien
tax or U.S. backup withholding tax will be deducted from U.S. source income. The
Customer shall provide to the Bank such documentation and information as it may
require in connection with taxation, and warrants that, when given, this
information shall be true and correct in every respect, not misleading in any
way, and contain all material information. The Customer undertakes to notify the
Bank immediately if any such information requires updating or amendment.
(iii) The Bank shall not be liable to the Customer or any third party for
any tax, fines or penalties payable by the Bank or the Customer, and shall be
indemnified accordingly, whether these result from the inaccurate completion of
documents by the Customer or any third party, or as a result of the provision to
the Bank or any third party of inaccurate or misleading information or the
withholding of material information by the Customer or any other third party, or
as a result of any delay of any revenue authority or any other matter beyond the
control of the Bank.
(iv) The Customer confirms that the Bank is authorized to deduct from any
cash received or credited to the deposit account any taxes or levies required by
any revenue or governmental authority for whatever reason in respect of the
Securities or Cash Accounts.
(v) The Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to the
Customer from time to time and the Bank 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, the
Bank shall have no responsibility with regard to the Customer's tax position or
status in any jurisdiction.
(vi) The Customer confirms that the Bank is authorized to disclose any
information requested by any revenue authority or any governmental body in
relation to the Customer or the Securities and/or Cash held for the Customer.
(vii) Tax reclaim services may be provided by the Bank or, in whole or in
part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank); provided that the Bank shall be liable for the
performance of any such third party to the same extent as the Bank would have
been if it performed such services itself.
9. NOMINEES.
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Securities which are ordinarily held in registered form may be registered
in a nominee name of the Bank, Subcustodian or securities depository, as the
case may be. The Bank may without notice to the Customer cause any such
Securities to cease to be registered in the name of any such nominee and to be
registered in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Securities in the Custody Account.
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees or
agents including investment managers as have been designated by written notice
from the Customer or its designated agent to act on behalf of the Customer under
this Agreement. Such persons shall continue to be Authorized Persons until such
time as the Bank receives Instructions from the Customer or its designated agent
that any such employee or agent is no longer an Authorized Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank reasonably believes in good faith to have
been given by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will hold the
Bank harmless for the failure of an Authorized Person to send such confirmation
in writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such duties
as are set forth in this Agreement or expressly contained in Instructions which
are consistent with the provisions of this Agreement as follows:
(i) The Bank will use reasonable care with respect to its obligations
under this Agreement and the safekeeping of Assets. The Bank shall be
liable to the Customer for any loss which shall occur as the result of the
failure of a Subcustodian to exercise reasonable care with respect to the
safekeeping of such Assets to the same extent that the Bank would be liable
to the Customer if the Bank were holding such Assets in New York. In the
event of any loss to the Customer by reason of the failure of the Bank or
its Subcustodian to utilize reasonable care, the Bank shall be liable to
the Customer only to the extent of the Customer's direct damages, to be
determined based on the market value of the property which is the subject
of the loss at the date of notification of such loss to Customer and
without reference to any special
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conditions or circumstances. Alternatively, the Customer may, at its
election and its sole expense, be subrogated to the rights of the Bank in
respect of any Subcustodian in connection with such a loss. In no event
shall the Bank be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including, but not limited to, lost
profits), even if the Bank has been advised of the likelihood of such loss
or damage and regardless of the form of action. Bank shall not be
responsible for the insolvency of any Subcustodian which is not a branch or
"Affiliate" of Bank, with the term "Affiliate" meaning any entity
controlling, controlled by, or under common control with, Bank.
(ii)
The Bank shall be indemnified by, and without liability to the Customer for
any action taken or omitted by the Bank whether pursuant to Instructions or
otherwise within the scope of this Agreement if such act or omission was in
good faith, without negligence and in compliance herewith. In performing
its obligations under this Agreement, the Bank may rely on the genuineness
of any document which it believes in good faith to have been validly
executed.
(iii) The Customer agrees to pay for and hold the Bank 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 from or Assets in the Accounts.
(iv) The Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for the Customer) on all matters and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice.
(v) The Bank need not maintain any insurance for the benefit of the
Customer.
(vi) Without limiting the foregoing, the Bank shall not be liable for any
loss which results from: 1) the general risk of investing, or 2) investing
or holding Assets in a particular country including, but not limited to,
losses resulting from nationalization, expropriation or other governmental
actions; regulation of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market conditions which
prevent the orderly execution of securities transactions or affect the
value of Assets.
(vii) Neither party shall be liable to the other for any loss due to forces
beyond their control including, but not limited to strikes or work
stoppages, acts of war or terrorism, insurrection, revolution, nuclear
fusion, fission or radiation, or acts of God; provided that. in the event
of the occurrence of any of the foregoing events, the Bank shall take such
steps as are reasonable to restore services within a reasonable time, but
shall not be obligated thereby to settle any strike or resolve any work
stoppage.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no
duty or responsibility to:
(i) question Instructions or make any suggestions to the Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or the
retention of Securities;
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(iii) advise the Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as provided
in Section 5(c) and the last paragraph of (S)7 of this Agreement;
(iv) evaluate or report to the Customer or an Authorized Person regarding
the financial condition of any broker, agent or other party selected by
Customer (other than any subcustodian) to which Securities are delivered or
payments are made pursuant to this Agreement, provided, however, that the
Bank shall exercise reasonable care when appointing any broker, agent or
other party in its discretion.
(v) review or reconcile trade confirmations received from brokers. The
Customer or its Authorized Persons (as defined in Section 10) issuing
Instructions shall bear any responsibility to review such confirmations
against Instructions issued to and statements issued by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may have a
material interest in a transaction, or circumstances are such that the Bank may
have a potential conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide brokerage services to other customers, act
as financial advisor to the issuer of Securities, act as a lender to the issuer
of Securities, act in the same transaction as agent for more than one customer,
have a material interest in the issue of Securities, or earn profits from any of
the activities listed herein.
13. FEES AND EXPENSES.
The Customer agrees to pay the Bank for its services under this Agreement
such amount as may be agreed upon in writing, together with the Bank's
reasonable out-of-pocket or incidental expenses, including, but not limited to,
legal fees. The Bank shall have a lien on and is authorized to charge any
Accounts of the Customer for any amount owing to the Bank under any provision of
this Agreement; provided that the Bank's security interest in a particular
Security will terminate at the time the Customer pays the Bank the settlement
amount for such Security in immediately available funds. The Bank shall give the
Customer prompt subsequent notice of any charge against Cash made hereunder and
not less than two days' prior notice of the liquidation or other disposition of
any Security subject to lien in connection with the satisfaction of any amount
owing to the Bank.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions. To facilitate the administration of
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the Customer's trading and investment activity, the Bank is authorized except as
instructed to the contrary, to enter into spot or forward foreign exchange
contracts with the Customer or an Authorized Person for the Customer and may
also provide foreign exchange through its subsidiaries, affiliates or
Subcustodians. Instructions, including standing instructions, may be issued with
respect to such contracts but the Bank may establish rules or limitations
concerning any foreign exchange facility made available. In all cases where the
Bank, its subsidiaries, affiliates or Subcustodians enter into a foreign
exchange contract related to Accounts, the terms and conditions of the then
current foreign exchange contract of the Bank, its subsidiary, affiliate or
Subcustodian and, to the extent not inconsistent, this Agreement shall apply to
such transaction.
(b) Certification of Residency, etc. The Customer certifies that it is a
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resident of the United States and agrees to notify the Bank of any changes in
residency. The Bank may rely upon this certification or the certification of
such other facts as may be required to administer the Bank's
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obligations under this Agreement. The Customer will indemnify the Bank against
all losses, liability, claims or demands arising directly or indirectly from any
such certifications.
(c) Access to Records. The Bank shall allow the Customer's independent
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public accountant reasonable access to the records of the Bank relating to the
Assets as is required in connection with their examination of books and records
pertaining to the Customer's affairs. Subject to restrictions under applicable
law, the Bank shall also obtain an undertaking to permit the Customer's
independent public accountants reasonable access to the records of any
Subcustodian which has physical possession of any Assets as may be required in
connection with the examination of the Customer's books and records.
(d) Governing Law; Successors and Assigns. This Agreement shall be
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governed by the laws of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Bank.
(e) Entire Agreement; Applicable Riders. Customer represents that the
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Assets deposited in the Accounts are (Check one):
____ Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");
x Mutual Fund assets subject to certain Securities and Exchange
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Commission ("SEC") rules
and regulations;
____ Neither of the above.
This Agreement consists exclusively of this document together with Schedule
A, Exhibits I - _______ and the following Rider(s) [Check applicable
rider(s)]:
____ ERISA
x MUTUAL FUND
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x PROXY VOTING
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____ SPECIAL TERMS AND CONDITIONS
There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) Severability. In the event that one or more provisions of this
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Agreement are held invalid, illegal or enforceable in any respect on the basis
of any particular circumstances or in any jurisdiction, the validity, legality
and enforceability of such provision or provisions under other circumstances or
in other jurisdictions and of the remaining provisions will not in any way be
affected or impaired.
(g) Waiver. Except as otherwise provided in this Agreement, no failure or
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delay on the part of either party in exercising any power or right under this
Agreement operates as a waiver, nor does any single or partial exercise of any
power or right preclude any other or further exercise, or the exercise of any
other power or right. No waiver by a party of any provision of this Agreement,
or
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waiver of any breach or default, is effective unless in writing and signed by
the party against whom the waiver is to be enforced.
(h) Notices. All notices under this Agreement shall be effective when
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actually received. Any notices or other communications which may be required
under this Agreement are to be sent to the parties at the following addresses or
such other addresses as may subsequently be given to the other party in writing:
Bank: The Chase Manhattan Bank
0 Xxxxx XxxxxXxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Global Custody Division
or telex: __________________________________
Customer: VAN ECK FUNDS
or telex: __________________________________
(i) Termination. This Agreement may be terminated by the Customer or the
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Bank by giving sixty (60) days written notice to the other, provided that such
notice to the Bank shall specify the names of the persons to whom the Bank shall
deliver the Assets in the Accounts. If notice of termination is given by the
Bank, the Customer shall, within sixty (60) days (or such other amount of days
as is contemplated by the Extension Notice) following receipt of the notice,
deliver to the Bank Instructions specifying the names of the persons to whom the
Bank shall deliver the Assets. In either case the Bank will deliver the Assets
to the persons so specified, after deducting any amounts which the Bank
determines in good faith to be owed to it under Section 13. If within sixty (60)
days following receipt of a notice of termination by the Bank, the Bank does not
receive Instructions from the Customer specifying the names of the persons to
whom the Bank shall deliver the Assets, the Bank, at its election, may deliver
the Assets to a bank or trust company doing business in the State of New York to
be held and disposed of pursuant to the provisions of this Agreement, or to
Authorized Persons, or may continue to hold the Assets until Instructions are
provided to the Bank; provided that, where the Bank is the terminating party and
the Bank had not notified the Customer that termination was for breach of this
Agreement by the Customer, such sixty (60) day period shall be extended for an
additional period as requested by Customer of up to one hundred and twenty (120)
days.
(j) Nonrecourse Obligations. A copy of the Master Trust Agreement, as
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amended from time to time, of the Customer is on file with Secretary of State of
Massachusetts, and notice is hereby given that this Agreement is not executed on
behalf of the Trustees of the Customer as individuals, and the obligations of
this Agreement are not binding upon any of the Trustees, officers, or
shareholders of the Customer individually, but are binding only upon the assets
and property of the Customer. The Bank agrees that no shareholder, Trustee or
officer of the Customer may be held personally liable or responsible for any
obligations of the Customer arising hereunder.
(k) Several Obligations of the Portfolios. The Customer is series company
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with multiple portfolios and has entered into this Agreement on behalf of those
portfolios identified in Exhibit __
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hereto, as amended from time to time on notice to the Bank (each a "Portfolio").
With respect to any obligation of the Customer on behalf of any Portfolio
arising hereunder, the Bank shall look for payment or satisfaction of such
obligation solely to the assets and property of the Portfolio to which such
obligation relates as though the Customer had separately contracted with the
Bank by separate written instrument with respect to each Portfolio. In addition
this Agreement may be terminated with respect to one or more Portfolios in
accordance with the terms of paragraph (i) hereof.
VAN ECK FUNDS
By:____________________________________________
Title:
Date:
THE CHASE MANHATTAN BANK
By:____________________________________________
Title:
Date:
11
STATE OF )
: ss.
COUNTY OF )
On this day of , 1996, before me personally came
, to me known, who being by me duly sworn, did depose and say that
he/she resides in at, that
he/she is of, the entity
described in and which executed the foregoing instrument; that he/she knows the
seal of said entity, that the seal affixed to said instrument is such seal, that
it was so affixed by order of said entity, and that he/she signed his/her name
thereto by like order.
Sworn to before me this ______________
day of ______________, 1996.
Notary
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this day of , 1996, before me personally came
,to me known, who being by me duly sworn,
did depose and say that he/she resides in
at; that he/she is a Vice President of THE CHASE MANHATTAN BANK, the
corporation described in and which executed the foregoing instrument; that
he/she knows the seal of said corporation, that the seal affixed to said
instrument is such corporate seal, that it was so affixed by order of the Board
of Directors of said corporation, and that he/she signed his/her name thereto by
like order.
Sworn to before me this ___________________
day of ________________, 1996
Notary
Mutual Fund Rider to Global Custody Agreement
Between The Chase Manhattan Bank and
XXX XXX FUNDS
effective August , 1996
Customer represents that the Assets being placed in the Bank's custody are
subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.
Except to the extent that the Bank has specifically agreed to comply with a
condition of a rule, regulation, interpretation promulgated by or under the
authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
Securities Exchange Commission.
The following modifications are made to the Agreement:
Section 3. Subcustodians and Securities Depositories.
------------------------------------------
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in this
Agreement shall mean a branch of a qualified U.S. bank, an eligible foreign
custodian or an eligible foreign securities depository, which are further
defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in
Rule 17f-5 under the Investment Company Act of 1940;
(b) "eligible foreign custodian" shall mean (i) a banking institution or
trust company incorporated or organized under the laws of a country other
than the United States that is regulated as such by that country's
government or an agency thereof and that has shareholders' equity in excess
of $200 million in U.S. currency (or a foreign currency equivalent
thereof), (ii) a majority owned direct or indirect subsidiary of a
qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States and that
has shareholders' equity in excess of $100 million in U.S. currency (or a
foreign currency equivalent thereof) (iii) a banking institution or trust
company incorporated or organized under the laws of a country other than
the United States or a majority owned direct or indirect subsidiary of a
qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States which
has such other qualifications as shall be specified in Instructions and
approved by the Bank; or (iv) any other entity that shall have been so
qualified by exemptive order, rule or other appropriate action of the SEC;
and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the laws of
a country other than the United States, which operates (i) the central
system for handling securities or equivalent book-entries in that country,
or (ii) a transnational system for the central handling of securities or
equivalent book-entries.
The Customer represents that its Board of Directors has approved each of
the Subcustodians listed in Schedule A to this Agreement and the terms of the
subcustody agreements between the Bank and each Subcustodian, which are attached
as Exhibits I through _____ of Schedule A, and further represents that its Board
has determined that the use of each Subcustodian and the terms of each
subcustody agreement are consistent with the best interests of the Fund(s) and
its (their) shareholders. The Bank will supply the Customer with any amendment
to Schedule A for approval. The Customer has supplied or will supply the Bank
with certified copies of its Board of Directors resolution(s) with respect to
the foregoing prior to placing Assets with any Subcustodian so approved.
Section 11. Instructions.
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Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant to
Section 5 and 6 of this Agreement may be made only for the purposes listed
below. Instructions must specify the purpose for which any transaction is
to be made and Customer shall be solely responsible to assure that
Instructions are in accord with any limitations or restrictions applicable
to the Customer by law or as may be set forth in its prospectus.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise become
payable;
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by the Customer requiring a pledge
of Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the
Customer and the delivery to, or the crediting to the account of, the Bank,
its Subcustodian or the Customer's transfer agent, such shares to be
purchased or redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer agent of
such shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement among
the Customer, the Bank and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Customer;
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(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only
upon payment to the Bank of monies for the premium due and a receipt for
the Securities which are to be held in escrow. Upon exercise of the option,
or at expiration, the Bank will receive from brokers the Securities
previously deposited. The Bank will act strictly in accordance with
Instructions in the delivery of Securities to be held in escrow and will
have no responsibility or liability for any such Securities which are not
returned promptly when due other than to make proper request for such
return;
(m) For spot or forward foreign exchange transactions to facilitate
security trading, receipt of income from Securities or related
transactions;
(n) For other proper purposes as may be specified in Instructions issued
by an officer of the Customer which shall include a statement of the
purpose for which the delivery or payment is to be made, the amount of the
payment or specific Securities to be delivered, the name of the person or
persons to whom delivery or payment is to be made, and a certification that
the purpose is a proper purpose under the instruments governing the
Customer; and
(o) Upon the termination of this Agreement as set forth in Section 14(i).
Section 12. Standard of Care; Liabilities.
------------------------------
Add the following subsection (c) to Section 12:
(c) The Bank hereby warrants to the Customer that in its opinion, after
due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign
custodian and each eligible foreign securities depository holding the
Customer's Securities pursuant to this Agreement afford protection for such
Securities at least equal to that afforded by the Bank's established
procedures with respect to similar securities held by the Bank and its
securities depositories in New York.
Section 14. Access to Records.
------------------
Add the following language to the end of Section 14(c):
-------------------------------------------------------
Upon reasonable request from the Customer, the Bank shall furnish the
Customer such reports (or portions thereof) of the Bank's system of
internal accounting controls applicable to the Bank's duties under this
Agreement. The Bank shall endeavor to obtain and furnish the Customer with
such similar reports as it may reasonably request with respect to each
Subcustodian and securities depository holding the Customer's assets.
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GLOBAL PROXY SERVICE RIDER
To Global Custody Agreement
Between
THE CHASE MANHATTAN BANK
AND
XXX XXX FUNDS (the "Customer")
dated August , 1996.
1. Global Proxy Services (the "Services") shall be provided for the countries
listed in the procedures and guidelines ("Procedures") furnished to
Customer, as the same may be amended by the Bank from time to time on prior
notice to Customer. The Procedures are incorporated by reference herein and
form a part of this Rider.
2. The Service shall consist of those elements as set forth in the Procedures,
and shall include (a) notifications ("Notifications") by the Bank to
Customer of the dates of pending shareholder meetings, resolutions to be
voted upon and the return dates as may be received by the Bank or provided
to the Bank by its Subcustodians or third parties, and (b) voting by the
Bank of proxies based on Customer Directions. Original proxy materials or
copies thereof shall not be provided. Notifications shall generally be in
English and, where necessary, shall be summarized and translated from such
non-English materials as have been made available to the Bank or its
subcustodian. In this respect the Bank's only obligation is to provide
information from sources it believes to be reliable and/or to provide
materials summarized and/or translated in good faith. the Bank reserves the
right to provide Notifications, or parts thereof, in the language received.
Upon reasonable advance request by Customer, backup information relative to
Notifications, such as annual reports, explanatory material concerning
resolutions, management recommendations or other material relevant to the
exercise of proxy voting rights shall be provided as available, but without
translation.
3. While the Bank shall attempt to provide accurate and complete
Notifications, whether or not translated, the Bank shall not be liable for
any losses or other consequences that may result from reliance by Customer
upon Notifications where the Bank prepared the same in good faith.
4 Notwithstanding the fact that the Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Services the Bank shall be acting solely as the
agent of Customer, and shall not exercise any discretion with regard to
such Services.
5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Financial Assets are: (i)
on loan; (ii) at registrar for registration or reregistration; (iii) the
subject of a conversion or other corporate action; (iv) not held in a name
subject to the control of the Bank or its subcustodian or are otherwise
held in a manner which precludes voting; (v) not capable of being voted on
account of local market regulations or practices or restrictions by the
issuer; or (vi) held in a margin or collateral account.
6 Customer acknowledges that in certain countries the Bank may be unable to
vote individual proxies but shall only be able to vote proxies on a net
basis (e.g., a net yes or no vote given the voting instructions received
---
from all customers).
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered by this Agreement, and
shall in no event sell, license, give or otherwise make the information
provided hereunder available, to any third party, and shall not directly or
indirectly compete with the Bank or diminish the market for the Services by
provision of such information, in whole or in part, for compensation or
otherwise, to any third party.
8. The names of Authorized Persons for Services shall be furnished to the Bank
in accordance with (S)10 of the Agreement. Fees for the Services shall be
agreed as set forth in (S)13 of the Agreement.
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DOMESTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
----------------------------------
Domestic Corporate Actions and Proxies
--------------------------------------
With respect to domestic U.S. and Canadian Securities (the latter if held in
DTC), the following provisions will apply rather than the pertinent provisions
of Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Securities
Account, such proxies (signed in blank, if issued in the name of Bank's nominee
or the nominee of a central depository) and communications with respect to
Financial Assets in the Securities Account as call for voting or relate to legal
proceedings within a reasonable time after sufficient copies are received by
Bank for forwarding to its customers. In addition, Bank shall follow coupon
payments, redemptions, exchanges or similar matters with respect to Financial
Assets in the Securities Account and advise Customer or the Authorized Person
for such Account of rights issued, tender offers or any other discretionary
rights with respect to such Financial Assets, in each case, of which Bank has
received notice from the issuer of the Financial Assets, or as to which notice
is published in publications routinely utilized by Bank for this purpose.
AMENDMENT, dated ________, 1996 to the ___________1996 custody agreement
("Agreement"), between VAN ECK FUNDS ("Customer"), having a place of business at
________________, and The Chase Manhattan Bank ("Bank"), having a place of
business at 000 Xxxx Xxx., Xxx Xxxx, X.X. 00000
It is hereby agreed as follows:
Section 1. Except as modified hereby, the Agreement is confirmed in all
respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
Section 2. The Agreement is amended as follows by adding the following as
new (S)15:
"(a) "CMBI" shall mean Chase Manhattan Bank International, an
indirect wholly-owned subsidiary of Bank, located in Moscow, Russia, and any
nominee companies appointed by it.
"(b) "International Financial Institution" shall mean any bank in the
top 1,000 (together with their affiliated companies) as measured by "Tier 1"
capital or any broker/dealer in the top 100 as measured by capital.
"(c) "Negligence" shall mean the failure to exercise "Reasonable
Care".
"(d) "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 Fund, Inc. (SEC Ref. No. 95-
151-CC, File No. 811-8788) providing "no-action" relief under (S)17(f) of The
Investment Company Act of 1940, as amended, and SEC Rule 17f-5 thereunder, in
connection with custody of such Xxxxxxxxx Russia Fund, Inc.'s investments in
Russian Securities.
"(e) "Reasonable Care" shall mean the use of reasonable custodial
practices under the applicable circumstances as measured by the custodial
practices then prevailing in Russia of International Financial Institutions
acting as custodians for their institutional investor clients in Russia.
"(f) "Registrar Company" shall mean any entity providing share
registration services to an issuer of Russian Securities.
"(g) "Registrar Contract" shall mean a contract between CMBI and a
Registrar Company (and as the same may be amended from time to time) containing,
inter alia, the contractual provisions described at paragraphs (a)-(e) on pps.
----- ----
5-6 of the No-Action Letter.
"(h) "Russian Security" shall mean a Security issued by a Russian
issuer.
"(i) "Share Extract" shall mean: (i) an extract of its share
registration books issued by a Registrar Company indicating an investor's
ownership of a security; and (ii) a form prepared by CMBI or its agent in those
cases where a Registrar Company is unwilling to issue a Share Extract.
Section 3. Section 6(a) of the Agreement is amended by adding the
following at the end thereof: "With respect to Russia, payment for Russian
Securities shall not be made prior to the issuance and receipt of the Share
Extract relating to such Russian Security. Delivery of Russian Securities may be
made in accordance with the customary or established securities trading or
securities processing practices and procedures in Russia. Delivery of Russian
Securities may also be made in any manner specifically required by Instructions
acceptable to the Bank. Customer shall promptly supply such transaction and
settlement information as may be requested by Bank or CMBI in connection with
particular transactions."
Section 4. Section 8 of the Agreement is amended by adding a new paragraph
to the end thereof as follows: "It is understood and agreed that Bank need only
use its reasonable efforts with respect to
performing the functions described in this (S)8 with respect to Russian
Securities, it being understood that proxy voting services are not available."
Section 5. Section 12(a)(i) of the Agreement is amended with respect to
Russian custody by deleting the phrase "reasonable care" wherever it appears and
substituting, in lieu thereof, the phrase "Reasonable Care".
Section 6. Section 12(a)(i) of the Agreement is further amended with
respect to Russian custody by inserting the following at the end of the first
sentence thereof: "; provided that, with respect to Russian Securities, Bank's
responsibilities shall be limited to safekeeping of relevant Share Extracts."
Section 7. Section 12(a)(i) of the Agreement is further amended with
respect to Russian custody by inserting the following after the second sentence
thereof: "Delegation by Bank to CMBI shall not relieve Bank of any
responsibility to Customer for any loss due to such delegation, and Bank shall
be liable for any loss or claim arising out of or in connection with the
performance by CMBI of such delegated duties to the same extent as if Bank had
itself provided the custody services hereunder. In connection with the
foregoing, neither Bank nor CMBI shall assume responsibility for, and neither
shall be liable for, any action or inaction of any Registrar Company and no
Registrar Company shall be, or shall be deemed to be, Bank, CMBI, a
Subcustodian, a 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 Bank or CMBI with respect to Russian Securities,
neither Bank 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 Negligence or in bad faith, except that where Bank or CMBI uses (i) an
affiliated nominee or (ii) an agent to perform the share registration or share
confirmation functions described in paragraphs (a)-(e) on pps. 5-6 of the No-
Action Letter, and, to the extent applicable to CMBI, the share registration
functions described on pps. 2-3 of the No-Action Letter, Bank and CMBI shall be
liable to Customer as if CMBI were responsible for performing such services
itself."
Section 8. Section 12(a)(ii) is amended with respect to Russian custody by
deleting the word "negligently" and substituting, in lieu thereof, the word
"Negligently".
Section 9. Section 12(a)(iii) is amended with respect to Russian custody
by deleting the word "negligence" and substituting, in lieu thereof, the word
"Negligence".
Section 10. Add a new Section 16 to the Agreement as follows:
"(a) Bank will advise Customer (and will update such advice from time
to time as changes occur) of those Registrar Companies with which CMBI has
entered into a Registrar Contract. Bank shall cause CMBI both to monitor each
Registrar Company and to promptly advise Customer and its investment advisor
when CMBI has actual knowledge of the occurrence of any one or more of the
events described in paragraphs (i)-(v) on pps. 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 Customer.
"(b) Where Customer is considering investing in the Russian
Securities of an issuer as to which CMBI does not have a Registrar Contract with
the issuer's Registrar Company, Customer may request that Bank ask that CMBI
both consider whether it would be willing to attempt to enter into such a
Registrar Contract and to advise Customer of its willingness to do so. Where
CMBI has agreed to make such an attempt, Bank will advise Customer of the
occurrence of any one or more of the events described in paragraphs (i)-(iv) on
pps. 8-9 of the No-Action Letter of which CMBI has actual knowledge.
(c) Where Customer is considering investing in the Russian Securities
of an issuer as to which CMBI has a Registrar Contract with the issuer's
Registrar Company, Customer may advise Bank of its interest in investing in such
issuer and, in such event, Bank will advise Customer of the occurrence of any
one or more of the events described in paragraphs (i)-(v) on pps. 8-9 of the No-
Action Letter of which CMBI has actual knowledge."
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Section 11. Add a new Section 17 to the Agreement as follows: "Customer
shall pay for and hold Bank 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 Bank, CMBI or their respective agents with
respect to income on Customer's Russian Securities.
Section 12. Add a new Section 18 to the Agreement as follows: "Customer
acknowledges and agrees that CMBI may not be able, in given cases and despite
its reasonable efforts, to obtain a Share Extract from a Registrar Company and
CMBI shall not be liable in any such event including with respect to any losses
resulting from such failure."
Section 13. Add a new Section 19 to the Agreement as follows: "Customer
acknowledges that it has received, reviewed and understands Bank's market report
for Russia, including, but not limited to, the risks described therein."
Section 14. Add a new Section 20 to the Agreement as follows: "Subject to
the cooperation of a Registrar Company, for at least the first two years
following CMBI's first use of a Registrar Company, Bank 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 Customer's Board of
Directors, in consultation with CMBI, determines it to be appropriate."
Section 15. Add a new Section 21 to the Agreement as follows: "Bank shall
cause CMBI to prepare for distribution to Customer's Board of Directors a
quarterly report identifying: (i) any concerns it has regarding the Russian
share registration system that should be brought to the attention of the Board
of Directors; and (ii) the steps CMBI has taken during the reporting period to
ensure that Customer's interests continue to be appropriately recorded."
Section 16. Add a new Section 22 to the Agreement as follows: "Except as
provided in new (S)16(b), the services to be provided by Bank hereunder will be
provided only in relation to Russian Securities for which CMBI has entered into
a Registrar Contract with the relevant Registrar Company."
*********************
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.
VAN ECK FUNDS THE CHASE MANHATTAN BANK
By: ___________________ By: _________________
Name: Name:
Title: Title:
Date: Date:
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