GLOBAL CUSTODY AGREEMENT
BETWEEN
▇▇▇▇▇▇▇▇ GLOBAL SERIES TRUST
AND
THE CHASE MANHATTAN BANK
CONTENTS
INTENTION OF THE PARTIES.......................................................3
WHAT CHASE IS REQUIRED TO DO...................................................3
INSTRUCTIONS AND AUTHORISED PERSONS...........................................10
BORROWINGS AND FOREIGN EXCHANGE...............................................13
FEES EXPENSES AND OTHER AMOUNTS OWING TO CHASE................................13
ELIGIBLE FOREIGN CUSTODIANS AND ELIGIBLE SECURITIES DEPOSITORIES..............14
BROKERS AND OTHER THIRD PARTIES...............................................18
OMNIBUS ACCOUNTS..............................................................19
ABOUT THE PARTIES.............................................................19
CONFLICTS OF INTEREST.........................................................20
STANDARD OF CARE - HOW CHASE IS TO PERFORM ITS DUTIES UNDER THIS AGREEMENT....21
WHEN CHASE IS NOT LIABLE......................................................21
INDEMNITY.....................................................................22
TERMINATION...................................................................23
RUSSIA........................................................................24
UKRAINE.......................................................................25
MISCELLANEOUS.................................................................27
DEFINITIONS...................................................................29
SCHEDULE 1: LIST OF ELIGIBLE FOREIGN CUSTODIANS AND MARKETS USED BY CHASE 26
SCHEDULE 2: TAIWAN RIDER 30
SCHEDULE 3: LETTER OF INSTRUCTION FOR THE TAIWAN MARKET 32
SCHEDULE 4: APPROVED BROKER LIST 34
SCHEDULE 5: TAIWANESE BROKER UNDERTAKING 35
SCHEDULE 6: INFORMATION REGARDING COUNTRY RISK 44
EXHIBIT A PERSONS AUTHORISED BY THE COMPANY TO GIVE INSTRUCTIONS 36
EXHIBIT B PORTFOLIOS OF THE FUND
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This Custody Agreement is made on the ___ day of July, 2003 between THE CHASE
MANHATTAN BANK ("Chase"), with a place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇▇ GLOBAL SERIES TRUST (the "FUND"), on behalf of each
separate series of the Fund listed on Exhibit B hereto (each such series, a
"PORTFOLIO") whose registered office/principal place of business is ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
1. INTENTION OF THE PARTIES
This Custody Agreement sets out the terms governing custody, settlement and
other associated services to be provided by Chase to the Fund on behalf of each
Portfolio.
2. WHAT CHASE IS REQUIRED TO DO
SET UP ACCOUNTS A. (i) Subject to the receipt of such documentation as Chase may require
(including, but not limited to, mandates and certified copies of the
Fund's constitutional documents), Chase shall open in its books and
records separately in the name of each Portfolio, or, at the Fund's
reasonable request, in any other name (together the "ACCOUNTS"):
(a) one or more securities accounts (the "SECURITIES ACCOUNTS")
evidencing any shares, stocks, debentures, bonds, notes,
mortgages or other like obligations and any certificates,
receipts, warrants or other instruments representing rights
to receive, purchase or subscribe for the same ("SECURITIES")
held by Chase or any branch of Chase on behalf of such
Portfolio or held, as described and defined in Clause 6, by
a Eligible Foreign Custodian or Eligible Securities Depository
for Chase on behalf of such Portfolio; and
(b) one or more cash accounts (the "CASH ACCOUNTS") for all cash
in any currency received by Chase or any Eligible Foreign
Custodian or Eligible Securities Depository or other agents
for the account of such Portfolio.
(ii) At the request of the Fund, further Accounts may be opened in the
future, which will be subject to the terms of this Agreement,
unless agreed in writing otherwise at the time the further Account
is opened.
MAINTENANCE OF B. (i) Unless Instructions (as detailed in Clause 3) require another
SECURITIES AND CASH AT location acceptable to Chase:
BANK AND SUB- LOCATIONS
(a) Financial Assets will be held in the country or jurisdiction
in which the principal trading market for the relevant
Securities is located, where such Financial Assets may be
presented for payment, where such Financial Assets were
acquired, or where such Financial Assets are held; and
(b) cash will be held on the books of Chase or be credited to
accounts of institutions chosen by Chase in the country or
jurisdiction where such cash is the legal currency for payment
of public or private debts.
(ii) Chase reserves the right to refuse to accept delivery of Financial
Assets or cash in countries and jurisdictions other than those
referred to in Schedule
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1 to this Agreement, which may be amended by Chase from time to time,
prior notice being given to the Fund where practicable.
SETTLEMENT
OF TRADES C. (i) When Chase receives an Instruction which includes all information
required by Chase requesting settlement of a trade in Financial
Assets, Chase shall use reasonable endeavours to effect such
settlement as instructed, save where Chase reasonably believes that
such settlement would be contrary to applicable law, regulation or
market practice.
(ii) With respect to Russia, payment for Local Russian Securities shall not
be made prior to the issuance by the Russian Registrar Company of the
Share Extract relating to such Local Russian Securities. Delivery of
Local Russian Securities may be made in accordance with the customary
or established securities trading or securities processing practices
and procedures in Russia. Delivery of Local Russian Securities may
also be made in any manner specifically required by Instructions
acceptable to Chase. The Fund shall promptly supply such transaction
and settlement information as may be required by Chase or CMBI in
connection with particular transactions.
(iii) Delivery of Financial Assets may be made in accordance with the
customary or established securities trading or securities processing
practices and procedures in the Ukraine (and the Fund expressly
acknowledge that delivery versus payment is not typically available in
the Ukraine market). Delivery of Financial Assets may also be made in
any manner specifically required by Instructions acceptable to Chase.
The Fund shall promptly supply such transaction and settlement
information as may be requested by Chase or the Ukrainian Eligible
Foreign Custodian in connection with particular transactions.
SEGREGATION OF ASSETS D. (i) Chase will identify separately in its books the Financial Assets that
belong to each Portfolio in the name of such Portfolio (save as
otherwise agreed by Chase and the Fund).
(ii) Chase will require that Eligible Foreign Custodians identify in their
own books that the Financial Assets belong to customers of Chase (to
the extent permitted by applicable law, regulation or market
practice).
CONTRACTUAL SETTLEMENT E. (i) Chase may, at its discretion, effect the following book entries with
DATE ACCOUNTING respect to the settlement of trades:
(a) ON SALES: on the settlement day for the sale, credit the Cash
Account of the Fund with the sale proceeds of the sale and
transfer the relevant Financial Assets to an account pending
settlement of the trade if not already delivered.
(b) ON PURCHASES: on or before the settlement day for the purchase,
debit the Cash Account of the Fund with the settlement monies and
credit a separate account in the name of the Fund. At the same
time Chase will post the Securities Account of the Fund with the
expected Financial Assets with a note to the effect that Chase is
awaiting receipt, pending actual receipt of such Financial
Assets. The Fund
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shall not be entitled to the delivery of Financial Assets which
are awaiting receipt until they have actually been received by
Chase or a Eligible Foreign Custodian.
(ii) Chase may (in its absolute discretion) reverse any debit or credit
made pursuant to paragraph (i) and the Fund shall be responsible for
any direct or indirect costs or liabilities resulting from such
reversal in the absence of negligence, willful default, bad faith or
fraud on the part of Chase, its Eligible Foreign Custodians (as
described in Clause 6H(i)(b) hereof) or their respective officers,
employees or agents. The Fund acknowledges that the procedures
described in this sub- clause are of an administrative nature and do
not amount to an agreement by Chase to make loans and/or Financial
Assets available to the Fund.
ACTUAL SETTLEMENT DATE F. With respect to any transaction for which the Fund's Cash Account is not
ACCOUNTING credited on the contractual settlement date as referred to in sub-clause
E, Chase shall credit the Fund's Cash Account with the proceeds of any
sale or exchange of Securities on the date on which such proceeds or
Securities are received by Chase.
INCOME COLLECTION/ G. (i) Chase will credit the Fund's Cash Account with income and redemption
AUTOCREDIT proceeds on Financial Assets in accordance with the times notified by
Chase from time to time on or after the anticipated payment date, net
of any taxes which are required to be withheld by Chase or any third
party. Where no time is specified for a particular market, income and
redemption proceeds on Financial Assets will only be credited as soon
as reasonably practical after actual receipt and reconciliation.
(ii) Chase may reverse such entries upon oral or written notification to
the Fund that Chase reasonably believes that such amount will not be
received by Chase within a reasonable period.
(iii) Neither Chase nor its Eligible Foreign Custodians shall be obliged to
institute legal proceedings, file a claim or proof of claim in any
insolvency proceeding or take any action with respect to collection of
interest, dividends or redemption proceeds. If Chase or its Eligible
Foreign Custodian does not take any such action with respect to the
filing of a claim or proof of claim in any insolvency proceeding or
the collection of interest, dividends or redemption proceeds, Chase
will, so far as reasonably practicable, take such steps as are
available to it to enable the Fund to take appropriate action.
PRESENTA-TION OF H. Until Chase receives Instructions to the contrary, Chase is authorised
COUPONS/ to and shall:
ISSUE OF STATEMENTS ETC
(i) present, upon notice to Chase, all Financial Assets called for
redemption or otherwise matured, and all income and interest coupons
and other income items which call for payment upon presentation;
(ii) execute in the name of the Fund such ownership and other certificates
as may be required to obtain payment in respect of Financial Assets;
(iii) exchange interim or temporary documents of title held in the
Securities Account for definitive ones; and
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(iv) issue statements to the Fund monthly or at such other times as are
mutually agreed identifying the Financial Assets in the Accounts.
CORPORATE ACTIONS I. (i) When Chase receives information or other material intended to be
transmitted to Financial Asset holders or information is generally
available in New York or the market where the relevant Financial
Assets are held or traded concerning the Financial Assets which
requires or may require discretionary action by the beneficial owner
of the Financial Assets (other than a proxy - see clause 2J, including
but not limited to stock dividend, stock split, fractional interest
resulting from a rights issue, subscription rights, bonus issues,
stock repurchase plans, warrant exercise notices, rights offerings, or
legal notices ("CORPORATE ACTIONS"), Chase will make all reasonable
endeavours to give the Fund notice in English of such Corporate
Actions within two Business Days of such information becoming
generally available. For the purposes of these terms, "BUSINESS DAY"
means a day on which both New York and the relevant local market are
open. Further, so far as it is within Chase's reasonable control Chase
shall allow the Fund at least two Business Days in which to give
Instructions. Notwithstanding the generality of the foregoing, if for
reasons outside Chase's reasonable control in setting the deadline for
Instructions from the Fund, Chase is unable to give at least two
Business Days notice to the Fund, Chase will use all reasonable
endeavours to inform the Fund of the Corporate Action and obtain and
act on the Fund's Instructions.
(ii) Without limiting the generality of the foregoing, where Chase receives
an Instruction prior to its stated deadline for receiving Instructions
from the Fund, which shall be in compliance with the terms of clause
2I(i) of this Agreement, it shall act upon that Instruction. If Chase
does not receive an Instruction from the Fund within a reasonable time
prior to such stated deadline, it will use all reasonable endeavours
to notify the Fund that it has yet to receive an Instruction and will
endeavour to obtain such Instruction in time for Chase to take timely
action including telephoning the Fund prior to such stated deadline
for receiving Instructions in an attempt to obtain an oral
Instruction. If the Fund still does not provide an oral or other
Instruction then Chase shall contact the Fund, in accordance with
escalation procedures agreed between the Fund and Chase (which may be
amended from time to time), to notify the Fund (a) that an Instruction
is outstanding and (b) what action Chase will take if the Instruction
remains outstanding and Chase is authorised to take such action if an
Instruction is then not received within the required time period. If
an Instruction from the Fund is received after Chase's stated deadline
but prior to the deadline for responses imposed on Financial Asset
holders by the issuer of such Financial Assets or other relevant
party, Chase will make all reasonable endeavours to act on the Fund's
Instruction.
(iii) It is understood and agreed that Chase need only use its reasonable
efforts with respect to performing the functions described in this
Clause 2I with respect to Local Russian Securities and Ukraine
Securities.
PROXY VOTING J. (i) Subject to and upon the terms of this sub-clause, Chase will provide
the
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Fund, or such other person as the Fund may reasonably require, with
information in English which it receives on resolutions to be voted
upon at meetings of holders of Financial Assets ("NOTIFICATIONS"), and
Chase will act in accordance with the Fund's Instructions, or the
Instructions of such other person as the Fund may reasonably require,
in relation to such Notifications (the "ACTIVE PROXY VOTING SERVICE").
(ii) Chase will act upon Instructions to vote on resolutions referred to in
a Notification, provided Instructions are received by Chase at its
proxy voting department by the deadline referred to in the relevant
Notification. Further notice will not be given, nor will Chase solicit
Instructions from the Fund. It is the recipient's obligation to
monitor the agreed means of providing Notifications to determine if
new Notifications have been received. The Fund acknowledges that in
some cases the time to respond to Notifications may be very limited.
If information is received by Chase at its proxy voting department too
late to permit timely voting by the Fund, or such other person as the
Fund may reasonably require, Chase's only obligation is to provide, so
far as reasonably practicable, a Notification (or summary information
concerning a Notification) on an "information only" basis.
(iii) Upon request by the Fund, so far as the same is available to Chase,
back-up information relating to Notifications (such as annual reports,
explanatory material concerning resolutions, management
recommendations or other material relevant to the exercise of proxy
voting rights) will be provided to the Fund or such other person as
the Fund may reasonably require, but without translation.
(iv) The Fund acknowledges that Notifications and other information
furnished pursuant to the Active Proxy Voting Service ("INFORMATION")
are proprietary and may be subject to various copyrights.
(v) In markets where the active proxy voting service is not available or
where Chase has not received relevant documentation, Chase will not
provide Notifications to the Fund but will endeavour to act upon
Instructions to vote on resolutions at meetings of holders of
Financial Assets where it is reasonably practicable for Chase (or its
correspondent banks or nominees as the case may be) to do so and where
such Instructions are received in time for Chase to take timely action
(the "PASSIVE PROXY VOTING SERVICE").
(vi) The Fund acknowledges that the provision of any proxy voting service
(whether active or passive) may be precluded or restricted under a
variety of circumstances, including the following:
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a. Financial Assets are out for registration;
b. Financial Assets conversion or another corporate action is pending;
c. local market regulations or practices or restrictions by the issuer;
d. Financial Assets are held in a margin or collateral account at
Chase or another bank or broker;
e. in certain countries Chase may be unable to vote proxies except
on a net basis (i.e. a net yes or no vote based on voting
instructions received from all its clients). Chase will inform the
Fund where this is the case.
TAX RECLAIMS K. (i) Subject to the provisions of this sub-clause, Chase will apply for a
reduction of withholding tax and any refund of any tax paid or tax
credits which apply in each market in respect of income payments on
Securities for the benefit of the Fund which Chase believes may be
available to the Fund.
(ii) The provision of a tax reclaim service by Chase in accordance with
this sub-clause is conditional upon Chase receiving from the
beneficial owner of the Financial Assets (a) a declaration on its
identity and place of residence and (b) certain other documentation
(pro forma copies of which are available from Chase). The Fund shall
provide to Chase such documentation and information as it may require
in connection with taxation, and warrant that, when given, this
information is true and correct in every respect, not misleading in
any way, and contains all material information. The Fund undertakes to
notify Chase promptly if any information requires updating or
correcting.
(iii) Chase shall not be liable for any tax, fines or penalties payable by
the Fund relating to the Accounts of the Fund, and shall be
indemnified by the Fund, as for such taxes, fines or penalties,
whether these result from the inaccurate completion of documents by
any person acting on behalf of the Fund, or as a result of the
provision to Chase or any third party of inaccurate or misleading
information or the withholding of material information by the Fund or
any other person acting on behalf of the Fund, or as a result of any
delay of any revenue authority or any other matter beyond the control
of Chase, except to the extent such taxes, fines or penalties are
caused by Chase's own negligence, willful default, bad faith or fraud.
(iv) The Fund confirms that Chase is authorised to deduct from any cash
received or credited to the Cash Account of the Fund any taxes or
levies legally required by any revenue or governmental authority for
whatever reason in respect of the Fund's Securities or Cash Accounts.
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(v) Chase shall perform the services set out in this sub-clause only with
respect to taxation levied by the revenue authorities of the countries
notified by Chase to the Fund from time to time and Chase may, by
notification in writing, at its absolute discretion, supplement or
amend the markets in which the tax reclaim services are offered. Other
than as expressly provided in this sub-clause, Chase shall have no
responsibility with regard to the tax position or status in any
jurisdiction of the Fund.
(vi) The Fund confirms that Chase is authorised to disclose any information
required by any relevant revenue authority or any governmental body
having jurisdiction over the Fund, or the Financial Assets and/or Cash
held for the Fund.
CLAIM OVER ▇. ▇▇▇▇▇ or any of its Eligible Foreign Custodians shall as soon as reasonably
SECURITIES practicable provide the Fund with notice of any attempt by any party to
assert any claim over the Financial Assets or any right or interest in the
Financial Assets provided that the notice gives sufficient information to
link the claim to an account of the Fund.
INCOME/ M. When Chase becomes aware of any dividend or redemption announcement
REDEMPTION concerning the Fund's Financial Assets or such information is generally
EVENTS available in New York or the market in which the Financial Assets are held
or traded Chase shall promptly notify the Fund, or such other person as the
Fund may reasonably require, of the same.
CONTROL OVER ▇. ▇▇▇▇▇ shall not release any Financial Assets into the possession or control
SECURITIES of a third party except on the Instructions of the Fund in accordance with
the duties and responsibilities of Chase as stipulated in this Agreement.
TIME DEPOSITS O. The Fund may direct that Chase establish time deposits in such other
banking institutions as may be agreed from time to time between the Fund
and Chase and in such amounts as Chase shall be instructed by the Fund. In
such event, whether or not instruments representing such time deposits are
to be issued and delivered to Chase, Chase shall maintain with respect to
such time deposits appropriate records as to the amounts of each such time
deposit with each such bank and the maturity rate and interest rate
relating to each such time deposit. In connection with such time deposits
with other banking institutions, Chase shall be obligated to credit to the
Fund only such amount as it shall be able to recover from such other
banking institutions. Chase shall have no other responsibility with respect
to such time deposits or the selection of the relevant banking institution.
P. In the event of the Fund placing monies belonging to the Fund on time
deposits with Chase, Chase shall pay interest on any such deposit in
accordance with normal banking practice for a deposit of that term at a
rate in such currencies as notified to the Fund from time to time
SEGREGATED ACCOUNTS ▇. ▇▇▇▇▇ shall upon receipt of Instructions establish and maintain a
segregated account or accounts for and on behalf of each Portfolio, into
which account or accounts may be transferred cash and/or Securities of such
Portfolio (i) in accordance with the provisions of any agreement among the
Fund on behalf of the Portfolio, Chase and a broker-dealer registered under
the Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. (or
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any futures commission merchant registered under the Commodity Exchange
Act), relating to compliance with the Rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or
of any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Portfolio, (ii) for the
purposes of segregating cash or government securities in connection with
options purchased, sold or written by the Portfolio or commodity futures
contracts or options thereon purchased or sold by the Portfolio, (iii) for
the purposes of compliance by the Portfolio with the procedures required by
The Investment Company Act of 1940, as amended (the "1940 ACT") Release No.
10666, or any subsequent release of the Securities and Exchange Commission
("SEC"), or interpretative opinion of the staff of the SEC, relating to the
maintenance of segregated accounts by registered investment companies, and
(iv) for any other purpose upon receipt of Instructions from the Fund on
behalf of the applicable Portfolio.
▇. ▇▇▇▇▇ shall with respect to each Portfolio create and maintain all records
relating RECORDS to its activities and obligations under this Agreement in
such manner with particular attention to Section 31 of the 1940 Act and
Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of
the Fund and shall at all times during regular business hours of Chase be
open for inspection by duly authorized officers, employees or agents of the
Fund and, upon notice to the Fund, by employees and agents of the
Securities and Exchange Commission. Chase shall, at the Fund's request,
supply the Fund with a tabulation of securities owned by each Portfolio and
held by Chase and shall, when requested to do so by the Fund and for such
reasonable compensation as shall be agreed upon between the Fund and Chase,
include certificate numbers in such tabulations.
REPORTS TO FUND BY ▇. ▇▇▇▇▇ shall provide the Fund, on behalf of each of the Portfolios, at such
INDEPENDENT times as the Fund may reasonably require, with reports by independent
PUBLIC public accountants on the accounting system, internal accounting control
ACCOUNTS and procedures for safeguarding securities, futures contracts and options
on futures contracts, including securities deposited and/or maintained
pursuant to this Agreement; such reports shall be of sufficient scope and
in sufficient detail as may reasonably be required by the Fund to provide
reasonable assurance that any material inadequacies would be disclosed by
such examination, and, if there are no such inadequacies, the reports shall
so state.
3. INSTRUCTIONS AND AUTHORISED PERSONS
AUTHORISED PERSONS AND A. As used in this Agreement:
INSTRUCTIONS
(i) the term "AUTHORISED PERSONS" means the individuals designated in
Exhibit A by the Fund, or the individuals designated by the fund
managers or advisers (the "INVESTMENT MANAGERS") using a mandate
acceptable to Chase to act on behalf of the Fund. The Fund
confirms that the Investment Manager may designate individuals to
act on behalf of the Fund for any Fund under this Agreement as if
such individuals had been designated by the Fund. Chase shall
continue to treat as Authorised Persons persons designated as
such in accordance with this clause until such time as Chase
receives Instructions from the Fund that any such individual is
no longer an Authorised Person. The Fund confirms that, unless
specified otherwise in
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Exhibit A or the mandate from the Investment Manager, each
Authorised Person shall be authorised to give any Instructions
(as defined in paragraph (ii) below) in relation to all
Securities and Cash Accounts and in relation to foreign exchange
transactions and shall be authorised to give Instructions
notwithstanding that they may result in an overdraft on any Cash
Account. The Investment Manager shall provide the Fund with such
information regarding the Authorised Persons designated by the
Investment Manager, in accordance with this clause, as the Fund
may reasonably require upon request; and
(ii) the term "INSTRUCTIONS" means instructions containing all
necessary information required by Chase to enable Chase to carry
out the Instructions received by Chase via telephone, telex, TWX,
bank wire, SWIFT or other teleprocess or electronic instruction
or trade information system acceptable to Chase which Chase
reasonably believes in good faith to have been given by
Authorised Persons or which are transmitted with proper testing
or authentication pursuant to terms and conditions which Chase
may specify. Unless otherwise expressly provided, all
Instructions shall continue in full force and effect until
cancelled or superseded.
B. (i) The Fund acknowledges that under Taiwanese applicable law and
regulations, settlement must be completed on a "Trade date plus one"
basis and agree that it shall be the Fund's sole responsibility to
ensure that Instructions are timely received by Chase and that Chase
shall have no responsibility in the event that Instructions are not so
timely received. In respect of custody services carried out by Chase's
local Taiwanese Eligible Foreign Custodian in the Republic of China
("ROC") Schedule 3 applies. In respect only of Financial Assets held
locally in Taiwan on behalf of the Fund, a letter substantially in the
form of Schedule 4, as amended from time to time, must be provided by
the Fund to Chase and Chase shall be required to ensure that Chase and
its local Eligible Foreign Custodian comply with the operating
provisions stated therein. In the event that Chase or such Eligible
Foreign Custodian does not follow such provisions, Chase shall be
liable to the Fund. Chase and the Fund agree that Chase's liability to
the Fund pursuant to this Clause shall be determined upon the direct
and foreseeable consequences of the acts and/or omissions of Chase or
its local Taiwanese Eligible Foreign Custodian.
(ii) The Fund agrees to deliver or cause to be delivered to Chase, upon
request, copies of all its agreements with the brokers listed in
Schedule 5.
(iii) The Fund acknowledges that Instructions should contain all necessary
information required by Chase to enable Chase to carry out the
Instructions in question.
CONFIRMA-TION OF ORAL C. Any Instructions delivered to Chase by telephone shall promptly thereafter
INSTRUCT-IONS/ be confirmed in writing by an Authorised Person (which confirmation may
SECURITY DEVICES bear the facsimile signature of such person). Chase is authorised to
reasonably follow such Instructions notwithstanding the failure of the
Authorised Person to send such confirmation in writing or the failure of
such confirmation to conform to the telephone Instructions received. Either
party may electronically record any Instructions given by telephone, and
any other telephone discussions. The Fund
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shall be responsible for safeguarding any test keys, identification codes
or other security devices which Chase shall make available to the Fund or
any Authorised Person.
ACTING ON D. The Fund authorises Chase to accept and reasonably act upon any
Instructions received by it in accordance with this Agreement without
inquiry. Chase may (without prejudice to the foregoing) seek clarification
or confirmation of an Instruction from an Authorised Person and in the
event that it does so shall seek such clarification or confirmation as soon
as reasonably practicable. Chase may decline to act upon an Instruction if
it reasonably and timely requests clarification or confirmation with
respect to such Instruction and does not receive clarification or
confirmation reasonably satisfactory to it. In the event that Chase does
seek clarification or confirmation as soon as reasonably practical Chase
shall not be liable for any loss arising from any delay whilst it obtains
such clarification or confirmation from an Authorised Person or from
exercising its right to decline to act in the absence of such clarification
or confirmation, to the extent such liability or loss is not caused by
Chase's own negligence, willful default, bad faith or fraud.
INSTRUCTIONS CONTRARY ▇. ▇▇▇▇▇ need not act upon Instructions which it reasonably believes to be
TO LAW/ MARKET PRACTICE contrary to law, regulation or market practice but is under no duty to
investigate whether any Instructions comply with any applicable law,
regulation or market practice. Chase shall be entitled (but not bound), if
it deems possible to do so to amend an Instruction (but only in an
administrative respect and not by way of exercising any investment decision
in respect of that Instruction) in such a manner to comply with what Chase
reasonably believes to be applicable law, regulation or market practice.
Chase shall immediately notify the Fund in the event that it determines not
to act on an Instruction.
OTHER MATTERS F. If Chase receives an Instruction that it cannot reasonably process
(including, without limitation, an Instruction to deliver a security which
is not held in the relevant Account or is not held in a deliverable form;
Instructions to purchase a security in a market where Chase is not able to
process trades for the Fund or an Instruction which Chase, acting
reasonably, declines to act upon), Chase will notify the Fund or such
person as the Fund may designate, of the fact that Chase believes an
Instruction to be unprocessable. Such notification shall be given within 24
hours of the time that Chase received the Instruction that it believes to
be unprocessable. If such Instruction is received by Chase after its
cut-off time (as advised to the Fund from time to time) on any day, it
shall be deemed to have been received, for the purposes of this paragraph,
as of the start of business in New York on the next Business Day following
receipt. If the 24 hour period following receipt would expire on a day that
is not a Business Day, it shall be deemed to expire at the same time of day
on the next Business Day.
G. If Chase is advised that a counterparty has instructions to settle a
trade with Chase, or any of its Eligible Foreign Custodians, which
Chase has identified as being for the account of the Fund and Chase
does not have corresponding Instructions from the relevant Authorised
Person (a "BROKER ALLEGED TRADE"), Chase will notify the relevant
Authorised Person of the Broker Alleged Trade within 24 hours of Chase
becoming aware of such Broker Alleged Trade. If such 24 hour period
would expire on a day that is not a Business Day, it shall be deemed
to expire at the same time of day on the next Business Day.
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H. For the purposes of Clause 2I, Clause 3F and 3G above "BUSINESS DAY" shall
mean a day (other than a Saturday) on which banks are open in New York for
the transaction of business of the nature contemplated herein.
STATEMENTS AND I. (a) Chase will at any time at the Fund's request deliver to the Fund as
ADVICES soon as reasonably practicable a statement of the Securities held by
it or to its order on behalf of the Fund.
(b) A certificate or statement by Chase as to any Liabilities or any
Financial Assets or cash held in any account for the Fund shall be
conclusive in the absence of error. Prices and other information
contained in any statement sent to the Fund will be obtained from
sources Chase believes to be reliable. Chase does not, however, make
any representation as to the accuracy of such information, nor that
the prices specified necessarily reflect the proceeds that would be
received on a disposal of the relevant Financial Assets. References in
this Agreement to statements include any statements in electronic
form.
4. BORROWINGS AND FOREIGN EXCHANGE
OVERDRAFTS BEAR A. Overdrafts
INTEREST AT NORMAL
RATES If a debit to any currency in the Cash Account of the Fund results in a
debit balance in that currency then Chase may, at its discretion, advance
an amount equal to the overdraft and such an advance shall be deemed a loan
to the Fund, payable on demand, bearing interest at the rate charged by
Chase for similar overdrafts from time to time from the date of such
advance to the date of payment (both after as well as before judgement) and
otherwise on the terms on which Chase makes similar overdrafts available
from time to time.
FX FACILITIES MAY BE B. Foreign Exchange Transactions
To facilitate the administration of the Fund's trading and investment
activity, Chase is authorised at its discretion to enter into spot or
forward foreign exchange contracts with the Fund in connection with the
Fund and may also provide foreign exchange contracts and facilities through
its affiliates or Eligible Foreign Custodians provided that the Fund shall
always receive a market rate reasonably prevailing on the date of the
transaction for transactions of similar size. Instructions, including
standing instructions, may be issued with respect to such contracts but
Chase may establish Rules or limitations concerning any foreign exchange
facility made available. In all cases where Chase, its affiliates or
Eligible Foreign Custodians enter into a foreign exchange contract related
to any Account, the terms and conditions then current for foreign exchange
contracts of Chase, its affiliates or Eligible Foreign Custodians and, to
the extent not inconsistent, this Agreement, shall apply to such
transaction.
5. FEES EXPENSES AND OTHER AMOUNTS OWING TO CHASE
FEES - CHASE A. The Fund will pay Chase for its services under this Agreement. The Fee
shall be such amount as may be agreed upon in writing, together with
Chase's reasonable out-of-pocket or incidental expenses, including,
but not limited to, legal fees. Chase may increase such fees only with
the written consent of the Fund. If authorized in writing by an
officer of the Fund,
13
Chase may deduct such amounts owing to it by the Fund from the Fund's Cash
Account monthly in arrears.
B. In the event of termination of this Agreement, Chase shall be entitled
to receive a proportionate amount of fees due to it calculated on a
pro-rata basis up to and including the date of termination.
CHASE'S RIGHTS OVER ▇. ▇▇▇▇▇ agrees that it waives its rights to any liens or other security
SECURITIES interest over any Financial Assets held for the Fund that may arise under
applicable law save for the limited right of sale specified in Clause 14.
CHASE HAS A RIGHT OF D. Following a reasonable period of notice, Chase may set off against any
SET OFF amount owing by the Fund under this Agreement in respect of the account of
the Fund any currency standing to the credit of any of the Fund's accounts
whether current, deposit or otherwise. For this purpose, Chase shall be
entitled to accelerate the maturity of any fixed term deposits and to
effect such currency conversions as may be necessary at its current rates
for the sale and purchase of the relevant currencies.
6. ELIGIBLE FOREIGN CUSTODIANS AND SECURITIES DEPOSITORIES
DELEGATION PURSUANT TO A. The Fund's Board of Trustees (hereinafter "BOARD") hereby delegates to
RULE Chase, and, except as to the country or countries as to which Chase may,
17F-5 from time to time, advise the Fund that it does not accept such delegation,
Chase hereby accepts the delegation to it, of the obligation to perform as
the Fund's "Foreign Custody Manager" (as that term is defined in SEC Rule
17f-5(a)(3) as promulgated under the 1940 Act, including for the purposes
of: (I) selecting "Eligible Foreign Custodians" (as the term is defined in
SEC Rule 17f-5(a)(I), as amended from time to time, or that have otherwise
been exempted pursuant to an SEC exemptive order) to hold the Fund's
"Foreign Assets" (as that term is defined in SEC Rule 17f-5(a)(1)), (ii)
evaluating the contractual arrangements with such Eligible Foreign
Custodians (in accordance with SEC Rule 17f-5(c)(2)), and (iii) monitoring
such foreign custody arrangements (in accordance with SEC Rule
17f-5(c)(3)).
DUTIES OF FOREIGN B. In connection with the foregoing, Chase shall:
CUSTODY
MANAGER
(i) provide written reports notifying the Fund's Board of the placement of
the Fund's Foreign Assets with particular Eligible Foreign Custodians
and of any material change in the arrangements with such Eligible
Foreign Custodians, with such reports to be provided to the Fund's
Board at such times as the Board deems reasonable and appropriate
based on the circumstances of the Fund's foreign custody arrangements
(and until further notice from the Fund such reports shall be provide
not less than quarterly with respect to the placement of the Fund's
Foreign Assets with particular Eligible Foreign Custodians and with
reasonable promptness upon the occurrence of any material change in
the arrangements with such Eligible
14
Foreign Custodians);
(ii) exercise reasonable care, prudence and diligence in performing as the
Fund's Foreign Custody Manager as a person having responsibility for
the safekeeping of the Fund's Foreign Assets would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined
that the Fund's Foreign Assets placed and maintained in the care of
such Eligible Foreign Custodian will be subject to reasonable care,
based on the standards applicable to custodians in the relevant
market, after having considered all factors relevant to the
safekeeping of the Fund's Foreign Assets, including, without
limitation, those factors set forth in SEC Rule 17f-5(c)(1)(i)-(iv);
(iv) ensure that the Fund's arrangement with each Eligible Foreign
Custodian is governed by a written contract that Chase has determined
will provide reasonable care for the Fund's Foreign Assets based on
the standards specified in SEC Rule 17f-5(c)(1) and contains at least
the provisions required by SEC Rule 17f-5(c)(2); and
(v) has established a system to monitor the continued appropriateness of
maintaining the Fund's Foreign Assets with particular Eligible Foreign
Custodians under SEC Rule 17f-5(c)(1) and of the governing contractual
arrangements under SEC Rule 17f-5(c)(2); it being understood, however,
that Chase shall promptly advise the Fund if the Fund's arrangements
with an Eligible Foreign Custodian no longer meet the requirements of
SEC Rule 17f-5 and shall then act in accordance with the Instructions
of the Fund with respect to the disposition of the affected Foreign
Assets.
Subject to subclause B(i)-(v) above, Chase is hereby authorized to place and maintain
the Fund's Foreign Assets with Eligible Foreign Custodians pursuant to a written
contract deemed appropriate by Chase.
C. Except as expressly provided herein, the Fund shall be solely
responsible to assure that the maintenance of the Fund's Foreign
Assets hereunder complies with the Rules, regulations, interpretations
and exemptive orders as promulgated by or under the authority of the
SEC.
▇. ▇▇▇▇▇ represents to the Fund that it is a "U.S. BANK" as defined in
SEC Rule 17f-5(a)(7) and will promptly notify the Fund in the event
that it is no longer a U.S. Bank. The Fund represents to Chase that:
(a) its Foreign Assets being placed and maintained in Chase's custody
are subject to the 1940 Act; and (b) its Board has determined that it
is reasonable to rely on Chase to perform as the Fund's Foreign
Custody Manager. Nothing contained herein shall require Chase to make
any selection or to engage in any monitoring on behalf of the Fund
that would entail consideration of Country Risk.
▇. ▇▇▇▇▇ shall provide to the Fund such information relating to Country
Risk as is specified in Schedule 6 hereto. The Fund hereby
acknowledges that: (a) such information is solely designed to inform
the Fund of market conditions and procedures and is not intended as a
recommendation to invest or not invest in particular markets; and (b)
Chase has gathered the information from sources it considers reliable,
but that Chase shall have no responsibility for inaccuracies or
incomplete information.
15
U.S. SECURITIES ▇. ▇▇▇▇▇ and each Eligible Foreign Custodian may deposit Securities with,
DEPOSITORIES and hold Securities in, any Eligible Securities Depository, settlement
system, dematerialized book entry system or similar system (together a
"U.S. ELIGIBLE SECURITIES Depository") on such terms as such systems
customarily operate. Chase will provide the Fund with market information
containing details of such U.S. Securities Depositories from time to time.
USE OF ELIGIBLE G. (i) Chase shall provide to the Fund and its investment advisers an
SECURITIES analysis of the custody risks associated with maintaining the Fund's
DEPOSITORIES PURSUANT Foreign Assets with each Eligible Securities Depository (as defined in
TO RULE 17f-7 SEC Rule 17f-7(b)(1)(i)-(vi) of the 1940 Act, or that has otherwise
been made exempt pursuant to an SEC order) used by Chase as of the
date hereof (or, in the case of an Eligible Securities Depository not
used by Chase as of the date hereof, prior to the initial placement of
the Fund's Foreign Assets at such depository) and at which any Foreign
Assets of the Fund are held or are expected to be held. The foregoing
analysis will be provided to the Fund and its investment adviser at
Chase's Website (▇▇▇.▇▇▇▇▇.▇▇▇.) In connection with the foregoing, the
Fund shall notify Chase of any Eligible Securities Depositories at
which it does not choose to have its Foreign Assets held. Chase shall
monitor the custody risks associated with maintaining the Fund's
Foreign Assets at each such Eligible Eligible Securities Depository on
a continuing basis and shall promptly notify the Fund or its
investment adviser of any material changes to such risks.
(ii) Chase shall exercise reasonable care, prudence and diligence in
performing the requirements set forth in Subclause B(i) above.
(iii) Based on the information available to it in the exercise of diligence,
Chase shall determine the eligibility under SEC Rule 17f-7 of each
depository before including it as an Eligible Securities Depository on
Schedule 7 hereto and Chase shall ensure that the Fund (or its
duly-authorized investment manager or investment adviser) receives
prompt and sufficient information hereunder if and when a custody
arrangement with an Eligible Securities Depository no longer meets the
requirements of Rule 17f-7, so that the Foreign Assets may be
withdrawn from the depository as soon as reasonably practicable
thereafter in accordance with section (a)(2) of Rule 17f-7. (Eligible
Securities Depositories used by Chase as of the date hereof are set
forth in Schedule 7 hereto, and as the same may be amended on notice
to the Fund from time to time.)
(iv) At the request of the Fund, Chase may, but need not, add to Schedule 1
an Eligible Foreign Custodian where Chase has not acted as Foreign
Custody Manager with respect to the selection thereof. Chase shall
notify the Fund in the event that it elects to add any such entity.
16
LIABILITY FOR EIGIBLE ▇. ▇▇▇▇▇ shall not be liable for any loss resulting from:
FOREIGN CUSTODIANS AND
U.S. SECURITIES (i) the insolvency of any Eligible Foreign Custodian which is not a branch
DEPOSITORIES or affiliate of Chase; or
(ii) any act of any Eligible Foreign Custodian, save where such loss
results from an error or omission by the Eligible Foreign Custodian or
the failure by the Eligible Foreign Custodian to use reasonable care
in the provision of custodial services by it in accordance with the
standards prevailing in the relevant market or from the fraud, willful
default or negligence (measured in accordance with the standards
prevailing in the relevant market) of such Eligible Foreign Custodian
in the provision of custodial services by it; or
(iii) any act, omission or insolvency of any U.S. Eligible Securities
Depository or Eligible Securities Depository.
HOLDING OF REGISTERED I. (i) Chase is authorised to hold:
AND BEARER SECURITIES
(a) in bearer form, such Securities as are customarily held in
bearer form; and
(b) subject to subsection (ii) below, registered in the name of (at
Chase's discretion) the Fund, Chase, a Eligible Foreign Custodian
or any nominee of Chase or a Eligible Foreign Custodian, such
Financial Assets as are customarily held in registered form.
(ii) although Securities will ordinarily be registered in the name of a
nominee, Chase may from time to time (due to the nature of law or
market practice, where it is in the Fund's best interest or it is not
feasible to do otherwise) register or record securities in the name of
an Eligible Foreign Custodian or Chase itself with prior notice to the
Fund of such registration or recordings, other than where in Chase's
reasonable opinion the giving of such prior notice may result in a
delay which could jeopardise the protection of the assets of the Fund,
in which case notice will be given as soon as reasonably practical
following such registration or recording (provided however, that any
registration of Securities in the name of an Eligible Foreign
Custodian or Chase indicates such Financial Assets are held for the
benefit of customers and not, in any event, for the benefit of Chase
or any Eligible Foreign Custodian or foreign securities system or any
nominee thereof). If Securities are registered in Chase's name the
Securities in question may not be segregated from assets of Chase and
in the event of default by Chase, customers' assets may not be as well
protected. Arrangements with the Eligible Foreign Custodians are such
that Chase's customer securities with them must be in a separate
account containing assets belonging only to the customers of Chase and
not Chase's proprietary assets. In any event, Chase will notify the
Fund of the registration name used in respect of Securities.
(iii) in the absence of negligence, wilful default or fraud on its part
Chase shall not be liable for any loss suffered howsoever caused as a
result of an Instruction to hold Securities with, or have them
registered in the name of, any person not chosen by Chase.
17
J. Neither Chase nor CMBI shall assume responsibility for, and neither
shall be liable for, any action or inaction of any Russian Registrar
Company and no Russian Registrar Company shall be, or shall be deemed
to be, Chase, CMBI, a Eligible Foreign Custodian, a Eligible
Securities Depository or the employee, agent or personnel of any of
the foregoing. To the extent that CMBI employs agents to perform any
of the functions to be performed by Chase or CMBI with respect to
Local Russian Securities, neither Chase nor CMBI shall be responsible
for any act, omission, default or for the solvency of any such agent
unless the appointment of such agent was made with Russian/Ukraine
Negligence or in bad faith except that where Chase or CMBI uses (i) an
affiliated nominee or (ii) an agent to perform the share registration
or share confirmation functions described at paragraphs (a)-(e) on
pages 5-6 of the No-Action Letter, and, to the extent applicable to
CMBI, the share registration functions described on pages 2-3 of the
No-Action Letter, Chase and CMBI shall be liable to the Fund as if
CMBI were responsible for performing such services itself.
K Delegation by Chase to the Ukrainian Eligible Foreign Custodian shall
not relieve Chase of any responsibility to the Fund for any loss due
to such delegation, and Chase shall be liable for any loss or claim
arising out of or in connection with the performance by the Ukrainian
Eligible Foreign Custodian of such delegated duties to the same extent
as if Chase had itself provided the custody services hereunder. In
connection with the foregoing, neither Chase nor the Ukrainian
Eligible Foreign Custodian shall assume responsibility for, and
neither shall be liable for, any action or inaction of any Registrar
Company or Ukrainian Eligible Securities Depository and no Registrar
Company or Ukrainian depository shall be, or shall be deemed to be,
Chase, the Ukrainian Eligible Foreign Custodian, a Eligible Foreign
Custodian, or the employee, agent or personnel of any of the
foregoing. In addition, no Registrar Company shall be deemed to be a
Eligible Securities Depository. To the extent that the Ukrainian
Eligible Foreign Custodian employs agents to perform any of the
functions to be performed by Chase or the Ukrainian Eligible Foreign
Custodian with respect to Ukrainian Securities, neither Chase nor the
Ukrainian Eligible Foreign Custodian shall be responsible for any act,
omission, default or for the solvency of any such agent unless the
appointment of such agent was made with Russian/Ukraine Negligence or
in bad faith, except that where Chase or the Ukrainian Eligible
Foreign Custodian uses (i) an affiliated nominee or (ii) an agent to
perform the share registration or share confirmation functions
described in paragraphs (a)-(e) on pages 5-6 of the No-Action Letter,
and, to the extent applicable by extension to the Ukrainian Eligible
Foreign Custodian, the share registration functions described on pages
2-3 of the No-Action Letter, Chase and the Ukrainian Eligible Foreign
Custodian shall be liable to the Fund as if the Ukrainian Eligible
Foreign Custodian were responsible for performing such services
itself.
7. BROKERS AND OTHER THIRD PARTIES
BROKER/ ▇. ▇▇▇▇▇ shall not be responsible for any loss solely resulting from a
THIRD PARTY DEFAULT failure by any broker or any other third party beyond the control of Chase.
In particular, if a broker or any third party defaults on any obligation to
deliver Securities or pay
18
cash, Chase shall have no liability to the Fund for such non-delivery or
payment in the absence of Chase's own negligence, willful default, bad
faith or fraud. Payments of income and settlement proceeds are at the risk
of the account. If Chase, at the request of the Fund, appoints a broker or
agent to effect any transaction on behalf of the Fund, Chase shall have no
liability whatsoever in respect of such broker's duties or its actions,
omissions or solvency unless, if Chase selects such broker or agent, Chase
fails to exercise reasonable care in such selection.
DELIVERY TO BROKERS B. Absent Chase's own negligence, willful default, bad faith or fraud, Chase
shall not be liable for losses arising from a proper Instruction to deliver
Securities or cash to a broker, even if Chase might have information
tending to show that this course of action, or the choice of a particular
broker for a transaction, was unwise.
8. OMNIBUS ACCOUNTS
The Fund authorises Chase or its Eligible Foreign Custodian to hold
Financial Assets in fungible accounts and will accept delivery of
Financial Assets of the same class and denomination as those deposited
with Chase or its Eligible Foreign Custodian.
9. ABOUT THE PARTIES
THE PARTIES STATE THAT A. The Fund represents and warrants that:
THEY HAVE FULL
AUTHORITY TO PERFORM (i) it has full authority and power, and has obtained all necessary
UNDER THIS AGREEMENT authorisations and consents, to deposit and control the Financial
Assets and cash in the Accounts, to appoint and to use Chase as
custodian in accordance with the terms of this Agreement and to
borrow money and enter into foreign exchange transactions
provided always that it shall be the duty of the Fund and not
Chase to ensure that there is no breach of any limit imposed on
the Fund;
(ii) this Agreement is its legal, valid and binding obligation,
enforceable in accordance with its terms and it has full power
and authority to enter into and has taken all necessary action to
authorise the execution of this Agreement;
(iii) it has not relied on any oral or written representation made by
Chase or any person on its behalf except as contained in this
Agreement and acknowledges that this Agreement sets out to the
fullest extent the duties of Chase;
(iv) the Financial Assets and cash deposited in the Accounts are not
subject to any encumbrances or security interest whatsoever,
other than a security interest that may be created in favor of
Chase, and the Fund undertakes that, so long as Liabilities are
outstanding, it will not create or permit to subsist any such
encumbrance or security interest over Financial Assets or cash,
without prior notification to Chase of the same, and in any
event, Chase shall not be liable if performance of its
obligations under this Agreement is prevented or impeded because
of the existence of any such encumbrance or security.
19
▇. ▇▇▇▇▇ represents and warrants that:
(i) it has full authority and power, and has obtained all necessary
authorisations and consents, to act as custodian in accordance
with the terms of this Agreement;
(ii) this Agreement is its legal, valid and binding obligation,
enforceable in accordance with its terms and it has full power
and authority to enter into and has taken all necessary action to
authorise the execution of this Agreement;
(iii) it has not relied on any oral or written representation made by
the Fund or any person on its behalf except as contained in this
Agreement and acknowledges that this Agreement sets out to the
fullest extent the duties of the Fund;
(iv) as specified in Clause 5C, Chase waives its rights to any liens
or other security interest over any Securities held for the Fund
that may arise under the applicable law, save for the limited
right of sale specified in Clause 14.
10. CONFLICTS OF INTEREST
CHASE PROVIDES DIVERSE Provided that nothing in this Clause herein shall be taken as authorising
FINANCIAL SERVICES AND Chase to contravene any and all applicable laws, the Fund hereby authorises
MAY GENERATE Chase to act hereunder notwithstanding that:
PROFITS
AS A RESULT (i) Chase or any of its divisions, branches or affiliates may have a
material interest in the transaction or that circumstances are such
that Chase may have a potential conflict of duty or interest including
the fact that Chase or any of its affiliates may:
(a) act as a market maker in the Financial Assets to which the
Instructions relate;
(b) provide broking services to other clients;
(c) act as financial adviser to the issuer of such Financial Assets;
(d) act in the same transaction as agent for more than one client;
(e) have a material interest in the issue of the Financial Assets; or
(f) earn profits from any of the activities listed herein.
CHASE NO DUTY TO (ii) Chase or any of its divisions, branches or affiliates may be in
ADVISE IF IT IS AWARE possession of information tending to show that the Instructions
THAT INSTRUCTIONS MAY received may not be in the best interests of the Fund. Chase is
BE UNWISE not under any duty to disclose any such information.
20
11. STANDARD OF CARE - HOW CHASE IS TO PERFORM ITS DUTIES UNDER THIS AGREEMENT
REASONABLE CARE A. Except to the extent that a higher standard of care applies pursuant to
Clause 6 of this Agreement, Chase will use reasonable care in performing
its obligations under this Agreement and Chase will look after assets with
the same degree of care as it does for its own similar assets in the
relevant market provided that Chase shall exercise at least the degree of
skill and care of a prudent professional custodian for hire. It is
understood and agreed, however, that for Local Russian Securities Chase's
safekeeping responsibilities shall be limited to safekeeping of relevant
Share Extracts. It is understood and agreed that for Ukraine Securities
Chase's responsibility shall be limited to the safekeeping of the relevant
Share Extracts and Depository Extracts.
CHASE CAN TAKE ADVICE ▇. ▇▇▇▇▇ shall be entitled to rely on, and may act upon the advice of external
professional advisers in relation to matters of law, regulation or market
practice (which may be the external professional advisers of the Fund), and
shall not be liable to the Fund for any action reasonably taken or omitted
pursuant to such advice, save to the extent that Chase is able to recover
from such external professional advisers in respect of negligent advice
given.
INSURANCE ▇. ▇▇▇▇▇ need not maintain any insurance cover for the benefit of the Fund
but, at the request of the Fund, Chase will confirm to the Fund details of
the insurance policy(ies) (commonly referred to as a "FINANCIAL
INSTITUTIONAL BOND") between Chase and its insurers providing in the
aggregate coverage in an amount not less than US$140,000,000 and insurance
policy(ies) providing at least S$140,000,000 cover for securities in
transit in the custody of any employee or designated messenger of Chase.
12. WHEN CHASE IS NOT LIABLE
MARKET AND COUNTRY RISK A. Investing in foreign markets may be a risky enterprise. The holding of
assets and cash in foreign jurisdictions may involve risks of loss or other
special features. Chase accepts no liability whatsoever for any loss which
results solely from:
(i) the general risks of investing; or
(ii) Country Risk.
FORCE MAJEURE ▇. ▇▇▇▇▇ shall have no liability for any damage, loss, expense or liability of
any nature which the Fund may suffer or incur, caused by an act of God,
fire, flood, civil or labour disturbance (save where the labour disturbance
occurs within Chase or any Eligible Foreign Custodian which is a branch or
affiliate of Chase in circumstances which are within its reasonable
control), act of any governmental authority or other act or threat of any
authority (de jure or de facto), legal constraint, fraud or forgery (other
than by Chase or its Eligible Foreign Custodian), malfunction of equipment
(including, without limitation any computer or related software other than
Chase's own computers or software or those of its Eligible Foreign
Custodians), failure of or the effect of Rules or operations of any funds
transfer system, inability to obtain or interruption of communications
facilities, or any cause beyond the reasonable control of Chase (including
without limitation, the non-availability of appropriate foreign exchange).
21
ACTING REASONABLY AND ▇. ▇▇▇▇▇ shall not be liable for acting on what it reasonably and in good
faith believes IN GOOD FAITH to be Instructions or in relation to notices,
requests, waivers, consents, receipts, corporate actions or other documents
which Chase reasonably and in good faith believes to be genuine and to have
been given or signed by the appropriate parties. In respect of the
undertaking given by brokers for Taiwanese Securities as detailed in
Schedule 3 Chase shall not be liable for acting on an undertaking which it
reasonably and in good faith believes to be genuine and to have been given
or signed by the appropriate parties.
INVALID SECURITIES D. In the absence of negligence, wilful default, fraud or bad faith on its
part, Chase shall not be liable to the Fund for the collection, deposit or
credit of invalid, fraudulent or forged Securities.
DELIVERIES ▇. ▇▇▇▇▇ shall effect all transactions for each account on a delivery versus
payment basis except that, in the absence of negligence, wilful default,
fraud or bad faith on its part, Chase shall not be liable for losses
arising out of effecting Instructions for delivery or payment against an
expectation of receipt, save where such delivery or payment was contrary to
local market practice or with respect to Local Russian Securities, where it
is agreed that payment shall not be made prior to the issuance of the Share
Extract relating to such Local Russian Securities. Notwithstanding the
foregoing, if the Fund wishes to give Instructions to Chase to settle a
trade other than in accordance with local market practice, the Fund will
signify this to Chase in the manner agreed from time to time in which case
Chase may decline to accept such Instructions to the extent provided for in
Clauses 3D and 3E. Chase shall use all reasonable endeavours to comply with
such Instructions.
CASES WHEN CHASE IS F. Except as provided in Clause 6, Chase shall only be liable to the Fund to
NOT LIABLE the extent Chase or its officers, employees or agents have been fraudulent,
negligent, or are in wilful default, of its or their duties as set out in
this Agreement and to the extent provided for in Clause 6H. Chase and the
Fund agree that Chase's liability to the Fund shall be determined based
upon the direct and foreseeable consequences of Chase's fraudulence,
negligence, wilful default or bad faith or Chase's liability for Eligible
Foreign Custodians as described in Clause 6H.
13. INDEMNITY
THE FUND TO INDEMNIFY A. Save in respect of fraud, negligence, willful default or bad faith of ▇▇▇▇▇
▇▇▇▇▇ or its officers, employees or agents, and save in respect of any action of
any Eligible Foreign Custodian for which Chase is liable pursuant to Clause
6H, the Fund undertakes to indemnify Chase and its nominees, and to keep
them indemnified, from
(i) any costs, calls, losses, taxes and other matters for which Chase or
any of its agents, Eligible Foreign Custodians or nominees becomes
liable or arising as a direct or indirect result of their status as a
holder of record of Financial Assets on behalf of the Fund; and
(ii) any other claims, losses, liabilities, costs and expenses arising
under or in connection with this Agreement.
22
14. TERMINATION
This Agreement shall continue in effect until termination as provided
herein, and may be amended at any time by a written instrument signed
by both parties.
A. (i) Either of the Fund or Chase may terminate this Agreement on 90 days'
notice in writing to the other party, PROVIDED THAT all applicable
legal and regulatory requirements are satisfied, namely that a
replacement custodian be appointed within 90 days of such termination
and that until such replacement is appointed, Chase shall take all
necessary steps to ensure the good preservation of the interests of
the Fund.
(ii) In the case of termination by Chase, the Fund shall use its best
endeavours to appoint a new custodian as set forth in Clause 14A(i)
above within the 90-day period specified in such clause. Chase shall,
in the event of such termination, deliver or cause to be delivered to
any succeeding custodian, the Fund's Financial Assets and cash.
B. In the event of notice of termination of this Agreement being given under
sub-clause A above, the following shall apply:
(i) Chase shall be entitled to deduct any amounts owing to it by the Fund
prior to delivery of the Financial Assets and cash to the replacement
custodian (and accordingly, Chase shall, with the prior written
consent of the Fund, such consent not to be unreasonably withheld be
entitled to sell Financial Assets pertaining to the Fund and apply the
sale proceeds in satisfaction of such amounts owing to it); and
(ii) if the Fund does not appoint a replacement custodian within the 90-day
period anticipated by sub-clause A above, Chase shall, following
expiry of one further month, be entitled to exercise the rights
conferred by Clause 14B(i) above; and
(iii) (termination shall not affect any of the liabilities any party owes to
the other arising under this Agreement prior to such termination.
C. This Agreement may be terminated by the Fund, forthwith, if at any time:
(a) Chase shall go into liquidation (except voluntary liquidation for the
purposes of reconstruction or amalgamation upon terms previously
agreed in writing by the Company), or commit any other act of
bankruptcy, or if a receiver is appointed over any of the assets of
Chase;
(b) Chase shall commit any material breach of its obligations under this
Agreement and, if capable of remedy, Chase fails to make good such
breach within 45 days of receipt of notice from the Fund requiring it
to do so:
(c) Chase's supervisory authority shall, as a result of a wrongful act or
omission by Chase, withdraw or fail to renew Chase's authorisation to
act as a bank or as a custodian of assets such that Chase is no longer
permitted to act as custodian hereunder and it is mandatory that the
Fund appoints a new custodian; or
(d) Chase is no longer eligible to serve as the Fund's Foreign Custody
Manager under SEC Rule 17f-5 or to perform its delegated
responsibilities under SEC Rule 17f-7.
23
15. RUSSIA
A. (i) Chase will advise the Fund (and will update such advice from time to
time as changes occur) of those Russian Registrar Companies with which
CMBI has entered into a Registrar Contract. Chase shall cause CMBI to
monitor each Russian Registrar Company and to promptly advise the Fund
when CMBI has actual knowledge of the occurrence of any one or more of
the events described in paragraphs (i)-(v) on pages 8-9 of the
No-Action Letter with respect to a Russian Registrar Company that
serves in that capacity for any issuer the shares of which are held by
the Fund.
(ii) Where the Fund is considering investing on behalf of the Fund in the
Local Russian Securities of an issuer as to which CMBI does not have
Registrar Contract with the issuer's Russian Registrar Company, the
a Fund may request that CMBI consider whether it would be willing to
attempt to enter into such a Registrar Contract and CMBI shall advise
the Fund of its willingness to do so. Where CMBI has agreed to make
such an attempt, Chase will advise the Fund of the occurrence of any
one or more of the events described in paragraphs (i)-(iv) on pages
8-9 of the No-Action Letter of which CMBI has actual knowledge.
(iii) Where the Fund is considering investing on behalf of the Fund in the
Local Russian Securities of an issuer as to which CMBI has a Registrar
Contract with the issuer's Russian Registrar Company, the Fund may
advise Chase of its interest in investing in such issuer and, in such
event, Chase will endeavour to, so far as reasonably practicable
advise the Fund of the occurrence of any one or more of the events
described in paragraphs (i)-(v) on pages 8 and 9 of the No-Action
Letter of which CMBI has actual knowledge.
B. The Fund shall pay for and hold Chase and CMBI harmless from any
liability or loss resulting from the imposition or assessment of any
taxes (including but not limited to state, stamp and other duties) or
other governmental charges, and any related expenses incurred by
Chase, CMBI or their respective agents with respect to income on that
Fund's Local Russian Securities.
C. The Fund acknowledges and agrees that CMBI may not be able, in given
cases and despite its reasonable efforts, to obtain a Share Extract
from a Russian Registrar Company and CMBI shall not be liable in any
such event including with respect to any losses resulting from such
failure. For the avoidance of doubt, this Clause shall not limit
Chase's liability for breach of its obligations under Clause 2C above.
D. Subject to the co-operation of a Russian Registrar Company for at
least the first two years following CMBI's first use of such Russian
Registrar Company, Chase shall cause CMBI to conduct share
confirmations on at least a quarterly basis, although thereafter
confirmations may be conducted on a less frequent basis if the Fund,
in consultation with CMBI, determines it to be appropriate.
▇. ▇▇▇▇▇ shall cause CMBI to prepare for distribution to the Fund a
quarterly report identifying: (i) any concerns it has regarding the
Local Russian share registration system that should be brought to the
attention of the Fund and (ii) the steps CMBI
24
has taken during the reporting period to ensure that the Fund's
interests continue to be appropriately recorded.
F. The services to be provided by Chase hereunder will be provided only
in relation to Local Russian Securities for which CMBI has entered
into a Registrar Contract with the relevant Russian Registrar Company.
▇. ▇▇▇▇▇ shall be entitled to disclose any information relating to the
Fund or the Local Russian Securities and/or cash held for the Fund as
is required by any law, court, legal process, or banking or other
regulatory or examining authorities (whether governmental or
otherwise).
H. The Fund acknowledges that it has received, reviewed and understands
the Chase market report for Russia, including, but not limited to, the
risks described therein. The Fund recognises that these risks
currently are inherent in investments in Local Russian Securities and
that they should be assessed by the Fund as an element of the Fund's
decision that it is appropriate for the Fund to invest in Local
Russian Securities. Chase is not responsible for the Fund's decision
that it is appropriate for the Fund to hold Local Russian Securities
despite the custodial risks associated with the Russian market. Chase
will promptly provide the Fund with updated market reports in
accordance with Chase's normal practice.
16 UKRAINE
A. (i) Chase shall advise the Fund (and shall update such advice from
time to time as changes occur) of those Registrar Companies with
which the Ukrainian Eligible Foreign Custodian has entered into a
Registrar Contract and the identity of those Ukrainian Securities
Depositories, if any, of which it is a member. In the case of
Ukrainian Securities which are held for the accounts through a
Registrar Company, but not through a Ukrainian Eligible
Securities Depository, Chase shall procure the Ukrainian Eligible
Foreign Custodian's agreement both to monitor each Registrar
Company and to promptly advise Chase (which shall then promptly
advise the Fund) when the Ukrainian Eligible Foreign Custodian
has actual knowledge of the occurrence of any one or more of the
events described in paragraphs (i)-(v) on pages 8-9 of the
No-Action Letter with respect to a Registrar Company that serves
in that capacity for any issuer the shares of which are held by
the Fund.
(ii) Where the Fund is considering investing in the Ukrainian
Securities of an issuer as to which the Ukrainian Eligible
Foreign Custodian does not have a Registrar Contract with the
issuer's Registrar Company which Ukrainian Securities either are
held though a Ukrainian Eligible Securities Depository or are
held in a Ukrainian Eligible Securities Depository of which the
Ukrainian Eligible Foreign Custodian is not a member, the Fund
may request that Chase request the Ukrainian Eligible Foreign
Custodian both to consider whether it would be willing to attempt
to enter into such a Registrar Contract or become a member of
such a Ukrainian Eligible Securities Depository and to advise the
Fund of its willingness to do so. Where the Ukrainian Eligible
Foreign Custodian has agreed to make such an attempt, Chase shall
advise the Fund of the occurrence of any one or more of the
events described in paragraphs (i)-(iv) on pages 8-9 of the
No-
25
Action Letter of which the Ukrainian Eligible Foreign Custodian has
actual knowledge and has advised Chase.
(iii) Where the Fund is considering investing in the Ukrainian
Securities of an issuer as to which the Ukrainian Eligible
Foreign Custodian has a Registrar Contract with the issuer's
Registrar Company, the Fund may advise Chase of its interest in
investing in such issuer and, in such event, Chase will advise
the Fund of the occurrence of any one or more of the events
described in paragraphs (i)-(v) on pages 8-9 of the No-Action
Letter of which the Ukrainian Eligible Foreign Custodian has
actual knowledge and has advised Chase.
B. The Fund shall pay for and hold Chase and the Ukrainian Eligible
Foreign Custodian 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 on the that
Fund's Ukrainian Securities.
C. The Fund acknowledges that the Ukrainian Eligible Foreign Custodian
may not be able, in given cases and despite its reasonable efforts, to
obtain a Share Extract from a Registrar Company or a Depository
Extract from a Ukrainian Eligible Securities Depository, and neither
Chase nor the Ukrainian Eligible Foreign Custodian shall be liable in
any such event including with respect to any losses resulting from
such failure.
D. Subject to the co-operation of a Registrar Company, for at least the
first two years following the Ukrainian Eligible Foreign Custodian's
first use of a Registrar Company, Chase shall procure the Ukrainian
Eligible Foreign Custodian's agreement to conduct share confirmations
with that Registrar Company on at least a quarterly basis, although
thereafter confirmations may be conducted on a less frequent basis if
the Fund, in consultation with Chase, determines it to be appropriate.
▇. ▇▇▇▇▇ shall prepare for distribution to the Fund a quarterly report
identifying: (i) any concerns the Ukrainian Eligible Foreign Custodian
has regarding the Ukrainian share registration system that should be
brought to the attention of the Fund; and (ii) the steps the Ukrainian
Eligible Foreign Custodian has taken during the reporting period to
help assure that the Fund's interests continue to be appropriately
recorded.
F. The Fund acknowledges that it has received, reviewed and understands
Chase's market report for the Ukraine, including, but not limited to,
the risks described therein.
G. Except as provided in Clause 15C above, the services to be provided
hereunder will be provided only in relation to Ukrainian Securities
for which the Ukrainian Eligible Foreign Custodian has entered into a
Registrar Contract with the relevant Registrar Company or which are
held through a Ukrainian Eligible Securities Depository of which the
Ukrainian Eligible Foreign Custodian is a member.
26
17. MISCELLANEOUS
NOTICES A . Notices (other than Instructions) shall be served by registered mail
or hand delivery to the address of the respective parties as set out
on the first page of this Agreement, unless notice of a new address is
given to the other party in writing. Notice shall not be deemed to be
given unless it has been received.
SUCCESSORS AND ASSIGNS B. This Agreement shall be binding on each of the parties' successors and
assigns, but the parties agree that neither party can assign its
rights and obligations under this Agreement without the prior written
consent of the other party, which consent shall not be unreasonably
withheld.
INTERPRETATION C. Headings, marginal notes and paragraphs are for convenience only and
are not intended to affect interpretation. References to clauses are
to clauses of this Agreement and references to sub-clauses and
paragraphs are to sub-clauses of the clauses and paragraphs of the
sub-clauses in which they appear.
INTER-PLEADER CLAUSE. D. In the event of any dispute between or conflicting claims by any
WHAT HAPPENS IF THERE person or persons with respect to Financial Assets held in a
IS A DISPUTE IN Securities Account or cash in a Cash Account, Chase shall be entitled
RELATION TO THE ASSETS to apply to a court of law to determine the rights of such persons and
HELD IN THE ACCOUNT meanwhile at its option to refuse to comply with any and all claims,
demands or Instructions with respect to such Financial Assets or cash
and other property related thereto so long as such dispute or conflict
shall continue. Chase shall not be liable or become liable in any way
for its refusal to comply with such conflicting claims, or demands or
Instructions. Chase shall be entitled to refuse to act until either:
(i) such conflicting or adverse claims or demands shall have been:
a) finally determined in a court of competent jurisdiction; or
b) settled by agreement between the conflicting parties and
Chase shall have received evidence in writing satisfactory
to Chase of such agreement; or
(ii) Chase shall have received an indemnity and/or security satisfactory
to Chase sufficient to save it harmless from and against any or all
loss, liability or expense which Chase may incur by reason of its
actions.
ENTIRE AGREEMENT E. This Agreement, including the Schedules and the Exhibits hereto, sets
out the entire Agreement between the parties and this Agreement
supersedes any other agreement relating to custody, whether oral or
written with respect to the Fund. Amendments must be in writing and
signed by all parties.
FRACTIONS/ F. The Fund shall not be entitled to any fraction or other entitlement
REDEMPTIONS BY LOT arising as a result of Chase holding Financial Assets in omnibus accounts,
as described in Clause 8, which is not directly referable solely to the
holding of the Fund, and such fractions or entitlements shall be at the
disposal of Chase, provided that Chase shall have paid to the Fund the
market value of such fraction. On partial redemptions, Chase shall use
whatever method it deems fair to determine how shares will be redeemed.
27
ACCESS TO CHASE'S ▇. ▇▇▇▇▇ shall, on written request allow the auditors of the Fund such
RECORDS reasonable access to its records relating to the Accounts as such auditors
may reasonably require in connection with the audit of the Fund. Further
Chase's books and records pertaining to the services to be provided by
Chase under this Agreement, shall be open to examination and review at
reasonable times by the Fund. In addition Chase agrees to comply with any
other reasonable due diligence checks that the Fund may wish to carry out
from time to time in relation to the Accounts.
GLOBAL CUSTODY H. If and to the extent that there is any inconsistency between the
AGREEMENT AND MANDATE provisions of any mandate between Chase and any Authorised Person and/or
the Fund and/or the Investment Manager and the provisions of this
Agreement, the provisions of this Agreement shall prevail.
STOCK LENDING ▇. ▇▇▇▇▇ unconditionally and irrevocably agrees that it shall not lend
to, or deposit by way of collateral with a third party any part or
whole of the Financial Assets held by it under this Agreement without
the prior written consent of the Fund.
GOVERNING LAW AND J. This Agreement shall be governed by and construed in accordance with the
JURISDICTION laws of the United States or State of New York, as applicable, without
regard to New York's principles regarding conflict of laws. The United
States District Court for the Southern District of New York will have the
sole and exclusive jurisdiction over any lawsuit or other judicial
proceeding relating to or arising from this Agreement. If that court lacks
federal subject matter jurisdiction, the Supreme Court of the State of New
York, New York County will have sole and exclusive jurisdiction. Either of
these courts will have proper venue for any such lawsuit or judicial
proceeding, and the parties waive any objection to venue or their
convenience as a forum. The parties agree to submit to the jurisdiction of
any of the courts specified and to accept service of process to vest
personal jurisdiction over them in any of these courts. The parties further
hereby knowingly, voluntarily and intentionally waive, to the fullest
extent permitted by applicable law, any right to a trial by jury with
respect to any such lawsuit or judicial proceeding arising or relating to
this Agreement or the transactions contemplated hereby.
TRUSTEE SHAREHOLD-▇▇ ▇. A copy of the Agreement and Declaration of Trust of the Fund is on file
LIABILITY, ETC with the Secretary of State of the Commonwealth of Massachusetts and notice
is hereby given that this Agreement is not binding upon any of the
trustees, officers or shareholders of the Fund individually, but is binding
only upon the assets and property of the Fund. Chase agrees that no
trustee, officer or shareholder of the Fund may be held personally liable
or responsible for any obligations of the Fund arising out of this
Agreement.
INDIVIDUAL L. The parties intend, acknowledge and agree that this Agreement shall
ARRANGEMENTS OF EACH constitute a separate and discrete contractual arrangement between
PORTFOLIO; ADDITIONAL Chase and the Fund on behalf of each Portfolio separately, and shall
PORTFOLIOS be construed in all respects so as to give effect to this intention to
the same extent as if the Agreement between Chase and the Fund on
behalf of each Portfolio were set out in a separate writing. In this
regard, unless the context clearly indicates otherwise, references to
the "Fund" under this Agreement shall be interpreted to mean and refer
to each Portfolio, taken separately (for example, references to the
Financial Assets of or belonging to the "Fund" hereunder shall mean
the Financial Assets of or belonging to a
28
particular Portfolio). Without limiting the generality of the
foregoing, the parties acknowledge and agree that each Portfolio's
obligations and duties under this Agreement are individual and are
neither joint nor joint and several, and that no Portfolio shall be
liable or responsible for the acts, omissions, or liabilities of any
other Portfolio or of the Fund on behalf of or in respect of any other
Portfolio. In the event that the Fund establishes one or more series
in addition to the Portfolios listed on Exhibit B hereto with respect
to which it desires to have Chase render services as custodian under
the terms hereof, the Fund shall notify Chase in writing, and if Chase
agrees in writing to provide such services, Exhibit B shall be amended
to add such series and such series shall become a Portfolio hereunder
for all purposes.
18. DEFINITIONS
(a) "ACCOUNT" has the meaning set forth in Section 2A(i) of this Agreement.
(b) "AFFILIATE" of a person shall mean an "affiliated person" of such
person as that term is used in the 1940 Act.
(c) "AUTHORIZED PERSON" has the meaning set forth in Section 3A(i) of this
Agreement.
(d) "CASH ACCOUNT" has the meaning set forth in Section 2A(i)(b) of this
Agreement.
(e) "CMBI" shall mean Chase Manhattan Bank International, an indirect
wholly-owned subsidiary of Chase, located in Moscow, Russia, and any
nominee companies appointed by it.
(f) "CORPORATE ACTION" has the meaning set forth in Section 2I(i) of this
Agreement.
(g) "COUNTRY RISK" means the risks of investing or holding assets in a
particular country, including, but not limited to, risks arising from
nationalization, expropriation or other governmental actions; the
country's financial infrastructure, including prevailing custody and
settlement practices; laws applicable to the safekeeping and recovery
of Financial Assets and cash held in custody in that country; the
country's regulation of the banking and securities industries,
including changes in market Rules; currency restrictions, devaluations
and fluctuations in that country; and market conditions affecting the
orderly execution of securities transactions or the value of assets in
that country.
(h) "DEPOSITORY EXTRACT" shall mean an extract issued by a Ukraine
Eligible Securities Depository.
(i) "DIRECT LOSS" shall mean a loss determined based on the market value
of the Ukraine Security that is the subject of the loss at the date of
discovery of such loss and without reference to any consequential
damages, special conditions or circumstances.
(j) "ENTITLEMENT HOLDER" means the person named on the records of a
Securities Intermediary as the person having a Securities Entitlement
against the Securities Intermediary.
29
(k) "FINANCIAL ASSET" means, as the context requires, either the asset
itself or the means by which a person's claim to it is evidenced,
including a Security, a security certificate, or a Securities
Entitlement. "FINANCIAL ASSET" does not include cash.
(l) "INSTRUCTIONS" has the meaning set forth in Section 3A(ii) of this
Agreement.
(m) "LIABILITIES" means any liabilities, losses, claims, costs, damages,
penalties, obligations or expenses of any kind whatsoever (including,
without limitation, reasonable attorneys', accountants', consultants'
or experts' fees and reasonable disbursements).
(n) "RUSSIAN/UKRAINE NEGLIGENCE" with respect to Local Russian Securities
and Ukraine Securities shall mean the failure to exercise Reasonable
Care.
(o) "NO-ACTION LETTER" shall mean the response of the Securities and
Exchange Commission's Office of Chief Counsel of Investment
Management, dated April 18, 1995, in respect of the ▇▇▇▇▇▇▇▇▇ Russia
Company, Inc. (SEC Ref. No. 95-141-CC, File No. 811-8788) providing
"no-action" relief under Section 17(f) of The Investment Company Act
of 1940, as amended, and SEC Rule 17f-5 thereunder, in connection with
custody of such Fund's Local Russian Securities investment.
(p) "REASONABLE CARE" with respect to Local Russian Securities and Ukraine
Securities shall mean the use of reasonable custodial practices under
the applicable circumstances as measured by the custodial practices
then prevailing in Russia or the Ukraine (respectively) of
International Financial Institutions acting as custodians for their
institutional investor clients in Russia or the Ukraine
(respectively).
(q) "REGISTRAR COMPANY" shall mean any entity providing share registration
services to an issuer of Ukraine Securities.
(r) "RUSSIAN REGISTRAR COMPANY" shall mean any entity providing share
registration services to an issuer of Local Russian Securities.
(s) "REGISTRAR CONTRACT" shall mean a contract between CMBI or for Ukraine
Securities the Ukraine Eligible Foreign Custodian and a Registrar
Company (and as the same may be amended from time to time) containing,
inter alia, the contractual provisions described in paragraphs (a)-(e)
on pages 5 and 6 of the No-Action Letter with the following
modifications in relation to Ukraine Securities: (1) reregistration by
a registrar is to take place within five Ukrainian business days
(rather than within 72 hours) after satisfactory documentation has
been submitted to the registrar, (2) it is anticipated that all
Ukrainian Securities shall be held in the name of a Ukrainian Eligible
Foreign Custodian nominee (rather than certain securities being held
in beneficial owner name) in the registration books, and (3) the
Ukrainian Eligible Foreign Custodian will itself obtain audit rights
(rather than obtaining rights for the Fund's own auditors) with
respect to the share registration books .
(t) "LOCAL RUSSIAN SECURITY" shall mean a Security issued by a Russian
issuer and held in the local market by CMBI but shall not include
Depository Receipts.
(u) "DEPOSITORY RECEIPTS" with respect to Russian Securities shall mean
global, international and American depository receipts or other such
instruments which it is
30
not market practice to settle and hold through a Russian Eligible
Foreign Custodian.
(v) "SECURITIES" has the meaning set forth in Section 2A(i)(a) of this
Agreement.
(w) "SECURITIES ACCOUNT" has the meaning set forth in Section 2A(i)(a) of
this Agreement.
(x) "SECURITIES ENTITLEMENT" means the rights and property interest of an
Entitlement Holder with respect to a Financial Asset as set forth in
Part 5 of Article 8 of the Uniform Commercial Code of the State of New
York, as the same may be amended from time to time.
(y) "SECURITIES INTERMEDIARY" means Chase, a Eligible Foreign Custodian, a
Eligible Securities Depository, and any other financial institution
which in the ordinary course of business maintains custody accounts
for others and acts in that capacity.
(z)(aa) "SHARE EXTRACT" shall mean: (1) an extract of its share
registration books issued by a Registrar Company or Ukrainian Eligible
Securities Depository indicating an investor's ownership of a
security; and (2) a form prepared by the Ukrainian Eligible Foreign
Custodian or its agent in those cases where a Registrar Company or
Ukrainian Eligible Securities Depository, as the case may be, is
unwilling to issue a Share Extract.
(bb) "UKRAINIAN ELIGIBLE SECURITIES DEPOSITORY" shall mean any entity both:
(1) which is licensed under Ukrainian law to carry out, as a
depository, registration of rights to Ukrainian Securities, which, in
turn, the Ukrainian Eligible Securities Depository has registered on
an omnibus basis with Registrar Companies; and (2) in which the
Ukrainian Eligible Foreign Custodian participates. (There are no
Ukrainian Securities Depositories as of the date hereof.)
(cc) "UKRAINIAN SECURITY" shall mean an equity Security issued by a Ukrainian
issuer.
(dd) "UKRAINIAN ELIGIBLE FOREIGN CUSTODIAN" shall mean ING Bank Ukraine, an
indirect wholly-owned subsidiary of ING Bank, N.V., located in Kiev,
Ukraine, and any nominee companies appointed by it (and shall also
mean any additional or successor Eligible Foreign Custodian used by
Chase in the Ukraine and any nominee companies appointed by it or
them).
AS WITNESS the hand of the duly authorised officers of the parties hereto:
PLEASE TURN TO PAGE 48 TO SIGN
31
SCHEDULE 1
LIST OF ELIGIBLE FOREIGN CUSTODIANS AND MARKETS USED BY CHASE
--------------------------------------- ----------------------------------------------------------------------------------
COUNTRIES/MARKETS ELIGIBLE FOREIGN CUSTODIANS
--------------------------------------- ----------------------------------------------------------------------------------
Argentina The Chase Manhattan Bank
Buenos Aires; and
Citibank N.A.
Buenos Aires
--------------------------------------- ----------------------------------------------------------------------------------
Australia The Chase Manhattan Bank
Sydney
--------------------------------------- ----------------------------------------------------------------------------------
Austria Bank Austria AG
Vienna
--------------------------------------- ----------------------------------------------------------------------------------
Bahrain HSBC Bank Middle East
Manama
--------------------------------------- ----------------------------------------------------------------------------------
Bangladesh Standard Chartered Bank
Dhaka
--------------------------------------- ----------------------------------------------------------------------------------
Belgium Fortis Bank N.V.
Brussels
--------------------------------------- ----------------------------------------------------------------------------------
Bermuda The Bank of Bermuda Ltd
▇▇▇▇▇▇▇▇
--------------------------------------- ----------------------------------------------------------------------------------
Botswana Barclays Bank of Botswana Limited
Gaborone
--------------------------------------- ----------------------------------------------------------------------------------
Brazil Citibank N.A.
Sao Paulo; and
BankBoston, N.A.
Sao Paulo
--------------------------------------- ----------------------------------------------------------------------------------
Bulgaria ING Bank N.V.
Sofia
--------------------------------------- ----------------------------------------------------------------------------------
Canada Canadian Imperial Bank of Commerce
Toronto; and
Royal Bank of Canada
Toronto
--------------------------------------- ----------------------------------------------------------------------------------
Chile Citibank ▇.▇.
▇▇▇▇▇▇▇▇
--------------------------------------- ----------------------------------------------------------------------------------
China The Hongkong and Shanghai Banking Corporation Ltd
(Shenzhen and Shanghai)
--------------------------------------- ----------------------------------------------------------------------------------
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria
Santa Fe de Bogota
--------------------------------------- ----------------------------------------------------------------------------------
Croatia Privredna Banka Zagreb d.d.
Zagreb
--------------------------------------- ----------------------------------------------------------------------------------
Cyprus The Cyprus Popular Bank Ltd.
Nicosia
--------------------------------------- ----------------------------------------------------------------------------------
Czech Republic Ceskoslovenska Obchodni Banka, A.S.
Prague
--------------------------------------- ----------------------------------------------------------------------------------
Denmark Danske Bank A/S
Copenhagen
--------------------------------------- ----------------------------------------------------------------------------------
Ecuador Citibank N.A.
Quito
--------------------------------------- ----------------------------------------------------------------------------------
Egypt Citibank N.A.
Cairo
--------------------------------------- ----------------------------------------------------------------------------------
32
--------------------------------------- ----------------------------------------------------------------------------------
COUNTRIES/MARKETS ELIGIBLE FOREIGN CUSTODIANS
--------------------------------------- ----------------------------------------------------------------------------------
Estonia Hansabank
Tallinn
--------------------------------------- ----------------------------------------------------------------------------------
Finland ▇▇▇▇▇▇ Bank Ltd.
Helsinki
--------------------------------------- ----------------------------------------------------------------------------------
France BNP Paribas S.A.
Paris; and
Societe Generale
Paris; and
Credit Agricole Indosuez
Paris
--------------------------------------- ----------------------------------------------------------------------------------
Germany Dresdner Bank A.G.
Frankfurt
--------------------------------------- ----------------------------------------------------------------------------------
Ghana Barclays Bank of Ghana Limited
Accra
--------------------------------------- ----------------------------------------------------------------------------------
Greece Barclays Bank plc
Athens
--------------------------------------- ----------------------------------------------------------------------------------
Hong Kong The Chase Manhattan Bank
Hong Kong
The Hongkong and Shanghai Banking Corporation Limited
Hong Kong
--------------------------------------- ----------------------------------------------------------------------------------
Hungary Citibank Rt.
Budapest
--------------------------------------- ----------------------------------------------------------------------------------
India The Hong Kong and Shanghai Banking Corporation Limited
Mumbai; and
Deutsche Bank AG,
Bombay; and
Standard Chartered Bank
Mumbai
--------------------------------------- ----------------------------------------------------------------------------------
Indonesia The Hongkong and Shanghai Banking Corporation Limited
Jakarta; and
Standard Chartered Bank
Jakarta
--------------------------------------- ----------------------------------------------------------------------------------
Ireland Bank of Ireland
Dublin; and
Allied Irish Banks, plc
Dublin
--------------------------------------- ----------------------------------------------------------------------------------
Israel Bank Leumi le-Israel B.M.
Tel Aviv
--------------------------------------- ----------------------------------------------------------------------------------
Italy BNP Paribas S.A.
Milan
--------------------------------------- ----------------------------------------------------------------------------------
Ivory Coast Societe Generale de Banques en Cote d'Ivoire
Abidjan
--------------------------------------- ----------------------------------------------------------------------------------
Jamaica CIBC Trust and Merchant Bank Jamaica Limited
Kingston
--------------------------------------- ----------------------------------------------------------------------------------
Japan The Fuji Bank Limited
Tokyo
The Bank of Tokyo-Mitsubishi, Limited
Tokyo
--------------------------------------- ----------------------------------------------------------------------------------
Jordan Arab Bank Plc
Amman
--------------------------------------- ----------------------------------------------------------------------------------
33
--------------------------------------- ----------------------------------------------------------------------------------
COUNTRIES/MARKETS ELIGIBLE FOREIGN CUSTODIANS
--------------------------------------- ----------------------------------------------------------------------------------
Kazakhstan ABN AMRO Bank Kazakhstan
Almaty
--------------------------------------- ----------------------------------------------------------------------------------
Kenya Barclays Bank of Kenya Limited
Nairobi
--------------------------------------- ----------------------------------------------------------------------------------
Latvia A/S Hansabanka
Riga
--------------------------------------- ----------------------------------------------------------------------------------
Lebanon HSBC Bank Middle East
Ras-Beirut
--------------------------------------- ----------------------------------------------------------------------------------
Lithuania Vilniaus Bankas AB
Vilnius
--------------------------------------- ----------------------------------------------------------------------------------
Luxembourg Banque Generale du Luxembourg S.A.
Luxembourg
--------------------------------------- ----------------------------------------------------------------------------------
Malaysia The Chase Manhattan Bank (M) Berhad
Kuala Lumpur; and
HSBC Bank Malaysia Berhad
Kuala Lumpur
--------------------------------------- ----------------------------------------------------------------------------------
Mauritius The Hongkong & Shanghai Banking Corporation Limited
Mauritius
--------------------------------------- ----------------------------------------------------------------------------------
Mexico Chase Manhattan ▇▇▇▇ ▇▇▇▇▇▇ S.A.
Mexico, D.F.; and
Citibank Mexico, S.A.
Mexico, D.F.
--------------------------------------- ----------------------------------------------------------------------------------
Morocco Banque Commerciale du Maroc S.A.
Casablanca
--------------------------------------- ----------------------------------------------------------------------------------
Namibia Standard Bank Namibia Limited
Windhoek
--------------------------------------- ----------------------------------------------------------------------------------
Netherlands ABN AMRO N.V.
De Breda; and
Fortis Bank (Nederland) N.V.
Amsterdam
--------------------------------------- ----------------------------------------------------------------------------------
New Zealand National Nominees Limited
Auckland
--------------------------------------- ----------------------------------------------------------------------------------
*Nigeria Stanbic Merchant Bank Nigeria Limited
Lagos
--------------------------------------- ----------------------------------------------------------------------------------
Norway Den norske Bank ASA
Oslo
--------------------------------------- ----------------------------------------------------------------------------------
Oman HSBC Bank Middle East
Muscat
--------------------------------------- ----------------------------------------------------------------------------------
Pakistan Citibank, N.A.,
Karachi; and
Deutsche Bank AG,
Karachi; and
Standard Chartered Bank
Karachi
--------------------------------------- ----------------------------------------------------------------------------------
Peru Citibank, N.A.
Lima
--------------------------------------- ----------------------------------------------------------------------------------
Philippines The Hongkong and Shanghai Banking Corporation Limited
Pasig City
--------------------------------------- ----------------------------------------------------------------------------------
Poland Bank Handlowy w. Warszawie S.A.
Warsaw; and
Bank Polska Kasa Opieki S.A.
Warsaw; and
Citibank (Poland) S.A.
Warsaw
--------------------------------------- ----------------------------------------------------------------------------------
34
--------------------------------------- ----------------------------------------------------------------------------------
COUNTRIES/MARKETS ELIGIBLE FOREIGN CUSTODIANS
--------------------------------------- ----------------------------------------------------------------------------------
Portugal Banco Espirito Santo e Commercial de Lisboa, S.A.
Lisbon
Banco Comercial Portugues, S.A.
Lisbon
--------------------------------------- ----------------------------------------------------------------------------------
Romania ABN-AMRO Bank (Romania) S.A.
Bucharest; and
ING Bank
Bucharest
--------------------------------------- ----------------------------------------------------------------------------------
*Russia Chase Manhattan Bank International
Moscow; and
Credit Suisse First Boston Bank AO
Moscow
--------------------------------------- ----------------------------------------------------------------------------------
Singapore Standard Chartered Bank
Singapore
--------------------------------------- ----------------------------------------------------------------------------------
Slovak Republic Ceskoslovenska Obchodni Banka, A.S.
Bratislava
--------------------------------------- ----------------------------------------------------------------------------------
Slovenia Bank Austria Creditanstalt d.d. Ljubljana
Ljubljana
--------------------------------------- ----------------------------------------------------------------------------------
South Africa The Standard Bank of South Africa Limited
Johannesburg
--------------------------------------- ----------------------------------------------------------------------------------
South Korea The Hongkong and Shanghai Banking Corporation Limited
Seoul; and
Standard Chartered Bank
Seoul
--------------------------------------- ----------------------------------------------------------------------------------
Spain Chase Manhattan Bank CMB, ▇.▇.
▇▇▇▇▇▇
--------------------------------------- ----------------------------------------------------------------------------------
Sri Lanka The Hongkong and Shanghai Banking Corporation Limited
Colombo
--------------------------------------- ----------------------------------------------------------------------------------
Sweden Skandinaviska Enskilda Banken
Stockholm
--------------------------------------- ----------------------------------------------------------------------------------
Switzerland UBS AG
Zurich
--------------------------------------- ----------------------------------------------------------------------------------
Taiwan The Chase Manhattan Bank
Taipei
The Hongkong and Shanghai Banking Corporation Limited
Taipei
--------------------------------------- ----------------------------------------------------------------------------------
Thailand The Chase Manhattan Bank
Bangkok; and
Standard Chartered Bank
Bangkok
--------------------------------------- ----------------------------------------------------------------------------------
Tunisia Banque Internationale Arabe de Tunisie
Tunis
--------------------------------------- ----------------------------------------------------------------------------------
Turkey The Chase Manhattan Bank
Istanbul
--------------------------------------- ----------------------------------------------------------------------------------
*Ukraine ING Bank Ukraine
Kiev
--------------------------------------- ----------------------------------------------------------------------------------
35
--------------------------------------- ----------------------------------------------------------------------------------
COUNTRIES/MARKETS ELIGIBLE FOREIGN CUSTODIANS
--------------------------------------- ----------------------------------------------------------------------------------
United Kingdom The Chase Manhattan Bank
London
--------------------------------------- ----------------------------------------------------------------------------------
Uruguay BankBoston, N.A.
Montevideo
--------------------------------------- ----------------------------------------------------------------------------------
United States The Chase Manhattan Bank
New York
--------------------------------------- ----------------------------------------------------------------------------------
Venezuela Citibank, N.A.
Caracas
--------------------------------------- ----------------------------------------------------------------------------------
Zambia Barclays Bank of Zambia Limited
Lusaka
--------------------------------------- ----------------------------------------------------------------------------------
Zimbabwe Barclays Bank of Zimbabwe Limited
Harare
--------------------------------------- ----------------------------------------------------------------------------------
* RESTRICTED SERVICE ONLY. PLEASE CONTACT YOUR RELATIONSHIP MANAGER FOR
FURTHER INFORMATION.
N.B. ADDITIONAL OPERATIONAL/LEGAL DOCUMENTATION MAY BE REQUIRED IN CERTAIN
MARKETS. PLEASE REFER TO YOUR RELATIONSHIP MANAGER.
36
SCHEDULE 2
TAIWAN RIDER
All defined terms used in this Rider shall, unless otherwise defined herein,
have the meanings ascribed thereto in the Custody Agreement. Save as expressly
provided in this Rider, all terms of the Custody Agreement shall apply to
services performed with respect to investments in the Republic of China ("R.O.C.
Services") provided that, as regards to R.O.C. Services, in the event of any
conflict between this Rider and the Custody Agreement, this Rider shall prevail.
The parties agree as follows as regards the R.O.C. Services:
1. INVESTMENT REGULATIONS, FILING OF REPORTS
The Fund acknowledges that the services rendered hereunder are being
rendered in connection with the Fund's investments in the R.O.C. ("R.O.C.
Investments") under the Regulations Governing Securities Investment by
Overseas Chinese and Foreign Investors and Procedures for Remittances and
related laws, regulations, guidelines, orders and policies (collectively,
as amended and supplemented from time to time, "R.O.C. Investment
Regulations") and represents and warrants to, and agrees with, Chase as
follows with respect thereto:
(i) The Fund is permitted under the R.O.C. Investment Regulations to make
the investments contemplated herein and as a condition to the
performance of Chase's obligations hereunder, the Adviser shall obtain
or complete, as applicable, and provide evidence to Chase that it has
obtained or completed as applicable, all required R.O.C. government
approvals or procedures necessary for the making of R.O.C. Investments
on behalf of the Fund.
(ii) Notwithstanding anything to the contrary contained in the Custody
Agreement, (a) Chase shall not be obliged to do any act which would,
in Chase's reasonable judgement, violate the R.O.C. Investment
Regulations including, but not limited to, any advance of funds with
respect to R.O.C. Investments and (b) the Fund authorises Chase to do
all reasonable acts, including disclosure of information, filing of
reports and countersigning of broker confirmations as is required by
the R.O.C. Investment Regulations including, if section 2 (ii) below
applies, the relevant Agency Functions (defined below).
(iii) If legally required, the Fund shall ensure that the relevant Fund
duly appoints a tax guarantor as contemplated by the R.O.C. Investment
Regulations ("Tax Guarantor") and in such case, shall at all times
during the term hereof ensure that the Fund continues to have a Tax
Guarantor, which the Fund acknowledges is not Chase's Taipei Branch.
2. AGENCY FUNCTIONS
(i) The Fund acknowledges that the R.O.C. Investment Regulations require
the Fund to appoint an agent or agents to carry out the agency
functions contemplated thereby ("Agency Functions").
(ii) If the Fund elects or is required to appoint Chase to perform any of
such Agency
37
Functions, the Fund shall execute all such powers of attorney and
other documents as the Chase may reasonably require to perform such
functions and the provisions of the Custody Agreement shall apply
thereto.
(iii) If the Fund does not so appoint Chase, Chase shall not,
notwithstanding anything to the contrary contained in the Custody
Agreement, be required to perform the Agency Functions and the
agent(s) so appointed by the Fund shall be authorised to give
Instructions with respect to the R.O.C. Investments of the Fund.
38
SCHEDULE ▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Dear Sirs
Please accept this letter as an Instruction pursuant to the Global Custody
Agreement dated 2003 between The Chase Manhattan Bank ("Chase") and ▇▇▇▇▇▇▇▇
Entity (the "Fund"). This Instruction relates solely to transactions in
securities to be settled by Chase's Eligible Foreign Custodian in Taiwan
("Taiwanese Trades").
In light of the fact that the penalties under Taiwanese law for failing a
Taiwanese Trade may exceed the risk to the Fund of Chase Taipei not settling
such trade due to incomplete, miss-matching or missing instructions, the Parties
agree to the following operating procedures.
In the normal course of events, the Fund will report Taiwanese Trades to Chase
in Bournemouth ("Chase Bournemouth"), giving notice either to deliver or to
receive shares to or from a specified broker account against payment. Chase
Bournemouth will pass these instructions to Chase's Eligible Foreign Custodian
in Taiwan ("Chase Taipei"). Chase Taipei will then settle the transaction on the
specified settlement date.
In the event that Chase Taipei has not received valid instructions from Chase
Bournemouth or there is a discrepancy with respect to a trade which appears to
be for the account of the Fund which has been advised to Chase Taipei either:
1. by way of a broker confirmation from a broker or the Taiwanese Agent of a
broker appearing on the Approved Broker List ("an Approved Broker")
attached hereto as Schedule 4, as may be amended from time to time by the
Fund or
2. through the list of pending trades provided by the Taiwan Securities
Central Depository ("the TSCD") as being a trade by an Approved Broker for
the account of the Fund,
it is hereby agreed that Chase Taipei will, in the first instance attempt to
contact the broker to ascertain the details of the alleged trades. In the event
of a discrepancy between the trade details shown by the TSCD and those provided
by the Approved Broker when contacted by Chase Taipei, the details provided by
the Approved Broker shall prevail. Chase Taipei shall then as soon as reasonably
practicable contact Chase Bournemouth to obtain instructions matching the
details provided by the Approved Broker or to resolve any discrepancy between
such details and the instructions provided by Chase Bournemouth. If Chase
Bournemouth is unable to provide the instructions or to resolve the discrepancy,
Chase Bournemouth will as soon as reasonably practicable contact SIMNA to obtain
instructions and will pass such instructions promptly to Chase Taipei for
action.
If Chase Taipei has not obtained valid instructions from Chase Bournemouth prior
to the point at which Chase Taipei must act if the trade is to be prevented from
failing, Chase Taipei shall, provided that the Broker is on the approved list in
Schedule 4 request the local Taiwanese broker to give a written undertaking
addressed to Chase Taipei, substantially in the form annexed here as Schedule 5.
The Fund agrees, however, that Chase may then act upon such undertaking, which
it reasonably believes is on the Approved Broker's headed paper and signed by a
person representing to be an authorised signature of the Approved Broker,
without further enquiry. If, however, for any reason whatsoever the Approved
Broker refuses to give such undertaking, Chase Taipei is hereby
39
authorised to settle any such trade without further investigation or
confirmation from Chase Bournemouth or the Fund on the basis of the information
that it has from an Approved Broker. Where such action is taken, Chase Taipei
will as soon as reasonably practicable inform Chase Bournemouth. Chase
Bournemouth will in turn as soon as reasonably practicable inform the Fund.
The Fund hereby agrees to indemnify Chase Taipei against all liabilities,
losses, damages, claims, costs, demands and actions, which it may suffer or
incur directly or indirectly in any way in connection with following these
procedures and instructions with respect to the Taiwanese Trades of the Fund
other than those arising from the negligence, wilful default, bad faith or
failure by Chase to follow the aforesaid procedures and instructions.
By: _____________________________________________
For and on behalf of The Chase Manhattan Bank
By: _____________________________________________
Name: _____________________________________________
Title: _____________________________________________
For and on behalf of ▇▇▇▇▇▇▇▇ Global Series Trust
By: _____________________________________________
Name: _____________________________________________
Title: _____________________________________________
40
SCHEDULE 4
APPROVED BROKER LIST
------------------------------------------------ ---------------------------------------
APPROVED BROKER BROKER'S TAIWANESE AGENT
------------------------------------------------ ---------------------------------------
Capital Securities Corporation
------------------------------------------------ ---------------------------------------
China Securities Corporation
------------------------------------------------ ---------------------------------------
Grand Cathay Securities Corporation
------------------------------------------------ ---------------------------------------
Jardine ▇▇▇▇▇▇▇ Taiwan Securities Ltd.
------------------------------------------------ ---------------------------------------
Masterlink Securities Corporation
------------------------------------------------ ---------------------------------------
National Securities Corporation
------------------------------------------------ ---------------------------------------
SBC Warburg Securities Ltd.
------------------------------------------------ ---------------------------------------
ABN AMRO Hoare Govett Asia Limited
------------------------------------------------ ---------------------------------------
HSBC ▇▇▇▇▇ ▇▇▇▇▇ Taiwan Limited
------------------------------------------------ ---------------------------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated Taiwan
------------------------------------------------ ---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ International Limited
------------------------------------------------ ---------------------------------------
41
SCHEDULE 5
MISMATCHED TRADE SETTLEMENT UNDERTAKING FROM THE BROKER TO THE CLIENT'S
TAIWANESE ELIGIBLE FOREIGN CUSTODIAN
[ON BROKERS HEADED PAPER]
TO: CHASE TAIPEI
We, [name of broker] hereby confirm that all trades made on [insert date]
for [insert official name of client] ("the Client") are valid trades
executed by us on the instructions of ▇▇▇▇▇▇▇▇ Global Series Fund. In
order to protect the Client from failed settlement penalties, please
settle the trades in the designated settlement date. To enable Chase
Taipei to proceed with settlement notwithstanding mismatched or missing
instructions from ▇▇▇▇▇▇▇▇ Global Series Trust, we hereby irrevocably
undertake to bear all costs, losses and expenses incurred in reversing
the settlement of a mismatched trade should it subsequently be determined
that the trade was not duly authorised and validly executed for the
account of ▇▇▇▇▇▇▇▇ Global Series Fund.
-----------------------------------------
AUTHORISED SIGNATORY
42
SCHEDULE 6
INFORMATION REGARDING COUNTRY RISK
1. To aid the Fund in its determinations regarding Country Risk, Chase shall
furnish annually and upon the initial placing of Financial Assets and cash
into a country the following information:
A. Opinions of local counsel concerning:
1. Whether applicable foreign law would restrict the access afforded
the Fund's independent public accountants to books and records
kept by an Eligible Foreign Custodian located in that country.
2. Whether applicable foreign law would restrict the Fund's ability
to recover its Foreign Assets in the event of the bankruptcy of
an Eligible Foreign Custodian located in that country.
3. Whether applicable foreign law would restrict the Fund's ability
to recover Foreign Assets that are lost while under the control
of an Eligible Foreign Custodian located in the country.
B. Written information concerning:
1. The foreseeability of expropriation, nationalization, freezes, or
confiscation of the Fund's Foreign Assets.
2. Whether difficulties in converting the Fund's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.
C. A market report with respect to the following topics:
(1). securities regulatory environment, (2) foreign ownership
restrictions, (3) foreign exchange, (4) securities settlement and
registration, (5) taxation and (6) depositories (including
depository evaluation), if any.
2. To aid the Fund in monitoring Country Risk, Chase shall furnish Board
additionally with market flashes, including with respect to changes in the
information in market reports.
43
SCHEDULE 7
ELIGIBLE SECURITIES DEPOSITORIES
44
EXHIBIT A
PERSONS AUTHORISED BY THE FUND TO GIVE INSTRUCTIONS
45
EXHIBIT B
PORTFOLIOS OF THE FUND
▇▇▇▇▇▇▇▇ North American Equity Fund
46
SIGNED by
For and on behalf of
THE CHASE MANHATTAN BANK
By:
Name:
Title:
For and on behalf of
▇▇▇▇▇▇▇▇ GLOBAL SERIES TRUST, SEPARATELY ON BEHALF OF EACH PORTFOLIO
LISTED ON EXHIBIT B HERETO.
By:
Name:
Title:
47
