CUSTODY AGREEMENT
AGREEMENT dated February 29, 1988, 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 XXXXXXXXX GLOBAL INCOME FUND, INC. (the "Fund"), an
investment company registered under the Investment Company Act of 0000 ( "Xxx xx
0000"), having its principal place of business at 000 Xxxxxxx Xxxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx 00000.
WHEREAS, the Fund wishes to appoint Chase as custodian to its securities
and assets and Chase is willing to act as custodian under the terms and
conditions hereinafter set forth; NOW, THEREFORE, the Fund 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
Fund, as provided herein, in connection with (a) cash ( "Cash") received
from time to time from, or for the account of, the Fund for credit to the
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 Fund (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 the 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
Fund 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:
A. The Book Entry System and The Depository Trust Company; 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
Fund's Board of Directors authorizing deposits therein;
X. Xxxxx'x 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 Directors of the
Fund as to which Chase shall have given prior notice to the Fund;
C. Foreign Banks which Chase shall have selected, which are
located in countries approved by the Board of Directors of the Fund,
and as to which banks Chase shall have given prior notice to the Fund;
and
D. Foreign Securities Depositories which Chase shall have
selected and as to which Chase has received a certified copy of a
resolution of the Fund's Board of Directors authorizing deposits
therein; to hold Securities and Cash at any time owned by the 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 the 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 Fund (the "Operating Agreement").
3. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Authorized Persons of the Fund" shall mean such officers or
employees of the Fund or any other person or persons as shall have
been designated by a resolution of the Board of Directors of the Fund,
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 Fund, 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 Fund shall have filed with Chase a
written notice of the Fund 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 Fund's Board of Directors 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 Fund giving such instructions,
and/or such other forms of communications as from time to time shall
be agreed upon in writing between the Fund 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 Fund has directed the holding of its assets in such
country. Chase will be provided with a copy of a resolution of the Fund's
Board of Directors 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 the Fund's Securities and Cash in
individual countries authorized by the Fund 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 Fund,
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
Fund, 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 Fund that a majority of its Board of
Directors:
(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 Fund and its Shareholder;
(b) Has approved as consistent with the best interests of the
Fund and its Shareholders a written contract prepared by Chase which
will govern the manner in which such Foreign Bank will maintain the
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 Fund. 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 Fund. Chase warrants and represents that all such instructions
shall afford protection to the Fund 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 Fund 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 Fund 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 with a
simultaneous agreement by the seller to repurchase them within no more than
7 days, at the original purchase price plus accrued interest, 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 the Fund and deliver
to the 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 the 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 the 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 the Fund and deliver to the Fund a written
confirmation to that effect.
9. Deposit Account. Subject to the provisions of this Agreement, the
Fund 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 the 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 Fund, or
(c) as directed by the Fund 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 the 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 Fund 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 the 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 Fund such ownership and other certificates as may be
required to obtain payments in respect thereto, provided that Chase
shall have requested and the Fund 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 Fund under this
Agreement in such manner as will meet the obligations of the Fund under the
Act of 1940, particularly Section 31 thereof and Rules 31a-l 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 Fund. 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 Fund 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
Fund. 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 Fund. Chase also agrees
that as the Fund 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 Fund, 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 Fund 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 Fund for any loss to the Fund
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 Fund
and shall reimburse the Fund to the extent of the market value of the
missing Securities or Cash as at the date of the discovery of such
loss. The Fund 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 Fund 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 Fund.
(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 Fund. 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 Fund or any of its
affiliates, or any robbery, theft, embezzlement or fraudulent act by
any employee or agent of the Fund 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 Fund or upon any certified
copy of any resolution of the Board of Trustees of the Fund, 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 l4(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 Fund 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 Fund 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, including Xxxxxxxxx Funds, Inc. on
behalf of Xxxxxxxxx World Fund and Xxxxxxxxx Foreign Fund; Xxxxxxxxx Global
Funds, Inc. on behalf of Xxxxxxxxx Global I and Xxxxxxxxx Global II;
Xxxxxxxxx Growth Fund, Ltd., Xxxxxxxxx Growth Fund, Inc.; Xxxxxxxxx
Emerging Markets Fund, Inc.; Xxxxxxxxx Income Fund and Templeton Income
Trust on behalf of Templeton Money Fund; Templeton Variable Annuity Fund,
all of which Funds have as their investment adviser either the Investment
Manager of the Fund or companies which are affiliated with the Investment
Manager; and (2) that Chase may enter into substantially similar custody
agreements with additional mutual funds under Templeton 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 Fund. Thereupon Chase shall allocate to this Agreement with
this Fund that proportion of its total of $150,000,000 responsibility
undertaking which is substantially equal to the proportion which this
Fund'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 Fund shall first be deducted from its proportionate allocable
share of the $150,000,000 Chase responsibility, and if the claims paid to
this Fund amount to more than its allocable share of the Chase
responsibility, then the excess of such claims paid to this Fund 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 Fund
of such limit of liability under this Section 14 which will be available to
the Fund 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
Fund 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 Fund. With respect to Securities and Cash held outside of the
United States, Chase will be liable to the Fund for any loss to the
Fund 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 Fund 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 Fund) at the expense of
the Fund 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 Fund will hold Chase harmless against any
claims, liabilities, costs, damages or expenses incurred in connection
therewith and, if the Fund so elects, the Fund 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 Fund'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 Fund 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 Fund, and
has advised the Fund 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 Fund 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 Fund 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 Fund. In addition, Chase shall notify the
Fund 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 Fund, 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 Fund
proxies, consents, authorizations and any other instruments whereby the
authority of the Fund 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 Fund 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 Fund. The Fund 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 Fund 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 Fund.
18. Agreement Subject to Approval of the Fund. It is understood that
this Agreement and any amendments shall be subject to the approval of the
Fund.
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
Fund, 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 Fund
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 Fund unless Chase has received from the Fund 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 Fund, or such other person as the Fund 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 Fund 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
Fund, or cause such other Chase Branch to execute and deliver in the name
of the Fund, such certificates, instruments, and other documents as shall
be reasonably necessary in connection with such performance, provided that
the Fund 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 Fund, then to
Xxxxxxxxx Global Income Fund, Inc.
000 Xxxxxxx Xxxxxx, P. 0. Xxx 00000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xx. Xxxxxxxxx, Vice President and Secretary
If to Chase, then to
The Chase Manhattan Bank, N.A.
1211 Avenue of the Americas
00xx Xxxxx
Xxx Xxxx, 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 Fund 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 Fund 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: /s/ Xxxxxxxxx X. Xxx
--------------------------------------
Xxxxxxxxx X. Xxx
Vice President
XXXXXXXXX GLOBAL INCOME FUND, INC.
By: /s/ Xxxx Xx. Xxxxxxxxx
--------------------------------------
Xxxx Xx. Xxxxxxxxx
Vice President and Secretary
