Exhibit 8(a)(1)
CUSTODIAN AGREEMENT
AGREEMENT made this 14 day of April, 1986, between Xxxxxxx International
Fund, Inc. (the "Fund") and Xxxxx Brothers Xxxxxxxx & Co. (the "Custodian").
WITNESSETH: That in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. The Fund hereby employs and appoints the Custodian as a custodian for
the term and subject to the provisions of this Agreement. The Fund agrees to
deliver to the Custodian all securities and cash owned by it, and all payments
of income, payments of principal or capital distributions received by it with
respect to all securities owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares of capital stock of
the Fund as may be issued or sold from time to time.
The Custodian shall not be under any duty or obligation to require the Fund
to deliver to it any securities or funds owned by the Fund and shall have no
responsibility or liability for or on account of securities or funds not so
delivered. The Fund will deposit with the Custodian copies of the Certificate of
Incorporation and By-Laws (or comparable documents) of the Fund and all
amendments thereto, and copies of such votes and other proceedings of the Fund
as may be necessary for or convenient to the Custodian in the performance of its
duties.
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It is understood that as used in this Agreement, the term securities" shall
include futures contracts and options.
2. Except for securities and funds held by subcustodians appointed pursuant
to the provisions of Section 3 hereof, the Custodian shall have and perform the
following powers and duties:
A. Safekeeping - To keep safely the securities of the Fund that have been
delivered to the Custodian and from time to time to receive delivery of
securities for safekeeping.
B. Manner of Holding Securities - To hold securities of the Fund (1) by
physical possession of the share certificates or other instruments representing
such securities in registered or bearer form or of the broker's receipts or
confirmations for futures contracts, options and similar securities, or (2) in
book-entry form by a Securities System (as said term is defined in Section 2V).
C. Registered Name; Nominee - To hold registered securities of the Fund (1)
in the name or any nominee name of the Custodian or the Fund, or in the name or
any nominee name of any agent appointed pursuant to Section 6E, or (2) in street
certificate form, so-called, and in any case with or without any indication of
fiduciary capacity.
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D. Purchases - Upon receipt of proper instructions, and insofar as funds
are available for the purpose, to pay for and receive securities purchased for
the account of the Fund, payment being made only upon receipt of the securities
(1) by the Custodian, or (2) by a clearing corporation of a national securities
exchange of which the Custodian is a member, or (3) by a Securities System.
However, (i) in the case of repurchase agreements entered into by the Fund, the
Custodian (as well as a Subcustodian or an Agent, as defined in Section 2G) may
release funds to a Securities System prior to the receipt of advice from the
Securities System that the securities underlying such repurchase agreement have
been transferred by book entry into the Account (as defined in Section 2V) of
the Custodian (or such Subcustodian or Agent) maintained with such Securities
System, and (ii) in the case of futures contracts, options and similar
securities or time deposits, call account deposits, currency deposits, and other
deposits pursuant to Sections 2M, 2N and 20, the Custodian may make payment
therefor without receiving an instrument evidencing said contract, option,
security or deposit.
E. Exchanges - Upon receipt of proper instructions, to exchange securities
held by it for the account of the Fund for other securities in connection with
any reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event, and to deposit any such securities in accordance with
the terms of any reorganization or protective
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plan. Without such instructions, the Custodian may surrender securities in
temporary form for definitive securities, may surrender securities for transfer
into a name or nominee name as permitted in Section 2C, and may surrender
securities for a different number of certificates or instruments representing
the same number of shares or same principal amount of indebtedness, provided the
securities to be issued are to be delivered to the Custodian.
F. Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit to the account of
the Custodian with a clearing corporation of a national securities exchange of
which the Custodian is a member, or (3) by credit to the account of the
Custodian or an Agent of the Custodian with a Securities System.
G. Depositary Receipts - Upon receipt of proper instructions, to instruct a
subcustodian appointed pursuant to Section 3 hereof (a "Subcustodian") or an
agent of the Custodian appointed pursuant to Section 6E hereof (an "Agent") to
surrender securities to the depositary used by an issuer of American Depositary
Receipts or International Depositary Receipts (hereinafter collectively referred
to as "ADRs") for such
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securities against a written receipt therefor adequately describing such
securities and written evidence satisfactory to the Subcustodian or Agent that
the depositary has acknowledged receipt of instructions to issue with respect to
such securities ADRs in the name of the Custodian, or a nominee of the
Custodian, for delivery to the Custodian in Boston, Massachusetts, or at such
other place as the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon receipt of proper instructions,
to deliver to the issuer or trustee thereof, or to the agent of either,
warrants, puts, calls, futures contracts, options rights or similar securities
for the purpose of being exercised or sold, provided that the new securities and
cash, if any, acquired by such action are to be delivered to the Custodian, and,
upon receipt of proper instructions, to deposit securities upon invitations for
tenders of securities, provided that the consideration is to be paid or
delivered or the tendered securities are to be returned to the Custodian.
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I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive and retain
confirmations or other documents evidencing the purchase or writing of an option
on a security or securities index by the Fund; to deposit and maintain in a
segregated account, either physically or by book-entry in a Securities System,
securities subject to a covered call option written by the Fund; and to release
and/or transfer such securities or other assets only in accordance with a notice
or other communication evidencing the expiration, termination or exercise of
such covered option furnished by The Options Clearing Corporation, the
securities or options exchange on which such covered option is traded or such
other organization as may be responsible for handling such options transactions.
K. Futures Contracts - Upon receipt of proper instructions, to receive and
retain confirmations evidencing the purchase or sale of a futures contract or an
option on a futures contract by the Fund; to deposit and maintain in a
segregated account, for the benefit of any futures commission merchant, assets
designated by the Fund as initial, maintenance or variation "margin" deposits
intended to secure the Fund's performance of
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its obligations under any futures contracts purchased or sold or any options on
futures contracts written by the Fund, in accordance with the provisions of any
agreement or agreements among any of the Fund, the Custodian and such futures
commission merchant, designed to comply with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar organization or
organizations, regarding such margin deposits; and to release and/or transfer
assets in such margin accounts only in accordance with any such agreements or
rules.
L. Borrowings - Upon receipt of proper instructions, to deliver securities
of the Fund to lenders or their agents as collateral for borrowings effected by
the Fund, but only against receipt of the amounts borrowed, provided that if
such collateral is held in book-entry form by a Securities System (as defined in
Section 2V), such collateral may be transferred by book-entry to such lender or
its agent against receipt by the Custodian of an undertaking by such lender to
pay such borrowed money to or upon the Custodian's order on the next business
day following such transfer of collateral.
M. Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of the Fund on the Custodian's books subject only to draft
or order by the Custodian. All funds received by the Custodian from or for the
account of the Fund shall be deposited in said account(s). The responsibilities
of
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the Custodian to the Fund for deposits accepted on the Custodian's books shall
be that of a U. S. bank for a similar deposit.
If and when authorized by proper instructions, the Custodian may open and
operate an additional account(s) in such other banks or trust companies as may
be designated by the Fund in such instructions (any such bank or trust company
so designated by the Fund being referred to hereafter as a "Banking
Institution"), provided that such account(s) shall be in the name of the
Custodian for account of the Fund and subject only to the Custodian's draft or
order. Such accounts may be opened with Banking Institutions in the United
States and in other countries and may be denominated in either U. S. Dollars or
other currencies as the Fund may determine. All such deposits shall be deemed to
be portfolio securities of the Fund and accordingly the responsibility of the
Custodian therefor shall be the same as and no greater than the Custodian's
responsibility in respect of other portfolio securities of the Fund.
N. Interest Bearing Call or Time Deposits - To place interest bearing fixed
term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other Banking Institutions as the Fund may
determine. Deposits may be denominated in U. S. Dollars
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or other currencies and need not be evidenced by the issuance or delivery of a
certificate to the Custodian, provided that the Custodian shall include in its
records with respect to the assets of the Fund, appropriate notation as to the
amount and currency of each such deposit, the accepting Banking Institution, and
other appropriate details. Such deposits, other than those placed with the
Custodian, shall be deemed portfolio securities of the Fund and the
responsibilities of the Custodian therefor shall be the same as those for demand
deposit bank accounts placed with other banks, as described in the second
paragraph of Section 2M of this Agreement. The responsibility of the Custodian
for such deposits accepted on the Custodian's books shall be that of a U. S.
bank for a similar deposit.
O. Foreign Exchange Transactions - Pursuant to proper instructions, to
enter into foreign exchange contracts to purchase and sell foreign currencies
for spot and future delivery on behalf and for the account of the Fund, and in
connection therewith to receive and retain receipts, confirmations or other
documents evidencing such contracts and to deposit and maintain cash or
designated securities in a segregated account and to release and/or transfer
assets held in such account only in accordance with such proper instructions.
Such transactions may be undertaken by the Custodian with such Banking
Institutions, including the Custodian and Subcustodian(s) as principals, as
approved and authorized by the Fund. Foreign exchange contracts,
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other than those executed with the Custodian, shall be deemed to be portfolio
securities of the Fund and the responsibilities of the Custodian therefor shall
be the same as those for demand deposit bank accounts placed with other banks as
described in the second paragraph of Section 2M of this Agreement.
P. Stock Loans - Upon receipt of proper instructions, to deliver securities
of the Fund, in connection with loans of securities by the Fund, to the borrower
thereof but only against receipt of such collateral as the Fund shall instruct;
except that in connection with any loans for which collateral is to be credited
to the Custodian's Account in a book-entry system referred to in Section 2V(ii)
hereof, the Custodian may deliver securities prior to the credit of such
collateral, provided that the Custodian shall promptly notify the Fund if such
collateral is not credited.
Q. Collections - To collect, receive and deposit in the account or accounts
referred to in Section 2M all income and other payments with respect to the
securities held hereunder, and to execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection with receipt of
income or other payments with respect to securities of the Fund or in connection
with transfer of securities, and pursuant to proper instructions to take other
actions, which involve an investment decision, with respect to collection or
receipt of funds or transfer of securities.
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R. Dividends, Distributions and Redemption - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder Servicing Agent or as such Agent shall otherwise instruct for
payment to Fund shareholders who have delivered to such Agent a request for
repurchase or redemption of their shares of capital stock of the Fund.
S. Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all
forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of proper instructions, to execute
and deliver
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or cause its nominee to execute and deliver such proxies or other authorizations
as may be required. Neither the Custodian nor its nominee shall vote upon any of
such securities or execute any proxy to vote thereon or give any consent or take
any other action with respect thereto (except as otherwise herein provided)
unless ordered to do so by proper instructions.
T. Bills - Upon receipt of proper instructions, to pay or cause to be paid,
insofar as funds are available for the purpose, bills, statements, or other
obligations of the Fund.
U. Nondiscretionary Details - Without the necessity of express
authorization from the Fund (1) to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Fund held by the
Custodian except as otherwise directed from time to time by the Board of
Directors of the Fund, and (2) to make payments to itself or others for minor
expenses of handling securities or other similar items relating to the
Custodian's duties under this Agreement, provided that all such payments shall
be accounted for to the Fund.
V. Deposit of Fund Assets in Securities Systems - The Custodian may deposit
and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart 0 of Treasury
Circular Xx. 000,
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00 XXX 000, Xxxxxxx X of 31 CRF Part 350, or the book-entry regulations of
federal agencies substantially in the form of Subpart O, or (iii) any other
domestic clearing agency registered with the Securities and Exchange Commission
under Section 17A of the Securities Exchange Act of 1934 which acts as a
securities depository and whose use the Fund has previously approved in writing
(each of the foregoing being referred to in this Agreement as a "Securities
System"). Utilization of a Securities System shall be in accordance with
applicable Federal Reserve Board and Securities and Exchange Commission rules
and regulations, if any, and subject to the following provisions:
(1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian
(provided that any such Agent shall be qualified to act as a custodian
of the Fund pursuant to the Investment Company Act of 1940 and the
rules and regulations thereunder), in a Securities System provided
that such securities are represented in an account ("Account") of the
Custodian or such Agent in the Securities System which shall not
include any assets of the Custodian or Agent other than assets held as
a fiduciary, custodian, or otherwise for customers;
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(2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund;
(3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund upon (i) receipt
of advice from the Securities System that payment for such securities
has been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and payment
for the account of the Fund. Copies of all advices from the Securities
System of transfers of securities for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian or an
Agent as referred to above, and be provided to the Fund at its
request. The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in the form of a written
advice or notice and shall furnish to the Fund copies of daily
transaction sheets
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reflecting each day's transactions in the Securities System for the
account of the Fund on the next business day;
(4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System; and the
Custodian and such Agents shall send to the Fund such reports on their
own systems of internal accounting control as the Fund may reasonably
request from time to time.
(5) At the written request of the Fund, the Custodian will terminate the
use of any such Securities System on behalf of the Fund as promptly as
practicable.
W. Other Transfers - To deliver securities, funds and other property of the
Fund to a Subcustodian or another custodian of the Fund; and, upon receipt of
proper instructions, to make such other disposition of securities, funds or
other property of the Fund in a manner other than or for purposes other than as
enumerated elsewhere in this Agreement, provided that the instructions relating
to such disposition shall include a statement of the purpose for which the
delivery is to be made, the amount of securities to be delivered and the name of
the person or persons to whom delivery is to be made.
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X. Investment Limitations - In performing its duties generally, and more
particularly in connection with the purchase, sale and exchange of securities
made by or for the Fund, the Custodian may assume unless and until notified in
writing to the contrary that proper instructions received by it are not in
conflict with or in any way contrary to any provisions of the Fund's Certificate
of Incorporation or By-Laws (or comparable documents) or votes or proceedings of
the shareholders or Directors of the Fund. The Custodian shall in no event be
liable to the Fund and shall be indemnified by the Fund for any violation or any
investment limitations to which the Fund is subject or other limitations with
respect to the Fund's powers to make expenditures, encumber securities, borrow
or take similar actions affecting its portfolio.
Y. Proper Instructions - Proper instructions shall mean a tested telex from
the Fund or a written request, direction, instruction or certification signed or
initialled on behalf of the Fund by one or more person or persons as the Board
of Directors of the Fund shall have from time to time authorized, provided,
however, that no such instructions directing the delivery of securities or the
payment of funds to an authorized signatory of the Fund shall be signed by such
person. Those persons authorized to give proper instructions may be identified
by the Board of Directors by name, title or position and will
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include at least one officer empowered by the Board to name other individuals
who are authorized to give proper instructions on behalf of the Fund. Telephonic
or other oral instructions given by any one of the above persons will be
considered proper instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. Oral instructions will be confirmed by tested telex or in
writing in the manner set forth above but the lack of such confirmation shall in
no way affect any action taken by the Custodian in reliance upon such oral
instructions. Proper instructions may relate to specific transactions or to
types or classes of transactions, and may be in the form of standing
instructions.
Proper instructions may include communications effected directly between
electro-mechanical or electronic devices or systems, in addition to tested
telex, provided that the Fund and the Custodian agree in writing to the use of
such device or system.
3. Securities, funds and other property of the Fund may be held by
subcustodians appointed pursuant to the provisions of this Section 3 (a
"Subcustodian"). The Custodian may, at any time and from time to time, appoint
any bank or trust company (meeting the requirements of a custodian or a foreign
custodian under the Investment Company Act of 1940 and the rules and
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regulations thereunder) to act as a Subcustodian for the Fund, provided that the
Fund shall have approved in writing (1) any such bank or trust company and the
subcustodian agreement to be entered into between such bank or trust company and
the Custodian, and (2) the Subcustodian's offices or branches at which the
Subcustodian is authorized to hold securities, cash and other property of the
Fund. Upon such approval by the Fund, the Custodian is authorized on behalf of
the Fund to notify each Subcustodian of its appointment as such. The Custodian
may, at any time in its discretion, remove any bank or trust company that has
been appointed as a Subcustodian.
Those Subcustodians, their offices or branches which the Fund has approved
to date are set forth on Appendix A hereto. Such Appendix shall be amended from
time to time as Subcustodians, branches or offices are changed, added or
deleted. The Fund shall be responsible for informing the Custodian sufficiently
in advance of a proposed investment which is to be held at a location not listed
on Appendix A, in order that there shall be sufficient time for the Fund to give
the approval required by the preceding paragraph and for the Custodian to put
the appropriate arrangements in place with such Subcustodian pursuant to such
subcustodian agreement.
If the Fund shall have invested in a security to be held in a location
before the foregoing procedures have been
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completed, such security shall be held by such agent as the Custodian may
appoint unless and until the Fund shall instruct the Custodian to move the
security into the possession of the Custodian or a Subcustodian. In any event,
the Custodian shall be liable to the Fund for the actions of such agent if and
only to the extent the Custodian shall have recovered from such agent for any
damages caused the Fund by such agent.
With respect to the securities and funds held by a Subcustodian, either
directly or indirectly, including demand and interest bearing deposits,
currencies or other deposits and foreign exchange contracts as referred to in
Sections 2M, 2N or 2O, the Custodian shall be liable to the Fund if and only to
the extent that such Subcustodian is liable to the Custodian and the Custodian
recovers under the applicable subcustodian agreement. The Custodian shall
nevertheless be liable to the Fund for its own negligence in transmitting any
instructions received by it from the Fund and for its own negligence in
connection with the delivery of any securities or funds held by it to any such
Subcustodian.
In the event that any Subcustodian appointed pursuant to the provisions of
this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
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event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon the Fund's
request terminate such Subcustodian and, if necessary or desirable, appoint
another subcustodian in accordance with the provisions of this Section 3. At the
election of the Fund, it shall have the right to enforce, to the extent
permitted by the subcustodian agreement and applicable law, the Custodian's
rights against any such Subcustodian for loss or damage caused the Fund by such
Subcustodian.
At the written request of the Fund, the Custodian will terminate any
Subcustodian appointed pursuant to the provisions of this Section 3 in
accordance with the termination provisions under the applicable subcustodian
agreement. The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
In the event the Custodian intends to make any payment to a Subcustodian
under the indemnification provisions of any subcustodian agreement, the
Custodian shall give the Fund written notice of such intention no less than
thirty (30) days prior to the date such payment is to be made. The Fund shall be
obligated promptly to reimburse the Custodian the amount of such payment, unless
the Fund shall, within thirty (30) days of receipt of the Custodian's notice,
object in writing to such payment to the
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Subcustodian or to reimbursement of the Custodian (i) because the Fund disputes
the right of the Subcustodian to be so indemnified or (ii) because the Fund
believes that the Custodian was or might have been responsible by reason of the
Custodian's negligence or misconduct for the event or occurrence giving rise to
the Subcustodian's demand for indemnification. In the event the Fund, at the
direction of its Board of Directors or any Executive Committee thereof, shall
give written notice of such objection and the reasons therefor, the Custodian
may nevertheless make such payment to the Subcustodian, but without prejudice to
the Fund's right to refuse to reimburse the Custodian if the Fund's objection
under clause (i) or (ii) above shall be upheld in an appropriate judicial or
other proceeding; or in the alternative, the Custodian may refuse to pay the
indemnification demanded by the Subcustodian and the Custodian shall in such
event defend against any judicial or other proceeding brought against the
Custodian by the Subcustodian to obtain such indemnification. Such defense shall
be conducted by counsel reasonably satisfactory to both the Fund and the
Custodian. The Fund shall be entitled to participate in any such proceeding with
separate counsel of its own choice if it believes its position might otherwise
be compromised and, if the Fund or the Custodian believes there may be a
conflict in the respective positions of the Fund and the Custodian, then each
may retain separate counsel of its own choice. The Fund shall bear the
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costs and expenses of defending against the Subcustodian's claim, and the Fund
shall indemnify the Custodian and hold it harmless from all claims, liabilities,
judgments, costs and expenses (including counsel fees) and settlements of such
claim (provided that such settlement shall have been effected with the Fund's
written consent) incurred or assessed against the Custodian. Notwithstanding the
foregoing, if it shall be determined in an appropriate proceeding, including in
a proceeding as aforesaid brought by the Subcustodian, that, although the
Subcustodian was entitled to indemnification the Custodian was not entitled to
reimbursement by the Fund because the Custodian was responsible by reason of its
negligence or misconduct for the occurrence or event giving rise to the
Subcustodian's right to indemnification, then in such event the Fund shall not
be obligated to indemnify the Custodian as aforesaid and the Custodian shall
reimburse the Fund for any amounts paid by the Fund to Custodian in respect of
the costs and expenses of defending against the Subcustodian's claim.
4. The Custodian may assist generally in the preparation of reports to Fund
shareholders, regulatory authorities and others, audits of accounts, and other
ministerial matters of like nature.
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5. The Fund hereby also appoints the Custodian as its financial agent. With
respect to the appointment as financial agent, the Custodian shall have and
perform the following powers and duties:
A. Records - To create, maintain and retain such records relating to its
activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 31a-l and 31a-2 thereunder) and under
applicable Federal and State tax laws and administrative regulations. All such
records will be the property of the Fund and in the event of termination of this
Agreement shall be delivered to the successor custodian.
B. Accounts - To keep books of account and render statements, including
interim monthly and complete quarterly financial statements, or copies thereof,
from time to time as reasonably requested by proper instructions.
C. Access to Records - Subject to security requirements of the Custodian
applicable to its own employees having access to similar records within the
Custodian and such regulations as may be reasonably imposed by the Custodian,
the books and records maintained by the Custodian pursuant to Sections 5A and 5B
shall be open to inspection and audit at reasonable times by officers of,
attorneys for, and auditors employed by, the Fund.
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D. Calculation of Net Asset Value - To compute and determine the net asset
value per share of capital stock of the Fund as of the close of business on the
New York Stock Exchange on each day on which such Exchange is open, unless
otherwise directed by proper instructions. Such computation and determination
shall be made in accordance with (1) the provisions of the Certificate of
Incorporation and By-Laws of the Fund, as they may. from time to time be amended
and delivered to the Custodian, (2) the votes of the Board of Directors of the
Fund at the time in force and applicable, as they may from time to time be
delivered to the Custodian, and (3) proper instructions from such officers of
the Fund or other persons as are from time to time authorized by the Board of
Directors of the Fund to give instructions with respect to computation and
determination of the net asset value. On each day that the Custodian shall
compute the net asset value per share of the Fund, the Custodian shall provide
the Fund with written reports which permit the Fund to verify that portfolio
transactions have been recorded in accordance with the Fund's instructions.
In computing the net asset value, the Custodian may rely upon any
information furnished by proper instructions, including without limitation any
information (1) as to accrual of liabilities of the Fund and as to liabilities
of the Fund not appearing on the books of account kept by the Custodian, (2) as
-25-
to the existence, status and proper treatment of reserves, if any, authorized by
the Fund, (3) as to the sources of quotations to be used in computing the net
asset value, including those listed in Appendix B, (4) as to the fair value to
be assigned to any securities or other property for which price quotations are
not readily available, and (5) as to the sources of information with respect to
"corporate actions" affecting portfolio securities of the Fund, including those
listed in Appendix B. (Information as to "corporate actions" shall include
information as to dividends, distributions, stock splits, stock dividends,
rights offerings, conversions, exchanges, recapitalizations, mergers,
redemptions, calls, maturity dates and similar transactions, including the ex-
and record dates and the amounts or other terms thereof.)
In like manner, the Custodian shall compute and determine the net asset
value as of such other times as the Board of Directors of the Fund from time to
time may reasonably request.
Notwithstanding any other provisions of this Agreement, including Section
6C, the following provisions shall apply with respect to the Custodian's
foregoing responsibilities in this Section 5D: The Custodian shall be held to
the exercise of reasonable care in computing and determining net asset value as
provided in this Section 5D, but shall not be held accountable or liable for any
losses, damages or expenses the Fund or any
-26-
shareholder or former shareholder of the Fund may suffer or in arising from or
based upon errors or delays in the determination of such net asset value unless
such error or delay was due to the Custodian's negligence, gross negligence or
reckless or willful misconduct in determination of such net asset value. (The
parties hereto acknowledge, however, that the Custodian's causing an error or
delay in the determination of net asset value may, but does not in and of
itself, constitute negligence, gross negligence or reckless or willful
misconduct.) In no event shall the Custodian be liable or responsible to the
Fund, any present or former shareholder of the Fund or any other party for any
error or delay which continued or was undetected after the date of an audit
performed by the certified public accountants employed by the Fund if, in the
exercise of reasonable care in accordance with generally accepted accounting
standards, such accountants should have become aware of such error or delay in
the course of performing such audit. The Custodian's liability for any such
negligence, gross negligence or reckless or willful misconduct which results in
an error in determination of such net asset value shall be limited to the
direct, out-of-pocket loss the Fund, shareholder or former shareholder shall
actually incur, measured by the difference between the actual and the
erroneously computed net asset value, and any expenses the Fund shall incur in
connection with correcting the records of the Fund affected by such error
(including charges made by the Fund's
-27-
registrar and transfer agent for making such corrections) or communicating with
shareholders or former shareholders of the Fund affected by such error.
Without limiting the foregoing, the Custodian shall not be held accountable
or liable to the Fund, any shareholder or former shareholder thereof or any
other person for any delays or losses, damages or expenses any of them may
suffer or incur resulting from (1) the Custodian's failure to receive timely and
suitable notification concerning quotations or corporate actions relating to or
affecting portfolio securities of the Fund or (2) any errors in the computation
of the net asset value based upon or arising out of quotations or information as
to corporate actions if received by the Custodian either (i) from a source which
the Custodian was authorized pursuant to the second paragraph of this Section 5D
to rely upon, or (ii) from a source which in the Custodian's reasonable
judgment was as reliable a source for such quotations or information as the
sources authorized pursuant to that paragraph. Nevertheless, the Custodian will
use its best judgment in determining whether to verify through other sources any
information it has received as to quotations or corporate actions if the
Custodian has reason to believe that any such information might be incorrect.
In the event of any error or delay in the determination of such net asset
value for which the Custodian may be liable, the
-28-
Fund and the Custodian will consult and make good faith efforts to reach
agreement on what actions should be taken in order to mitigate any loss suffered
by the Fund or its present or former shareholders, in order that the Custodian's
exposure to liability shall be reduced to the extent possible after taking into
account all relevant factors and alternatives. Such actions might include the
Fund or the Custodian taking reasonable steps to collect from any shareholder or
former shareholder who has received any overpayment upon redemption of shares
such overpaid amount or to collect from any shareholder who has underpaid upon a
purchase of shares the amount of such underpayment or to reduce the number of
shares issued to such shareholder. It is understood that in attempting to reach
agreement on the actions to be taken or the amount of the loss which should
appropriately be borne by the Custodian, the Fund and the Custodian will
consider such relevant factors as the amount of the loss involved, the Fund's
desire to avoid loss of shareholder good will, the fact that other persons or
entities could have been reasonably expected to have detected the error sooner
than the time it was actually discovered, the appropriateness of limiting or
eliminating the benefit which shareholders or former shareholders might have
obtained by reason of the error, and the possibility that other parties
providing services to the Fund might be induced to absorb a portion of the loss
incurred.
-00-
X. Xxxxxxxxxxxxx - Xxxx receipt of proper instructions, to pay or cause to
be paid, insofar as funds are available for the purpose, bills statements and
other obligations of the Fund (including but not limited to interest charges,
taxes, advisory fees, compensation to Fund officers and employees, and other
operating expenses of the Fund).
6. A. The Custodian shall not be liable for any action taken or omitted in
reliance upon proper instructions reasonably believed by it to be genuine or
upon any other written notice, request, direction, instruction, certificate or
other instrument believed by it to be genuine and signed by the proper party or
parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or shareholders. Such certificate may be accepted and
relied upon by the Custodian as conclusive evidence of the facts set forth
therein and may be considered in full force and effect until receipt of a
similar certificate to the contrary.
-30-
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive and
act upon advice of counsel (who may be counsel for the Fund) on all matters, and
the Custodian shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
B. With respect to the portfolio securities, cash and other property of the
Fund held by a Securities System, the Custodian shall be liable to the Fund for
any loss or damage to the Fund resulting from use of the Securities System if
caused by any negligence, misfeasance or misconduct of the Custodian or any of
its agents or of any of its or their employees or from any failure of the
Custodian or any such agent to enforce effectively such rights as it may have
against the Securities System. At the election of the Fund, it shall be entitled
to be subrogated to the rights of the Custodian with respect to any claim
against the Securities System or any other person which the Custodian may have
as a consequence of any such loss or damage if and to the extent that the Fund
has not been made whole for any such loss or damage. The Custodian shall be
subject to the same
-31-
responsibility with respect to all securities of the Fund, and all cash, stock
dividends, rights and items of like nature to which the Fund is entitled, held
or received by such Securities System, as if the same where held or received by
the Custodian at its own office.
C. Except as may otherwise be set forth in this Agreement with respect to
particular matters, the Custodian shall be held only to the exercise of
reasonable care and diligence in carrying out the provisions of this Agreement,
provided that the Custodian shall not thereby be required to take any action
which is in contravention of any applicable law. The Fund agrees to indemnify
and hold harmless the Custodian and its nominees from all claims and liabilities
(including counsel fees) incurred or assessed against it or its nominees in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's breach of the relevant standard of conduct set forth in
this Agreement. Without limiting the foregoing indemnification obligation of the
Fund, the Fund agrees to indemnify the Custodian and its nominees against any
liability the Custodian or such nominee may incur by reason of taxes assessed to
the Custodian or such nominee or other costs, liability or expense incurred by
the Custodian or such nominee resulting directly or indirectly from the fact
that portfolio securities or other property of the Fund are registered in the
name of the Custodian or such nominee.
-32-
It is also understood that the Custodian shall not be liable for any loss
involving any securities, currencies, deposits or other property of the Fund,
whether maintained by it, a Subcustodian, an agent of the Custodian or a
Subcustodian, a Securities System, or a Banking Institution, or a loss arising
from a foreign currency transaction or contract, resulting from a Sovereign
Risk. A "Sovereign Risk" shall mean nationalization, expropriation, devaluation,
revaluation, confiscation, seizure, cancellation, destruction or similar action
by any governmental authority, de facto or de jure; or enactment, promulgation,
imposition or enforcement by any such governmental authority of currency
restrictions, exchange controls, taxes, levies or other charges affecting the
Fund's property; or acts of war, terrorism, insurrection or revolution; or any
other similar act or event beyond the Custodian's control.
D. The Custodian shall be entitled to receive reimbursement from the Fund
on demand, in the manner provided in Section 7, for its cash disbursements,
expenses and charges (including the fees and expenses of any Subcustodian or any
Agent) in connection with this Agreement, but excluding salaries and usual
overhead expenses.
E. The Custodian may at any time or times in its discretion appoint (and
may at any time remove) any other bank or trust company as its agent (an
"Agent") to carry out such of the
-33-
provisions of this Agreement as the Custodian may from time to time direct,
provided, however, that the appointment of such Agent (other than an Agent
appointed pursuant to the third paragraph of Section 3) shall not relieve the
Custodian of any of its responsibilities under this Agreement.
F. Upon request, the Fund shall deliver to the Custodian such proxies,
powers of attorney or other instruments as may be reasonable and necessary or
desirable in connection with the performance by the Custodian or any
Subcustodian of their respective obligations under this Agreement or any
applicable subcustodian agreement.
7. The Fund shall pay the Custodian a custody fee based on such fee
schedule as may from time to time be agreed upon in writing by the Custodian and
the Fund. Such fee, together with all amounts for which the Custodian is to be
reimbursed in accordance with Section 6D, shall be billed to the Fund in such a
manner as to permit payment either by a direct cash payment to the Custodian or
by placing Fund portfolio transactions with the Custodian resulting in an
agreed-upon amount of commissions being paid to the Custodian within an
agreed-upon period of time.
8. This Agreement shall continue in full force and effect until terminated
by either party by an instrument in writing delivered or mailed, postage
prepaid, to the other party, such termination to take effect not sooner than
sixty (60) days after
-34-
the date of such delivery or mailing. In the event of termination
the Custodian shall be entitled to receive prior to delivery of the securities,
funds and other property held by it all accrued fees and unreimbursed expenses
the payment of which is contemplated by Sections 6D and 7, upon receipt by the
Fund of a statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed that
the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
9. This Agreement constitutes the entire understanding and agreement of the
parties hereto with respect to the subject matter hereof. No provision of this
Agreement may be amended or terminated except by a statement in writing signed
by the party against which enforcement of the amendment or termination is
sought.
In connection with the operation of this Agreement, the Custodian and the
Fund may agree in writing from time to time on such provisions interpretative of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. No
-35-
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
10. This instrument is executed and delivered in The Commonwealth of
Massachusetts and shall be governed by and construed according to the laws of
said Commonwealth.
11. Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to the Fund at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or to
such other address as the Fund may have designated to the Custodian in writing,
or to the Custodian at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Manager, Securities Department, or to such other address as the Custodian may
have designated to the Fund in writing, shall be deemed to have been properly
delivered or given hereunder to the respective addressee.
12. This Agreement shall be binding on and shall inure to the benefit of
the Fund and the Custodian and their respective successors and assigns, provided
that neither party hereto may assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of the other party.
13. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original. This
-36-
Agreement shall become effective when one or more counterparts have been signed
and delivered by each of the parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
XXXXXXX INTERNATIONAL FUND, INC. XXXXX BROTHERS XXXXXXXX & CO.
BY /s/ Xxxxx X. Xxx per pro /s/ [ILLEGIBLE]
------------------------------- ----------------------------
XXXXXXX INTERNATIONAL FUND
APPENDIX A
COUNTRY SUBCUSTODIAN DEPOSITORY
------- ------------ ----------
AUSTRIA XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS NONE
BELGIUM XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS C.I.K.
DENMARK XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS NONE
FINLAND XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS NONE
FRANCE XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, PARIS SICOVAM
GERMANY XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, FRANKFURT KASSENVEREIN
ITALY BANCA COMMERCIALE ITALIANA SUBCUSTODIAN FOR
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS NONE
NETHERLANDS XXXXXX BANK NEDERLAND NECIGEF
NORWAY XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS NONE
SPAIN BANCO DE SANTANDER, SUBCUSTODIAN FOR
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS NONE
SWEDEN XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS EUROCLEAR
SWITZERLAND XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, ZURICH SEGA
UNITED KINGDOM XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, LONDON TALISMAN
KOREA CITIBANK, N.A., SEOUL KSSC
JAPAN XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, TOKYO NONE
AUSTRALIA NATIONAL AUSTRALIA BANK, LTD. NONE
HONG KONG THE CHASE MANHATTAN BANK, N.A. NONE
SINGAPORE XXX XXXXX XXXXXXXXX XXXX, X.X. XXXX
XXXXX XXXXXX BARCLAYS BANK, JOHANNESBURG SUBCUSTODIAN FOR
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, BRUSSELS NONE
MEXICO CITIBANK, N.A., MEXICO CITY NONE
TRANSNATIONAL OPERATED BY XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, EUROCLEAR
BRUSSELS
APPROVED: DSL
------------------------------------
XXXXXXX INTERNATIONAL FUND
APPENDIX B
INFORMATION PREFERRED AUTHORIZED SOURCES
----------- ----------------------------
1. PRICE QUOTATIONS CAZENOVE INCORPORATED
2. CORPORATE ACTIONS, INTERACTIVE DATA CORPORATION
DIVIDENDS, RIGHTS VALORINFORM (GENEVA)
OFFERINGS
3. FOREIGN EXCHANGE QUOTATIONS REUTERS, LIMITED
XXXXX BROTHERS XXXXXXXX & CO.,
NEW YORK
INFORMATION SUPPLEMENTARY AUTHORIZED SOURCES
----------- --------------------------------
1. PRICE QUOTATIONS QUOTRON
REUTERS, LIMITED
2. CORPORATE ACTIONS, CAZENOVE INCORPORATED
DIVIDENDS, SUBCUSTODIAN BANKS
RIGHTS OFFERINGS FUND MANAGERS
EXTEL (LONDON)
FOREIGN BROKERS
WEEKLY OFFICIAL INTELLIGENCE (LONDON)
SYDNEY STOCK EXCHANGE
REPORT (AUSTRALIA)
WEEKLY GAZETTE (HONG KONG)
X.X. XXXXXXX & CO. (SINGAPORE)
BONDHOLDERS REGISTER (LONDON)
Supplementary Authorized Sources shall be used only if the Custodian is unable
to obtain required information from a Preferred Authorized Source.
