CHASE
GLOBAL CUSTODY AGREEMENT
This AGREEMENT is effective January 6, 1998, and is between THE CHASE
MANHATTAN BANK ("Bank") and each of the funds set forth in Schedule A hereto
(with each fund a "Customer").
It is hereby agreed as follows:
1. CUSTOMER ACCOUNTS.
Bank shall establish and maintain the following accounts ("Accounts"):
(a) A custody account in the name of Customer ("Custody Account") for any
and all stocks, shares, bonds, debentures, notes, mortgages or other obligations
for the payment of money, bullion, coin and any certificates, receipts, warrants
or other instruments representing rights to receive, purchase or subscribe for
the same or evidencing or representing any other rights or interests therein and
other similar property whether certificated or uncertificated as may be received
by Bank or its Subcustodian (as defined in Section 3) for the account of
Customer ("Securities"); and
(b) A deposit account in the name of Customer ("Deposit Account") for any
and all cash in any currency received by Bank or its Subcustodian for the
account of Customer, which cash shall not be subject to withdrawal by draft or
check.
Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in
Section 11) concerning the Accounts. Bank may deliver securities of the same
class in place of those deposited in the Custody Account.
Upon written agreement between Bank and Customer, additional Accounts may
be established and separately accounted for as additional Accounts hereunder.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to
Bank:
(a) Securities shall be held in the country or other jurisdiction in which
the principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash shall be credited to an account in a country or other jurisdiction
in which such cash may be legally deposited or is the legal currency for the
payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
To the extent Instructions are issued and Bank can comply with such
Instructions, Bank is authorized to maintain cash balances on deposit for
Customer with itself or one of its "Affiliates" at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as Customer may direct, if acceptable to Bank. For purposes
hereof, the term "Affiliate" shall mean an entity controlling, controlled by, or
under common control with, Bank.
If Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by Bank and Customer.
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3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
Bank may act hereunder through the subcustodians listed in Schedule B
hereof with which Bank has entered into subcustodial agreements
("Subcustodians"). Customer authorizes Bank to hold Assets in the Accounts in
accounts which Bank has established with one or more of its branches or
Subcustodians. Bank and Subcustodians are authorized to hold any of the
Securities in their account with any securities depository in which they
participate.
Bank reserves the right to add new, replace or remove Subcustodians.
Customer shall be given reasonable notice by Bank of any amendment to Schedule
B. Upon request by Customer, Bank shall identify the name, address and principal
place of business of any Subcustodian of Customer's Assets and the name and
address of the governmental agency or other regulatory authority that supervises
or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) Bank shall identify the Assets on its books as belonging to Customer.
(b) A Subcustodian shall hold such Assets together with assets belonging to
other customers of Bank in accounts identified on such subcustodian's books as
custody accounts for the exclusive benefit of customers of Bank.
(c) Any Assets in the Accounts held by a Subcustodian shall be subject only
to the instructions of Bank or its agent. Any Securities held in a securities
depository for the account of a Subcustodian shall be subject only to the
instructions of such Subcustodian.
(d) Any agreement Bank enters into with a Subcustodian for holding Bank's
customers' assets shall provide that such assets shall not be subject to any
right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian except for safe custody or administration, and that the beneficial
ownership of such assets shall be freely transferable without the payment of
money or value other than for safe custody or administration or, in the case of
cash deposits, except for liens or rights in favor of creditors of the
Subcustodian arising under bankruptcy, insolvency or similar laws. Where
Securities are deposited by a Subcustodian with a securities depository, Bank
shall cause the Subcustodian to identify on its books as belonging to Bank, as
agent, the Securities shown on the Subcustodian's account on the books of such
securities depository. The foregoing shall not apply to the extent of any
special agreement or arrangement made by Customer with any particular
Subcustodian.
5. DEPOSIT ACCOUNT TRANSACTIONS.
(a) Bank or its Subcustodians shall make payments from the Deposit Account
upon receipt of Instructions which include all information required by Bank.
(b) In the event that any payment to be made under this Section 5 exceeds
the funds available in the Deposit Account, Bank, in its discretion, may advance
Customer such excess amount which shall be deemed a loan payable on demand,
bearing interest at the rate customarily charged by Bank on similar loans.
(c) If Bank credits the Deposit Account on a payable date, or at any time
prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, Customer shall
promptly return any such amount upon oral or written notification: (i) that such
amount has not been received in the ordinary course of business or (ii) that
such amount was incorrectly credited. If Customer does not promptly return any
amount upon such notification, Bank shall be entitled, upon oral or written
notification to Customer, to reverse such credit by debiting the Deposit Account
for the amount previously credited. Bank or its Subcustodian shall have no duty
or obligation to institute legal proceedings, file a claim or a proof of claim
in any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for Customer upon Instructions after
consultation with Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
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(a) Securities shall be transferred, exchanged or delivered by Bank or its
Subcustodian upon receipt by Bank of Instructions which include all information
required by Bank. Settlement and payment for Securities received for, and
delivery of Securities out of, the Custody Account may be made in accordance
with the customary or established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the transaction
occurs, including, without limitation, delivery of Securities to a purchaser,
dealer or their agents against a receipt with the expectation of receiving later
payment and free delivery. Delivery of Securities out of the Custody Account may
also be made in any manner specifically required by Instructions acceptable to
Bank.
(b) Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any sale,
exchange or purchase of Securities. Otherwise, such transactions shall be
credited or debited to the Accounts on the date cash or Securities are actually
received by Bank and reconciled to the Account.
(i) Bank, upon oral or written notice to Customer, may reverse credits
or debits made to the Accounts in its discretion if the related transaction
fails to settle within a reasonable period, determined by Bank in its
discretion, after the contractual settlement date for the related
transaction.
(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, Bank may reverse the credits and debits
of the particular transaction at any time.
7. ACTIONS OF BANK.
Bank shall follow Instructions received regarding Assets held in the
Accounts. However, until it receives Instructions to the contrary, Bank shall:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income items which
call for payment upon presentation, to the extent that Bank or Subcustodian is
actually aware of such opportunities.
(b) Execute in the name of Customer such ownership and other certificates
as may be required to obtain payments in respect of Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction for which Bank has
received Instructions involving the Securities, including, without limitation,
Affiliates of Bank or any Subcustodian.
(e) Issue statements to Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
Bank shall send Customer an advice or notification of any transfers of
Assets to or from the Accounts. Such statements, advices or notifications shall
indicate the identity of the entity having custody of the Assets. Unless
Customer sends Bank a written exception or objection to any Bank statement
within sixty (60) days of receipt, Customer shall be deemed to have approved
such statement. In such event, or where Customer has otherwise approved any such
statement, Bank shall, to the extent permitted by law, be released, relieved and
discharged with respect to all matters set forth in such statement or reasonably
implied therefrom and based on information which Customer knew or reasonably
should have known as though it had been settled by the decree of a court of
competent jurisdiction in an action where Customer and all persons having or
claiming an interest in Customer or Customer's Accounts were parties.
Provided that Bank has acted in accordance with the standard of care in
Section 12 (a) hereof, all collections of funds or other property paid or
distributed in respect of Securities in the Custody Account shall be made at the
risk of Customer. Provided that Bank has acted in accordance with the standard
of care in Section 12(a) hereof, Bank shall have no liability for any loss
occasioned by delay in the actual receipt of notice by Bank or by its
Subcustodians of any payment, redemption or other transaction regarding
Securities in the Custody Account in respect of which Bank has agreed to take
any action hereunder.
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8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
(a) CORPORATE ACTIONS. Whenever Bank receives information concerning the
Securities which requires discretionary action by the beneficial owner of the
Securities (other than a proxy), such as subscription rights, bonus issues,
stock repurchase plans and rights offerings, or legal notices or other material
intended to be transmitted to securities holders ("Corporate Actions"), Bank
shall give Customer prompt notice of such Corporate Actions to the extent that
Bank has received actual notice of the Corporate Action from the relevant issuer
or issuer's agent or as to which notice is published in publications routinely
utilized by Bank for this purpose.
When a rights entitlement or a fractional interest resulting from a rights
issue, stock dividend, stock split is received which bears an expiration date,
Bank shall endeavor to obtain Instructions from Customer or its Authorized
Person (as defined in Section 10 hereof), but if Instructions are not received
in time for Bank to take timely action, or actual notice of such Corporate
Action was received too late to seek Instructions, Bank is authorized but need
not sell such rights entitlement or fractional interest and to credit the
Deposit Account with the proceeds, if Bank, in good faith, deems such action to
be appropriate in which case it shall be held harmless for any such action.
(b) PROXY VOTING. Bank shall provide proxy voting services, if elected by
Customer, in accordance with the terms of the proxy voting services rider
hereto. Proxy voting services may be provided by Bank or, in whole or in part,
by one or more third parties appointed by Bank (which may be Affiliates of
Bank).
(c) TAX RECLAIMS.
(i) Subject to the provisions hereof, Bank shall apply for a reduction
of withholding tax and any refund of any tax paid or tax credits which
apply in each applicable market in respect of income payments on Securities
for the benefit of Customer which Bank believes may be available to such
Customer.
(ii) The provision of tax reclaim services by Bank is conditional upon
Bank receiving from the beneficial owner of Securities (A) a declaration of
its identity and place of residence and (B) certain other documentation
(pro forma copies of which are available from Bank). Customer acknowledges
that, if Bank does not receive such declarations, documentation and
information, additional United Kingdom taxation shall be deducted from all
income received in respect of Securities issued outside the United Kingdom
and that U.S. non-resident alien tax or U.S. backup withholding tax shall
be deducted from U.S. source income. Customer shall provide to Bank such
documentation and information as it may require in connection with
taxation, and warrants that, when given, this information shall be true and
correct in every respect, not misleading in any way, and contain all
material information. Customer undertakes to notify Bank immediately if any
such information requires updating or amendment.
(iii) Provided that Bank has acted in accordance with the standard of
care in Section 12(a) hereof, Bank shall not be liable to Customer or any
third party for any taxes, fines or penalties payable by Bank or Customer,
and shall be indemnified accordingly, whether these result from the
inaccurate completion of documents by Customer or any third party acting as
agent for Customer, or as a result of the provision to Bank or any third
party of inaccurate or misleading information or the withholding of
material information by Customer or any other third party, or as a result
of any delay of any revenue authority or any other matter beyond the
control of Bank.
(iv) Customer confirms that Bank is authorized to deduct from any cash
received or credited to the Deposit Account any taxes or levies required by
any revenue or governmental authority for whatever reason in respect of the
Securities or Cash Accounts.
(v) Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to
Customer from time to time and Bank may, by notification in writing, at its
absolute discretion, supplement or amend the markets in which the tax
reclaim services are offered. Other
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than as expressly provided in this sub-clause, Bank shall have no
responsibility with regard to Customer's tax position or status in
any jurisdiction.
(vi) Customer confirms that Bank is authorized to disclose any
information requested by any revenue authority or any governmental body in
relation to Customer or the Securities and/or Cash held for Customer.
(vii) Tax reclaim services may be provided by Bank or, in whole or in
part, by one or more third parties appointed by Bank (which may be
Affiliates of Bank); provided that. Bank shall be liable for the
performance of any such third party to the same extent as Bank would have
been if it performed such services itself
9. NOMINEES.
Securities which are ordinarily held in registered form may be
registered in a nominee name of Bank, Subcustodian or securities
depository, as the case may be. Bank may without notice to Customer cause
any such Securities to cease to be registered in the name of any such
nominee and to be registered in the name of Customer. In the event that any
Securities registered in a nominee name are called for partial redemption
by the issuer, Bank may allot the called portion to the respective
beneficial holders of such class of security in any manner Bank deems to be
fair and equitable. Customer shall hold Bank, Subcustodians, and their
respective nominees harmless from any liability arising directly or
indirectly from their status as a mere record holder of Securities in the
Custody Account.
10. AUTHORIZED PERSONS.
As used herein, the term "Authorized Person" means employees or agents
including investment managers as have 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 employee or
agent is no longer an Authorized Person.
11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by Bank, via telephone, telex, facsimile transmission, bank wire or
other teleprocess or electronic instruction or trade information system
acceptable to Bank which Bank believes in good faith to have been given by
Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which Bank may specify. Unless
otherwise expressly provided, all Instructions shall continue in full force and
effect until canceled or superseded. I
Any Instructions delivered to Bank by telephone shall promptly thereafter
be confirmed in writing by an Authorized Person (which confirmation may bear the
facsimile signature of such Person), but Customer shall hold Bank harmless for
the failure of an Authorized Person to send such confirmation in writing, the
failure of such confirmation to conform to the telephone instructions received
or Bank's failure to produce such confirmation at any subsequent time. Bank may
electronically record any Instructions given by telephone, and any other
telephone discussions with respect to the Custody Account. Customer shall be
responsible for safeguarding any testkeys, identification codes or other
security devices which Bank shall make available to Customer or its Authorized
Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) Bank shall be responsible for the performance of only such duties as
are set forth herein or expressly contained in Instructions which are consistent
with the provisions hereof as follows:
(i) Bank shall use reasonable care with respect to its obligations
hereunder and the safekeeping of Assets. Bank shall be liable to Customer
for any loss which shall occur as the result of the failure of a
Subcustodian to exercise reasonable care with respect to the safekeeping of
such Assets to the same extent that Bank would be liable to Customer if
Bank were holding such Assets in New York. In the event of any loss to
Customer by reason of the failure of Bank or its Subcustodian to utilize
reasonable care (including, but not
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limited to, as respects corporate actions), Bank shall be liable to
Customer only to the extent of Customer's direct damages, to be determined
based on the market value of the property which is the subject of the loss
at the date of discovery of such loss and without reference to any special
conditions or circumstances. Bank shall have no liability whatsoever for
any consequential, special, indirect or speculative loss or damages
(including, but not limited to, lost profits) suffered by Customer in
connection with the transactions contemplated hereby and the relationship
established hereby even if Bank has been advised as to the possibility of
the same and regardless of the form of the action.
(ii) Bank shall not be responsible for the insolvency of any
Subcustodian which IS not a branch or Affiliate of Bank. Bank shall not be
responsible for any act, omission, default or the solvency of any broker or
agent which it or a Subcustodian appoints unless such appointment was made
negligently or in bad faith.
(iii) Bank shall be indemnified by, and without liability to Customer
for any action taken or omitted by Bank whether pursuant to Instructions or
otherwise within the scope hereof if such act or omission was in good
faith, without negligence. In performing its obligations hereunder, Bank
may rely on the genuineness of any document which it believes in good faith
to have been validly executed.
(iv) Customer shall pay for and hold Bank harmless from any liability
or loss resulting from the imposition or assessment of any taxes or other
governmental charges, and any related expenses with respect to income from
or Assets in the Accounts.
(v) Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for Customer) on all matters and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice.
(vi) Bank need not maintain any insurance for the benefit of Customer.
(vii) Without limiting the foregoing, Bank shall not be liable for any
loss which results from: 1) the general risk of investing, or 2) investing
or holding Assets in a particular country including, but not limited to,
losses resulting from malfunction, interruption of or error in the
transmission of information caused by any machines or system or
interruption of communication facilities, abnormal operating conditions,
nationalization, expropriation or other governmental actions; regulation of
the banking or securities industry; currency restrictions, devaluations or
fluctuations; and market conditions which prevent the orderly execution of
securities transactions or affect the value of Assets; except that, with
respect to the failure of machines, systems, interruption of Communication
facilities or abnormal operating conditions on Bank or a Subcustodian's
premises or otherwise within the control of Bank or a Subcustodian, Bank
shall not be so excused to the extent that such failure was on account of
Bank's or the Subcustodian's (as the case may be) negligence (such as a
failure to have had routine maintenance performed or to have selected
equipment reasonably suitable for the purposes contemplated hereby given,
in the case of Subcustodians, local market practices with respect to such
matters). Bank confirms that it has in place backup procedures,
periodically tested by it, that would permit continued operation of its
Brooklyn, New York and Bournemouth, England data centers in the event of a
failure of its systems or equipment.
(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or work
stoppages, acts of war (whether declared or undeclared) or terrorism,
insurrection, revolution, nuclear fusion, fission or radiation, or acts of
God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or
the retention of Securities;
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(iii) advise Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as provided
in Section 5(c) hereof;
(iv) evaluate or report to Customer or an Authorized Person regarding
the financial condition of any broker, agent or other party to which
Securities are delivered or payments are made pursuant hereto; and
(v) review or reconcile trade confirmations received from brokers.
Customer or its Authorized Persons issuing Instructions shall bear any
responsibility to review such confirmations against Instructions issued to
and statements issued by Bank.
(c) Customer authorizes Bank to act hereunder notwithstanding that Bank or
any of its divisions or Affiliates may have a material interest in a
transaction, or circumstances are such that Bank may have a potential conflict
of duty or interest including the fact that Bank or any of its Affiliates may
provide brokerage services to other customers, act as financial advisor to the
issuer of Securities, act as a lender to the issuer of Securities, act in the
same transaction as agent for more than one customer, have a material interest
in the issue of Securities, or earn profits from any of the activities listed
herein.
13. FEES AND EXPENSES.
Customer shall pay Bank for its services hereunder the fees set forth in
Schedule C hereto or such other amounts as may be agreed upon in writing,
together with Bank's reasonable out-of-pocket or incidental expenses, such as,
but not limited to, scrip and stamp fees, legal fees registration fees, and
other costs that Bank pays on behalf of Customer. Bank shall have a lien on and
is authorized to charge any Accounts of Customer for any amount owing to Bank
under any provision hereof upon oral or written notice to Customer.
14. MISCELLANEOUS.
(a) FOREIGN EXCHANGE TRANSACTIONS. To facilitate the administration of
Customer's trading and investment activity, subject to Instructions (which may
be standing Instructions) Bank is authorized to enter into spot or forward
foreign exchange contracts with Customer and may also provide foreign exchange
through its subsidiaries, Affiliates or Subcustodians. Instructions, including
standing instructions, may be issued with respect to such contracts but Bank may
establish rules or limitations concerning any foreign exchange facility made
available. In all cases where Bank, its subsidiaries, Affiliates or
Subcustodians enter into a foreign exchange contract related to Accounts, the
terms and conditions of the then current foreign exchange contract of Bank, its
subsidiary, Affiliate or Subcustodian and, to the extent not inconsistent, this
Agreement shall apply to such transaction.
(b) CERTIFICATION OF RESIDENCY, ETC. Customer certifies that it is a
resident of the United States and shall notify Bank of any changes in residency.
Bank may rely upon this certification or the certification of such other facts
as may be required to administer Bank's obligations hereunder. Customer shall
indemnify Bank against all losses, liability, claims or demands arising directly
or indirectly from any such certifications.
(c) ACCESS TO RECORDS. Bank shall allow Customer's independent public
accountant reasonable access to the records of Bank relating to the Assets as is
required in connection with their examination of books and records pertaining to
Customer's affairs. Subject to restrictions under applicable law, Bank shall
also obtain an undertaking to permit Customer's independent public accountants
reasonable access to the records of any Subcustodian which has physical
possession of any Assets as may be required in connection with the examination
of Customer's books and records.
(d) GOVERNING LAW SUCCESSORS AND ASSIGNS, CAPTIONS THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN NEW YORK and shall not be assignable by either party, but
shall bind the successors in interest of Customer and Bank. The captions given
to the sections and subsections of this Agreement are for convenience of
reference only and are not to be used to interpret this Agreement.
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(e) ENTIRE AGREEMENT: APPLICABLE RIDERS. Customer represents that the
Assets deposited in the Accounts are
(Check one):
- Employee Benefit Plan or other assets subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");
X Investment Company assets subject to certain U.S. Securities
------ and Exchange Commission rules and regulations;
------ Neither of the above.
This Agreement consists exclusively of this document together with
Schedules A-C, and the following Rider(s) [Check applicable rider(s)]:
------ ERISA
X INVESTMENT COMPANY.
------
X PROXY VOTING
------
X SPECIAL TERMS AND CONDITIONS
------
There are no other provisions hereof and this Agreement supersedes any
other agreements, whether written or oral, between the parties. Any amendment
hereto must be in writing, executed by both parties.
(f) SEVERABILITY. In the event that one or more provisions hereof are held
invalid, illegal or unenforceable in any respect on the basis of any particular
circumstances or in any jurisdiction, the validity, legality and enforceability
of such provision or provisions under other circumstances or in other
jurisdictions and of the remaining provisions shall not in any way be affected
or impaired.
(g) WAIVER. Except as otherwise provided herein, no failure or delay on the
part of either party in exercising any power or right hereunder operates as a
waiver, nor does any single or partial exercise of any power or right preclude
any other or further exercise, or the exercise of any other power or right. No
waiver by a party of any provision hereof, or waiver of any breach or default,
is effective unless in writing and signed by the parry against whom the waiver
is to be enforced.
(h) REPRESENTATIONS AND WARRANTIES. (i) Customer hereby represents and
warrants to Bank that: (A) it has full authority and power to deposit and
control the Securities and cash deposited in the Accounts; (B) it has all
necessary authority to use Bank as its custodian; (C) this Agreement
constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms; (D) it shall have full authority and power to
borrow moneys and enter into foreign exchange transactions; and (E) it has
not relied on any oral or written representation made by Bank or any person
on its behalf, and acknowledges that this Agreement sets out to the fullest
extent the duties of Bank. (ii) Bank hereby represents and warrants to
Customer that: (A) it has the full power and authority to perform its
obligations hereunder, (B) this Agreement constitutes its legal, valid and
binding obligation; enforceable in accordance with its terms; (C) that it has
taken all necessary action to authorize the execution and delivery hereof.
(i) NOTICES. All notices hereunder shall be effective when actually
received. Any notices other communications which may be required hereunder
are to be sent to the parties at the following address or such other
addresses as may subsequently be given to the other party in writing: (a)
Bank: The Chase Manhattan Bank, 4 Chase MetroTech Center, l8th Floor,
Brooklyn, N.Y. 11245, Attention: Global Investor Services, Investment
Management Group (Reserve Funds Relationship Manager) and to The Chase
Manhattan Bank, 3 Chase MetroTech Center, 8th floor, Brooklyn, N.Y. 11245,
Attention: Reserve Funds Service Manager; and (b) Customer: [Fund name)
c/o The Reserve Funds, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, 00000-0000.
Attn: Operations Manager.
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(j) TERMINATION. This Agreement may be terminated by Customer or Bank
by giving ninety (90) days written notice to the other, provided that such
notice to Bank shall specify the names of the persons whom Bank shall deliver
the Assets in the Accounts. If notice of termination is given by Bank, Customer
shall within ninety (90) days following receipt of the notice, deliver to Bank
Instructions specifying the name of the persons to whom Bank shall deliver the
Assets. In either case Bank shall deliver the Assets to persons so specified,
after deducting any amounts which Bank determines in good faith to be owed to it
under Section 13, an explanation for any such deductions shall be furnished to
Customer. If within ninety (90) days following receipt of a notice of
termination by Bank, Bank does not receive Instructions from Customer specifying
the names of the persons to whom Bank shall deliver the Assets, Bank, at its
election, may deliver the Assets to a bank or trust company doing business in
the State of New York to be held and disposed pursuant to the provisions hereof,
or to Authorized Persons, or may continue to hold the Assets Instructions are
provided to Bank.
(k) IMPUTATION OF CERTAIN INFORMATION. Bank shall not be held responsible
for and shall not required to have regard to information held by any person by
imputation or information of which Bank not aware by virtue of a "Chinese Wall"
arrangement. If Bank becomes aware of confidential information which in good
faith it feels inhibits it from effecting a transaction hereunder Bank may
refrain from effecting it.
(l) Year 2000. Bank confirms that it is aware of the problem that may be
presented for certain computer systems by use of date fields and the like on and
after January 1, 2000 and that Bank has developed and is implementing a plan to
help assure that Bank's systems as the same relate to services provided
hereunder will be unaffected by such problems.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first-above written.
THE RESERVE FUNDS THE CHASE MANHATTAN BANK
By:
-------------------- -------------------------
Title: Title:
-----------------
Date Date:
-------------------
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STATE OF NY )
: ss
COUNTY OF NY )
On this 9th day of January 1998 before me personally came Xxxxxxxx X.
Xxxxxxxx, to me known, who being by me duly sworn, did depose and say that
he/she resides in Fairfield , Ct. at 000 Xxxxxxxx Xx., that her/she is
General Counsel & Secy of The Reserve Funds & all affiliates, the entity
described in and which executed the foregoing instrument; that he/she knows
the seal of said entity, that the seal affixed to said instrument is such
seal, that it was so affixed by order OF said entity, and that he/she signed
his/her name thereto by like order.
Sworn to before me this 9TH Day of JANUARY, 1998.
Notary
/s/ XXXXXXXX Xxxxxxxxx
Notary Public, State of New York
No. 01MA5014011
Qualified in Bronx County
Commission Expires July 6, 1999.
10
INVESTMENT COMPANY RIDER TO GLOBAL CUSTODY AGREEMENT
BETWEEN THE CHASE MANHATTAN BANK AND
THE RESERVE FUNDS
EFFECTIVE JANUARY 6, 1998
The following modifications are made to the Agreement:
The following modifications are made to the Agreement:
A. Add a new Section 15 to the Agreement as follows:
15. COMPLIANCE WITH SEC RULE 17f-5.
(a) Customer's board of directors (or equivalent body) (hereinafter
'Board') hereby delegates to Bank, and, except as to the country or countries as
to which Bank may, from time to time, advise Customer that it does not accept
such delegation, Bank hereby accepts the delegation to it, of the obligation to
perform as Customer's 'Foreign Custody Manager' (as that term is defined in SEC
rule l7f-5 (a)(2)), both for the purpose of selecting Eligible Foreign
Custodians (as that term is defined in SEC rule l7f-5(a)(1), and as the same may
be amended from time to time, or that have otherwise been made exempt pursuant
to an SEC exemptive order) to hold Assets and of evaluating the contractual
arrangements with such Eligible Foreign Custodians (as set forth in SEC rule
17f-5(c)(2)); provided that, the term Eligible Foreign Custodian shall not
include any 'Compulsory Depository. A Compulsory Depository shall mean a
securities depository or clearing agency the use of which is compulsory because:
(1) its use is required by law or regulation, (2) securities cannot be withdrawn
from the depository, or (3) maintaining securities outside the depository is not
consistent with prevailing custodial practices in the country which the
depository serves. Compulsory Depositories used by Chase as of the date hereof
are set forth in Appendix 1-A hereto, and as the same may be amended on notice
to Customer from time to time.
(b) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Customer's Board of the placement of
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 Customer's Board at such times as the Board deems
reasonable and appropriate based on the circumstances of Customer's foreign
custody arrangements (and until further notice from Customer such reports
shall be provided not less than quarterly with respect to the placement of
Assets with particular Eligible Foreign Custodians and with reasonable
promptness upon the occurrence of any material change in the arrangements
with such Eligible Foreign Custodians);
(ii) exercise such reasonable care, prudence and diligence in performing as
Customer's Foreign Custody Manager as a person having responsibility for
the safekeeping of Assets would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined
that Assets placed and in the safekeeping of such Eligible Foreign
Custodian shall 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 such Assets, including, without
limitation, those factors set forth in SEC rule l7f-5(c)(l)(i)-(iv);
(iv) determine that the written contract with the Eligible Foreign
Custodian (or, in the case of an Eligible Foreign Custodians that is a
securities depository or clearing agency, such contract, the rules or
established practices or procedures of the depository, or any combination
of the foregoing) requires that the Eligible Foreign Custodian will provide
reasonable care for Assets based on the standards applicable to custodians
11
in the relevant market. In making this determination, Bank shall consider
the provisions of Rule l7f-5(c)(2), together with whether Bank shall be
liable to Customer for any loss which shall occur as the result of the
failure of the Eligible Foreign Custodian to exercise reasonable ca with
respect to the safekeeping of such Assets to the same extent that Bank
would be liable to Customer if Bank were holding such Assets in New York;
and
(v) have established a system to monitor the continued appropriateness of
maintaining Assets with particular Eligible Foreign Custodians and of the
governing contractual arrangements; it being understood, however, that in
the event that Bank shall have determined that the existing Eligible
Foreign Custodian in a given country would no longer afford Assets
reasonable care and that no other Eligible Foreign Custodian in that
country would afford reasonable care, Bank shall promptly so advise
Customer and shall then act in accordance with the Instructions of Customer
with respect to the disposition of the affected Assets.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
Assets on behalf of Customer with Eligible Foreign Custodians pursuant to a
written contract deemed appropriate by Bank.
(c) Except as expressly provided herein, Customer shall be solely
responsible to assure that the maintenance of Assets hereunder complies with the
rules, regulations, interpretations and exemptive orders promulgated by or under
the authority of the SEC.
(d) Bank represents to Customer that it is a U.S. Bank as defined in Rule
l7f-5(a)(7). Customer represents to Bank that: (1) the Assets being placed and
maintained in Bank's custody are subject to the Investment Company Act of 1940,
as amended (the '1940 Act'), as the same may be amended from time to time; (2)
its Board: (i) has determined that it is reasonable to rely on Bank to perform
as Customer's Foreign Custody Manager (ii) or its investment advisor shall have
determined that Customer may maintain Assets in each country in which Customer's
Assets shall be held hereunder and determined to accept the risks arising
therefrom (including, but not limited to, a country's financial infrastructure
(and including any Compulsory Depository operating in such country), prevailing
custody and settlement practices, laws applicable to the safekeeping and
recovery of Assets held in custody, and the likelihood of nationalization,
currency controls and the like)."
B. Add the following after the first sentence of Section 3 of the
Agreement: "At the request of Customer, Bank may, but need not, add to Schedule
B an Eligible Foreign Custodian that is either a bank or a non-Compulsory
Depository where Bank has not acted as Foreign Custody Manager with respect to
the selection thereof. Bank shall notify Customer in the event that it elects
not to add any such entity."
C. Add the following language to the end of Section 3 of the Agreement:
The term Subcustodian as used herein shall mean the following:
(a) a U.S. Bank, which shall mean a U.S. bank as defined in SEC rule
l7f-5(a)(7);
(b) an 'Eligible Foreign Custodian,' which shall mean (i) a banking
institution or trust company, incorporated or organized under the laws of a
country other than the United States, that is regulated as such by that
country's government or an agency thereof, (ii) a majority-owned direct or
indirect subsidiary of a U.S. bank or bank holding company which subsidiary
is incorporated or organized under the laws of a country other than the
United States; (iii) a securities depository or clearing agency,
incorporated or organized under the laws of a country other than the United
States, that acts as a system for the central handling of securities or
equivalent book-entries in that country and that is regulated by a foreign
financial regulatory authority as defined under section 2(a)(5) of the 1940
Act, (iv) a securities depository or clearing agency organized under the
laws of a country other than the United States to the extent acting as a
transnational system for the central handling of securities or equivalent
book-entries, and (v) any other entity that shall have been so qualified by
exemptive order, rule or other appropriate action of the SEC.
12
For purposes of clarity, it is agreed that as used in Section 12(a)(i), the term
Subcustodian shall include neither any Eligible Foreign Custodian as to which
Bank has not acted as Foreign Custody Manager nor any Compulsory Depository."
D. Insert the following language at the beginning of the second sentence of
Section 12(a)(i):
"Except with respect to those countries as to which the parties may from
time to time agree in writing otherwise".
E. In recognition of the fact that compliance with amended Rule l7f-5 is in
an early stage of development and of the importance to Bank of the relationship
between Bank and Customer, Bank hereby agrees that, if prior to June 15, 1998,
Bank makes any material change to this rider for its mutual fund customers,
Customer shall be given the option of continuing to operate under this rider or
pursuant to the changed rider. Customer shall promptly notify Bank of whether or
not it elects to operate pursuant to the changed rider, and if it does so elect,
such election shall be effective on and after the date that Bank receives such
notice.
13
GLOBAL PROXY SERVICE RIDER
TO GLOBAL CUSTODY AGREEMENT
BETWEEN
THE CHASE MANHATTAN BANK
AND
THE RESERVE FUNDS
JANUARY 6, 1998
1. Global Proxy Services ("Proxy Services") shall be provided for the
countries listed in the procedures and guidelines ("Procedures") furnished
to Customer, as the same may be amended by Bank from time to time on prior
notice to Customer. The Procedures are incorporated by reference herein and
form a part of this Rider.
2. Proxy Services shall consist of those elements as set forth in the
Procedures, and shall include (a) notifications ("Notifications") by Bank
to Customer of the dates of pending shareholder meetings, resolutions to be
voted upon and the return dates as may be received by Bank or provided to
Bank by its Subcustodians or third parties, and (b) voting by Bank of
proxies based on Customer directions. Original proxy materials or copies
thereof shall not be provided. Notifications shall generally be in English
and, where necessary, shall be summarized and translated from such
non-English materials as have been made available to Bank or its
Subcustodian. In this respect Bank's only obligation is to provide
information from sources it believes to be reliable and/or to provide
materials summarized and/or translated in good faith. Bank reserves the
right to provide Notifications, or parts thereof, in the language received.
Upon reasonable advance request by Customer, backup information relative to
Notifications, such as annual reports, explanatory material concerning
resolutions, management recommendations or other material relevant to the
exercise of proxy voting rights shall be provided as available, but without
translation.
3. While Bank shall attempt to provide accurate and complete Notifications,
whether or not translated, Bank shall not be liable for any losses or other
consequences that may result from reliance by Customer upon Notifications
where Bank prepared the same in good faith.
4. Notwithstanding the fact that Bank may act in a fiduciary capacity with
respect to Customer under other agreements or otherwise under the
Agreement, in performing Proxy Services Bank shall be acting solely as the
agent of Customer, and shall not exercise any discretion with regard to
such Proxy Services.
5. Proxy voting may be precluded or restricted in a variety of circumstances,
including, without limitation, where the relevant Securities are: (i) on
loan; (ii) at registrar for registration or reregistration; (iii) the
subject of a conversion or other corporate action; (iv) not held in a name
subject to the control of Bank or its Subcustodian or are otherwise held in
a manner which precludes voting; (v) not capable of being voted on account
of local market regulations or practices or restrictions by the issuer; or
(vi) held in a margin or collateral account.
6. Customer acknowledges that in certain countries Bank may be unable to vote
individual proxies but shall only be able to vote proxies on a net basis
(e.g. a net yes or no vote given the voting instructions received from all
customers).
7. Customer shall not make any use of the information provided hereunder,
except in connection with the funds or plans covered hereby, and shall in
no event sell, license, give or otherwise make the information provided
hereunder available, to any third party, and shall not directly or
indirectly compete with Bank or diminish the market for Proxy Services by
provision of such information, in whole or in part, for compensation or
otherwise, to any third party.
8. The names of Authorized Persons for Proxy Services shall be furnished to
Bank in accordance with Sections10 of the Agreement. Proxy Services fees
shall be as set forth in Sections13 of the Agreement or as separately
agreed.
14
APPENDIX 1-A
COMPULSORY DEPOSITORIES
AS OF JANUARY 6, 1998
COUNTRY DEPOSITORY INSTRUMENT
ARGENTINA CAJA DE VALORES Equity Corporate & Government Debt
AUSTRALIA AUSTRACLEAR LTD. Corporate Debt, Money Market & Semi Government Debt
CHESS Equity
(Clearing House Electronic
Sub-register System)
RITS Government Debt
(Reserve Bank Information and
Transfer System)
AUSTRIA OESTERREICHISCHER KONTROLBANK AG Equity, Corporate + Government Debt
BELGIUM CIK
(Caiss Interprofessionnelle de Equity + Corporate Debt
Deposits de Virements de Titres)
BANK NATIONALE DE BELGIQUE Treasury Bills + Government Debt
BRAZIL BOVESPA
(Bolsa de Valores de Sao Paolo) Equity
BVRJ
(Bolsa de Valores de Rio de Janeiro) Equity
BULGARIA BNB Government Debt
(Bulgaria National Bank)
CANADA CDS
(Canadian Depository for Securities) Equity, Corporate + Government Debt
CHINA, SSCCRC
SHANGHAI (Shanghai Securities Central Clearing Equity
and Registration Corp.)
CHINA, SSCC Equity
SHENZHEN (Shenzhen Securities Registration
Co., Ltd.)
CZECH SCP Equity + Long-Term Government Debt
REPUBLIC (Securities Center)
TKD
(Trh Kratkododich Dlluhopisu or Treasury Bills + Money Market
Short-Term Bond Market)
DENMARK VP Equity, Corporate + Government Debt
(Vaerdipapircentralen)
EGYPT MISR CLEARING & SEC. DEP. Equity
ESTONIA EVK Equity
(Estonian Central Depository for
Securities Ltd.)
EUROMARKET CEDEL & EUROCLEAR Euro-Debt
FINLAND CSR Equity + Government Debt
(Central Share Registry Finland)
HELSINKI MONEY MARKET CENTER LTD. Money Market
FRANCE SICOVAM Equity + Corporate Debt.
(Banque de France)
15
APPENDIX 1-A
COMPULSORY DEPOSITORIES
AS OF JANUARY 6, 1998
COUNTRY DEPOSITORY INSTRUMENT
FRANCE SATURNE Government Debt
(Banque de France)
GERMANY DKV Equity, Corporate + Government Debt
(Deutscher Kassenverein)
GREECE APOTHETIRIO TITLON A.E. Equity
BANK OF GREECE Government Debt
HONG KONG CCASS Equity
(Central Clearing and Settlement
System)
CMU
(Central Money-markets Unit) Corporate + Government Debt
HUNGARY KELER LTD. Equity + Government Debt
INDIA NSDL
(National Securities Depository Ltd)
IRELAND CREST Equity
GSO
(Gilt Settlement Office) Government Debt
ISRAEL TASE CLEARING HOUSE Equity, Corporate + Government Debt
(Tel Aviv Stock Exchange
Clearing House)
ITALY MONTE TITOLI Equity + Corporate Debt
BANK OF ITALY Government Debt
JAPAN BANK OF JAPAN Registered Government Debt
LATVIA LCD
(Latvian Central Depository) Equity + Government Debt
LEBANON MIDCLEAR Equity
(Custodian and Clearing Center
of Lebanon and the Middle East)
LUXENBOURG CEDEL Equity
MALAYSIA MCD
(Malaysian Central Depository Equity
Snd Bhd)
MAURITIUS CDS
(Central Depository System) Equity
MEXICO INDEVAL
(Institucion para el Deposito Equity, Corporate + Government Debt.
de Valores
MOROCCO MAROCLEAR Equity + Corporate Debt
MORROCO, CONT. BANK AL'MAGHRIB Government Debt
NETHERLANDS NECIGEF/KAS ASSOCIATE NV Equity, Corporate + Government Debt
16
APPENDIX 1-A
COMPULSORY DEPOSITORIES
AS OF JANUARY 6, 1998
COUNTRY DEPOSITORY INSTRUMENT
DE NEDERLANDSCHE BANK N.V. Money-Market
NIEC
(Nederlands Interprofessioneel
Effectencentrum B.V.) Premium Bonds
NEW ZEALAND AUSTRACLEAR NEW ZEALAND Equity, Corporate + Government Debt
NORWAY VPS Equity, Corporate + Government Debt
(Verdipapiresentralen)
PAKISTAN CDC Equity
(Central Depository Company of
Pakistan Ltd.)
PERU CAVALI Equity
(Caja de Valores)
PHILIPPINES PCD
(Philippine Central Depository Equity
POLAND NDS
(National Securities Depository) Equity, Long-Term Government
Debt + Vouchers
CRT
(Central Registry of Treasury Bills) Treasury Bills
PORTUGAL INTERBOLSA Equity, Corporate + Government Debt
ROMANIA SNCDD - RASDAQ Equity
(National Company for Clearing,
Settlement and Depository for
Securities)
BUCHAREST STOCK EXCHANGE REGISTRY Equity
NATIONAL BANK OF ROMANIA Treasury Bills
RUSSIA MICEX GKO's
(Moscow Interbank Currency Exchange) (Gosudarstvennye Kratkosrochnye
Obyazatelstva [T-Bills])
OFZ's (obligatsyi Federalnogo
Zaima [Federal Loan Bonds])
SINGAPORE CDP Equity + Corporate Debt and Malaysian
(Central Depository Pte. Ltd.) equities traded on CLOB
MONETARY AUTHORITY OF SINGAPORE Government Debt
SLOVAK SCP
REPUBLIC (Stredisko Cennych Papiru) Equity + Government Debt
NATIONAL BANK OF SLOVAKIA Treasury Bills
SO. AFRICA CD
(Central Depository) Corporate + Government Debt
SO. KOREA KSD Equity, Corporate + Government Debt
SPAIN SCLV Equity, + Corporate Debt
(Servicio de Compensacion y
Liquidacion de Valores)
CBEO Government Debt
SPAIN (Central Book Entry Office)
SRI LANKA CDS Equity
(Central Depository System
(Private) Ltd.)
17
APPENDIX 1-A
COMPULSORY DEPOSITORIES
AS OF JANUARY 6, 1998
COUNTRY DEPOSITORY INSTRUMENT
SWEDEN VPC Equity, Corporate + Government Debt
(Vardepapperscentralen AB)
SWITZERLAND SEGA
(Schweizerische Effekten-Giro AG) Equity, Corporate + Government Debt
TAIWAN TSCD Equity + Government Debt
(Taiwan Securities Central Depository
Co., Ltd.)
THAILAND TSDC Equity, Corporate + Government Debt
(Thailand Securities Depository Company
Ltd.)
TUNISIA STICODEVAM Equity
(Societe Tunisienne Interprofessionnelle
pour la Compensation et le Depot des
Valeurs Mobilieres)
MINISTRY OF FINANCE Government Debt tradable on the stock
exchange (BTNBs)
CENTRAL BANK OF TUNISIA Government Debt tradable on the stock
exchange (BTCs)
TURKEY TAKAS BANK Equity + Corporate Debt
CENTRAL BANK OF TURKEY Government Debt
UNITED CREST Equity + Corporate Debt
KINGDOM (Clearing & settlement system)
CMO Sterling CD's & CP
(Central Money-market Office)
CGO
(Central Gilts Office) Gilts
UNITED STATES DTC Equity + Corporate Debt
(Depository Trust Company)
PTC
(Participants Trust Company) Mortgage Back Debt
FED BOOK-ENTRY Government Debt
ZAMBIA XXXX
(XxXX Central Shares Depository Ltd.) Equity + Government Debt
18
DOMSTIC AND GLOBAL
SPECIAL TERMS AND CONDITIONS RIDER
DOMESTIC CORPORATE ACTIONS AND PROXIES
With respect to domestic U.S. and Canadian Securities (the latter if held in
DTC), the following provisions shall apply rather than the pertinent provisions
of Section 8 of the Agreement and the Global Proxy Service rider:
Bank shall send to Customer or the Authorized Person for a Custody
Account, such proxies (signed in blank, if issued in the name of Bank's
nominee or the nominee of a central depository) and communications with
respect to Securities in the Custody Account as call for voting or
relate to legal proceedings within a reasonable time after sufficient
copies are received by Bank for forwarding to its customers. In
addition, Bank shall follow coupon payments, redemptions, exchanges or
similar matters with respect to Securities in the Custody Account and
advise Customer or the Authorized Person for such Account of rights
issued, tender offers or any other discretionary rights with respect to
such Securities, in each case, of which Bank has received notice from
the issuer of the Securities, or as to which notice is published in
publications routinely utilized by Bank for this purpose
19
Schedule A
Portfolios of the Reserve Funds:
Reserve Primary Fund
Reserve Government Fund
Reserve Interstate Fund
Reserve
New York Tax-Exempt Fund
Reserve Connecticut Tax-Exempt Fund
Reserve Massachusetts Tax-Exempt Fund
Reserve New Jersey Tax-Exempt Fund
Reserve U.S. Treasury Fund
Reserve Convertible Securities Fund
Reserve Florida Tax-Exempt Fund
Reserve Offshore Fund
Reserve Mid-Cap Growth Fund
Reserve Large-Cap Value Fund
Reserve Strategist Money-Market Fund
Reserve Small-Cap Growth Fund
Reserve California Tax-Exempt Fund
Reserve, Blue Chip Growth Fund
Reserve Informed Investor Growth Fund
Reserve Pennsylvania Tax-Exempt Fund
Reserve International Equity Fund
Reserve Primary Institution Fund
Reserve U.S. Government Institutional Fund
Reserve U.S. Treasury Institutional Fund
Reserve Interstate Tax-Exempt Institutional Fund
Reserve Ohio Tax-Exempt Fund
Reserve Michigan Tax-Exempt Fund
The InterVest Fund
- InverVest Fixed-Rate Fund
- InterVest Variable-Rate Fund
20
