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Draft of February 7, 1996
The CountryBasketsSM Index Fund, Inc.
Indemnity Agreement
This Indemnity Agreement (the "Agreement"), is made as of
___________ __, 1996 between The CountryBasketsSM Index Fund, Inc., a
Maryland corporation (the "Fund"), and Xxxxxxxxx Xxxxx Inc., a
___________________ corporation (the "Servicer").
WHEREAS, the Fund has appointed State Street Bank and Trust
Company the transfer agent and dividend disbursing agent (the "Transfer
Agent") pursuant to a Transfer Agency and Service Agreement (the "Transfer
Agency Agreement") with respect to the nine initial series of shares of
Common Stock ("Shares") of the Fund identified therein (each such series,
and each series subsequently established by the Fund and made subject to
the Transfer Agency Agreement in accordance with the terms thereof, a
"Series"); and
WHEREAS, the Servicer has entered into a Service Agreement (the
"Service Agreement") with the Transfer Agent whereby the Servicer agrees to
provide certain administrative services to the Transfer Agent in connection
with the receipt and processing of requests for redemption of Shares; and
WHEREAS, the Fund and the Servicer wish to set forth their
mutual understandings with respect to the
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Servicer's responsibilities to the Fund for the performance of its duties
under the Service Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement and the Fund's designation of the Servicer as a
permitted subcontractor of the Transfer Agent pursuant to Section 11.4 of
the Transfer Agency Agreement, the Fund and the Servicer agree as follows:
Section 1. Standard of Care. The Servicer shall at all times
act in good faith and agrees to use its best efforts within reasonable
limits to insure the delivery and accuracy of all services to be performed,
including any documents or information to be provided by it, under the
Service Agreement, but assumes no responsibility and shall not be liable
for loss or damage due to errors unless said errors are caused by its
negligence, bad faith, or willful misconduct or that of its officers,
agents or employees or the reckless disregard of its or their obligations
and duties thereunder.
Section 2. Indemnification of Servicer. The Servicer shall
not be responsible for, and the Fund shall with respect to each Series
indemnify and hold the Servicer harmless from and against, any and all
losses, damages, costs, charges, reasonable counsel fees, payments,
expenses and liability (collectively, "Claims") arising out of or
attributable to (a) the reasonable good faith reliance on or
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use by the Serivcer, its officers and employees of information, records or
documents which (i) are received by the Servicer from persons authorized by
the Fund's Board of Directors to give instructions under the Transfer
Agency Agreement ("Authorized Persons") or (ii) have been prepared or
maintained by the Fund or any other person or firm authorized to prepare or
maintain same on behalf of the Fund; and (b) the reliance on, or the
carrying out by the Servicer or its officers or employees of any
instructions or requests of the Fund received from Authorized Persons with
respect to each Series.
Section 3. Indemnification of the Fund. The Servicer agrees
to indemnify and hold the Fund harmless from and against any and all Claims
arising out of or attributable to the negligent performance of or negligent
failure to perform the duties and obligations of, or the willful
misconduct of, the Servicer under the Service Agreement.
Section 4. Idemnification Procedures. In order that the
indemnification provisions contained in Sections 2 and 3 shall apply, upon
the assertion of a Claim for which a party hereto may be required to
indemnify the other party, the party seeking indemnification (the
"Indemnitee") shall promptly notify the indemnifying party (the
"Indemnitor") of such assertion and shall keep the Indemnitor advised with
respect to all developments concerning such Claim. The
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Indemnitor shall have the option to participate with the Indemnitee in the
defense of such Claim or to defend against said Claim in its own name or in
the name of the Indemnitee. The Indemnitee shall in no case confess any
Claim or make any compromise or settlement in any case in which the
Indemnitor may be required to indemnify the Indemnitee except with the
Indemnitor's prior written consent.
Section 5. Termination; Amendment. This Agreement may be
terminated by either party upon sixty days' prior written notice to the
other party and shall terminate automatically upon the termination of the
Service Agreement. This Agreement may be amended or modified by a written
instrument executed by the parties.
Section 6. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF the parties have caused the Agreement to be
executed as of the day and year first written above.
THE COUNTRYBASKETSSM INDEX
FUND, INC.
By: _________________________
Name:
Title:
XXXXXXXXX XXXXX INC.
By: _________________________
Name:
Title:
