Exhibit 9.18
SUB-CUSTODIAN AGREEMENT
AGREEMENT dated as of September 26, 1997 among THE CHASE MANHATTAN
BANK, N.A. ("Bank"), XXXXXXXX-XXXXXXXXX MUTUAL FUNDS (the "Fund") and PNC BANK,
NATIONAL ASSOCIATION ("Company").
WITNESSETH:
WHEREAS, the Company has entered into a Custodian Agreement with the
Fund, a Delaware business trust, to provide domestic custody services; and
WHEREAS, the Company and the Fund wish to retain Bank to provide
certain foreign sub-custodian services to the Company and the Fund for the
benefit of the Fund and certain of its series of shares of beneficial interest
("Portfolios"), and Bank is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. CUSTODY ACCOUNT. The Bank agrees to establish and maintain (a) a
separate custody account for each Portfolio of the Fund designated on Appendix A
("Custody Account") for any and 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 (hereinafter called "Securities")
from time to time received by the Bank or any sub-custodian (as defined in the
second paragraph of Section 3 hereof) for the account of the designated
Portfolio; and (b) a separate deposit account or accounts in the name of each
designated Portfolio ("Deposit Account") for any and all cash and cash
equivalents in any currency received by the Bank or any sub-custodian for the
account of the designated Portfolio, which cash shall not be subject to
withdrawal by draft or check. The term "Property" as used herein shall mean all
Securities, cash, cash equivalents and other assets held by the Portfolios.
2. MAINTENANCE OF PROPERTY ABROAD. Securities in a Custody Account
shall be held in the country or other jurisdiction as shall be specified from
time to time in Instructions (as defined in Section 9 hereof), provided that
such country or other jurisdiction shall be one in which the principal trading
market for such Securities is located or the country or other jurisdiction in
which such Securities are to be presented for payment or are acquired for the
Custody Account, and cash in a Deposit Account shall be credited to an account
in such country or other jurisdiction in which such cash may be legally
deposited or is the legal currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or non-interest
bearing accounts as may be available for the particular currency. To the extent
Instructions are issued and the Bank can comply with such Instructions, the Bank
is authorized to maintain cash balances on deposit for the Fund on behalf of
each designated Portfolio with itself or one of its affiliates at such
reasonable rates of interest as may from time to time be paid on such accounts,
or in non-interest bearing accounts as the Fund may direct, if acceptable to the
Bank.
3. ELIGIBLE FOREIGN CUSTODIANS AND SECURITIES DEPOSITORIES. The
Company andthe Board of Trustees of the Fund authorize the Bank to hold the
Securities in the Custody Account(s) and the
cash in the Deposit Account(s) in custody and deposit accounts, respectively,
which have been established by the Bank with one of its branches, a branch of a
qualified U.S. bank, an eligible foreign custodian or an eligible foreign
securities depository; provided, however, that prior to the establishment of
accounts with any such branch, eligible foreign custodian or foreign securities
depository, the Company and the Board of Trustees of the Fund have approved the
use of, and the Bank's contract with, such branch or eligible foreign custodian
or eligible foreign securities depository by resolution, and Instructions to
such effect have been provided to the Bank. Furthermore, if a Bank's branch, a
branch of a qualified U. S. bank or an eligible foreign custodian is selected to
act as the Bank's sub-custodian to hold any Property and such selection is
approved by the Board of Trustees of the Fund, such entity is authorized to hold
such Property in its account with any eligible foreign securities depository in
which it participates so long as such foreign securities depository has been
approved by the Board of Trustees of the Fund. For purposes of this Agreement
(a) "qualified U.S. bank" shall mean a qualified U.S. bank as defined in Rule
17f-5 under the Investment Company Act of 1940, as amended ("Rule 17f-5");
(b) "eligible foreign custodian" shall mean (i) a banking institution or trust
company incorporated or organized under the laws of a country other than the
United States that is regulated as such by that country's government or an
agency thereof and that has shareholders' equity in excess of $200 million in
U.S. currency (or a foreign currency equivalent thereto) or (ii) a
majority-owned direct or indirect subsidiary of a qualified U.S. bank or bank
holding company that is incorporated or organized under the laws of a country
other than the United States and that has shareholders' equity in excess of $100
million in U.S. currency (or a foreign currency equivalent thereto); and (c)
"eligible foreign securities depository" shall mean a securities depository or
clearing agency, incorporated or organized under the laws of a country other
than the United States, which operates (i) the central system for handling of
securities or equivalent book-entries in that country or (ii) a transnational
system for the central handling of securities or equivalent book-entries.
Hereinafter the term "sub-custodian" will refer to any Bank branch,
any branch of a qualified U.S. bank, any eligible foreign custodian or any
eligible foreign securities depository with which the Bank has entered into an
agreement of the type contemplated hereunder regarding Securities and/or cash
held in or to be acquired for a Custody Account or a Deposit Account and which
has been approved by the Company and the Board of Trustees of the Fund. If,
after the initial approval of the sub-custodians by the Board of Trustees of the
Fund in connection with this Agreement, the Bank wishes to appoint other
sub-custodians to hold the Fund's or any Portfolio's Property, it will so notify
the Company and the Fund and will provide them with information reasonably
necessary to determine any such new sub-custodian's eligibility under Rule
17f-5, including a copy of the proposed agreement with such sub-custodian. Such
appointment shall not become effective until each of the Company and the Board
of Trustees of the Fund has provided Instructions indicating its approval.
If the Bank intends to remove any sub-custodian previously approved,
it shall so notify the Fund and the Company, both of which shall have the right
to approve such removal, and upon such removal, shall move the Property
deposited with such sub-custodian to another sub-custodian previously approved
or to a new sub-custodian, provided that the appointment of any new
sub-custodian will be subject to the approval and other requirements set forth
in the preceding
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paragraph. The Bank shall take steps as may be required to remove any
sub-custodian which has ceased to meet the requirements of Rule 17f-5.
4. USE OF SUB-CUSTODIANS. With respect to Property which is
maintained by the Bank in the physical custody of a sub-custodian pursuant to
Section 3:
A. The Bank will identify on its books as belonging to each
designated Portfolio any Property held by such sub-custodian.
B. In the event that a sub-custodian permits any of the
Securities placed in its care to be held in an eligible foreign securities
depository, such sub-custodian will be required by its agreement with the Bank
to identify on its books such Securities as being held for the account of the
Bank as a custodian for its customers.
C. Any Securities in a Custody Account held by a sub-custodian
of the Bank will be subject only to the instructions of the Bank or its agents;
and any Securities held in an eligible foreign securities depository for the
account of a sub-custodian will be subject only to the instructions of such
sub-custodian.
D. The Bank will only deposit Securities in an account with a
sub-custodian which includes exclusively the assets held by the Bank for its
customers, and the Bank will cause such account to be designated by such
sub-custodian as a special custody account for the exclusive benefit of
customers of the Bank.
E. Any agreement the Bank shall enter into with a sub-custodian
with respect to the holding of Securities shall require that (i) the Securities
are not subject to any right, charge, security interest, lien or claim of any
kind in favor of such sub-custodian or its creditors except for a claim of
payment for its safe custody or administration and (ii) beneficial ownership of
such Securities is freely transferable without the payment of money or value
other than for safe custody or administration; provided, however, that the
foregoing shall not apply to the extent that any of the above-mentioned rights,
charges, etc. result from any compensation or other expenses arising with
respect to the safekeeping of Securities pursuant to such agreement.
F. The Bank shall allow independent public accountants of the
Fund such access to the records of the Bank relating to Property held in a
Custody Account and a Deposit Account as is reasonably requested by such
accountants in connection with their examination of the books and records
pertaining to the affairs of the Fund. The Bank shall, subject to restrictions
under applicable law, also obtain from any sub-custodian with which the Bank
maintains the physical possession of any Property an undertaking to permit
independent public accountants of the Fund such reasonable access to the records
of such sub-custodian as is reasonably requested in connection with their
examination of the books and records pertaining to the affairs of the Fund or to
supply a verifiable confirmation of the contents of such records. The Bank
shall furnish the Fund and the Company such reports (or portions thereof) of the
Bank's external auditors as relate directly to the Bank's system of internal
accounting controls applicable to the Bank's duties under this Agreement.
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G. The Bank will supply to the Fund, care of its investment
adviser, and the Company at least monthly a statement in respect to any Property
in a Custody and a Deposit Account held by each sub-custodian, including an
identification of the entity having possession of such Property, and the Bank
will send to the Fund and the Company an advice or notification of any transfers
of Property to or from the Custody Account and Deposit Account, indicating, as
to Property acquired for an investment portfolio of the Fund, the identity of
the entity having physical possession of such Property. In the absence of the
filing in writing with the Bank by the Fund of exceptions or objections to any
such statement within one hundred twenty (120) days of the Fund's receipt of
such statement, or within one hundred twenty days (120) days after the date that
a material defect is reasonably discoverable, the Fund shall be deemed to have
approved such statement; and in such case or upon written approval of the Fund
of any such statement the Bank shall, to the extent permitted by law and
provided the Bank has met the standard of care in Section 12 hereof, be
released, relieved and discharged with respect to all matters and things set
forth in such statement as though such statement has been settled by the decree
of a court of competent jurisdiction in an action in which the Company and the
Fund and all persons having any equity interest in the Fund were parties.
H. The Bank hereby warrants to the Fund and the Company that in
its opinion, after due inquiry, the established procedures to be followed by
each of its branches, each branch of a qualified U.S. bank, each eligible
foreign custodian and each eligible foreign securities depository holding
Securities of the Fund pursuant to this Agreement afford protection for such
Securities at least equal to that afforded by the Bank's established procedures
with respect to similar Securities held by the Bank (and its securities
depositories) in New York.
I. The Bank hereby warrants to the Fund and the Company that as
of the date of this Agreement it is maintaining a sufficient Bankers Blanket
Bond and hereby agrees to notify the Fund and the Company in the event its
Bankers Blanket Bond is canceled or otherwise lapses.
J. The Bank agrees to comply with all applicable requirements
of federal and other securities laws, rules and regulations with respect to all
duties to be performed by the Bank hereunder.
5. DEPOSIT ACCOUNT PAYMENTS. Subject to the provisions of Section
7, the Bank shall make, or cause its sub-custodian to make, payments of cash
credited to a Deposit Account only:
A. in connection with the purchase of Securities for a
designated Portfolio and the delivery of such Securities to, or the crediting of
such Securities to the particular Custody Account of, the Bank or its
sub-custodian, each such payment to be made at prices as confirmed by
Instructions from Authorized Persons (as defined in Section 10 hereof);
B. for the purchase or redemption of shares of beneficial
interest of the designated Portfolio involved and the delivery to, or crediting
to the account of, the Bank or its sub-custodian of such shares to be so
purchased or redeemed;
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C. for the payment for the account of the designated Portfolio
involved of dividends, interest, taxes, management, administrative,
distribution, shareholder service and transfer agency fees, capital
distributions or other operating expenses;
D. for the payments to be made in connection with the
conversion, exchange or surrender of Securities held in a Custody Account;
E. for other proper purposes of the designated Portfolio
involved; or
F. upon the termination of this Custody Agreement as
hereinafter set forth.
All payments of cash for a purpose permitted by subsection (a), (b), (c) or (d)
of this Section 5 will be made only upon receipt by the Bank of Instructions
from Authorized Persons which shall specify the purpose for which the payment is
to be made and the applicable subsection of this Section 5. In the case of any
payment to be made for the purpose permitted by subsection (e) of this Section
5, the Bank must first receive a certified copy of a resolution of the Board of
Trustees of the Fund adequately describing such payment, declaring such purpose
to be a proper purpose, and naming the person or persons to whom such payment
shall be made. Any payment pursuant to subsection (f) of this Section 5 will be
made in accordance with Section 17 hereof.
In the event that any payment for a designated Portfolio made under
this Section 5 exceeds the funds available in that Portfolio's Deposit Account,
the Bank may, in its discretion, advance the Fund on behalf of that Portfolio an
amount equal to such excess and such advance shall be deemed a loan from the
Bank to that Portfolio payable on demand, bearing interest at the rate of
interest customarily charged by the Bank on similar loans. If the Bank causes a
Deposit Account to be credited on the payable date for interest, dividends or
redemptions, the designated Portfolio involved will promptly return to the Bank
any such amount or property so credited upon oral or written notification that
neither the Bank nor its sub-custodian can collect such amount or property in
the ordinary course of business. The Bank or its sub-custodian, as the case may
be, shall have no duty or obligation to institute legal proceedings, file a
claim or proof of claim in any insolvency proceeding or take any other action
with respect to the collection of such amount or property beyond its ordinary
collection procedures.
6. CUSTODY ACCOUNT TRANSACTIONS. Subject to the provisions of
Section 7, Securities in a Custody Account will be transferred, exchanged or
delivered by the Bank or its sub-custodians only:
A. upon sale of such Securities for the designated Portfolio
involved and receipt by the Bank or its sub-custodian of payment therefor, each
such payment to be in the amount confirmed by Instructions from Authorized
Persons;
B. when such Securities are called, redeemed or retired, or
otherwise become payable;
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C. in exchange for or upon conversion into other Securities
alone or other Securities and cash pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment;
D. upon conversion of such Securities pursuant to their terms
into other Securities;
E. upon exercise of subscription, purchase or other similar
rights represented by such Securities;
F. for the purpose of exchanging interim receipts or temporary
Securities for definitive Securities;
G. for the purpose of redeeming in kind shares of beneficial
interest of the designated Portfolio involved against delivery to the Bank or
its sub-custodian of such shares to be redeemed;
H. for other proper purposes of the designated Portfolio
involved; or
I. upon the termination of this Custody Agreement as
hereinafter set forth.
All transfers, exchanges or deliveries of Securities in a Custody Account for a
purpose permitted by either subsection (a), (b), (c), (d), (e) or (f) of this
Section 6 will be made, except as provided in Section 8 hereof, only upon
receipt by the Bank of Instructions from Authorized Persons which shall specify
the purpose of the transfer, exchange or delivery to be made and the applicable
subsection of this Section 6. In the case of any transfer or delivery to be
made for the purpose permitted by subsection (g) of this Section 6, the Bank
must first receive Instructions from Authorized Persons specifying the shares
held by the Bank or its sub-custodian to be so transferred or delivered and
naming the person or persons to whom transfers or delivery of such shares shall
be made. In the case of any transfer, exchange or delivery to be made for the
purpose permitted by subsection (h) of this Section 6, the Bank must first
receive from the Company a certified copy of a resolution of the Board of
Trustees of the Fund adequately describing such transfer, exchange or delivery,
declaring such purpose to be a proper purpose, and naming the person or persons
to whom delivery of such Securities shall be made. Any transfer or delivery
pursuant to subsection (i) of this Section 6 will be made in accordance with
Section 17 hereof.
7. CUSTODY ACCOUNT PROCEDURES. With respect to any transaction
involving Securities held in or to be acquired for a Custody Account, the Bank
in its discretion may cause the Deposit Account for the designated Portfolio
involved to be credited on the contractual settlement date with the proceeds of
any sale or exchange of Securities from the particular Custody Account and to be
debited on the contractual settlement date for the cost of Securities purchased
or acquired for the particular Custody Account. The Bank may reverse any such
credit or debit if the transaction with respect to which such credit or debit
was made fails to settle within a reasonable period, determined by the Bank in
its discretion, after the contractual settlement date, except that if any
Securities delivered pursuant to this Section 7 are returned by the recipient
thereof, the Bank may cause any such credits and debits to be reversed at any
time. With respect to any transactions as to which the Bank does not determine
so to credit or debit the particular Deposit Account, the proceeds from the sale
or exchange of Securities will be credited and the cost of such Securities
purchased or acquired will be
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debited to the particular Deposit Account on the date such proceeds or
Securities are received by the Bank.
Notwithstanding the preceding paragraph, settlement and payment for
Securities received for, and delivery of Securities out of, a Custody Account
may be effected in accordance with the customary or established securities
trading or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without limitation,
delivering Securities to the purchaser thereof or to a dealer therefor (or an
agent for such purchaser or dealer) against a receipt with the expectation of
receiving later payment for such Securities from such purchaser or dealer.
8. ACTIONS OF THE BANK. Until the Bank receives Instructions from
Authorized Persons to the contrary, the Bank will, or will instruct its
sub-custodian, to:
A. present for payment any Securities in a 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 to the
extent that the Bank or sub-custodian is aware of such opportunities for
payment, and hold cash received upon presentation of such Securities in
accordance with the provisions of Sections 2, 3 and 4 hereof;
B. in respect of Securities in a Custody Account, execute in
the name of the Fund on behalf of the designated Portfolio involved such
ownership and other certificates as may be required to obtain payments in
respect thereof;
C. exchange interim receipts or temporary Securities in a
Custody Account for definitive Securities;
D. collect and receive for the account of the designated
Portfolio all income, dividends, distributions, coupons, option premiums, other
payments and similar items, and promptly advise the Fund and the Company of such
receipt and credit such income, as collected, to the designated Portfolio's
Deposit Account;
E. endorse and deposit for collection, in the name of the Fund
and the designated Portfolio, checks, drafts, or other orders for the payment of
money;
F. (if applicable) convert monies received with respect to
Securities of foreign issue into United States dollars or any other currency
necessary to effect any transaction involving the Securities whenever it is
practicable to do so through customary banking channels, using any method or
agency available, including, but not limited to, the facilities of the Bank, its
subsidiaries, affliates or sub-custodians;
G. reclaim taxes withheld by foreign issuers where reclaim is
possible, provided that Bank has been provided with all documentation it may
require.
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9. INSTRUCTIONS. As used in this Agreement, the term "Instructions"
means instructions of the Fund or the Company received by the Bank via
telephone, telex, TWX, facsimile transmission, bank wire or other teleprocess or
electronic instruction system acceptable to the Bank which the Bank believes in
good faith to have been given by Authorized Persons or which are transmitted
with proper testing or authentication pursuant to terms and conditions which the
Bank may specify.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the designated Portfolio
involved and the Company will hold the Bank harmless for the Company's or the
Fund's (i) failure to send such confirmation in writing, or (ii) the failure of
such confirmation to conform to the telephone Instructions received. Unless
otherwise expressly provided, all Instructions shall continue in full force and
effect until cancelled or superseded. If the Bank requires test arrangements,
authentication methods or other security devices to be used with respect to
Instructions, any Instructions given by the Fund or the Company thereafter shall
be given and processed in accordance with such terms and conditions for the use
of such arrangements, methods or devices as the Bank may put into effect and
modify from time to time. The Fund and the Company shall safeguard any
testkeys, identification codes or other security devices which the Bank shall
make available to them. The Bank may electronically record any Instructions
given by telephone, and any other telephone discussions, with respect to a
Custody Account.
10. AUTHORIZED PERSONS. As used in this Agreement, the term
"Authorized Persons" means such officers or such agents of the Company or of the
Fund as have been designated by a resolution of the Board of Trustees of the
Fund, a certified copy of which has been provided to the Bank, to act on behalf
of the Fund in the performance of any acts which Authorized Persons may do under
this Agreement. Such persons shall continue to be Authorized Persons until such
time as the Bank receives Instructions from Authorized Persons that any such
officer or agent is no longer an Authorized Person.
11. NOMINEES. Securities in a Custody Account which are ordinarily
held in registered form may be registered in the name of the Bank's nominee or,
as to any Securities in the possession of an entity other than the Bank, in the
name of such entity's nominee. The Fund on behalf of each designated Portfolio
involved agrees to hold any such nominee harmless from any liability as a holder
of record of such Securities, but not if such liability is a result of such
nominee's negligence. The Bank may without notice to the Company or the Fund
cause any such Securities to cease to be registered in the name of any such
nominee and to be registered in the name of the Fund. In the event that any
Securities registered in the name of the Bank's nominee or held by one of its
sub-custodians and registered in the name of such sub-custodian's nominee are
called for partial redemption by the issuer of such Security, the Bank may
allot, or cause to be allotted, the called portion to the respective beneficial
holders of such class of security in any manner the Bank deems to be fair and
equitable.
12. STANDARD OF CARE.
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A. The Bank shall be obligated to perform only such duties as
are set forth in this Agreement or expressly contained in Instructions given to
the Bank which are consistent with the provisions of this Agreement.
1. The Bank will use reasonable care with respect to its
obligations under this Agreement and the safekeeping of
Property. The Bank shall be liable to the Fund and the
Company for any loss which shall occur as the result of the
failure of a sub-custodian or an eligible foreign securities
depository to exercise reasonable care with respect to the
safekeeping of such Property to the same extent that the
Bank would be liable to the Fund and the Company if the Bank
were holding such Property in New York. In the event of any
loss to the Fund or the Company by reason of the failure of
the Bank or its sub-custodian or an eligible foreign
securities depository to exercise reasonable care, the Bank
shall be liable to the Fund or the Company only to the
extent of the Fund's or Company's direct damages and
expenses to be determined based on, but not limited to, the
market value of the Property which is the subject of the
loss at the date of discovery of such loss and without
reference to any special conditions or circumstances.
2. The Bank will not be responsible for any act, omission,
default or for the solvency of any broker or agent (other
than as provided herein) which it or a sub-custodian
appoints and uses unless such appointment and use were made
or done negligently or in bad faith.
3. The Bank shall be indemnified by, and without liability to,
the designated Portfolio involved and the Company for any
action taken or omitted by the Bank whether pursuant to
Instructions or otherwise within the scope of this Agreement
if such act or omission was in good faith and without
negligence. In performing its obligations under this
Agreement, the Bank may rely on the genuineness of any
document which it believes in good faith and without
negligence to have been validly executed.
4. The Fund, on behalf of each designated Portfolio, agrees to
cause such Portfolio to pay for and hold the Bank harmless
from any liability or loss resulting from the imposition or
assessment of any taxes or other governmental charges, and
any related expenses with respect to income from or Property
in such Portfolio's Custody Account and Deposit Account.
5. The Bank, at its own expense, shall be entitled to rely, and
may act upon the advice of reasonably qualified counsel (who
may be counsel for the Fund or the Company) on all matters
and shall be without liability for any action reasonably
taken or omitted in good faith and without negligence
pursuant to such advice.
6. The Bank need not maintain any insurance for the exclusive
benefit of the Fund or Company.
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7. Without limiting the foregoing, the Bank shall not be liable
for any loss which results from:
a. the general risk of investing, or
b. subject to Section 12(a)(i) hereof, investing or
holding Property in a particular country including, but
not limited to, losses resulting from nationalization,
expropriation or other governmental actions; regulation
of the banking or securities industry; currency
restrictions, devaluations or fluctuations; and market
conditions which prevent the orderly execution of
securities transactions or affect the value of
Property.
8. No party shall be liable to the other for any loss due to
forces beyond its control including but not limited to
strikes or work stoppages, acts of war or terrorism,
insurrection, revolution, nuclear fusion, fission or
radiation, or acts of God.
B. Consistent with and without limiting the first paragraph of
this Section 12, it is specifically acknowledged that the Bank shall have no
duty or responsibility to:
1. Question Instructions or make any suggestions to the Fund,
Company or an Authorized Person regarding such Instructions;
2. Supervise or make recommendations with respect to
investments or the retention of Securities;
3. Subject to Section 12(a)(ii) hereof, evaluate or report to
the Fund, Company or an Authorized Person regarding the
financial condition of any broker, agent or other party to
which Securities are delivered or payments are made pursuant
to this Agreement; or
4. Review or reconcile trade confirmations received from
brokers.
C. The Bank shall provide to the Company and the Fund, on an
annual basis, a report confirming that the arrangements hereunder remain in
compliance with the rules of the Securities and Exchange Commission governing
such arrangements, and information regarding changes in the law which affects
any of the sub-custodians, and shall promptly inform the Fund in the event that
the Bank learns of any material adverse change in the financial condition of any
sub-custodian.
13. COMPLIANCE WITH SECURITIES AND EXCHANGE COMMISSION RULES AND
ORDERS. Except to the extent the Bank has specifically agreed pursuant to this
Agreement or in an exemptive order to comply with a condition of Rule 17f-5 or
any interpretation or exemptive order promulgated thereunder by or under the
authority of the Securities and Exchange Commission, the Fund shall be solely
responsible to assure that the maintenance of Securities and cash under this
Agreement complies with such Rule 17f-5.
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14. CORPORATE ACTION. Whenever the Bank or its sub-custodian
receives information concerning the Securities which requires discretionary
action by the beneficial owner of the Securities (other than a proxy), such as
subscription rights, bonus issues, stock repurchase plans and rights offerings,
or legal notices or other material intended to be transmitted to securities
holders ("Corporate Actions"), the Bank will give the Company notice of such
Corporate Actions to the extent that the Bank's central corporate actions
department has actual knowledge of a Corporate Action in time to notify its
customers, and the Company will forward such notice to the Fund.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank or its sub-custodians will
endeavor to obtain Instructions from the Fund, Company or its Authorized Person,
but if Instructions are not received in time for the Bank to take timely action,
or actual notice of such Corporate Action was received too late to seek
Instructions, the Bank is authorized to sell such rights entitlement or
fractional interest and to credit the applicable Deposit Account with the
proceeds and to take any other action it deems, in good faith, to be appropriate
in which case, provided it has met the standard of care in Section 12 hereof, it
shall be held harmless by the Fund on behalf of the designated Portfolio
involved for any such action.
The Bank will deliver proxies to the Company or its designated agent
pursuant to special arrangements which may have been agreed to in writing
between the parties hereto. Such proxies shall be executed in the appropriate
nominee name relating to Securities in a Custody Account registered in the name
of such nominee but without indicating the manner in which such proxies are to
be voted; and where bearer Securities are involved, proxies will be delivered in
accordance with instructions from Authorized Persons.
15. FEES AND EXPENSES. The Fund agrees to pay to the Bank 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 the Bank's out-of-pocket
or incidental expenses, including (but without limitation) reasonable legal
fees. The Fund hereby agrees on behalf of the designated Portfolios to cause
the designated Portfolio to hold the Bank harmless from any liability or loss
resulting from any taxes or other governmental charges, and any expenses related
thereto, which may be imposed, or assessed with respect to such Portfolio's
Custody Account, and also agrees on behalf of the designated Portfolios to cause
the designated Portfolios to hold the Bank, its sub-custodians, and their
respective nominees harmless from any liability as a record holder of Securities
in such Portfolio's Custody Account. The Bank is authorized to charge any
account of the designated Portfolio involved for such items and the Bank shall
have a lien on Securities in such Portfolio's Custody Account and on cash in
such Portfolio's Deposit Account for any amount owing to the Bank in connection
with such investment portfolio from time to time under this Agreement.
16. EFFECTIVENESS. This Agreement shall be effective on the date
first noted above.
17. TERMINATION. This Agreement may be terminated by the Fund, the
Company or the Bank upon 60 days' prior written notice to the others, sent by
registered mail, provided that any termination by the Company shall be
authorized by a resolution of the Board of Trustees of the Fund, and provided
further, that such resolution shall specify the names of persons to whom the
Bank shall
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deliver the Securities in each Custody Account and to whom the cash in each
Deposit Account shall be paid. If notice of termination is given by the Bank,
the Fund or the Company shall, within 60 days following the giving of such
notice, deliver to the Bank the names of the persons to whom the Bank shall
deliver such Securities and cash. If within 60 days following the giving of a
notice of termination by the Bank, the Bank does not receive from the Fund or
the Company the names of the persons to whom the cash in each Deposit Account
shall be paid and to whom the Securities in each Custody Account shall be
delivered, the Bank, at its election, may deliver such Securities and pay such
cash to a bank or trust company doing business in the State of New York and
qualified as a custodian under the Investment Company Act of 1940 to be held and
disposed of pursuant to the provisions of this Agreement, or to Authorized
Persons, or may continue to hold such Securities and cash until the names of the
persons to whom the cash in each Deposit Account shall be paid and to whom the
Securities in each Custody Account shall be delivered is provided to the Bank.
The obligations of the parties hereto regarding the use of reasonable care,
indemnities and payment of fees and expenses shall survive the termination of
this Agreement, and the obligations of each designated Portfolio to indemnify
and/or hold harmless other persons or entities under this Agreement shall be the
several (and not the joint or joint and several) obligation of each Portfolio.
18. NOTICES. Any notice or other communication from the Fund or the
Company to the Bank shall be in writing and shall be delivered, sent by
registered or certified mail, return receipt requested, or communicated by
telegram, telex or facsimile transmission addressed to the office of the Bank at
1211 Avenue of the Americas (33rd floor), New York, New York, 10036, Attention:
Global Custody Division, or such other address as may hereafter be given to the
Fund or the Company in accordance with the notice provisions hereunder, and any
notice from the Bank to the Fund or the Company shall be in writing and shall be
delivered, sent by registered or certified mail, return receipt requested, or
communicated by telegram, telex or facsimile transmission addressed to the Fund
and to the Company at the addresses appearing below their signatures to this
Agreement, or as the same may hereafter be changed on the Bank's records in
accordance with notice hereunder from the Fund or the Company.
19. GOVERNING LAW AND SUCCESSORS AND ASSIGNS. This Agreement shall
be governed by the law of the State of New York (without regard to principles of
conflicts of law) and shall not be assignable by any party, but shall bind the
successors and assigns of the Fund, the Company and the Bank.
20. HEADINGS. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.
21. COUNTERPART EXECUTION. This Agreement may be executed in any
number of counterparts with the same effect as if all parties hereto had signed
the same document. All counterparts shall be construed together and shall
constitute one agreement.
22. CONFIDENTIALITY. Bank agrees on behalf of itself and its
employees to treat confidentially all records and other information relative to
the Fund and its prior, present, or potential shareholders, and relative to the
Company and its prior, present, or potential customers, except, after prior
notification to and approval in writing by the Fund or the Company, as the case
may be, which
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approval may not be withheld where Bank may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Fund or
the Company.
23. LIMITATIONS ON LIABILITY. Pursuant to the Fund's Declaration of
Trust, no trustee, officer, employee or agent of the Fund shall be subject to
any personal liability whatsoever, in his or her official or individual
capacity, to any person, including the Bank or any sub-custodian, other than to
the Fund or its shareholders, in connection with Fund property or the affairs of
the Fund, save only that arising from his or her bad faith, willful misfeasance,
gross negligence or reckless disregard of his or her duty to such person; and
all such persons shall look solely to the Fund property for satisfaction of
claims of any nature against a trustee, officer, employee or agent of the Fund
arising in connection with the affairs of the Fund. Moreover, the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a designated Portfolio shall be enforceable against the
assets and property of Portfolio only, and not against the assets and property
of any other series or Portfolio.
24. OWNERSHIP OF RECORDS. The books and records pertaining to the
Fund and each designated Portfolio, which are in the possession of the Bank or
any sub-custodian, shall be the property of the Fund. Such books and records
shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund, or the Fund's
Authorized Persons, shall have access to such books and records at all times
during the Bank's or any sub-custodian's business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be provided by
the Bank or the sub-custodian to the Fund or to an Authorized Person of the
Fund, at the Fund's expense.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
PNBC BANK, NATIONAL ASSOCIATION
By:
--------------------------------------------------------
Address for record:
Airport Business Center
000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
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XXX XXXXX XXXXXXXXX BANK, N.A.
By:
--------------------------------------------------------
Address for record:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
XXXXXXXX-XXXXXXXXX MUTUAL FUNDS
By:
--------------------------------------------------------
Address for record:
000 Xxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx, XX 00000
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APPENDIX A
LIST OF DESIGNATED PORTFOLIOS
Xxxxxxxx-Xxxxxxxxx Pacific Rim Fund
Xxxxxxxx-Xxxxxxxxx Greater China Fund
Xxxxxxxx-Xxxxxxxxx Latin America Fund
Xxxxxxxx-Xxxxxxxxx Global Blue Chip Fund
Xxxxxxxx-Xxxxxxxxx Emerging Markets Bond Fund
In addition, any series or portfolio established by the Fund in the future
in respect of which the Fund and the Company wish to have the Bank agree in
writing to serve as sub-custodian.
Dated: September 26, 1997
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