SUBCUSTODIAN AGREEMENT
______________, 199_
[Name]
[Address]
Dear Sirs:
This will confirm to you that The Chase Manhattan Bank, N.A. ("Chase") has been
appointed to act as Trustee, Custodian or Subcustodian of securities and monies
on behalf of certain of its customers including, without limitation, investment
companies subject to the Investment Company Act of 1940, as amended and
qualified employee benefit plans subject to the Employee Retirement Income
Security Act of 1974, as amended.
Chase has been authorized to use the services of other banks, financial
institutions and securities depositories located in countries or jurisdictions
in which the principal trading markets for any shares, bonds, debentures or any
other securities (hereinafter collectively called "Securities") of its customers
are located or in which any Securities of its customers are to be presented for
payment or acquired. In particular, Chase has been authorized to use such
services for the purpose of holding Securities and Cash (as hereinafter defined)
of its customers. Chase wishes to use the services of your bank ("Bank") as
Chase's agent within __________ for the foregoing purposes and hereby
establishes with Bank a special custody account which Bank understands and
agrees shall be used exclusively for Securities and other assets of Chase's
customers ("Account") and not for Chase's own interest.
The services Bank shall provide to Chase and the manner in which such services
shall be performed are as set forth in this letter (the "Agreement") and in the
separate agent service contract ("Contract") between Bank and Chase, either of
which may be amended in writing from time to time by Bank and Chase. The terms
and conditions set forth herein shall govern the Contract in the event of any
inconsistency. To the extent inconsistent with this Agreement and/or the
Contract, Bank's rules and conditions regarding accounts generally or custody
accounts specifically shall not apply.
1. The Account shall be used exclusively to hold, acquire,
transfer or otherwise care for, on behalf of Chase as
Trustee, Custodian or Subcustodian as aforesaid and the
customers of Chase and not for Chase's own interest,
Securities and such cash or cash equivalents as are
transferred to Bank or as are received in payment for any
transfer of, or as payment on, or interest on or dividend
from, any such Securities (hereinafter such cash or cash
equivalents shall be collectively called "Cash"), and
beneficial ownership of the Securities and Cash in the
Account shall be freely transferable without payment of
money or value other than for safe custody and
administration. All transactions involving the
Securities and Cash in the Account shall be executed
solely in accordance with Chase's Instructions, as that
term is defined in Section 10, except that until Bank
receives Instructions from Chase to the contrary, Bank
shall:
a) present for payment all Securities held in the Account which are
called, redeemed or retired or otherwise become payable and all
coupons and other income items which call for payment upon
presentation and hold the Cash received therefrom in the Account
pursuant to this Agreement;
b) in respect of Securities held in the Account,
execute in the name of Chase such ownership and
other certificates as may be required to obtain
payments in respect thereof;
c) exchange interim receipts or temporary Securities
held in the Account for definitive Securities; and
d) where any Securities held in any securities depository or clearing
agency, as hereinafter authorized, are called for a partial
redemption by the issuer of such Securities, allot the called portion
to the respective holders in any manner deemed to be fair and
equitable in the Bank's sole discretion.
Whenever pursuant to this Agreement or for any purpose relating hereto
anything whatsoever may or is required to be done or given by Chase, it
shall be done or given, as the case may be, by and for Chase by such
officer or officers of Chase or other person or persons as the governing
body of Chase shall specify from time to time ("Authorized Persons"). Any
such specification by the governing body shall be by resolution, of which
a copy certified by the President or a Vice President and the seal
attested to by the Secretary or any Assistant Secretary of Chase shall be
furnished to Bank. Bank shall be conclusively entitled to rely upon the
identification of such persons as the holders of those offices and/or
titles so specified in any such resolution, absent Instructions to the
contrary. Chase shall furnish to Bank specimens of the signatures of all
such Authorized Persons specified in any such resolution which shall be in
force from time to time. Bank shall act upon, and be fully protected in
acting in accordance with, Instructions signed or given by an Authorized
Person specified in any such resolution received by Bank and in force at
the time of the receipt by Bank of such Instructions, and shall not be
charged with any responsibility respecting the application of monies paid
out in accordance therewith.
Bank shall not be liable for any act or omission in respect of any
Instructions so given, except in the case of (i) an act or omission
constituting a breach of this Agreement by Bank and/or (ii) willful
default, negligence, fraud, bad faith, willful misconduct, or reckless
disregard of duties on the part of Bank. In executing all Instructions,
Bank shall take relevant action in accordance with accepted industry
practice. Bank shall advise Chase to the extent that such practices are
contrary to, or inconsistent with, any such Instructions.
2. The Account shall not be subject to any right, charge,
security interest, lien or claim of any kind (hereinafter
collectively called "Claims") in favor of Bank or any
other institution with whom assets in the Account may be
maintained as provided in this Agreement or any creditor
of Bank or of such other institution, including a
receiver or trustee in bankruptcy, except to the extent
of Bank's or such other institution's right to
compensation or reimbursement with regard to the
Account's administration in accordance with the terms of
this Agreement. Bank shall provide Chase with prompt
notice of any attempt by any party to assert any Claim
against the Account and shall take all lawful actions to
protect the Account from such Claim until Chase has had a
reasonable opportunity to respond to such notice.
3. The ownership of the assets of the Account, whether
Securities, Cash or both, and whether any such assets are
held by Bank or in a securities depository or clearing
agency or with a Bank Subcustodian, as hereinafter
authorized, shall be clearly recorded on Bank's books as
belonging to Chase on behalf of Chase's customers and not
for Chase's own interest and, to the extent Securities
are physically held in the Account, such Securities shall
also be physically segregated from the general assets of
Bank, the assets of Chase in its individual capacity and
the assets of Bank's other customers.
In order to facilitate the settlement of transactions, Bank may, with the
approval of Chase, which shall not be unreasonably withheld, maintain all
or any part of the Securities in the Account with a securities depository
or clearing agency which is incorporated or organized under the laws of a
country other than the United States of America and which is supervised or
regulated by a government agency or regulatory authority in the foreign
jurisdiction having authority over such securities depositories or
clearing agencies, and which operates (i) the central system for handling
of securities or equivalent book entries in ____________ or (ii) a
transnational system for the central handling of securities or equivalent
book entries, provided, however, that while so maintained such Securities
shall be subject only to the directions of Bank and that Bank's duties,
obligations and responsibilities with regard to such Securities shall be
the same as if such Securities were held by Bank. Securities which are
eligible for deposit in a securities depository or clearing agency may be
maintained with any such securities depository or clearing agency in an
account for Bank's customers.
At the direction of Chase, Bank shall hold such portion of the Securities
as Chase shall direct at one or more additional custodians (collectively
"Bank Subcustodians"); provided that: (a) any such Bank Subcustodian shall
be eligible to hold investment company assets under the Investment Company
Act of 1940 and the SEC rules thereunder, and (b) Bank shall enter into a
subcustodian agreement with any such Bank Subcustodian, which agreement
shall satisfy the requirements of the Act (including Rule 17f-5 to the
extent applicable). Securities which are deposited with a Bank
Subcustodian shall be maintained therewith in an account for Bank's
customers, and while so maintained such Securities shall be subject only
to the directions of Bank and Bank's duties, obligations and
responsibilities with regard to such Securities shall be the same as if
such Securities were held by Bank.
Securities which are not deposited in a securities depository, clearing
agency or with a Bank Subcustodian shall be held in the following forms:
a) Securities issued only in bearer form shall be held
in bearer form.
b) Securities issued only in registered form shall be registered in the
name of Bank as agent, in the name of Bank on behalf of its
customers, in the name of Bank's nominee, or otherwise, as Chase may
instruct.
c) If received by Bank in registered form, Securities
issued in both bearer and registered form (which
Securities are freely interchangeable without
penalty), shall be registered in the name of Bank as
agent, in the name of Bank on behalf of its
customers, in the name of Bank's nominee, or
otherwise, as Chase may instruct. If such
Securities are received by Bank in bearer form, they
shall be so held, unless alternate Instructions are
furnished by Chase.
4. Subject to the provisions of Section 8 hereof:
a) Bank shall be responsible for complying with all provisions of the
laws of __________________, and any other laws, applicable to Bank in
connection with its duties hereunder, including, but not limited to,
the payment of all transfer or similar taxes and compliance with any
currency restrictions and securities laws;
b) All collections of funds or other property paid or
distributed in respect of Securities held in the
Account shall be made at the risk of the Account; and
c) Bank shall have no liability for any loss occasioned
by delay in the actual receipt of notice by its
Custody Division of any payment, redemption or other
transaction regarding Securities held in the Account
in respect of which Bank has agreed to take action
as provided in Section 1 hereof, except to the
extent that any such delay arises from (i) an act or
omission constituting a breach of this Agreement by
Bank and/or (ii) willful default, negligence, fraud,
bad faith, willful misconduct or reckless disregard
of duties on the part of Bank.
5. Subject to applicable law, Bank shall permit independent
public accountants for Chase and customers of Chase
reasonable access to Bank's books and records as they
pertain to the Account in connection with such
accountants' examination of the books and records of
Account. Bank shall use its best efforts in obtaining
such reasonable access with respect to the books and
records of any securities depository or clearing agency
used by Bank as authorized hereunder, as such books and
records pertain to the Account in connection with such
accountants' examination of the books and records of
Account. Further, as Chase may request from time to
time, Bank shall (i) furnish Chase with auditor's reports
on Bank's system of internal accounting controls as such
reports relate to Bank's services and duties hereunder
and (ii) use its best efforts to furnish Chase with
similar reports with respect to any securities depository
or clearing agency holding Securities in the Account.
6. Bank shall either periodically or upon Chase's request
supply Chase with such statements regarding the Account
as Chase may reasonably specify, including the name or
identification of, and the location or address and
principal place of business of, any person having
physical possession of the Securities in the Account, and
the name and address of the governmental agency or other
regulatory authority that supervises or regulates Bank
and/or any such person. In addition, Bank shall furnish
Chase periodically with advices and/or notifications of
any transfers of such Securities.
Bank shall follow interest, dividend and coupon payments, redemptions,
exchanges and similar matters with respect to Securities, and matters
concerning Securities that require discretionary action, including,
without limitation, subscription rights, bonus issues, stock repurchase
plans and rights offerings, or legal notices or other material intended to
be transmitted to securities holders ("Corporate Actions"). Bank shall
give Chase timely notice in English of such Corporate Actions to the
extent that Bank has actual knowledge of such Corporate Actions. Upon
receipt, and if Chase has so requested, Bank promptly shall send to Chase
all notices of annual and extraordinary meetings of shareholders and other
proxy solicitations together with resolutions or other matters to be voted
on by shareholders. Where such notices and related materials are not
provided to Bank in English, Bank shall provide English translations. Bank
shall also provide Chase with copies of any backup information which is
received, including the reports or recommendations of management, annual
reports and other material relevant to proxy voting. This latter
information need not be translated, but the material must be legible and
in a form suitable for copying. Bank shall vote proxies as directed
pursuant to timely Instructions. To the extent local practices or
particular issuers may impose special requirements in order to vote
proxies, Bank shall cooperate with Chase to assure such requirements are
met.
7. In the event of any loss of Securities or Cash in the Account, Bank shall
use its best efforts to ascertain the circumstances relating to such loss
and promptly report the same to Chase.
8. Bank shall hold Chase or its customers (as the case may
be) harmless from, and shall indemnify Chase for, any
loss, liability, claim or expense incurred by Chase or
them (including, but not limited to, Chase's or their
legal fees and expenses and any other legal fees and
expenses for which Chase or they may be liable, and any
loss, liability or expense in connection with a claim
settled by agreement between Chase and a customer, which
agreement is accepted by Bank) to the extent that such
loss, liability, claim or expense arises from (i) an act
or omission constituting a breach of this Agreement by
Bank and/or (ii) willful default, negligence, fraud, bad
faith, willful misconduct or reckless disregard of duties
on the part of Bank. Chase shall hold Bank harmless
from, and shall indemnify Bank for, any loss, liability,
claim or expense incurred by Bank as the result of any
action taken or omitted to be taken by Bank with respect
to the Account, except to the extent that such loss,
liability, claim or expense arises from (i) an act or
omission constituting a breach of this Agreement by Bank
and/or (ii) willful default, negligence, fraud, bad
faith, willful misconduct or reckless disregard of duties
on the part of Bank. Any provision herein to the
contrary notwithstanding, Bank shall be liable for, and
shall indemnify Chase or its customers (as the case may
be) for, any loss of Securities and/or Cash due to
mysterious or unexplained circumstances.
If Bank is the branch of a bank, the obligations and responsibilities of
Bank hereunder are the obligations and responsibilities of Bank as a whole
(including, but not limited to, Bank's head office).
9. Bank acknowledges that under U.S. regulatory requirements
Bank must be a regulated entity and must have a certain
minimum shareholders' equity in order to be used by Chase
to provide the services contemplated in this Agreement.
Bank represents and warrants to Chase, which shall be
continuing representations and warranties, that it (i) is
a banking institution incorporated or organized under the
laws of ______________, (ii) is regulated as a banking
institution by ______________, which is the agency of the
Government of ______________ responsible for the
regulation of banks and (iii) as of the close of its
fiscal year most recently completed and on and after the
date hereof or such later date as shall be specified in
Instructions, has shareholders' equity in excess of two
hundred thirty million U.S. dollars (U.S.$230,000,000),
or such lesser amount as shall be specified in any order
of the United States Securities and Exchange Commission
applicable to Bank, or the equivalent thereof in
________________ currency determined at current rates.
For purposes of this Section, shareholders' equity of the
Bank shall mean such shareholders' equity as would be
shown on any financial statement of Bank if such
financial statement were prepared according to United
States generally accepted accounting principles. If Bank
is a majority owned direct or indirect subsidiary of a
U.S. bank or bank-holding company, the provisions of this
Section 9 shall remain as specified above except that the
amount of two hundred thirty million U.S. dollars (U.S.
$230,000,000) specified in Section 9(iii) above is
substituted for the amount of one hundred thirty million
U.S. dollars (U.S. $130,000,000) and, in such case, Bank
further represents and warrants, which shall be a
continuing representation and warranty, that it is a
majority-owned direct or indirect subsidiary of a
qualified U.S. bank (as that term is defined in Rule
17f-5(c)(3) under the Investment Company Act of 1940, as
amended) or bank-holding company. If Bank is a branch of
a United States bank satisfying the requirements of
Section 17(f) and other relevant provisions of the
Investment Company Act of 1940, as amended, the
provisions of this Section 9 specified above shall not
apply; provided, however, that in such event, Bank
represents and warrants to Chase, which shall be a
continuing representation and warranty, that it is a
branch of a United States bank, which bank satisfies the
requirements of Section 17(f) and other relevant
provisions of the Investment Company Act of 1940, as
amended.
Bank shall immediately notify Chase in writing or by other authorized
means of any development or occurrence (and the circumstances related
thereto) which could render Bank unable to continue to make any
representation and warranty specified in this Section 9 at any date. Upon
such notification Chase may terminate this Agreement immediately without
prior notice to Bank.
This Agreement shall terminate immediately, without further action of
either party, if Bank shall become insolvent. Chase may terminate this
Agreement forthwith on notice to Bank if Bank is in danger of becoming
insolvent, as determined by Chase in its sole discretion. Further, Chase
may terminate this Agreement forthwith on notice to Bank if Chase and/or a
Chase customer determines, in its and/or their sole discretion, that the
political, governmental, regulatory or economic environment of ___________
threatens the security or safety of Securities and/or Cash or for any
other reason determines, in its and/or their sole discretion, that the
security or safety of Securities and/or Cash is threatened.
10. As used in this Agreement, the term "Instructions" means
instructions by an Authorized Person received by Bank via
telephone, in writing, or by the Society for Worldwide
Interbank Financial Telecommunication (SWIFT) System,
telex, TWX, facsimile transmission, bank wire or other
teleprocess or electronic instruction system acceptable
to Chase which Bank reasonably believes in good faith to
have been given or signed by an Authorized Person or
which are transmitted with proper testing or
authentication pursuant to terms and conditions which
Chase may specify or to which Chase may agree. Unless
otherwise expressly provided, all Instructions shall
continue in full force and effect until canceled or
superseded by an Authorized Person. Bank shall safeguard
any testkeys, identification codes or other security
devices which Chase may make available to it. Either
party may electronically record any Instructions given by
telephone, and any other telephone discussions with
respect to the Account. Instructions by telephone shall
be confirmed by Chase by telex or such other
communication as may be mutually acceptable. Information
communicated via telephone by Bank to Chase shall, upon
Chase's request, be confirmed by Bank by telex or such
other form of communication as may be mutually acceptable.
11. Chase shall pay Bank compensation in accordance with the
schedule of fees set forth in Appendix A hereto, and Bank
shall send Chase an invoice with the frequency set forth
in Appendix A in reasonable detail for such fees (and
Bank's reasonable expenses), in arrears for the prior
period, which fees shall be the only fees owing hereunder
by Chase to Bank. Changes to Appendix A may be made from
time to time as may be mutually agreed to in writing by
Bank and Chase. In no event shall Bank debit Chase's
account for any fee owing hereunder or for any other
reason without Chase's express prior written consent.
12. Either Bank or Chase may terminate this Agreement upon 60
days prior notice to the other party. Any such notice,
whether given by Chase or by Bank, shall be followed by
Instructions specifying the name(s) of the person(s) to
whom Bank shall deliver the Securities and Cash in the
Account and Bank shall promptly execute such
Instructions. If Bank does not receive such
Instructions, Bank shall continue to hold such Securities
and Cash subject to this Agreement until such
Instructions are received. If Chase shall terminate this
Agreement in accordance with the provisions of Section 9
above, Bank shall immediately deliver the Securities and
Cash in the Account upon receiving, and in accordance
with, the Instructions of Chase. The obligations of the
parties under Section 4(a), 8 and 11 of this Agreement
shall survive the termination of this Agreement.
13. Notices with respect to termination, specification of
Authorized Persons and terms and conditions for
Instructions (except as otherwise expressly provided
herein) shall be in writing, and delivered by mail,
postage prepaid, to the following addresses (or to such
other address as either party hereto may from time to
time designate by notice duly given in accordance with
this paragraph): (a) to Bank at:
(b) to Chase at: The Manager, Global Custody Division, The Chase Manhattan
Bank, N.A., ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, with a copy
to: Network Management, Global Securities Services, The Chase Manhattan
Bank, N.A., ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
14. This Agreement shall not be assignable by either party but shall bind any
successor in interest of Chase and Bank, respectively.
15. This Agreement shall be governed by and construed in
accordance with the substantive laws of New York, and,
with respect to any disputes arising under this
Agreement, the parties hereto submit to the nonexclusive
jurisdiction of the Supreme Court of the State of New
York, County of New York, or the United States District
Court for the Southern District of New York and Bank
hereby waives the defense of forum non conveniens, to the
extent it may do so. In the event that this Agreement,
or any other document executed in connection herewith,
shall be translated into, or appear in, a language other
than English, the English language version shall govern
and control.
16. Any provision of this Agreement which may be determined
by competent authority to be prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other
jurisdiction.
17. Except as otherwise provided in this Agreement, no
failure or delay on the part of either party in
exercising any power or right under this Agreement
operates as a waiver, nor does any single or partial
exercise of any power or right preclude any other or
further exercise thereof, or the exercise of any other
power or right. No waiver by a party of any provision of
this Agreement, or waiver of any breach or default, is
effective unless in writing and signed by the party
against whom the waiver is to be enforced.
18. This Agreement, together with the Contract, set forth the
complete understanding of the parties with respect to the
subject matters contained in such agreements, and
collectively supersede and replace any previously made
proposals, representations, warranties or agreements with
respect thereto by either or both of the parties hereto.
This Agreement shall become effective upon Chase's
receipt of an executed copy of this letter.
19. Bank represents and warrants to Chase that: (i) it has
the corporate power and authority to execute, deliver and
perform this Agreement; (ii) this Agreement has been duly
authorized, executed and delivered by it, does not
contravene any contractual restriction binding on it or
any law applicable to it and constitutes a valid, binding
and enforceable obligation; and (iii) all authorizations
of, exemptions by and filings with any governmental or
other authority that are required to be obtained or made
by it in connection herewith have been obtained or made
and are valid and subsisting.
If the foregoing correctly sets forth the understanding between Bank and Chase
with respect to Bank's services in connection with the Account, kindly execute
and return to Chase the enclosed additional copy of this letter.
Very truly yours,
THE CHASE MANHATTAN BANK, N.A.
By
[Name of Subcustodian]
The foregoing is hereby agreed
to this ____ day of ________________, 199_
By ____________________________
-------------------------
[Print or type name]
Title: ________________________