CUSTODY AGREEMENT
This AGREEMENT is effective as of December 29, 2000 and is between
THE CHASE MANHATTAN BANK ("Chase"), having its principal place of business at 0
Xxxxx XxxxxXxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, and FRANKLIN GLOBAL TRUST, a
Delaware 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 Xxxxxxxx Xxxxxx Xxxxxxxxx, Xxx Xxxxx Xxxxxxxxxx, on
behalf of the Funds from time to time listed in Schedule 1 hereto (each a
"Fund", and collectively, the "Funds").
WHEREAS, the Trust, on behalf of 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 a 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 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:
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
Trust's Board of Trustees 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 Trustees of the Trust
as to which Chase shall have given prior notice to the Trust;
C. 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
D. 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
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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
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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
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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
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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
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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.
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(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
Franklin Xxxxxxxxx Funds and Xxxxxxxxx Funds, 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 Franklin Xxxxxxxxx or
Templeton management which may hereafter be organized. Each of such
custody agreements with each of such other Franklin Xxxxxxxxx Funds
and 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 Franklin Xxxxxxxxx Funds and Xxxxxxxxx Funds, and will
calculate the percentage of the aggregate net assets of all the
Franklin Xxxxxxxxx Funds and 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 Franklin Xxxxxxxxx Funds and 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 Franklin Xxxxxxxxx Funds and 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
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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
Franklin Global Trust
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Secretary
If to Chase, then to
The Chase Manhattan Bank, N.A.
0 Xxxxx 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
By: /s/ Xxxxxx X. Xxxxxx
_____________________
Xxxxxx X. Xxxxxx
Vice President
FRANKLIN GLOBAL TRUST
By: /s/ Xxxxxx X. Xxxxxxx
__________________________________
Xxxxxx X. Xxxxxxx
Secretary
SCHEDULE 1
Franklin Global Growth Fund
Franklin Global Aggressive Growth Fund
Address: 000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Secretary
