CUSTODY AGREEMENT
AGREEMENT dated as of May 3, 1993, and amended and restated as of January
29, 1996, December 31, 1996, and February 21, 1997 between THE CHASE MANHATTAN
BANK ("Chase"), having its principal place of business at 0 Xxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and XXXXXXXXX INSTITUTIONAL FUNDS, INC., a
Maryland corporation (the "Company"), and an investment company registered under
the Investment Company Act of 1940 ("Act of 1940"), having its principal place
of business at 000 Xxxxxxx Xxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000-0000.
WHEREAS, the Company, on behalf of Emerging Markets Series, Growth Series,
Foreign Equity Series and Emerging Fixed Income Markets Series, (each a "Fund",
and collectively, the "Funds"), wishes to appoint Chase as custodian to the
securities and assets of each Fund and Chase is willing to act as custodian
under the terms and conditions hereinafter set forth;
NOW, THEREFORE, the Company 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
Funds, as provided herein, in connection with (a) cash ("Cash") received from
time to time from, or for the account of, each Fund for credit to each 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 received by Chase and/or
any Chase Branch, Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository for the account of a Fund (the "Custody Account"); and (c)
original margin and variation margin payments in a segregated account for
futures contracts (the "Segregated Account").
All Cash held in the Deposit Account or in the Segregated Account 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 each 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 Funds 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.
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
Sections 4 and 5 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 Company's
Board of Directors authorizing deposits therein;
X. Xxxxx'x 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 Company as
to which Chase shall have given prior notice to the Company;
C. Foreign Banks which Chase shall have selected, which are located in
countries approved by the Board of Directors of the Company, and as to
which banks Chase shall have given prior notice to the Company; 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
Company's Board of Directors authorizing deposits therein;
to hold Securities and Cash at any time owned by each 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 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 each 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
Company (the "Operating Agreement").
3. DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:
(a) "Authorized Persons of the Company" shall mean such officers or
employees of the Company or any other person or persons as shall have been
designated by a resolution of the Board of Directors of the Company, 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 Company, authorized to act either singly or together with one or more
other of such persons as provided in such resolution, until such time as
the Company shall have filed with Chase a written notice of the Company
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
Company'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
without physical delivery of the securities by any Chase Branch or Foreign
Bank.
(f) "Written Instructions" shall mean instructions in writing signed
by Authorized Persons of the Company giving such instructions, and/or such
other forms of communications as from time to time shall be agreed upon in
writing between the Company 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 Company has directed the holding of each Fund's assets in such
country. Chase will be provided with a copy of a resolution of the Company's
Board of Directors authorizing such custody in any country outside of the United
States, which resolution shall be based upon, 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 each Fund's Securities and Cash in
individual countries authorized by the Company 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 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 Company, 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 Company, 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 Company 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 Funds and their Shareholders; and
(b) Has approved as consistent with the best interests of the Funds
and their Shareholders a written contract prepared by Chase which will
govern the manner in which such Foreign Bank will maintain each Fund's
assets.
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 COMPANY. 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
Company. Chase warrants and represents that all such instructions shall afford
protection to the Company 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 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
Company 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 Company
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
(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 foreign government obligations subject to repurchase
agreements, 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 a Fund and deliver to
that Fund a written confirmation to that effect.
8c. SEGREGATED ACCOUNTS FOR DEPOSITS OF COLLATERAL. Chase agrees, with
respect to (i) cash or high quality debt securities to secure each Fund's
commitments to purchase new issues of debt obligations offered on a when-issued
basis; (ii) cash, U.S. government securities, or irrevocable letters of credit
of borrowers of each Fund's portfolio securities to secure the loan to them of
such securities; and/or (iii) cash, securities or any other property delivered
to secure any other obligations; (all of such items being hereinafter referred
to as "collateral"), pursuant to Written Instructions, to:
(a) deposit the collateral for each such obligation in a separate
segregated account maintained by Chase; and
(b) promptly to show on Chase's records that such collateral is being
held on behalf of a Fund and deliver to that Fund a written confirmation to
that effect.
9. DEPOSIT ACCOUNT. Subject to the provisions of this Agreement, the
Company 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 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.
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
each 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 Company, or
(c) as directed by the Company 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:
(a) upon sale of such Securities for the account of a 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 Company 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;
(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 each 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 Company such ownership and other certificates as may be
required to obtain payments in respect thereto, provided that Chase shall
have requested and the Company 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 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 Company under this Agreement in such manner
as will meet the obligations of the Company 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 Company. All records so
maintained in connection with the performance of its duties under this Agreement
shall, in the event of termination of this Agreement, be preserved and
maintained by Chase as required by regulation, and shall be made available to
the Company or its agent upon request, 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 Company. Chase hereby agrees that,
subject to restrictions under applicable laws, access shall be afforded to the
Accountants to such of the books and 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
Company. Chase also agrees that as the Company 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 Company, 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 Company 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.
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 responsibility for all
Securities held in the Custody Account, Cash held in the Deposit Account,
Cash or Securities held in the Segregated Account 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 Company for any
loss to the Company 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 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 Company and shall reimburse the Company to the
extent of the market value of the missing Securities or Cash as at the date
of the discovery of such loss. The Company 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 Company 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 Company.
(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 the Company. 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 Company or any of its affiliates, or any
robbery, theft, embezzlement or fraudulent act by any employee or agent of
the Company 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 Company or upon any certified copy of any resolution of the Board of
Directors of the Company, and may rely on the genuineness of any such
documents which it may in good faith believe to 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
Chase's sole responsibility with respect to losses under Section 14(a)
shall be to pay the Company the amount of any such loss as provided in
Section 14(a) (subject to the limitation provided in Section 14(e) of this
Agreement). 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, the Company 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).
It is understood by the parties to this Agreement (1) that Chase
has entered into substantially similar custody agreements with other
Xxxxxxxxx Funds, all of which Funds have as their investment adviser either
the Investment Manager of the Fund or companies which are affiliated with
the Investment Manager; and (2) that Chase may enter into 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 (or will be) 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, 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 asset
value of this Company. Thereupon Chase shall allocate to this Agreement
with this Company that proportion of its total of $150,000,000
responsibility undertaking which is substantially equal to the proportion
which this Company'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 Company shall first be deducted from its
proportionate allocable share of the $150,000,000 Chase responsibility, and
if the claims paid to this Company amount to more than its allocable share
of the Chase responsibility, then the excess of such claims paid to this
Company 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 Company of such limit of liability under this Section 14 which
will be available to the Company 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.
(f) OTHER LIABILITY. Independently of Chase's liability to the
Company as provided in Section 14(a) above (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 Account
as it uses in respect of its own similar property, but it need not maintain
any insurance for the benefit of the Company. With respect to Securities
and Cash held outside of the United States, Chase will be liable to the
Company for any loss to the Company 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 Company 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 under Section 14(a), the amount of
such liability shall not be charged against the amount of the limitation on
liability provided in Section 14(d).
(g) COUNSEL; LEGAL EXPENSES. Chase shall be entitled to the advice
of counsel (who may be counsel for the Company) at the expense of the
Company, 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 Company will hold Chase harmless against any claims,
liabilities, costs, damages or expenses incurred in connection therewith
and, if the Company so elects, the Company 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 Company'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 Company which protects against the
imposition of exchange control 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 Company, and has advised the Company 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 Company 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 understood that Chase may give
notice to the Company 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 Company. In addition,
Chase shall notify the Company 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 Company, 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 Company proxies, consents,
authorizations and any other instruments whereby the authority of the Company 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 publications referred to in the first sentence of
this Section 16.
17. COMPENSATION. The Company 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
Company. The Company shall have no responsibility for the payment of services
provided by any Domestic 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 Company 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 Company.
18. AGREEMENT SUBJECT TO APPROVAL OF THE COMPANY. It is understood that
this Agreement and any amendments shall be subject to the approval of the
Company.
19. TERM. This Agreement shall 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 Company,
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 Company 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 to, deliver the Securities in the Custody
Account, pay the Cash in the Deposit Account, and deliver and pay Securities and
Cash in the Segregated Account to the Company unless Chase has received from the
Company 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 Account shall
be delivered and paid. Concurrently with the delivery of such Securities, Chase
shall deliver to the Company, or such other person as the Company shall
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 Company 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 Company, or cause such other
Chase Branch to execute and deliver in the name of the Company, such
certificates, instruments, and other documents as shall be reasonably necessary
in connection with such performance, provided that the Company 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:
If to the Company, then to
Xxxxxxxxx Institutional Funds, Inc.
000 X. Xxxxxxx Xxxx.
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Secretary
If to Chase, then to
The Chase Manhattan Bank, N.A.
XxxxxXxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Global Custody Division Executive
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
Company 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 Company business of Chase, shall succeed to the respective rights and
shall assume the respective duties of the Company or of Chase, as the case may
be, hereunder.
23. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York.
THE CHASE MANHATTAN BANK
By: /s/XXXXXX XXXXXXX
---------------------
Xxxxxx Xxxxxxx
SEnior Vice President
XXXXXXXXX INSTITUTIONAL FUNDS, INC.
By:/s/XXXXXXX X. XXXXX
----------------------
Xxxxxxx X. Xxxxx
Secretary
