CUSTODY AGREEMENT
AGREEMENT dated as of August 31, 1988, as amended and restated
__________, 1996 between THE CHASE MANHATTAN BANK, N.A. ("Chase"), having its
principal place of business at 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, and TEMPLETON VARIABLE PRODUCTS SERIES FUND, a Massachusetts business
trust, (the "Trust") and an investment company registered under the Investment
Company Act of 1940 ("Act of 1940"), having its principal place of business at
000 Xxxxxxx Xxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000-0000.
WHEREAS, the Trust, on behalf of Templeton Money Market Fund,
Templeton Bond Fund, Templeton Stock Fund, Templeton Asset Allocation Fund,
Templeton International Fund and Xxxxxxxxx Developing Markets Fund (each a
"Fund", and collectively, the "Funds"), wishes to appoint Chase as custodian to
the securities and assets of each Fund and Chase is willing to act as custodian
under the terms and conditions hereinafter set forth;
NOW, THEREFORE, the Trust and its successors and assigns and
Chase and its successors and assigns, hereby agree as follows:
1. APPOINTMENT AS CUSTODIAN. Chase agrees to act as custodian
for the Funds, as provided herein, in connection with (a) cash ("Cash") received
from time to time from, or for the account of, each Fund for credit to each
Fund's deposit account or accounts administered by Chase, Chase Branches and
Domestic Securities Depositories (as hereinafter defined), and/or Foreign Banks
and Foreign Securities Depositories (as hereinafter defined) (the "Deposit
Account"); (b) all stocks, shares, bonds, debentures, notes, mortgages, or other
obligations for the payment of money and any certificates, receipts, warrants,
or other instruments representing rights to receive, purchase, or subscribe for
the same or evidencing or representing any other rights or interests therein and
other similar property ("Securities") from time to time received by Chase and/or
any Chase Branch, Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository for the account of the Trust (the "Custody Account"); and
(c) original margin and variation margin payments in a segregated account for
futures contracts (the "Segregated Account").
All Cash held in the Deposit Account or in the Segregated
Account in connection with which Chase agrees to act as custodian is hereby
denominated as a special deposit which shall be held in trust for the benefit of
each Fund and to which Chase, Chase Branches and Domestic Securities
Depositories and/or Foreign Banks and Foreign Securities Depositories shall have
no ownership rights, and Chase will so indicate on its books and records
pertaining to the Deposit Account and the Segregated Account. All cash held in
auxiliary accounts that may be carried for the Funds with Chase (including a
Money Market Account, Redemption Account, Distribution Account and Imprest
Account) is not so denominated as a special deposit and title thereto is held by
Chase subject to the claims of creditors.
2. AUTHORIZATION TO USE BOOK-ENTRY SYSTEM, DOMESTIC
SECURITIES DEPOSITORIES, BRANCH OFFICES, FOREIGN BANKS AND FOREIGN SECURITIES
DEPOSITORIES. Chase is hereby authorized to appoint and utilize, subject to
the provisions of Sections 4 and 5 hereof:
The Book Entry System and The Depository Trust Fund;
and also such other Domestic Securities Depositories selected
by Chase and as to which Chase has received a certified copy
of a resolution of the Trust's Board of Trustees authorizing
deposits therein;
Chase's foreign branch offices in the United Kingdom,
Hong Kong, Singapore, and Tokyo, and such other foreign branch
offices of Chase located in countries approved by the Board of
Trustees of the Trust as to which Chase shall have given prior
notice to the Trust;
Foreign Banks which Chase shall have selected, which are
located in countries approved by the Board of Trustees of the
Trust, and as to which banks Chase shall have given prior
notice to the Trust; and
Foreign Securities Depositories which Chase shall have
selected and as to which Chase has received a certified copy
of a resolution of the Trust's Board of Trustees authorizing
deposits therein;
to hold Securities and Cash at any time owned by each Fund, it being understood
that no such appointment or utilization shall in any way relieve Chase of its
responsibilities as provided for in this Agreement. Foreign branch offices of
Chase appointed and utilized by Chase are herein referred to as "Chase
Branches." Unless otherwise agreed to in writing, (a) each Chase Branch, each
Foreign Bank and each Foreign Securities Depository shall be selected by Chase
to hold only Securities as to which the principal trading market or principal
location as to which such Securities are to be presented for payment is located
outside the United States; and (b) Chase and each Chase Branch, Foreign Bank and
Foreign Securities Depository will promptly transfer or cause to be transferred
to Chase, to be held in the United States, Securities and/or Cash that are then
being held outside the United States upon request of each Fund and/or of the
Securities and Exchange Commission. Utilization by Chase of Chase Branches,
Domestic Securities Depositories, Foreign Banks and Foreign Securities
Depositories shall be in accordance with provisions as from time to time
amended, of an operating agreement to be entered into between Chase and the
Trust (the "Operating Agreement").
3. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
(a) "Authorized Persons of the Trust" shall mean such
officers or employees of the Trust or any other person or
persons as shall have been designated by a resolution of the
Board of Trustees of the Trust, a certified copy of which has
been filed with Chase, to act as Authorized Persons hereunder.
Such persons shall continue to be Authorized Persons of the
Trust, authorized to act either singly or together with one or
more other of such persons as provided in such resolution,
until such time as the Trust shall have filed with Chase a
written notice of the Trust supplementing, amending, or
revoking the authority of such persons.
(b) "Book-Entry system" shall mean the Federal
Reserve/Treasury book-entry system for United States and
federal agency securities, its successor or successors and its
nominee or nominees.
(c) "Domestic Securities Depository" shall mean The
Depository Trust Company, a clearing agency registered with
the Securities and Exchange Commission, its successor or
successors and its nominee or nominees; and (subject to the
receipt by Chase of a certified copy of a resolution of the
Trust's Board of Trustees specifically approving deposits
therein as provided in Section 2(a) of this Agreement) any
other person authorized to act as a depository under the Act
of 1940, its successor or successors and its nominee or
nominees.
(d) "Foreign Bank" shall mean any banking institution
organized under the laws of a jurisdiction other than the
United States or of any state thereof.
(e) A "Foreign Securities Depository" shall mean any
system for the central handling of securities abroad where all
securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping without physical
delivery of the securities by any Chase Branch or Foreign
Bank.
(f) "Written Instructions" shall mean instructions
in writing signed by Authorized Persons of the Trust giving
such instructions, and/or such other forms of communications
as from time to time shall be agreed upon in writing between
the Trust and Chase.
4. SELECTION OF COUNTRIES IN WHICH SECURITIES MAY BE HELD.
Chase shall not cause
Securities and Cash to be held in any country outside the United States until
the Trust has directed the holding of each Fund's assets in such country. Chase
will be provided with a copy of a resolution of the Trust's Board of Trustees
authorizing such custody in any country outside of the United States, which
resolution shall be based upon, among other factors, the following:
(a) comparative operational efficiencies of custody;
(b) clearance and settlement and the costs thereof; and
(c) political and other risks, other than those risks
specifically assumed by Chase.
5. RESPONSIBILITY OF CHASE TO SELECT CUSTODIANS IN INDIVIDUAL
FOREIGN COUNTRIES. The responsibility for selecting the Chase Branch,
Foreign Bank or Foreign Securities Depository to hold each Fund's
Securities and Cash in individual countries authorized by the Trust shall be
that of Chase. Chase generally shall utilize Chase Branches where available.
In locations where there are no Chase Branches providing custodial services,
Chase shall select as its agent a Foreign Bank, which may be an affiliate or
subsidiary of Chase. To facilitate the clearance and settlement of
securities transactions, Chase represents that,
subject to the approval of the Trust, it may deposit Securities in a Foreign
Securities Depository in which Chase is a participant. In situations in which
Chase is not a participant in a Foreign Securities Depository, Chase may,
subject to the approval of the Trust, authorize a Foreign Bank acting as its
subcustodian to deposit the Securities in a Foreign Securities Depository in
which the Foreign Bank is a participant. Notwithstanding the foregoing, such
selection by Chase of a Foreign Bank or Foreign Securities Depository shall not
become effective until Chase has been advised by the Trust that a majority of
its Board of Trustees:
(a) Has approved Chase's selection of the particular
Foreign Bank or Foreign Securities Depository, as the case may
be, as consistent with the best interests of the Funds and
their Shareholders; and
(b) Has approved as consistent with the best
interests of the Funds and their Shareholders a written
contract prepared by Chase which will govern the manner in
which such Foreign Bank will maintain each Fund's assets.
6. CONDITIONS ON SELECTION OF FOREIGN BANK OR FOREIGN
SECURITIES DEPOSITORY. Chase shall authorize the holding of Securities and
Cash by a Chase Branch, Foreign Bank or Foreign Securities Depository only:
(a) to the extent that the Securities and Cash are
not subject to any right, charge, security interest, lien or
claim of any kind in favor of any such Foreign Bank or Foreign
Securities Depository, except for their safe custody or
administration; and
(b) to the extent that the beneficial ownership of
Securities is freely transferable without the payment of
money or value other than for safe custody or
administration.
7. CHASE BRANCHES AND FOREIGN BANKS NOT AGENTS OF THE TRUST.
Chase Branches, Foreign Banks and Foreign Securities Depositories shall be
subject to the instructions of Chase and/or the Foreign Bank, and not to those
of the Trust. Chase warrants and represents that all such instructions shall
afford protection to the Trust at least equal to that afforded for Securities
held directly by Chase. Any Chase Branch, Foreign Bank or Foreign Securities
Depository shall act solely as agent of Chase or of such Foreign Bank.
8. CUSTODY ACCOUNT. Securities held in the Custody Account
shall be physically segregated at all times from those of any other person or
persons except that (a) with respect to Securities held by Chase Branches, such
Securities may be placed in an omnibus account for the customers of Chase, and
Chase shall maintain separate book entry records for each such omnibus account,
and such Securities shall be deemed for the purpose of this Agreement to be held
by Chase in the Custody Account; (b) with respect to Securities deposited by
Chase with a Foreign Bank, a Domestic Securities Depository or a Foreign
Securities Depository, Chase shall identify on its books as belonging to the
Trust the Securities shown on Chase's account on the books of the Foreign Bank,
Domestic Securities Depository or Foreign Securities Depository; and (c) with
respect to Securities deposited by a Foreign Bank with a Foreign Securities
Depository, Chase shall cause the Foreign Bank to identify on its books as
belonging to Chase, as agent, the Securities shown on the Foreign Bank's account
on the books of the Foreign Securities Depository. All Securities of the Trust
maintained by Chase pursuant to this Agreement shall be subject only to the
instructions of Chase, Chase Branches or their agents. Chase shall only deposit
Securities with a Foreign Bank in accounts that include only assets held by
Chase for its customers.
8a. SEGREGATED ACCOUNT FOR FUTURES CONTRACTS. With respect to
every futures contract purchased, sold or cleared for the Custody Account,
Chase agrees, pursuant to Written Instructions, to:
(a) deposit original margin and variation margin
payments in a segregated account maintained by Chase; and
(b) perform all other obligations attendant to
transactions or positions in such futures contracts, as such
payments or performance may be required by law or the
executing broker.
8b. SEGREGATED ACCOUNT FOR REPURCHASE AGREEMENTS.
With respect to purchases for the Custody Account from banks (including Chase)
or broker-dealers, of United States or foreign government obligations subject to
repurchase agreements, Chase agrees, pursuant to Written Instructions, to:
(a) deposit such securities and repurchase agreements
in a segregated account maintained by Chase; and
(b) promptly show on Chase's records that such
securities and repurchase agreements are being held on
behalf of a Fund and deliver to that Fund a written
confirmation to that effect.
8c. SEGREGATED ACCOUNTS FOR DEPOSITS OF COLLATERAL.
Chase agrees, with respect to (i) cash or high quality debt securities to
secure each Fund's commitments to purchase new issues of debt obligations
offered on a when-issued basis; (ii) cash, U.S. government securities, or
irrevocable letters of credit of borrowers of each Fund's portfolio
securities to secure the loan to them of such securities; and/or (iii)
cash, securities or any other property delivered to secure any other
obligations; (all of such items being hereinafter referred to as "collateral"),
pursuant to Written Instructions, to:
(a) deposit the collateral for each such obligation
in a separate segregated account maintained by Chase; and
(b) promptly to show on Chase's records that such
collateral is being held on behalf of a Fund and deliver to
that Fund a written confirmation to that effect.
9. DEPOSIT ACCOUNT. Subject to the provisions of this
Agreement, the Trust authorizes Chase to establish and
maintain in each country or other jurisdiction in which
the principal trading market for any Securities is
located or in which any Securities are to be presented for
payment, an account or accounts, which may include nostro
accounts with Chase Branches and omnibus accounts of Chase at
Foreign Banks, for receipt of cash in the Deposit Account, in such currencies as
directed by Written Instructions. For purposes of this Agreement, cash so held
in any such account shall be evidenced by separate book entries maintained by
Chase at its office in London and shall be deemed to be Cash held by Chase in
the Deposit Account. Unless Chase receives Written Instructions to the contrary,
cash received or credited by Chase or any other Chase Branch, Foreign Bank or
Foreign Securities Depository for the Deposit Account in a currency other than
United States dollars shall be converted promptly into United States dollars
whenever it is practicable to do so through customary banking channels
(including without limitation the effecting of such conversions at Chase's
preferred rates through Chase, its affiliates or Chase Branches), and shall be
automatically transmitted back to Chase in the United States.
10. SETTLEMENT PROCEDURES. Settlement procedures for
transactions in Securities delivered to, held in, or to be delivered from the
Custody Account in Chase Branches, Domestic Securities Depositories, Foreign
Banks and Foreign Securities Depositories, including receipts and payments of
cash held in any nostro account or omnibus account for the Deposit Account as
described in Section 9, shall be carried out in accordance with the provisions
of the Operating Agreement. It is understood that such settlement procedures may
vary, as provided in the Operating Agreement, from securities market to
securities market, to reflect particular settlement practices in such markets.
Chase shall make or cause the appropriate Chase Branch or
Foreign Bank to move payments of Cash held in the Deposit Account only:
(a) in connection with the purchase of Securities for
the account of each Fund and only against the receipt of such
Securities by Chase or by another appropriate Chase Branch,
Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository, or otherwise as provided in the
Operating Agreement, each such payment to be made at prices
confirmed by Written Instructions, or
(b) in connection with any dividend, interim
dividend or other distribution declared by the Trust, or
(c) as directed by the Trust by Written
Instructions setting forth the name and address of the
person to whom the payment is to be made and the purpose
for which the payment is to be made.
Upon the receipt by Chase of Written Instructions specifying the Securities
to be so transferred or delivered, which instructions shall name the person or
persons to whom transfers or deliveries of such Securities shall be made and
shall indicate the time(s) for such transfers or deliveries, Securities
held in the Custody Account shall be transferred, exchanged, or delivered
by Chase, any Chase Branch, Domestic Securities Depository, Foreign Bank,
or Foreign Securities Depository, as the case may be, against payment in
Cash or Securities, or otherwise as provided in the Operating Agreement, only:
(a) upon sale of such Securities for the account of a
Fund and receipt of such payment in the amount shown in a
broker's confirmation of sale of the Securities or other
proper authorization received by Chase before such payment is
made, as confirmed by Written Instructions;
(b) in exchange for or upon conversion into other
Securities alone or other Securities and Cash pursuant to any
plan of merger, consolidation, reorganization,
recapitalization, readjustment, or tender offer;
(c) upon exercise of conversion, subscription,
purchase, or other similar rights represented by such
Securities; or
(d) otherwise as directed by the Trust by Written
Instructions which shall set forth the amount and purpose of
such transfer or delivery.
Until Chase receives Written Instructions to the contrary, Chase shall,
and shall cause each Chase Branch, Domestic Securities Depository,
Foreign Bank and Foreign Securities Depository holding Securities or Cash to,
take the following actions in accordance with procedures established in the
Operating Agreement:
(a) collect and timely deposit in the Deposit Account
all income due or payable with respect to any Securities and
take any action which may be necessary and proper in
connection with the collection and receipt of such income;
(b) present timely for payment all Securities in the
Custody Account which are called, redeemed or retired or
otherwise become payable and all coupons and other income
items which call for payment upon presentation and to receive
and credit to the Deposit Account Cash so paid for the account
of each Fund except that, if such Securities are convertible,
such Securities shall not be presented for payment until two
business days preceding the date on which such conversion
rights would expire unless Chase previously shall have
received Written Instructions with respect thereto;
(c) present for exchange all Securities in the
Custody Account converted pursuant to their terms into other
Securities;
(d) in respect of securities in the Custody Account,
execute in the name of the Trust such ownership and other
certificates as may be required to obtain payments in respect
thereto, provided that Chase shall have requested and the
Trust shall have furnished to Chase any information necessary
in connection with such certificates;
(e) exchange interim receipts or temporary
Securities in the Custody Account for definitive
Securities; and
(f) receive and hold in the Custody Account all
Securities received as a distribution on Securities held in
the Custody Account as a result of a stock dividend, share
split-up or reorganization, recapitalization, readjustment or
other rearrangement or distribution of rights or similar
Securities issued with respect to any Securities held in the
Custody Account.
11. RECORDS. Chase hereby agrees that Chase and any
Chase Branch or Foreign Bank shall create, maintain, and retain all records
relating to their activities and obligations as custodian for the Trust
under this Agreement in such manner as will meet the obligations of the
Trust under the Act of 1940, particularly Section 31 thereof and Rules 31a-1
and 31a-2 thereunder, and Federal, state and foreign tax laws and other legal
or administrative rules or procedures, in each case as currently in effect
and applicable to the Trust. All records so maintained in connection with
the performance of its duties under this Agreement shall, in the event of
termination of this Agreement, be preserved and maintained by Chase as
required by regulation, and shall be made available to the Trust or its agent
upon request, in accordance with the provisions of Section 19.
Chase hereby agrees, subject to restrictions under applicable
laws, that the books and records of Chase and any Chase Branch pertaining to
their actions under this Agreement shall be open to the physical, on-premises
inspection and audit at reasonable times by the independent accountants
("Accountants") employed by, or other representatives of, the Trust. Chase
hereby agrees that, subject to restrictions under applicable laws, access shall
be afforded to the Accountants to such of the books and records of any Foreign
Bank, Domestic Securities Depository or Foreign Securities Depository with
respect to Securities and Cash as shall be required by the Accountants in
connection with their examination of the books and records pertaining to the
affairs of the Trust. Chase also agrees that as the Trust may reasonably request
from time to time, Chase shall provide the Accountants with information with
respect to Chase's and Chase Branches' systems of internal accounting controls
as they relate to the services provided under this Agreement, and Chase shall
use its best efforts to obtain and furnish similar information with respect to
each Domestic Securities Depository, Foreign Bank and Foreign Securities
Depository holding Securities and Cash.
12. REPORTS. Chase shall supply periodically, upon the
reasonable request of the Trust, such statements, reports, and advices with
respect to Cash in the Deposit Account and the Securities in the Custody Account
and transactions in Securities from time to time received and/or delivered for
or from the Custody Account, as the case may be, as the Trust shall require.
Such statements, reports and advices shall include an identification of the
Chase Branch, Domestic Securities Depository, Foreign Bank and Foreign
Securities Depository having custody of the Securities and Cash, and
descriptions thereof.
13. REGISTRATION OF SECURITIES. Securities in the Custody
Account which are issued or issuable only in bearer form (except such securities
as are held in the Book-Entry System) shall be held by Chase, Chase Branches,
Domestic Securities Depositories, Foreign Banks or Foreign Securities
Depositories in that form. All other Securities in the Custody Account shall be
held in registered form in the name of Chase, or any Chase Branch, the
Book-Entry System, Domestic Securities Depository, Foreign Bank or Foreign
Securities Depository and their nominees, as custodian or nominee.
14. STANDARD OF CARE.
(a) GENERAL. Chase shall assume entire responsibility
for all Securities held in the Custody Account, Cash held in
the Deposit Account, Cash or Securities held in the Segregated
Account and any of the Securities and Cash while in the
possession of Chase or any Chase Branch, Domestic Securities
Depository, Foreign Bank or Foreign Securities Depository, or
in the possession or control of any employees, agents or other
personnel of Chase or any Chase Branch, Domestic Securities
Depository, Foreign Bank or Foreign Securities Depository; and
shall be liable to the Trust for any loss to the Trust
occasioned by any destruction of the Securities or Cash so
held or while in such possession, by any robbery, burglary,
larceny, theft or embezzlement by any employees, agents or
personnel of Chase or any Chase Branch, Domestic Securities
Depository, Foreign Bank or Foreign Securities Depository,
and/or by virtue of the disappearance of any of the Securities
or Cash so held or while in such possession, with or without
any fault attributable to Chase ("fault attributable to Chase"
for the purposes of this Agreement being deemed to mean any
negligent act or omission, robbery, burglary, larceny, theft
or embezzlement by any employees or agents of Chase or any
Chase Branch, Domestic Securities Depository, Foreign Bank or
Foreign Securities Depository). In the event of Chase's
discovery or notification of any such loss of Securities or
Cash, Chase shall promptly notify the Trust and shall
reimburse the Trust to the extent of the market value of the
missing Securities or Cash as at the date of the discovery of
such loss. The Trust shall not be obligated to establish any
negligence, misfeasance or malfeasance on Chase's part from
which such loss resulted, but Chase shall be obligated
hereunder to make such reimbursement to the Trust after the
discovery or notice of such loss, destruction or theft of such
Securities or Cash. Chase may at its option insure itself
against loss from any cause but shall be under no obligation
to insure for the benefit of the Trust.
(b) COLLECTIONS. All collections of funds or other
property paid or distributed in respect of Securities held in
the Custody Account shall be made at the risk of the Trust.
Chase shall have no liability for any loss occasioned by delay
in the actual receipt of notice by Chase (or by any Chase
Branch or Foreign Bank in the case of Securities or Cash held
outside of the United States) of any payment, redemption or
other transaction regarding Securities held in the Custody
Account or Cash held in the Deposit Account in respect of
which Chase has agreed to take action in the absence of
Written Instructions to the contrary as provided in Section 10
of this Agreement, which does not appear in any of the
publications referred to in Section 16 of this Agreement.
(c) EXCLUSIONS. Notwithstanding any other provision
in this Agreement to the contrary, Chase shall not be
responsible for (i) losses resulting from war or from the
imposition of exchange control restrictions, confiscation,
expropriation, or nationalization of any securities or assets
of the issuer of such securities, or (ii) losses resulting
from any negligent act or omission of the Trust or any of its
affiliates, or any robbery, theft, embezzlement or fraudulent
act by any employee or agent of the Trust or any of its
affiliates. Chase shall not be liable for any action taken in
good faith upon Written Instructions of Authorized Persons of
the Trust or upon any certified copy of any resolution of the
Board of Trustees of the Trust, and may rely on the
genuineness of any such documents which it may in good faith
believe to be validly executed.
(d) LIMITATION ON LIABILITY UNDER SECTION 14(A).
Notwithstanding any other provision in this Agreement to the
contrary, it is agreed that Chase's sole responsibility with
respect to losses under Section 14(a) shall be to pay the
Trust the amount of any such loss as provided in Section 14(a)
(subject to the limitation provided in Section 14(e) of this
Agreement). This limitation does not apply to any liability of
Chase under Section 14(f) of this Agreement.
(e) ANNUAL ADJUSTMENT OF LIMITATION OF LIABILITY. As
soon as practicable after June 1 of every year, the Trust
shall provide Chase with the amount of its total net assets as
of the close of business on such date (or if the New York
Stock Exchange is closed on such date, then in that event as
of the close of business on the next day on which the New York
Stock Exchange is open for business).
It is understood by the parties to this Agreement (1)
that Chase has entered into substantially similar custody
agreements with other Xxxxxxxxx Funds, all of which Funds have
as their investment adviser either the Investment Manager of
Xxxxxxxxx Global Rising Dividends Fund, the Investment Manager
of Xxxxxxxxx Global Infrastructure Fund or the Investment
Manager of Xxxxxxxxx Americas Government Securities Fund or
companies which are affiliated with either Investment Manager;
and (2) that Chase may enter into substantially similar
custody agreements with additional mutual funds under
Xxxxxxxxx management which may hereafter be organized. Each of
such custody agreements with each of such other Xxxxxxxxx
Funds contains (or will contain) a "Standard of Care" section
similar to this Section 14, except that the limit of Chase's
liability is (or will be) in varying amounts for each Fund,
with the aggregate limits of liability in all of such
agreements, including this Agreement, amounting to
$150,000,000.
On each June 1, Chase will total the net assets
reported by each one of the Xxxxxxxxx Funds, and will
calculate the percentage of the aggregate net assets of all
the Xxxxxxxxx Funds that is represented by the net asset value
of this Trust. Thereupon Chase shall allocate to this
Agreement with this Trust that proportion of its total of
$150,000,000 responsibility undertaking which is substantially
equal to the proportion which this Trust's net assets bears to
the total net assets of all such Xxxxxxxxx Funds subject to
adjustments for claims paid as follows: all claims previously
paid to this Trust shall first be deducted from its
proportionate allocable share of the $150,000,000 Chase
responsibility, and if the claims paid to this Trust amount to
more than its allocable share of the Chase responsibility,
then the excess of such claims paid to this Trust shall
diminish the balance of the $150,000,000 Chase responsibility
available for the proportionate shares of all of the other
Xxxxxxxxx Funds having similar custody agreements with Chase.
Based on such calculation, and on such adjustment for claims
paid, if any, Chase thereupon shall notify the Trust of such
limit of liability under this Section 14 which will be
available to the Trust with respect to (1) losses in excess of
payment allocations for previous years and (2) losses
discovered during the next year this Agreement remains in
effect and until a new determination of such limit of
responsibility is made on the next succeeding June 1.
(f) OTHER LIABILITY. Independently of Chase's
liability to the Trust as provided in Section 14(a) above (it
being understood that the limitations in Sections 14(d) and
14(e) do not apply to the provisions of this Section 14(f)),
Chase shall be responsible for the performance of only such
duties as are set forth in this Agreement or contained in
express instructions given to Chase which are not contrary to
the provisions of this Agreement. Chase will use and require
the same care with respect to the safekeeping of all
Securities held in the Custody Account, Cash held in the
Deposit Account, and Securities or Cash held in the Segregated
Account as it uses in respect of its own similar property, but
it need not maintain any insurance for the benefit of the
Trust. With respect to Securities and Cash held outside of the
United States, Chase will be liable to the Trust for any loss
to the Trust resulting from any disappearance or destruction
of such Securities or Cash while in the possession of Chase or
any Chase Branch, Foreign Bank or Foreign Securities
Depository, to the same extent it would be liable to the Trust
if Chase had retained physical possession of such Securities
and Cash in New York. It is specifically agreed that Chase's
liability under this Section 14(f) is entirely independent of
Chase's liability under Section 14(a). Notwithstanding any
other provision in this Agreement to the contrary, in the
event of any loss giving rise to liability under this Section
14(f) that would also give rise to liability under Section
14(a), the amount of such liability shall not be charged
against the amount of the limitation on liability provided in
Section 14(d).
(g) COUNSEL; LEGAL EXPENSES. Chase shall be entitled
to the advice of counsel (who may be counsel for the Trust) at
the expense of the Trust, in connection with carrying out
Chase's duties hereunder and in no event shall Chase be liable
for any action taken or omitted to be taken by it in good
faith pursuant to advice of such counsel. If, in the absence
of fault attributable to Chase and in the course of or in
connection with carrying out its duties and obligations
hereunder, any claims or legal proceedings are instituted
against Chase or any Chase Branch by third parties, the Trust
will hold Chase harmless against any claims, liabilities,
costs, damages or expenses incurred in connection therewith
and, if the Trust so elects, the Trust may assume the defense
thereof with counsel satisfactory to Chase, and thereafter
shall not be responsible for any further legal fees that may
be incurred by Chase, provided, however, that all of the
foregoing is conditioned upon the Trust's receipt from Chase
of prompt and due notice of any such claim or proceeding. 15.
EXPROPRIATION INSURANCE. Chase represents that it does not
intend to obtain any
insurance for the benefit of the Trust which protects against the imposition of
exchange control restrictions on the transfer from any foreign jurisdiction of
the proceeds of sale of any Securities or against confiscation, expropriation or
nationalization of any securities or the assets of the issuer of such securities
by a government of any foreign country in which the issuer of such securities is
organized or in which securities are held for safekeeping either by Chase, or
any Chase Branch, Foreign Bank or Foreign Securities Depository in such country.
Chase has discussed the availability of expropriation insurance with the Trust,
and has advised the Trust as to its understanding of the position of the staff
of the Securities and Exchange Commission that any investment company investing
in securities of foreign issuers has the responsibility for reviewing the
possibility of the imposition of exchange control restrictions which would
affect the liquidity of such investment company's assets and the possibility of
exposure to political risk, including the appropriateness of insuring against
such risk. The Trust has acknowledged that it has the responsibility to review
the possibility of such risks and what, if any, action should be taken.
16. PROXY, NOTICES, REPORTS, ETC. Chase shall watch for the
dates of expiration of (a) all purchase or sale rights (including warrants,
puts, calls and the like) attached to or inherent in any of the Securities held
in the Custody Account and (b) conversion rights and conversion price changes
for each convertible Security held in the Custody Account as published in
Telstat Services, Inc., Standard & Poor's Financial Inc. and/or any other
publications listed in the Operating Agreement (it being understood that Chase
may give notice to the Trust as provided in Section 21 as to any change,
addition and/or omission in the publications watched by Chase for these
purposes). If Chase or any Chase Branch, Foreign Bank or Foreign Securities
Depository shall receive any proxies, notices, reports, or other communications
relative to any of the Securities held in the Custody Account, Chase shall, on
its behalf or on behalf of a Chase Branch, Foreign Bank or Foreign Securities
Depository, promptly transmit in writing any such communication to the Trust. In
addition, Chase shall notify the Trust by person-to-person collect telephone
concerning any such notices relating to any matters specified in the first
sentence of this Section 16.
As specifically requested by the Trust, Chase shall execute or
deliver or shall cause the nominee in whose name Securities are registered to
execute and deliver to such person as may be designated by the Trust proxies,
consents, authorizations and any other instruments whereby the authority of the
Trust as owner of any Securities in the Custody Account registered in the name
of Chase or such nominee, as the case may be, may be exercised. Chase shall vote
Securities in accordance with Written Instructions timely received by Chase, or
such other person or persons as designated in or pursuant to the Operating
Agreement.
Chase and any Chase Branch shall have no liability for any
loss or liability occasioned by delay in the actual receipt by them or any
Foreign Bank or Foreign Securities Depository of notice of any payment or
redemption which does not appear in any of the publications referred to in the
first sentence of this Section 16.
17. COMPENSATION. The Trust agrees to pay to Chase from time
to time such compensation for its services pursuant to this Agreement as may be
mutually agreed upon in writing from time to time and Chase's out-of-pocket or
incidental expenses, as from time to time shall be mutually agreed upon by Chase
and the Trust. The Trust shall have no responsibility for the payment of
services provided by any Domestic Securities Depository, such fees being paid
directly by Chase. In the event of any advance of Cash for any purpose made by
Chase pursuant to any Written Instruction, or in the event that Chase or any
nominee of Chase shall incur or be assessed any taxes in connection with the
performance of this Agreement, the Trust shall indemnify and reimburse Chase
therefor, except such assessment of taxes as results from the negligence, fraud,
or willful misconduct of Chase, any Domestic Securities Depository, Chase
Branch, Foreign Bank or Foreign Securities Depository, or as constitutes a tax
on income, gross receipts or the like of any one or more of them. Chase shall
have a lien on Securities in the Custody Account and on Cash in the Deposit
Account for any amount owing to Chase from time to time under this Agreement
upon due notice to the Trust.
18. AGREEMENT SUBJECT TO APPROVAL OF THE TRUST. It is
understood that this Agreement and any amendments shall be subject to the
approval of the Trust.
19. TERM. This Agreement shall remain in effect until
terminated by either party upon 60 days' written notice to the other, sent by
registered mail. Notwithstanding the preceding sentence, however, if at any time
after the execution of this Agreement Chase shall provide written notice to the
Trust, by registered mail, of the amount needed to meet a substantial increase
in the cost of maintaining its present type and level of bonding and insurance
coverage in connection with Chase's undertakings in Section 14(a), (d) and (e)
of this Agreement, said Section 14(a), (d) and (e) of this Agreement shall cease
to apply 60 days after the providing of such notice by Chase, unless prior to
the expiration of such 60 days the Trust agrees in writing to assume the amount
needed for such purpose. Chase, upon the date this Agreement terminates pursuant
to notice which has been given in a timely fashion, shall, and/or shall cause
each Domestic Securities Depository to, deliver the Securities in the Custody
Account, pay the Cash in the Deposit Account, and deliver and pay Securities and
Cash in the Segregated Account to the Trust unless Chase has received from the
Trust 60 days prior to the date on which this Agreement is to be terminated
Written Instructions specifying the name(s) of the person(s) to whom the
Securities in the Custody Account shall be delivered, the Cash in the Deposit
Account shall be paid, and Securities and Cash in the Segregated Account shall
be delivered and paid. Concurrently with the delivery of such Securities, Chase
shall deliver to the Trust, or such other person as the Trust shall instruct,
the records referred to in Section 11 which are in the possession or control of
Chase, any Chase Branch, or any Domestic Securities Depository, or any Foreign
Bank or Foreign Securities Depository, or in the event that Chase is unable to
obtain such records in their original form Chase shall deliver true copies of
such records.
20. AUTHORIZATION OF CHASE TO EXECUTE NECESSARY DOCUMENTS. In
connection with the performance of its duties hereunder, the Trust hereby
authorizes and directs Chase and each Chase Branch acting on behalf of Chase,
and Chase hereby agrees, to execute and deliver in the name of the Trust, or
cause such other Chase Branch to execute and deliver in the name of the Trust,
such certificates, instruments, and other documents as shall be reasonably
necessary in connection with such performance, provided that the Trust shall
have furnished to Chase any information necessary in connection therewith.
21. NOTICES. Any notice or other communication authorized
or required by this Agreement to be given to the parties shall be sufficiently
given (except to the extent otherwise specifically provided) if addressed and
mailed postage prepaid or delivered to it at its office at the address set forth
below:
If to the Trust, then to
Xxxxxxxxx Variable Products Series Fund
000 Xxxxxxx Xxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Secretary
If to Chase, then to
The Chase Manhattan Bank, N.A.
XxxxxXxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Global Custody Division Executive
or such other person or such other address as any party shall have furnished to
the other party in writing.
22. NON-ASSIGNABILITY OF AGREEMENT. This Agreement shall
not be assignable by either party hereto; provided, however, that any
corporation into which the Trust or Chase, as the case may be, may be merged or
converted or with which it may be consolidated, or any corporation succeeding
to all or substantially all of the trust business of Chase, shall succeed to
the respective rights and shall assume the respective duties of the Trust or
of Chase, as the case may be, hereunder.
23. GOVERNING LAW. This Agreement shall be governed by the
laws of the State of New York.
THE CHASE MANHATTAN BANK, N.A.
By:__________________________________
XXXXXXXXX VARIABLE PRODUCTS SERIES FUND
By:__________________________________
