EXHIBIT 8.7
AMENDMENT TO THE CUSTODIAN AGREEMENT
AMENDMENT entered into as of this _____ day of ____________, 1998 to the
Custodian Agreement between Xxxxxxxx Xxxxxxxxx Mutual Funds (the "Fund") on
behalf of each of the portfolios listed on the attached Appendix "C" as the same
may be amended from time to time (each a Portfolio and collectively the
Portfolios) and XXXXX BROTHERS XXXXXXXX & CO. (the "Custodian") dated as of
____________________(the "Agreement").
In consideration of the Custodian's offering subcustodial services to the
Portfolios in Russia, the Fund and the Custodian agree that the Agreement is
hereby amended as follows:
1. Section 5. SAFEKEEPING OF FUND ASSETS is amended by the addition of
the following phrase at the end of said Section:
"The Custodian's responsibility for safekeeping equity securities of
Russian issuers ("Russian Equities") hereunder shall be limited to the
safekeeping of relevant share extracts from the share registration books
maintained by the entities providing share registration services to issuers
of Russian Equities (each a "Registrar") indicating an investor's ownership
of such securities (each a "Share Extract")."
2. Section 5.4 BOOK ENTRY ASSETS, is amended by the addition of the
following at the end of said Section:
"With respect to Russian Equities, the Custodian shall instruct a
Subcustodian to endeavor to assure that registration thereof shall be
reflected on the books of the issuer's Registrar, subject to the following
conditions, but shall in no event be liable for losses or costs incurred as
a result of delays or failures in the registration process, including
without limitation the inability to obtain or enforce relevant Share
Extracts. Such registration may be in the name of a nominee of a
Subcustodian. In the event registration is in the name of a Portfolio, the
Fund hereby acknowledges that only the Custodian or Subcustodian may give
instructions to the Registrar to transfer or engage in other transactions
involving the Russian Equities so registered.
A Subcustodian may from time to time enter into contracts with
Registrars with respect to the registration of Russian Equities ("Registrar
Contracts"). Such Registrar Contracts may provide for (i) regular share
confirmations by the Subcustodian, (ii) reregistrations within set
timeframes, (iii) use of a Subcustodian's nominee name, (iv) direct access
by auditors of the Subcustodian or its clients to share registers, and (v)
specification of the Registrar's responsibilities and liabilities. It is
hereby acknowledged and agreed that the Custodian does not represent or
warrant that such Registrar Contracts
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are enforceable.
If the Fund instructs the Custodian to settle a purchase of a Russian
Equity, the Custodian will instruct a Subcustodian to endeavor on a best
efforts basis to reregister the Russian Equity and obtain a Share Extract
in a timely manner.
After completion of reregistration of a Russian Equity in respect of
which a Subcustodian has entered into a Registrar Contract, the Custodian
shall instruct the Subcustodian to monitor such registrar on a best efforts
basis and to notify the Custodian upon the Subcustodian's obtaining
knowledge of the occurrence of any of the following events ("Registrar
Events"): (i) a Registrar has eliminated a shareholder from the register or
has altered registration records; (ii) a Registrar has refused to register
securities in the name of a particular purchaser and the purchaser or
seller has alleged that the registrar's refusal to so register was
unlawful; (iii) a Registrar holds for its own account shares of an issuer
for which it serves as registrar; (iv) if a Registrar Contract is in effect
with a Registrar, the Registrar notifies the Subcustodian that it will no
longer be able materially to comply with the terms of the Registrar
Contract; or (v) if a Registrar Contract is in effect with a Registrar,
the Registrar has materially breached such Contract. The Custodian shall
inform the Fund of the occurrence of a Registrar Event provided the
Custodian has in fact received actual notice thereof from the Subcustodian.
It shall be the sole responsibility of the Fund to contact the
Custodian prior to executing any transaction in a Russian Equity to
determine whether a Registrar Contract exists in respect of such issuer.
If the Fund instructs the Custodian by Proper Instruction to settle a
purchase of a Russian Equity in respect of which the Subcustodian has not
entered into a Registrar Contract, then the Custodian shall instruct the
Subcustodian to endeavor to settle such transaction in accordance with the
Proper Instruction and with the provisions of Section 6.1 of this
Agreement, notwithstanding the absence of any such Registrar Contract and
without the Custodian being required to notify the Fund that no such
Registrar Contract is then in effect, and it being understood that neither
the Custodian nor the Subcustodian shall be required to follow the
procedure set forth in the second preceding paragraph."
3. Section 6.1 PURCHASE OF INVESTMENTS, is amended by the addition of
the following at the end of said Section:
"Without limiting the generality of the foregoing, the following
provisions shall apply with respect to settlement of purchases of
securities in Russia. Unless otherwise instructed by Proper Instructions
acceptable to the Custodian, the Custodian shall only authorize a
Subcustodian to make payment for purchases of Russian Equities upon receipt
of the relevant Share Extract in respect of the Portfolio's purchases. With
respect to securities other than Russian Equities, settlement of purchases
shall be made in accordance with securities processing or settlement
practices which the Custodian in its discretion determines to be a market
practice. The Custodian shall only be responsible for securities purchased
upon actual receipt of such securities at the premises of its Subcustodian,
provided that the Custodian's responsibility for securities represented by
Share Extracts shall be limited to the safekeeping of the relevant Share
Extract upon
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actual receipt of such Share Extract at the premises of the Subcustodian."
4. Section 6.2 SALE OF INVESTMENTS is amended by the addition of the
following at the end of said Section:
"Without limiting the generality of the foregoing, the following
provisions shall apply with respect to settlement of sales of securities in
Russia. Unless otherwise expressly instructed by Proper Instructions
acceptable to the Custodian, settlement of sales of securities shall be
made in accordance with securities processing or settlement practices which
the Custodian in its discretion determines to be a market practice. The
Fund hereby expressly acknowledges that such market practice might require
delivery of securities prior to receipt of payment and that the Fund bears
the risk of payment in instances where delivery of securities is made prior
to receipt of payment therefor in accordance with Proper Instructions
received by the Custodian or pursuant to the Custodian's determination in
its discretion that such delivery is in accordance with market practice.
The Custodian shall not be responsible for any securities delivered from
the premises of the Subcustodian from the time they leave such premises."
5. Section 5.1 USE OF SECURITIES DEPOSITORIES is amended by the addition
of the following at the end of said Section:
"With respect to Russia, the Fund hereby expressly acknowledges that a
Subcustodian for Russian securities may from time to time delegate any of
its duties and responsibilities to any securities depository, clearing
agency, share registration agent or sub-subcustodian (collectively,
"Russian Agent") in Russia, including without limitation Rosvneshtorgbank
(also called Vneshtorgbank RF) ("VTB"). The Fund acknowledges that the
rights of the Subcustodian against any such Russian Agent may consist only
of a contractual claim against the Russian Agent.
Notwithstanding any provision of this Agreement to the contrary,
neither the Custodian nor the Subcustodian shall be responsible or liable
to the Fund or its shareholders for the acts or omissions of any such
Russian Agent. In the event of a loss of securities or cash held on behalf
of a Portfolio through any Russian Agent, the Custodian shall not be
responsible to the Fund or its shareholders unless and to the extent it in
fact recovers from the Subcustodian."
6. Section 6.13 TAXES is amended by the insertion of the following at
the end of said Section:
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"It is agreed that the Fund shall be responsible for preparation and
filing of tax returns, reports and other documents on any activities it
undertakes in Russia which are to be filed with any relevant governmental
or other authority and for the payment of any taxes, levies, duties or
similar liability the Fund incurs in respect of property held or sold in
Russia or of payments or distributions received in respect thereof in
Russia. Accordingly, the Fund hereby agrees to indemnify and hold harmless
the Custodian from any loss, cost or expense resulting from the imposition
or assessment of any such tax, duty, levy or liability or any expenses
related thereto."
7. A new Section 15 RISK DISCLOSURE ACKNOWLEDGMENT, is added at the end
of the present Section 15.3:
"The Fund hereby acknowledges that it has received, has read and has
understood the Custodian's Risk Disclosure Statement, a copy of which is
attached hereto and is incorporated herein by reference. The Fund further
acknowledges that the Risk Disclosure Statement is not comprehensive, and
warrants and represents to the Custodian that it has undertaken its own
review of the risks associated with investment in Russia and has concluded
that such investment is appropriate for the Fund and in no way conflicts
with the Fund's constitutive documents, investment objective, duties to its
shareholders or with any regulatory requirements applicable to the Fund."
Except as amended above, all the provisions of the Agreement as heretofore
in effect shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first set forth above.
Xxxxxxxx Xxxxxxxxx Mutual Funds (the "Fund")
on behalf of each of the portfolios listed on
the attached Appendix "C" as the same may be
amended from time to time (each a Portfolio
and collectively the Portfolios) XXXXX BROTHERS XXXXXXXX & CO.
----------------------------- -----------------------------
Name: Name:
Title: Title:
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