Form of Foreign Custody
Manager Delegation Amendment
2001
Xxx Xxxxxx Series Fund, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
RE: FOREIGN CUSTODY MANAGER DELEGATION AMENDMENT
THE XXX XXXXXX SERIES FUND, INC
Dear Sirs:
Reference is made to the custody agreement dated as of December 31, 1992,
amended April 22, 1996 (the "Agreement") by and between The Chase Manhattan Bank
(as successor by operation of law to Xxxxxx Xxxxxxx Trust Company) ("Custodian")
and the Client for the safekeeping of securities and cash ("Property") received
by the Custodian for the account of the Client. Unless otherwise defined herein,
terms defined in the Agreement are used herein with their defined meanings.
1. In addition to the duties of the Custodian under the Agreement, with
respect to foreign Property in such jurisdictions as the Client and the
Custodian shall agree from time to time, the Client hereby delegates to the
Custodian, and the Custodian hereby accepts and assumes, the following duties of
a "Foreign Custody Manager" as set forth in Securities and Exchange Commission
rule 17f-5 ("rule 17f-5") under the Investment Company Act of 1940, as amended
("1940 Act"):
a. selecting Eligible Foreign Custodians (as that term is defined in
rule 17f-5(a)(1)), having first determined that foreign Property placed
and maintained in the safekeeping of each such Eligible Foreign
Custodian shall be subject to reasonable care, based on the standards
applicable to custodians in the relevant market, after having
considered all factors relevant to the safekeeping of such foreign
Property, including, without limitation, those factors set forth in
rule 17f-5(c)(1)(i)-(iv);
b. determining that the written contract with each Eligible Foreign
Custodian requires that the Eligible Foreign Custodian will provide
reasonable care for foreign assets based on the standards applicable to
custodians in the relevant market (as provided in rule 17f-5(c)(2)) and
entering into written contracts with such Eligible Foreign Custodians;
and
c. establishing a system for monitoring the appropriateness of both
maintaining the foreign Property with each Eligible Foreign Custodian
and the performance of the custody contract with such Xxxxxxxx Foreign
Custodians, it being understood, however, that in the event that
Xxxxxxxxx shall have determined that the existing Eligible Foreign
Custodian in a given country no longer affords reasonable care to
foreign Property and that no other Eligible Foreign Custodian in that
country would afford reasonable care, Custodian shall promptly so
advise Client and shall then act in accordance with the Authorized
Instructions of Client with respect to the disposition of the affected
foreign Property.
For purposes of clarity, it is understood and agreed that Custodian shall not be
responsible for any Foreign Custody Manager duties, including but not limited to
those described in a., b. and c. above, with respect to any securities
depository.
2. In acting as a Foreign Custody Manager, the Custodian shall exercise
reasonable care, prudence and diligence such as a person having responsibility
for the safekeeping of fund foreign Property would exercise.
3. The Custodian shall provide the Board of Directors of the Client
with written quarterly reports for use at the Client's quarterly Board of
Directors meetings regarding the placement of the foreign Property with a
particular Eligible Foreign Custodian and any material changes to the
arrangements with any Eligible Foreign Custodian holding any foreign Property.
4. Subject to Sections 1-3 above, Custodian is hereby authorized to
place and maintain foreign Property on behalf of Client with Eligible Foreign
Custodians pursuant to a written contract deemed appropriate by Custodian.
5. In acting as a Foreign Custody Manager, the Custodian shall not
supervise, recommend or advise the Client relative to the investment, purchase,
sale, retention or disposition of any foreign Property in any country, including
with respect to prevailing country risks. At Client's request, Custodian shall
provide to Client such information relating to country risk as is specified in
Appendix 1 hereto. Client hereby acknowledges that: (i) such information is
solely designed to inform Client of market conditions and procedures and is not
intended as a recommendation to invest or not invest in particular markets; and
(ii) Custodian has gathered the information from sources it considers reliable,
but that Custodian shall have no responsibility for inaccuracies or incomplete
information.
6. (a) The Client represents that it: (i) has the authority and power
to delegate to the Custodian the duties set forth herein, (ii) has taken all
requisite action (corporate or otherwise) to authorize the execution and
delivery of this Amendment, and (iii) the foreign Property being placed and
maintained in Bank's custody is subject to the 1940 Act, and (iv) its Board (or
other governing body) has determined that it is reasonable to rely on Custodian
to perform as Client's Foreign Custody Manager. (b) Custodian represents that
it: (i) is a U.S. Bank (as defined in rule 17f-5(a)(7), and (ii) has taken all
requisite action (corporate or otherwise) to authorize the execution and
delivery of this Amendment.
7. (a) In addition to the duties of the Custodian under the Agreement,
the Custodian shall, for consideration by the Client and as contemplated by SEC
rule 17f-7, provide an analysis of the custody risks associated with maintaining
the Client's foreign Property with each Eligible Securities Depository used by
the Custodian as of the effective of this Section 7 (or, in the case of an
Eligible Securities Depository not used by the Custodian as of such date, prior
to the initial placement of the
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Client's foreign Property at such Depository after such date) and at which any
foreign Property of the Client is held or is expected to be held. The foregoing
analysis will be provided to Customer at the Custodian's Website. In connection
with the foregoing, the Client shall notify the Custodian of any Eligible
Securities Depositories at which it does not choose to have its Foreign Assets
held. The Custodian shall monitor the custody risks associated with maintaining
the Client's foreign Property at each such Eligible Securities Depository on a
continuing basis and shall promptly notify the Client or its adviser of any
material change in such risks.
(b) The Custodian shall exercise reasonable care, prudence and
diligence in performing pursuant to Section 7(a).
(c) Based on the information available to it in the exercise of
diligence, the Custodian shall determine the eligibility under rule 17f-7(b)(1)
of each depository before including it on Appendix B hereto and shall promptly
advise the Client if any Eligible Securities Depository ceases to be eligible.
(d) The Custodian need not commence performing any of the duties set
forth in this Section 7 prior to March 31, 2001, but the Custodian shall advise
the Client if it is prepared to commence such duties prior to such date as to
particular depositories.
8. Section 2 of the Agreement is hereby deleted and replaced with the
following:
Foreign Property may be placed and maintained by Custodian on behalf of
Client: (i) in custody and deposit accounts that have been established
by the Custodian with one or more Eligible Foreign Custodians as listed
on Exhibit A, and as such Exhibit may be amended from time to time by
the Custodian by written notice to the Client (the "Subcustodians"),
(ii) through the facilities of the securities depositories (which shall
be Eligible Securities Depositories on and after the date of compliance
with rule 17f-7 and shall be "securities depositories" as defined in
(a)(1)(ii)-(iii) of the 1997 amendments to rule 17f-5 until such time)
listed on Exhibit B hereto (except that a "securities depository" as
used herein when referring to a securities depository located in the
U.S. shall mean a "securities depository" as defined in SEC rule
17f-4(a)), which are hereby authorized in respect of the markets in
which foreign Property is currently held, and (iii) through the
facilities of securities depositories listed on Exhibit B in respect of
the markets in which foreign Property is not currently held and as to
depositories added to such Exhibit from time to time by the Custodian
on written notice to the Client, but as to both such types of
depositories only upon Authorized Instructions (and which shall have
the same definitions as in (ii) above). At the request of Client,
Custodian may, but need not, add to Exhibit A an Eligible Foreign
Custodian that is a bank where Xxxxxxxxx has not acted as Foreign
Custody Manager with respect to the selection thereof. Custodian shall
notify Client in the event that it elects to add any such entity. For
purposes of the liability provisions of the Agreement, the term
Subcustodian shall not include any entity so added.
9. Except as expressly amended hereby, all terms and provisions of the
Agreement are and shall continue to be in full force and effect. This Amendment
shall be construed in accordance with the laws of the State of New York, without
regard to its conflict of laws principles.
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This Amendment may be executed by one or both of the parties hereto in any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.
If the foregoing corresponds to your understanding of our agreement,
please indicate your acceptance by the signature of your authorized
representative below.
Yours truly,
THE CHASE MANHATTAN BANK
By: /s/ XXXX X. XXXXXX
--------------------------------
Name: Xxxx X. Xxxxxx
Title: VP
Agreed and accepted:
The Xxx Xxxxxx Series Fund, Inc.
By: /s/ XXXX X. XXXXXX
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Assistant Secretary
Date: May 24, 2001
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Appendix 1
INFORMATION REGARDING COUNTRY RISK
1. To aid Client in its determinations regarding Country Risk, Custodian shall
furnish annually and upon the initial placing of Assets into a country the
following information (check items applicable):
A Opinions of local counsel concerning:
i. Whether applicable foreign law would restrict the access
afforded Client's independent public accountants to books and records kept by an
Eligible Foreign Custodian located in that country.
ii. Whether applicable foreign law would restrict the Client's
ability to recover its assets in the event of the bankruptcy of an Eligible
Foreign Custodian located in that country.
iii. Whether applicable foreign law would restrict the
Client's ability to recover assets that are lost while under the control of an
Eligible Foreign Custodian located in the country.
B. Written information concerning:
i. The likelihood of expropriation, nationalization, freezes,
or confiscation of Client's assets.
ii. Whether difficulties in converting Client's cash and
cash equivalents to U.S. dollars are reasonably foreseeable.
C. A market report with respect to the following topics: (i) securities
regulatory environment, (ii) foreign ownership restrictions, (iii) foreign
exchange, (iv) securities settlement and registration, (v) taxation, and (vi)
securities depositories (including securities depository evaluation).
2. Custodian shall furnish the following additional information on an as needed
basis:
Market flashes, including with respect to changes in the information in
market reports.
