A vault agreement is a legal document that outlines the terms and conditions governing the storage and management of securities or other assets. The document is typically entered into between the issuer of the securities and a custodian or depository institution responsible for holding and safeguarding the assets.

The purpose of a vault agreement is to establish the rights and obligations of each party with respect to the assets held in the vault, including issues such as access, security, and transferability. The agreement may also include provisions governing the payment of fees and other expenses associated with the custody and management of the assets.

In the context of securities, a vault agreement may be used to govern the storage of physical certificates or to establish the terms of an electronic book-entry system. For example, a company issuing stock may enter into a vault agreement with a custodian bank to hold the physical certificates representing the shares. Alternatively, the company may choose to use a book-entry system, in which case the vault agreement would establish the terms and procedures for the transfer of ownership and management of the shares.

Vault agreements are especially important in the context of securitization transactions, in which assets such as mortgages or consumer loans are packaged into securities and sold to investors. In these cases, the vault agreement may be used to establish the rights and obligations of the issuer, custodian, and investors with respect to the underlying assets.

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