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Title: |
Global Custody Agreement |
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Date: |
2007 |
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Preview shows 24KB of 189KB total |
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$54 |
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#2825461 |
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GLOBAL CUSTODY AGREEMENT
This Amended and Restated Agreement, dated June 25, 2001, is between THE
CHASE MANHATTAN BANK ("Bank"), a New York banking corporation with a place of
business at 4 MetroTech Center, Brooklyn, New York 11245; and each of the
open-end management investment companies listed on Exhibit 1 of this Agreement,
registered with the U.S. Securities and Exchange Commission under the Investment
Company Act of 1940, organized as Delaware business trusts (each a "Trust"),
severally and for and on behalf of certain of their respective portfolios listed
on Exhibit 1 (each a "Fund"), each Trust and their respective Funds with a place
of business at P.O. Box 2600, Valley Forge, PA 19482. Each Trust for which Bank
serves as custodian under this Agreement, shall individually be referred to as
"Customer".
1. INTENTION OF THE PARTIES; DEFINITIONS
1.1 INTENTION OF THE PARTIES.
(a) This Agreement sets out the terms governing custodial, settlement and
certain other associated services offered by Bank to Customer. Bank shall be
responsible for the performance of only those duties that are set forth in this
Agreement or expressly contained in Instructions that are consistent with the
provisions of this Agreement and with Bank's operations and procedures. Customer
acknowledges that Bank is not providing any legal, tax or investment advice in
providing the services hereunder.
(b) Investing in foreign markets may be a risky enterprise. The holding of
Global Assets and cash in foreign jurisdictions may involve risks of loss or
other special features. Bank shall not be liable for any loss that results from
the general risks of investing or Country Risk.
1.2 DEFINITIONS.
(a) As used herein, the following terms have the meaning hereinafter
stated.
"ACCOUNT" has the meaning set forth in Section 2.1 of this Agreement.
"AFFILIATE" means an entity controlling, controlled by, or under common
control with, Bank.
"AFFILIATED SUBCUSTODIAN" means a Subcustodian that is an Affiliate.
"APPLICABLE LAW" means any statute, whether national, state or local,
applicable in the United States or any other country, the rules of the
treaty establishing the European Community, other applicable treaties, any
other law, rule, regulation or
{PAGE}
interpretation of any governmental entity, any applicable common law, and
any decree, injunction, judgment, order, ruling, or writ of any
governmental entity.
"AUTHORIZED PERSON" means any person (including an investment manager or
other agent) who has been designated by written notice from Customer or its
designated agent to act on behalf of Customer hereunder. Such persons shall
continue to be Authorized Persons until such time as Bank receives
Instructions from Customer or its designated agent that any such person is
no longer an Authorized Person.
"BANK INDEMNITEES" means Bank, its Subcustodians, and their respective
nominees, directors, officers, employees and agents.
"BANK'S LONDON BRANCH" means the London branch office of The Chase
Manhattan Bank.
"CASH ACCOUNT" has the meaning set forth in Section 2.1(a)(ii).
"CORPORATE ACTION" means any subscription right, bonus issue, stock
repurchase plan, redemption, exchange, tender offer, or similar matter with
respect to a Financial Asset in the Securities Account that requires
discretionary action by the holder, but does not include proxy voting.
"COUNTRY RISK" means the risk of investing or holding assets in a
particular country or market, 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; the regulation of the banking
and securities industries, including changes in market rules; currency
restrictions, devaluations or fluctuations; and market conditions affecting
the orderly execution of securities transactions or the value of assets.
"CUSTOMER" means individually each Trust and their respective Funds as
listed on Exhibit 1 hereto.
"ENTITLEMENT HOLDER" means the person named on the records of a Securities
Intermediary as the person having a Securities Entitlement against the
Securities Intermediary.
"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" includes any Global Assets but does not include cash.
"FUND" means each portfolio of each Trust and listed on Exhibit 1 hereto.
2
{PAGE}
"GLOBAL ASSET" means any "Financial Asset" (a) for which the principal
trading market is located outside of the United States; (b) for which
presentment for payment is to be made outside of the United States; or (c)
which is acquired outside of the United States.
"INSTRUCTIONS" has the meaning set forth in Section 3.1 of this Agreement.
"LIABILITIES" means any liabilities, losses, claims, costs, damages,
penalties, fines, obligations, or expenses of any kind whatsoever
(including, without limitation, reasonable attorneys', accountants',
consultants' or experts' fees and disbursements).
"SECURITIES" means stocks, bonds, rights, warrants and other negotiable and
non-negotiable instruments, whether issued in certificated or
uncertificated form, that are commonly traded or dealt in on securities
exchanges or financial markets. "Securities" also means other obligations
of an issuer, or shares, participations and interests in an issuer
recognized in the country in which it is issued or dealt in as a medium for
investment and any other property as may be acceptable to Bank for the
Securities Account.
"SECURITIES ACCOUNT" means each Securities custody account on Bank's
records to which Financial Assets are or may be credited pursuant hereto.
"SECURITIES DEPOSITORY" has the meaning set forth in Section 5.1 of this
Agreement.
"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.
"SECURITIES INTERMEDIARy" means Bank, a Subcustodian, a Securities
Depository, and any other financial institution which in the ordinary
course of business maintains custody accounts for others and acts in that
capacity.
"SUBCUSTODIAN" has the meaning set forth in Section 5.1 and includes
Affiliated Subcustodians.
"TRUST" means each open-end investment company organized as a Delaware
business trust and listed on Exhibit 1 hereto.
(b) All terms in the singular shall have the same meaning in the
plural unless the context otherwise provides and visa versa.
3
{PAGE}
2. WHAT BANK IS REQUIRED TO DO
2.1 Set Up Accounts.
--- ----------------
(a) Bank shall establish and maintain the following accounts ("Accounts"):
(i) a Securities Account in the name of Customer on behalf of each
Fund for Financial Assets, which may be received by Bank or its
Subcustodian for the account of Customer, including as an
Entitlement Holder; and
(ii) an account in the name of Customer ("Cash Account") for any and
all cash in any currency received by Bank or its Subcustodian for
the account of Customer.
Notwithstanding paragraph (ii), cash held in respect of those markets where
Customer is required to have a cash account in its own name held directly with
the relevant Subcustodian shall be held in that manner and shall not be part of
the Cash Account. Bank shall notify Customer prior to the establishment of such
an account.
(b) At the request of Customer, additional Accounts may be opened in
the future, which shall be subject to the terms of this Agreement.
2.2 Cash Account.
--- -------------
Except as otherwise provided in Instructions acceptable to Bank, all cash
held in the Cash Account shall be deposited during the period it is credited to
the Account in one or more deposit accounts at Bank or at Bank's London Branch.
Any cash so deposited with Bank's London Branch shall be payable exclusively by
Bank's London Branch in the applicable currency, subject to compliance with any
Applicable Law, including, without limitation, any restrictions on transactions
in the applicable currency imposed by the country of the applicable currency.
2.3 Segregation of Assets; Nominee Name.
--- ------------------------------------
(a) Bank shall identify in its records that Financial Assets credited to
Customer's Securities Account belong to Customer on behalf of the relevant Fund
(except as otherwise may be agreed by Bank and Customer).
(b) To the extent permitted by Applicable Law or market practice, Bank
shall require each Subcustodian to identify in its own records that Financial
Assets credited to Customer's Securities Account belong to customers of Bank,
such that it is readily apparent that the Financial Assets do not belong to Bank
or the Subcustodian.
(c) Bank is authorized, in its discretion, to hold in bearer form, such
Financial
4
{PAGE}
Assets as are customarily held in bearer form or are delivered to Bank or its
Subcustodian in bearer form; and to register in the name of the Customer, Bank,
a Subcustodian, a Securities Depository, or their respective nominees, such
Financial Assets as are customarily held in registered form. Customer authorizes
Bank or its Subcustodian to hold Financial Assets in omnibus accounts and shall
accept delivery of Financial Assets of the same class and denomination as those
deposited with Bank or its Subcustodian.
2.4 Settlement of Trades.
--- ---------------------
When Bank receives an Instruction directing settlement of a trade in
Financial Assets that includes all information required by Bank, Bank shall use
reasonable care to effect such settlement as instructed. Settlement of purchases
and sales of Financial Assets shall be conducted in accordance with prevailing
standards of the market in which the transaction occurs. The risk of loss shall
be Customer's whenever Bank delivers Financial Assets or payment in accordance
with applicable market practice in advance of receipt or settlement of the
expected consideration. In the case of the failure of Customer's counterparty to
deliver the expected consideration as agreed, Bank shall contact the
counterparty to seek settlement and, if the settlement is not received, notify
Customer, but Bank shall not be obligated to institute legal proceedings, file
proof of claim in any insolvency proceeding, or take any similar action.
2.5 Contractual Settlement Date Accounting.
--- ---------------------------------------
(a) Bank shall effect book entries on a "contractual settlement date
accounting" basis as described below with respect to the settlement of trades in
those markets where Bank generally offers contractual settlement day accounting
and shall notify Customer of these markets from time to time.
(i) Sales: On the settlement date for a sale, Bank shall credit
the Cash Account 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.
(ii) Purchases: On the settlement date for the purchase (or
earlier, if market practice requires delivery of the
purchase price before the settlement date), Bank shall debit
the Cash Account with the settlement monies and credit a
separate account. Bank then shall post the Securities
Account as awaiting receipt of the expected Financial
Assets. Customer shall not be entitled to the delivery of
Financial Assets that are awaiting receipt until Bank or a
Subcustodian actually receives them.
Bank reserves the right to restrict in good faith the availability of
contractual day settlement accounting for credit reasons. Bank, whenever
reasonably possible, will notify Customer prior to imposing such restrictions.
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{PAGE}
(b) Bank may (in its discretion) upon at least 48 hours prior oral or
written notification to Customer, reverse any debit or credit made pursuant to
Section 2.5(a) prior to a transaction's actual settlement, and Customer shall be
responsible for any costs or liabilities resulting from such reversal. Customer
acknowledges that the procedures described in this sub-section are of an
administrative nature, and Bank does not undertake to make loans and/or
Financial Assets available to Customer.
2.6 Actual Settlement Date Accounting.
--- ----------------------------------
With respect to any sale or purchase transaction that is not posted to the
Account on the contractual settlement date as referred to in Section 2.5, Bank
shall post the transaction on the date on which the cash or Financial Assets
received as consideration for the transaction is actually received by Bank.
2.7 Income Collection; Autocredit.
--- ------------------------------
(a) Bank shall credit the Cash Account with income and redemption proceeds
on Financial Assets in accordance with the times notified by Bank from time to
time on or after the anticipated payment date, net of any taxes that are
withheld by Bank or any third party. Where no time is specified for a particular
market, income and redemption proceeds from Financial Assets shall be credited
only after actual receipt and reconciliation. Bank may reverse such credits upon
at least 48 hours prior oral or written notification to Customer when Bank
believes that the corresponding payment shall not be received by Bank within a
reasonable period or such credit was incorrect.
(b) Bank shall make reasonable endeavors in its discretion to contact
appropriate parties to collect unpaid interest, dividends or redemption
proceeds, but neither Bank nor its Subcustodians shall be obliged to file any
formal notice of default, institute legal proceedings, file proof of claim in
any insolvency proceeding, or take any similar action.
2.8 Fractions/ Redemptions by Lot.
--- ------------------------------
Bank may sell fractional interests in Financial Assets and credit the Cash
Account with the proceeds of the sale. If some, but not all, of an outstanding
class of Financial Asset is called for redemption, Bank may allot the amount
redeemed among the respective beneficial holders of such class of Financial
Asset in any manner Bank deems to be fair and equitable.
2.9 Presentation of Coupons; Certain Other Ministerial Acts.
--- --------------------------------------------------------
Until Bank receives Instructions to the contrary, Bank shall:
(a) present all Financial Assets for which Bank has received
notice of a call for redemption or that have otherwise
matured, and all income and interest coupons and other
income items that call for payment upon
6
{PAGE}
presentation;
(b) execute in the name of Customer such certificates as may be
required to obtain payment in respect of Financial Assets;
and
(c) exchange interim or temporary documents of title held in the
Securities Account for definitive documents of
title.
2.10 Corporate Actions.
---- ------------------
(a) Bank shall follow Corporate Actions and advise Customer of those
Corporate Actions of which Bank's central corporate actions department receives
notice from the issuer or from the Securities Depository in which such Financial
Assets are maintained or notice published in publications and reported in
reporting services routinely used by Bank for this purpose.
(b) If an Authorized Person fails to provide Bank with timely Instructions
with respect to any Corporate Action, neither Bank nor its Subcustodians or
their respective nominees shall take any action in relation to that Corporate
Action, except as otherwise agreed in writing by Bank and Customer or as may be
set forth by Bank as a default action in the advice it provides under Section
2.10 (a) with respect to that Corporate Action.
2.11 Proxy Voting.
---- -------------
(a) Subject to and upon the terms of this sub-section, Bank shall provide
Customer with information which it receives on matters to be voted upon at
meetings of holders of Financial Assets ("Notifications"), and Bank shall act in
accordance with Customer's Instructions in relation to such Notifications ("the
active proxy voting service").
(b) The following provisions relate to proxy voting services with respect
to Global Assets:
(i) If information is received by Bank at its proxy voting
department too late to permit timely voting by Customer,
Bank's only obligation shall be to provide to Customer, so
far as reasonably practicable, a Notification (or summary
information concerning a Notification) on an "information
only" basis.
(ii) The active proxy voting service is available only in certain
markets, details of which are available from Bank on
request. Provision of the active proxy voting service is
conditional upon receipt by Bank of a duly completed
enrollment form as well as additional documentation that may
be required for certain markets.
(iii)Bank reserves the right to provide Notifications or parts
thereof in the language received. Bank shall attempt in good
faith to provide accurate and complete
7
{PAGE}
Notifications, whether or not translated.
(iv) Customer acknowledges that Notifications and other
information furnished pursuant to the active proxy voting
service ("information") are proprietary to Bank and that
Bank owns all intellectual property rights, including
copyrights and patents, embodied therein. Accordingly,
Customer shall not make any use of such information except
in connection with the active proxy voting service.
(v) In markets where the active proxy voting service is not
available or where Bank has not received a duly completed
enrollment form or other relevant documentation, Bank shall
not provide Notifications to Customer but shall endeavor to
act upon Instructions to vote on matters before meetings of
holders of Financial Assets where it is reasonably
practicable for Bank (or its Subcustodians or nominees as
the case may be) to do so and where such Instructions are
received in time for Bank to take timely action (the
"passive proxy voting service").
(c) Bank shall act upon Instructions to vote on matters referred to in a
Notification, provided Instructions are received by Bank at its proxy voting
department by the deadline referred to in the relevant Notification. If
Instructions are not received in a timely manner, Bank shall not be obligated to
vote on the matter, but shall notify Customer accordingly.
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