CUSTODY AGREEMENT
RESTATED AS OF FEBRUARY 11, 1986
AGREEMENT dated June 1, 1984, amended September 1, 1985 and
amended and restated as of February 10, 1986, between THE CHASE MANHATTAN BANK,
N.A. ("Chase"), having its principal place of business at 0 Xxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and XXXXXXXXX GLOBAL FUNDS, INC. ("the
Company"), a series 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, on behalf of Xxxxxxxxx Global II
(the "Fund"), a separate mutual fund forming part of the Company.
WHEREAS, the Company wishes to appoint Chase as custodian of
the securities and assets of the 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 on
behalf of the Fund and Chase and its successors and assigns, hereby agree as
follows:
1. APPOINTMENT AS CUSTODIAN. Chase agrees to act as custodian
for the Fund, as provided herein, in connection with (a) cash ("Cash") received
from time to time from, or for the account of, the Fund for credit to the Fund's
deposit account or accounts administered by Chase, Chase Branches and Domestic
Securities Depositories (as hereinafter defined), and/or Foreign Banks and
Foreign Securities Depositories (as hereinafter
defined) (the "Deposit Account"); (b) all stocks, shares, bonds, debentures,
notes, mortgages, or other obligations for the payment of money and any
certificates, receipts, warrants, or other instruments representing rights to
receive, purchase, or subscribe for the same or evidencing or representing any
other rights or interests therein and other similar property ("Securities") from
time to time received by Chase and/or any Chase Branch, Domestic Securities
Depository, Foreign Bank or Foreign Securities Depository for the account of the
Fund (the "Custody Account"); and (c) original margin and variation margin
payments in a segregated account for futures contracts, and U.S. and Canadian
government obligations purchased with a simultaneous agreement by the seller to
repurchase them within 7 days plus accrued interest deposited in a separate
segregated account (the "Segregated Accounts").
All cash hold in the Deposit Account or in the Segregated
Accounts in connection with which Chase agrees to act as custodian is hereby
denominated as a special deposit which shall be held in trust for the benefit of
the Fund and to which Chase, Chase Branches and Domestic Securities Depositories
and/or Foreign Banks and Foreign Securities Depositories shall have no ownership
rights, and Chase will so indicate on its books and records pertaining to the
Deposit Account and the Segregated Accounts. All cash hold in auxiliary accounts
that may be carried for the Fund with Chase (including a Money Market Account,
Redemption Account, Distribution Account and Imprest
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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 Section 4
hereof:
(a) The Book Entry System and The Depository Trust Company;
and also such other Domestic Securities Depositories selected by Chase
and as to which Chase has received a certified copy of a resolution of
the Company's Board of Directors authorizing deposits therein;
(b) Chase's foreign branch offices in the United Kingdom, Hong
Kong, Singapore, and Tokyo, and such other foreign branch offices of
Chase located in countries approved by the Board of Directors of the
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;
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to hold Securities and Cash at any time owned by the Company on behalf of the
Fund, it being understood that no such appointment or utilization shall in any
way relieve Chase of its responsibilities as provided for in this Agreement.
Foreign branch offices of Chase appointed and utilized 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 hold in the United States, Securities
and/or Cash that are then being hold outside the United States upon request of
the Company 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 on behalf of the Fund (the "Operating Agreement").
3. DEFINITIONS. As used in this Agreement the
following terms shall have the following meanings:
(a) "Authorized Persons of the Fund" shall mean such
officers or employees of the Company or any other person or
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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 Fund, 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.
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(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 Fund giving such instructions,
and/or such other forms of communications as from time to time shall be
agreed upon in writing between the Company on behalf of the Fund and
Chase.
4. SELECTION OF COUNTRIES IN WHICH SECURITIES MAY BE HELD.
Chase shall not cause Securities and Cash to be hold in any country outside the
United States until the Company has directed the holding of the Fund's assets in
such country. Chase represents that it has been advised by the Company that in
giving such a direction the Company may consider, among other factors, the
following:
(a) comparative operational efficiencies of custody;
(b) clearance and settlement and the costs thereof;
and
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(c) political and other risks, other than those risks
specifically assumed by Chase.
5. RESPONSIBILITY OF CHASE TO SELECT CUSTODIANS IN INDIVIDUAL
FOREIGN COUNTRIES. The responsibility for selecting the Chase Branch, Foreign
Bank or Foreign Securities Depository to hold the Fund's Securities and Cash in
individual countries authorized by the Company on behalf of the Fund shall be
that of Chase. Chase generally shall utilize Chase Branches where available. In
locations where there are no Chase Branches providing custodial services, Chase
shall select as 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 the Company's Board of Directors:
(i) Have approved Chase's selection of the
particular Foreign Bank or Foreign Securities
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Depository, as the case may be, as consistent with the
best interests of the Fund and its Shareholders;
(ii) Have approved as consistent with the best
interests-of the Fund and its Shareholders a written
contract prepared by Chase which will govern the manner
in which such Foreign Bank will maintain the Fund's
assets.
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
FUND. Chase Branches, Foreign Banks and Foreign Securities
Depositories shall be subject to the instructions of Chase and/or
the Foreign Bank, and not to those of the Company. Chase
warrants and represents that all such instructions shall afford
protection to the Fund at least equal to that afforded for
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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
Fund the Securities shown on Chase's account on the books of the Foreign Bank,
Domestic Securities Depository or Foreign Securities Depository and (c) with
respect to Securities deposited by a Foreign Bank with a Foreign Securities
Depository, Chase shall cause the Foreign Bank to identify on its books as
belonging to Chase, as agent, the Securities shown on the Foreign Bank's account
on the books of the Foreign Securities Depository. All Securities of the Fund
maintained by Chase pursuant to this Agreement shall be subject only to the
instructions of Chase, Chase Branches or their agents. Chase shall only deposit
Securi-ties with a Foreign Bank in accounts that include only assets held by
Chase for its customers.
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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:
(i) deposit original margin and variation margin
payments in a segregated account maintained by Chase;
and
(ii) perform all other obligations attendant to
transactions or positions in such futures contracts, as
such payments or performance may be required by law or
the executing broker.
8b. SEGREGATED ACCOUNT FOR REPURCHASE AGREEMENTS.
With respect to purchases for the Custody Account from banks (including Chase)
or broker-dealers of United States or Canadian government obligations with a
simultaneous agreement by the seller to repurchase them within no more than 7
days at the original purchase price plus accrued interest, pursuant to written
Instructions, to:
(i) deposit such securities and repurchase
agreements in a segregated account maintained by Chase;
and
(ii) promptly show on Chase's records that such
securities and repurchase agreements are being held on behalf
of the Fund and deliver to the Fund a written confirmation to
that effect.
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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 nostra 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
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Depositories, including receipts and payments of cash held in any nostra 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 make payments of Cash held in the Deposit Account only:
(a) in connection with the purchase of Securities for the
account of the Fund and only against the receipt of such Securities by
Chase or by another appropriate Chase Branch, Domestic Securities
Depository, Foreign Bank or Foreign Securities Depository, or otherwise
as provided in the Operating Agreement, each such payment to be made at
prices confirmed by Written Instructions, or
(b) in connection with any dividend, interim dividend
or other distribution declared by the Company on behalf of
the Fund, 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.
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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 the Fund
and receipt of such payment in the amount shown in a broker's
confirmation of sale of the Securities or other proper authorization
received by Chase before such payment is made, as confirmed by Written
Instructions;
(b) in exchange for or upon conversion into other Securities
alone or other Securities and Cash pursuant to any plan of merger,
consolidation, reorganization, re-capitalization, readjustment, or
tender offer;
(c) upon exercise of conversion, subscription, pur-
chase, or other similar rights represented by such Securi-
ties; or
(d) otherwise as directed by the Company by Written
Instructions which shall set forth the amount and purpose of
such transfer or delivery.
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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 the Fund except that, if such Securities
are convertible, such Securities shall not be presented for payment
until two business days preceding the date on which such conversion
rights would expire unless Chase previously shall have received Written
Instructions with respect thereto;
(c) present for exchange all Securities in the Custody
Account converted pursuant to their terms into other
Securities,
(d) in respect of securities in the Custody Account,
execute in the name of the Fund such ownership and other
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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 Fund 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 on behalf of the Fund. All records so maintained in
connection with the performance of its duties under this Agreement shall remain
the property of the Company and, in the event of termination of this
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Agreement, shall be delivered in accordance with the provisions of Section 19.
Chase hereby agrees, subject to restrictions under applicable
laws, that the books and records of Chase and any Chase Branch pertaining to
their actions under this Agreement shall be open to the physical, on-premises
inspection and audit at reasonable times by the independent accountants
("Accountants") employed by, or other representatives of, the 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 Fund. 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 on behalf of the Fund, such
statements, reports, and advice with respect to Cash in the
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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 advice 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 Accounts and any of the Securities and Cash
while in the posses-sion of Chase or any Chase Branch, Domestic Securities
Deposi-tory, Foreign Bank or Foreign Securities Depository, or in the possession
or control of any employees, agents or other personnel
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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 or the Fund occasioned by any destruction of the Securities or
Cash so held or while in such possession, by any robbery, burglary, larceny,
theft or embezzlement by any employees, agents or personnel of Chase or any
Chase Branch, Domestic Securities Depository, Foreign 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
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itself against loss from any cause but shall be under no obligation to insure
for the benefit of the Company or the Fund.
(b) COLLECTIONS. All collections of funds or other property
paid or distributed in respect of Securities held in the Custody Account shall
be made at the risk of 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, the Fund or any of their affiliates, or any robbery,
theft, embezzlement or fraudulent act by any employee or agent of the Company,
the Fund or any of their affiliates. Chase shall not be liable for any action
taken in good faith upon Written Instructions of Authorized Persons of the
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Fund 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 the extent of Chase's liability to the Company on behalf of the Fund
under Section 14(a) shall not exceed $8,000,000 (as of June 1, 1984), it being
understood and agreed that the foregoing limit of $8,000,000 applies on an,
aggregated basis to all losses under Section 14(a) incurred by the Fund and is
subject to annual adjustment as set forth in Section 14(e). The Company agrees
that Chase's sole responsibility with respect to losses under Section 14(a)
shall be to pay to the Company on behalf of the Fund the amount of any such loss
as provided in Section 14(a) (subject to the limitation provided in the
preceding sentence). 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 each anniversary of the original June 1, 1984
date of this Agreement the Company on behalf of the Fund shall provide
Chase with the amount of the total net assets of the Fund as of the
close of business on such anniversary date (or if the New York Stock
Exchange is closed on such anniversary 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).
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It is understood by the parties to this Agreement that,
simultaneously with this Agreement, Chase is entering into sub-stantially
similar custody agreements as follows: an agreement with the Company on behalf
of Xxxxxxxxx World Fund; an agreement with Xxxxxxxxx Global Funds, Inc. on
behalf of Xxxxxxxxx Global I; an agreement with Xxxxxxxxx Global Funds, Inc. on
behalf of Xxxxxxxxx Global II; and an agreement with Xxxxxxxxx Growth Fund,
Ltd., all of which Funds have as their investment advisers companies under the
control and direction of Xxxx X. Xxxxxxxxx and the same as or affiliated with
the Investment Manager of the Fund; as well as any substantially similar custody
agreements of Chase with any additional mutual funds under Xxxxxxxxx management
which may hereafter be organized. Each of such custody agreements with each of
such other Xxxxxxxxx Funds contains (or will contain) a "Standard of Care"
section similar to this Section 14, except that the limit of Chase's liability
is in varying amounts for each Fund, with the aggregate limits of liability in
all of such agreements, including this custody agreement, amounting to
$150,000,000.
On each anniversary of the original June 1, 1984 date of this
Agreement, and of the similar custody agreements with each other Xxxxxxxxx Fund,
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 Fund.
Thereupon Chase shall allocate to this Agreement with this Fund that proportion
of its total of $150,000,000 responsibility undertaking which is substantially
equal to the proportion which this Fund's net assets bears to the total net
assets of all such Xxxxxxxxx Funds subject to adjustments for claims
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paid as follows: all claims previously paid to this Fund shall first be deducted
from its proportionate allocable share of the $150,000,000 Chase responsibility,
and if the claims paid to this Fund amount to more than its allocable share of
the Chase responsibility, then the excess of such claims paid to this Fund shall
diminish the balance of the $150,000,000 Chase responsibility available for the
proportionate shares of all of the other Xxxxxxxxx Funds having similar custody
agreements with Chase. Based on such calculation, and on such adjustment for
claims paid, if any, Chase thereupon shall notify the Company on behalf of the
Fund of such limit of liability under this Section 14 which will be available to
this Fund with respect to (1) losses in excess of payment allocations for
previous years and (2) losses discovered during the next year this Agreement
remains in affect and until a new determination of such limit of responsibility
is made on the next succeeding anniversary date.
(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 Section 14(d) 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 hold
in the Custody Account, Cash held in the Deposit Account, and Securities or Cash
hold in the Segregated Accounts as it uses in respect of its own similar
property, but it need not maintain any insurance for the benefit of the Company
or the Fund with respect to Securities and Cash held outside of the United
States, Chase will be liable to the Company
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for any loss to the Company or the Fund resulting from any disappearance or
destruction of such Securities or Cash while in the possession of Chase or any
Chase Branch, Foreign Bank or Foreign Securities Depository, to the same extent
it would be liable to the 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,
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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 Fund 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 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 &
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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 the 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.
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17. COMPENSATION. The Company on behalf of the Fund agrees to
pay to Chase from time to time such compensation for its services pursuant to
this Agreement as may be mutually agreed upon in writing from time to time and
Chase's out-of-pocket or incidental expenses, as from time to time shall be
mutually agreed upon by Chase and the Company. The Company shall have no
responsibility for the payment of services provided by any Domestic securities
Depository, Chase Branch, Foreign Bank or Foreign Security 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 for a period
of one (1) year from the date of this Agreement and shall thereafter remain in
effect until terminated by either party upon 60 days' written notice to the
other, sent by registered mail.
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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 on behalf of the Fund agrees in writing
to assume the amount needed for such purpose. Chase, upon the date this
Agreement terminates pursuant to notice which has been given in a timely
fashion, shall, and/or shall cause each Domestic Securities Depository, Chase
Branch, Foreign Bank and Foreign Securities Depository to, deliver the
Securities in the Custody Account, pay the Cash in the Deposit Account, and
deliver and pay Securities and Cash in the Segregated Accounts to the Company on
behalf of the Fund 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 Accounts shall be delivered and paid.
Concurrently with the delivery of such Securities, Chase shall deliver to the
Company, on behalf of the Fund, 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
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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 Fund, or
cause such other Chase Branch to execute and deliver in the name of the Fund,
such certificates, instruments, and other documents as shall be reasonably
necessary in connection with such performance, provided that the 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 on behalf of the Fund, then to
Xxxxxxxxx Global II
Xxxxxxxxx Global Funds, Inc.
000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xx. Xxxxxxxxx, Treasurer
If to Chase, then to
The Chase Manhattan Bank, N.A.
1211 Avenue of the Americas
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, V.P.
or such other person or such other address as any party shall have furnished to
the other party in writing.
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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 trust 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 Now York.
THE CHASE MANHATTAN BANK, N.A.
By:_______________________________
Vice President
XXXXXXXXX GLOBAL FUNDS, INC.,
on behalf of XXXXXXXXX
GLOBAL II
By:/s/XXX X. XXXXXXXXXX
Xxx X. Xxxxxxxxxx,
Executive Vice President
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