AMENDED AND RESTATED CUSTODIAN AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT, dated as of June 25, 2001, between
certain open-end management investment companies (each investment company a
"Fund") organized under the laws of the State of Delaware and registered with
the Securities and Exchange Commission under the Investment Company Act of 1940
(the "1940 Act"), on behalf of certain of their series (each series a "Series"),
and XXXXX BROTHERS XXXXXXXX & CO., a limited partnership formed under the laws
of the State of New York (BBH&Co. or the Custodian),
W I T N E S S E T H:
WHEREAS, each Fund has employed BBH&Co. to act as the Fund's custodian and
to provide related services, all as provided herein;
WHEREAS, the Securities and Exchange Commission has promulgated amendments
to Rule 17f-5 and adopted Rule 17f-7 under the 1940 Act that establish rules
regarding the custody of investment company assets held outside the United
States; and
WHEREAS, BBH&Co. is willing to provide services in connection with such
Rules in accordance with the terms of this Amended Custodian Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, each Fund and BBH&Co. hereby agree, as follows:
1. APPOINTMENT OF CUSTODIAN. The Fund hereby appoints BBH&Co. as the Fund's
custodian, and BBH&Co. hereby accepts such appointment. All Investments of the
Fund delivered to the Custodian or its agents or Subcustodians shall be dealt
with as provided in this Agreement. The duties of the Custodian with respect to
the Fund's Investments shall be set forth expressly in this Agreement and any
addenda thereto which duties are generally comprised of safekeeping and various
administrative duties that will be performed in accordance with Instructions and
as reasonably required to effect Instructions.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE FUND. The Fund hereby
represents, warrants and covenants each of the following:
2.1 This Agreement has been, and at the time of delivery of each
Instruction such Instruction will have been, duly authorized, executed and
delivered by the Fund. This Agreement does not violate any Applicable Law
or conflict with or constitute a default under the Fund's prospectus or
other organic document, agreement, judgment, order or decree to which the
Fund is a party or by which it or its Investments is bound. The Fund is and
will be in compliance with all laws and regulations applicable to its
operations, investments or activities.
2.2 By providing an Instruction with respect to the first acquisition
of an Investment in a jurisdiction other than the United States of America,
the Fund shall be deemed to have confirmed to the Custodian that the Fund
has (a) assessed and accepted all material Country or Sovereign Risks and
accepted responsibility for their occurrence, (b) made all determinations
required to be made by the Fund under the 1940 Act, and (iii) appropriately
and adequately disclosed to its shareholders, other investors and all
persons who have rights in or to such Investments, all material investment
risks, including those relating to the custody and settlement
infrastructure or the servicing of securities in such jurisdiction.
2.3 The Fund shall safeguard and shall solely be responsible for the
safekeeping of any testkeys, identification codes, passwords, other
security devices or statements of account with which the Custodian provides
it. In furtherance and not limitation of the foregoing, in the event the
Fund utilizes any on-line service offered by the Custodian, the Fund and
the Custodian shall be fully responsible for the security of each party's
connecting terminal, access thereto and the proper and authorized use
thereof and the initiation and application of continuing effective
safeguards in respect thereof. Additionally, if the Fund uses any on-line
or similar communications service made available by the Custodian, the Fund
shall be solely responsible for ensuring the security of its access to the
service and for the use of the service, and shall only attempt to access
the service and the Custodian's computer systems as directed by the
Custodian. If the Custodian provides any computer software to the Fund
relating to the services described in this Agreement, the Fund will only
use the software for the purposes for which the Custodian provided the
software to the Fund, and will abide by the license agreement accompanying
the software and any other security policies which the Custodian provides
to the Fund.
3. REPRESENTATION AND WARRANTY OF BBH&CO. BBH&Co. hereby represents and warrants
that this Agreement has been duly authorized, executed and delivered by BBH&Co.
and does not and will not violate any Applicable Law or conflict with or
constitute a default under BBH&Co.'s limited partnership agreement or any
agreement, instrument, judgment, order or decree to which BBH&Co. is a party or
by which it is bound. BBH&Co. also warrants that it will comply with all
applicable laws and regulations in performance of its duties under this
Agreement.
2
4. INSTRUCTIONS. Unless otherwise explicitly indicated herein, the Custodian
shall perform its duties pursuant to Instructions. As used herein, the term
Instruction shall mean a directive initiated by the Fund, acting directly or
through its board of directors or trustees, officers or other Authorized
Persons, which directive shall conform to the requirements of this Section 4.
4.1 AUTHORIZED PERSONS. For purposes hereof, an Authorized Person
shall be a person or entity authorized to give Instructions for or on
behalf of the Fund by written notices to the Custodian or otherwise in
accordance with procedures delivered to the Custodian. The Custodian may
treat any Authorized Person as having full authority of the Fund to issue
Instructions hereunder unless the notice of authorization contains explicit
limitations as to said authority. The Custodian shall be entitled to rely
upon the authority of Authorized Persons until it receives appropriate
written notice from the Fund to the contrary.
4.2 FORM OF INSTRUCTION. Each Instruction shall be transmitted by such
secured or authenticated electro-mechanical means as the Custodian shall
make available to the Fund from time to time unless the Fund shall elect to
transmit such Instruction in accordance with Subsections 4.2.1 through
4.2.3 of this Section.
4.2.1 Fund Designated Secured-Transmission Method. Instructions
may be transmitted through a secured or tested electro-mechanical
means identified by the Fund or by an Authorized Person entitled to
give Instruction and acknowledged and accepted by the Custodian; it
being understood that such acknowledgment shall authorize the
Custodian to receive and process such means of delivery but shall not
represent a judgment by the Custodian as to the reasonableness or
security of the method determined by the Authorized Person.
4.2.2 Written Instructions. Instructions may be transmitted in a
writing that bears the manual signature of Authorized Persons.
4.2.3 Other Forms of Instruction. Instructions may also be
transmitted by another means determined by the Fund or Authorized
Persons and acknowledged and accepted by the Custodian (subject to the
same limits as to acknowledgements as is contained in Subsection
4.2.1, above) including Instructions given orally or by SWIFT, telex
or telefax (whether tested or untested).
3
When an Instruction is given by means established under Subsections 4.2.1
through 4.2.3, it shall be the responsibility of the Custodian to use reasonable
care to adhere to any security or other procedures established in writing
between the Custodian and the Authorized Person with respect to such means of
Instruction, but such Authorized Person shall be solely responsible for
determining that the particular means chosen is reasonable under the
circumstances. If the Custodian believes that the means chosen are unreasonable,
it shall promptly notify an Authorized Person. Oral Instructions shall be
binding upon the Custodian only if and when an Authorized Person provides
Instructions that conform to the requirements of this Section 4. Any Oral
Instructions shall promptly thereafter be confirmed in writing by an Authorized
Person (which confirmation may bear the facsimile signature of such Person).
With respect to telefax Instructions, the parties agree and acknowledge that
receipt of legible Instructions cannot be assured and that the Custodian cannot
verify that authorized signatures on telefax Instructions are original or
properly affixed. If the Custodian determines that a telefax Instruction is
illegible, the Custodian shall promptly contact an Authorized Person and request
a legible telefax Instruction. Provided the Custodian has exercised the standard
of care required herein with respect to receipt of Proper Instructions including
but not limited to any applicable security or authorization procedures, the
Custodian shall not be liable for losses or expenses incurred through actions
taken in reliance on inaccurately stated or unauthorized telefax Instructions.
The provisions of Section 4A of the Uniform Commercial Code shall apply to Funds
Transfers performed in accordance with Instructions. In the event that a Funds
Transfer Services Agreement is executed between the Fund or an Authorized Person
and the Custodian, such an agreement shall comprise a designation of form of a
means of delivering Instructions for purposes of this Section 4.2.
4.3 COMPLETENESS AND CONTENTS OF INSTRUCTIONS. The Authorized Person
shall be responsible for assuring the adequacy and accuracy of
Instructions. Particularly, upon any acquisition or disposition or other
dealing in the Fund's Investments and upon any delivery and transfer of any
Investment or moneys, the person initiating such Instruction shall give the
Custodian an Instruction with appropriate detail, including, without
limitation:
4
4.3.1 The transaction date and the date and location of
settlement;
4.3.2 The specification of the type of transaction;
4.3.4 A description of the Investments or moneys in question,
including, as appropriate, quantity, price per unit, amount of money
to be received or delivered and currency information. Where an
Instruction is communicated by electronic means, or otherwise where an
Instruction contains an identifying number such as a CUSIP, SEDOL or
ISIN number, the Custodian shall be entitled to rely on such number as
controlling notwithstanding any inconsistency contained in such
Instruction, particularly with respect to Investment description. If
the Custodian is aware of such an inconsistency in an Instruction, it
shall give prompt notice of such inconsistency to an Authorized
Person.
4.3.5 The name of the broker or similar entity concerned with
execution of the transaction. If the Custodian shall reasonably
determine that an Instruction, including a telefax Instruction, is
either unclear or incomplete, the Custodian shall give prompt notice
of such determination to the Fund, and the Fund shall thereupon amend
or otherwise reform such Instruction. In such event, the Custodian
shall have no obligation to take any action in response to the
Instruction initially delivered until the redelivery of an amended or
reformed Instruction
4.4 TIMELINESS OF INSTRUCTIONS. In giving an Instruction, the Fund
shall take into consideration delays which may occur due to the involvement
of a Subcustodian or agent, differences in time zones, and other factors
particular to a given market, exchange or issuer. When the Custodian has
established specific timing requirements or deadlines with respect to
particular classes of Instruction and the Custodian has notified the Fund
of such timing requirements and deadlines, or when an Instruction is
received by the Custodian at such a time that it could not reasonably be
expected to have acted on such Instruction due to time zone differences or
other factors beyond its reasonable control, the execution of any
Instruction received by the Custodian after such deadline or at such time
(including any modification or revocation of a previous Instruction) shall
be at the risk of the Fund.
5
5. SAFEKEEPING OF FUND ASSETS. The Custodian shall hold Investments delivered
to it or Subcustodians for the Fund in accordance with the provisions of this
Section. The Custodian will identify the Investments on its books as belonging
to each individual Series. The Custodian shall not be responsible for (a) the
safekeeping of Investments not delivered or that are not caused to be issued to
it or its Subcustodians; or, (b) pre-existing faults or defects in Investments
that are delivered to the Custodian, or its Subcustodians. The Custodian or
Subcustodian shall give prompt notice to the Fund of any pre-existing faults or
defects that it is aware of. The Custodian is hereby authorized to hold with
itself or a Subcustodian, and to record in one or more accounts, all Investments
delivered to and accepted by the Custodian, any Subcustodian or their respective
agents pursuant to an Instruction or in consequence of any corporate action.
Each such account is a "Securities Account" (as such term is defined in the
Uniform Commercial Code as in effect from time to time in the State of New York
(the "UCC"). The Custodian shall hold Investments for the account of the Fund
and shall segregate Investments from assets belonging to the Custodian and shall
cause its Subcustodians to segregate Investments from assets belonging to the
Subcustodian in an account held for the Fund or in an account maintained by the
Subcustodian generally for non-proprietary assets of the Custodian.
The parties acknowledge that the Custodian and Subcustodians each are
acting under this Agreement as a "Securities Intermediary" (as such term is used
and defined in the UCC). For the purposes of this Agreement, the parties hereto
acknowledge and agree that (i) any Investment held by the Custodian or any
Subcustodian shall constitute a "Financial Asset" (as such term is used and
defined in the UCC), (ii) the Fund may at any time issue one or more
"Entitlement Orders" (as such term is used and defined in the UCC) with respect
to the Fund's Investments, (iii) upon the Custodian's or Subcustodian's receipt
of an Investment for the benefit of the Fund, the Custodian or Subcustodian, as
the case may be, shall credit to the Fund a "Security Entitlement" (as such term
is used and defined in the UCC), and (iv) the Fund shall have a Security
Entitlement with respect to all Investments held by the Custodian or
Subcustodian.
6
5.1 USE OF SECURITIES DEPOSITORIES. The Custodian may deposit and
maintain Investments in any Securities Depository, either directly or
through one or more Subcustodians appointed by the Custodian. Investments
held in a Securities Depository shall be held (a) subject to the agreement,
rules, statement of terms and conditions or other document or conditions
effective between the Securities Depository and the Custodian or the
Subcustodian, as the case may be, and (b) in an account for the Fund or in
bulk segregation in an account maintained for the non-proprietary assets of
the entity holding such Investments in the Depository. If market practice
or the rules and regulations of the Securities Depository prevent the
Custodian, the Subcustodian or (any agent of either) from holding its
client assets in such a separate account, the Custodian, the Subcustodian
or other agent shall as appropriate segregate such Investments for the
benefit of the Fund or for benefit of clients of the Custodian generally on
its own books.
5.2 CERTIFICATED ASSETS. Investments which are certificated may be
held in registered or bearer form: (a) in the Custodian's vault; (b) in the
vault of a Subcustodian or agent of the Custodian or a Subcustodian; or (c)
in an account maintained by the Custodian, Subcustodian or agent at a
Securities Depository; all in accordance with customary market practice in
the jurisdiction in which any Investments are held.
7
5.3 REGISTERED ASSETS. Investments which are registered may be
registered in the name of the Custodian, a Subcustodian, or in the name of
the Fund or a nominee for any of the foregoing, and may be held in any
manner set forth in paragraph 5.2 above with or without any identification
of fiduciary capacity in such registration.
5.4 BOOK ENTRY ASSETS. Investments which are represented by book-entry
may be so held in an account maintained by the Book-Entry Agent on behalf
of the Custodian, a Subcustodian or another agent of the Custodian, or a
Securities Depository.
5.5 REPLACEMENT OF LOST INVESTMENTS. In the event of a loss of
Investments for which the Custodian is responsible under the terms of this
Agreement, the Custodian shall promptly replace such Investment, or in the
event that such replacement cannot be effected, the Custodian shall pay to
the Fund the fair market value of such Investment based on the last
available price as of the close of business in the relevant market on the
date that a claim was first made to the Custodian with respect to such
loss.
6. ADMINISTRATIVE DUTIES OF THE CUSTODIAN. The Custodian shall perform the
following administrative duties with respect to Investments of the Fund.
6.1 PURCHASE OF INVESTMENTS. Pursuant to Instruction, Investments
purchased for the account of the Fund shall be paid for (a) against
delivery thereof to the Custodian or a Subcustodian, as the case may be,
either directly or through a Clearing Corporation or a Securities
Depository (in accordance with the rules of such Securities Depository or
such Clearing Corporation), or (b) otherwise in accordance with an
Instruction, Applicable Law, generally accepted trade practices, or the
terms of the instrument representing such Investment.
6.2 SALE OF INVESTMENTS. Pursuant to Instruction, Investments sold for
the account of the Fund shall be delivered (a) against payment therefor in
cash, by check or by bank wire transfer, (b) by credit to the account of
the Custodian or the applicable Subcustodian, as the case may be, with a
Clearing Corporation or a Securities Depository (in accordance with the
rules of such Securities Depository or such Clearing Corporation), or (c)
otherwise in accordance with an Instruction, Applicable Law, generally
accepted trade practices, or the terms of the instrument representing such
Investment.
8
6.3 DELIVERY IN CONNECTION WITH BORROWINGS OF THE FUND OR OTHER
COLLATERAL AND MARGIN REQUIREMENTS. Pursuant to Instruction, the Custodian
may deliver Investments or cash of the Fund in connection with borrowings
and other collateral and margin requirements.
6.4 FUTURES AND OPTIONS. If, pursuant to an Instruction, the Custodian
shall become a party to an agreement with the Fund and a futures commission
merchant regarding margin (Tri-Party Agreement), the Custodian shall (a)
receive and retain, to the extent the same are provided to the Custodian,
confirmations or other documents evidencing the purchase or sale by the
Fund of exchange-traded futures contracts and commodity options, (b) when
required by such Tri-Party Agreement, deposit and maintain in an account
opened pursuant to such Agreement (Margin Account), segregated either
physically or by book-entry in a Securities Depository for the benefit of
any futures commission merchant, such Investments as the Fund shall have
designated as initial, maintenance or variation "margin" deposits or other
collateral intended to secure the Fund's performance of its obligations
under the terms of any exchange-traded futures contracts and commodity
options; and (c) thereafter pay, release or transfer Investments into or
out of the Margin Account in accordance with the provisions of the such
Agreement. Alternatively, the Custodian may deliver Investments, in
accordance with an Instruction, to a futures commission merchant for
purposes of margin requirements in accordance with Rule 17f-6. The
Custodian shall in no event be responsible for but shall give prompt notice
to the Fund in the event it becomes aware of the acts and omissions of any
futures commission merchant to whom Investments are delivered pursuant to
this Section; for the sufficiency of Investments held in any Margin
Account; or, for the performance of any terms of any exchange-traded
futures contracts and commodity options.
6.5 CONTRACTUAL OBLIGATIONS AND SIMILAR INVESTMENTS. From time to
time, the Fund's Investments may include Investments that are not ownership
interests as may be represented by certificate (whether registered or
bearer), by entry in a Securities Depository or by book entry agent,
registrar or similar agent for recording ownership interests in the
relevant Investment. If the Fund shall at any time acquire such
Investments, including without limitation deposit obligations, loan
participations, repurchase agreements and derivative arrangements, the
Custodian shall (a) receive and retain, to the extent the same are provided
to the Custodian, confirmations or other documents evidencing the
arrangement; and (b) perform on the Fund's account in accordance with the
terms of the applicable arrangement, but only to the extent directed to do
so by Instruction. The Custodian shall have no responsibility for
agreements running to the Fund as to which it is not a party other than to
retain, to the extent the same are provided to the Custodian, documents or
copies of documents evidencing the arrangement and, in accordance with
Instruction, to include such arrangements in reports made to the Fund.
9
6.6 EXCHANGE OF SECURITIES. Unless otherwise directed by Instruction,
the Custodian shall: (a) exchange securities held for the account of the
Fund for other securities in connection with any reorganization,
recapitalization, conversion, split-up, change of par value of shares or
similar event, and (b) deposit any such securities in accordance with the
terms of any reorganization or protective plan.
6.7 SURRENDER OF SECURITIES. Unless otherwise directed by Instruction,
the Custodian may surrender securities: (a) in temporary form for
definitive securities; (b) for transfer into the name of an entity
allowable under Section 5.3; and (c) for a different number of certificates
or instruments representing the same number of shares or the same principal
amount of indebtedness.
6.8 RIGHTS, WARRANTS, ETC. Pursuant to Instruction, the Custodian
shall (a) deliver warrants, puts, calls, rights or similar securities to
the issuer or trustee thereof, or to any agent of such issuer or trustee,
for purposes of exercising such rights or selling such securities, and (b)
deposit securities in response to any invitation for the tender thereof.
6.9 MANDATORY CORPORATE ACTIONS. Unless otherwise directed by
Instruction, the Custodian shall: (a) comply with the terms of all
mandatory or compulsory exchanges, calls, tenders, redemptions or similar
rights of securities ownership affecting securities held on the Fund's
account and promptly notify the Fund of such action, and (b) collect all
stock dividends, rights and other items of like nature with respect to such
securities.
6.10 INCOME COLLECTION. Unless otherwise directed by Instruction, the
Custodian shall collect any amount due and payable to the Fund with respect
to Investments and promptly credit the amount collected to a Principal or
Agency Account; provided, however, that the Custodian shall not be
responsible for: (a) the collection of amounts due and payable with respect
to Investments that are in default, or (b) the collection of cash or share
entitlements with respect to Investments that are not registered in the
name of the Custodian or its Subcustodians. The Custodian is hereby
authorized to endorse and deliver any instrument required to be so endorsed
and delivered to effect collection of any amount due and payable to the
Fund with respect to Investments.
10
6.11 OWNERSHIP CERTIFICATES AND DISCLOSURE OF THE FUND'S INTEREST. The
Custodian is hereby authorized to execute on behalf of the Fund ownership
certificates, affidavits or other disclosure required under Applicable Law
or established market practice in connection with the receipt of income,
capital gains or other payments by the Fund with respect to Investments, or
in connection with the sale, purchase or ownership of Investments.
6.12 PROXY MATERIALS. The Custodian shall deliver, or cause to be
delivered promptly, to the Fund proxy forms, notices of meeting, and any
other notices or announcements materially affecting or relating to
Investments received by the Custodian or any nominee.
6.13 TAX RECLAIM SERVICE. The Custodian will apply for a reduction of
withholding tax and any refund of any tax paid or tax credits which apply
in each applicable market in respect of income payments on Investments for
the benefit of the Fund which the Custodian believes may be available to
such Fund. Where such reports are available, the Custodian shall
periodically report to the Fund concerning the making of applications for a
reduction of withholding tax and refund of any tax paid or tax credits
which apply in each applicable market in respect of income payments on
Investments for the benefit of the Fund. The provision of tax reclaim
services by the Custodian is conditional upon the Custodian receiving from
the Fund or, where required, the beneficial owner of Investments (a) a
declaration of its identity and place of residence and (b) certain other
documentation (pro forma copies of which are available from the Custodian).
The Custodian shall use reasonable means to advise the Fund of the
declarations, documentation and information which the Fund is to provide to
the Custodian in order for the Custodian to provide the tax reclaim
services described herein. The Fund shall provide to the Custodian such
documentation and information as it may require in connection with
taxation, and warrants that, when given, this information shall be true and
correct in every respect, not misleading in any way, and contain all
material information. The Fund undertakes to notify the Custodian
immediately if any such information requires updating or amendment. The
Custodian shall perform tax reclaim services only with respect to taxation
by the revenue authorities of the countries notified to the Fund.
11
The Fund confirms that the Custodian is authorized to deduct from any
cash received or credited to an account any taxes or levies required by any
revenue or governmental authority for whatever reasons in respect of the
accounts. The Custodian and the Fund shall promptly notify the other
regarding any change in the Fund's tax status with respect to withholding
taxes of which it becomes aware. It is acknowledged that the Custodian does
not offer tax advice and that the Fund should consult with its tax adviser
as to tax matters.
6.14 OTHER DEALINGS. The Custodian shall otherwise act as directed by
Instruction, including without limitation effecting the free payments of
moneys or the free delivery of securities, provided that such Instruction
shall indicate the purpose of such payment or delivery and that the
Custodian shall record the party to whom such payment or delivery is made.
The Custodian shall attend to all nondiscretionary details in
connection with the sale or purchase or other administration of
Investments, except as otherwise directed by an Instruction.
In fulfilling the duties set forth in Sections 6.6 through 6.10 above,
the Custodian shall provide promptly to the Fund all material information
pertaining to a corporate action which the Custodian actually receives. The
Custodian shall not be responsible for the completeness or accuracy of such
information as long as the Custodian has shown due diligence in attempting
to receive complete and accurate information. Any advance credit of cash or
shares expected to be received as a result of any corporate action shall be
subject to actual collection and may, when the Custodian deems collection
unlikely, be reversed by the Custodian. The Custodian shall notify the Fund
at least 48 hours prior to any such reversal.
The Custodian may at any time or times in its discretion appoint (and
may at any time remove) agents (other than Subcustodians) to carry out some
or all of the administrative provisions of this Agreement (Agents),
provided, however, that the appointment of such agent shall not relieve the
Custodian of its administrative obligations under this Agreement.
12
7. CASH ACCOUNTS, DEPOSITS AND MONEY MOVEMENTS. Subject to the terms and
conditions set forth in this Section 7, the Fund hereby authorizes the Custodian
to open and maintain, with itself or with Subcustodians, cash accounts in United
States Dollars, in such other currencies as are the currencies of the countries
in which the Fund maintains Investments or in such other currencies as the Fund
shall from time to time request by Instruction.
7.1 TYPES OF CASH ACCOUNTS. Cash accounts opened on the books of the
Custodian (Principal Accounts) shall be opened in the name of the Fund.
Such accounts collectively shall be a deposit obligation of the Custodian
and shall be subject to the terms of this Section 7 and the general
liability provisions contained in Section 9. Cash accounts opened on the
books of a Subcustodian may be opened in the name of the Fund or the
Custodian or in the name of the Custodian for its customers generally
(Agency Accounts). Such deposits shall be obligations of the Subcustodian
and shall be treated as an Investment of the Fund. Accordingly, the
Custodian shall be responsible for exercising reasonable care in the
administration of such accounts but shall not be liable for their repayment
in the event such Subcustodian, by reason of its bankruptcy, insolvency or
sovereign risk/force majeure, fails to make repayment unless (a) such
Subcustodian is a parent, subsidiary or otherwise affiliated with the
Custodian or (b) the Custodian's negligence, bad faith or willful
misconduct was the direct cause of the Subcustodian failing to make the
repayment or (c) a transaction or other matter between the Custodian and
Subcustodian unrelated to the Funds was the cause of the Subcustodian
failing to make repayment. Under (a), (b) or (c) the Custodian shall be
liable for the repayment.
13
7.2 PAYMENTS AND CREDITS WITH RESPECT TO THE CASH ACCOUNTS. The
Custodian shall make payments from or deposits to any of said accounts in
the course of carrying out its administrative duties, including but not
limited to income collection with respect to the Fund's Investments, and
otherwise in accordance with Instructions. The Custodian and its
Subcustodians shall be required to credit amounts to the cash accounts only
when moneys are actually received in cleared funds in accordance with
banking practice in the country and currency of deposit. Any credit made to
any Principal or Agency Account before actual receipt of cleared funds
shall be provisional and may be reversed by the Custodian in the event such
payment is not actually collected. The Custodian shall provide the Fund
with at least 48 hours notice prior to any such reversal. Unless otherwise
specifically agreed in writing by the Custodian or any Subcustodian, all
deposits shall be payable only at the branch of the Custodian or
Subcustodian where the deposit is made or carried.
7.3 CURRENCY AND RELATED RISKS. The Fund bears risks of holding or
transacting in any currency. The Custodian shall not be liable for any loss
or damage arising from the applicability of any law or regulation now or
hereafter in effect, or from the occurrence of any event, which may delay
or affect the transferability, convertibility or availability of any
currency in the country (a) in which such Principal or Agency Accounts are
maintained or (b) in which such currency is issued, and in no event shall
the Custodian be obligated to make payment of a deposit denominated in a
currency during the period during which its transferability, convertibility
or availability has been affected by any such law, regulation or event. The
Custodian shall notify the Fund in the event it is aware that the Fund is
entering into a transaction that is, to its knowledge, illegal under local
law. Without limiting the generality of the foregoing, neither the
Custodian nor any Subcustodian shall be required to repay any deposit made
at a foreign branch of either the Custodian or Subcustodian if such branch
cannot repay the deposit due to a cause for which the Custodian would not
be responsible in accordance with the terms of Section 9 of this Agreement
unless the Custodian or such Subcustodian expressly agrees in writing to
repay the deposit under such circumstances. All currency transactions in
any account opened pursuant to this Agreement are subject to exchange
control regulations of the United States and of the country where such
currency is the lawful currency or where the account is maintained. Any
taxes, costs, charges or fees imposed on the convertibility of a currency
held by the Fund shall be for the account of the Fund unless such taxes,
costs, charges or fees were due to an error by the Custodian or
Subcustodian.
14
7.4 FOREIGN EXCHANGE TRANSACTIONS. The Custodian shall, subject to the
terms of this Section, settle foreign exchange transactions (including
contracts, futures, options and options on futures) on behalf and for the
account of the Fund with such currency brokers or banking institutions,
including Subcustodians, as the Fund may direct pursuant to Instructions.
The Custodian may act as principal in any foreign exchange transaction with
the Fund in accordance with Section 7.4.2 of this Agreement. The
obligations of the Custodian in respect of all foreign exchange
transactions (whether or not the Custodian shall act as principal in such
transaction) shall be contingent on the free, unencumbered transferability
of the currency transacted on the actual settlement date of the
transaction.
7.4.1 THIRD PARTY FOREIGN EXCHANGE TRANSACTIONS. The Custodian
shall process foreign exchange transactions (including without
limitation contracts, futures, options, and options on futures), where
any third party acts as principal counterparty to the Fund on the same
basis it performs duties as agent for the Fund with respect to any
other of the Fund's Investments. Accordingly the Custodian shall only
be responsible for delivering or receiving currency on behalf of the
Fund in respect of such contracts pursuant to Instructions. The
Custodian shall not be responsible for the failure of any counterparty
(including any Subcustodian) in such agency transaction to perform its
obligations thereunder unless (a) such counterparty is a parent,
subsidiary or otherwise affiliated with the Custodian or (b) the
Custodian's negligence, bad faith or willful misconduct was the direct
cause of the counterparty failing to perform its obligations or (c) a
transaction or other matter between the Custodian and the counterparty
unrelated to the Funds was the cause of the counterparty's failure to
perform. Under (a), (b) or (c) , the Custodian shall be liable. The
Custodian (a) shall transmit cash and Instructions to and from the
currency broker or banking institution with which a foreign exchange
contract or option has been executed pursuant hereto, (b) may make
free outgoing payments of cash in the form of Dollars or foreign
currency without receiving confirmation of a foreign exchange contract
or option or confirmation that the countervalue currency completing
the foreign exchange contract has been delivered or received or that
the option has been delivered or received, and (c) shall hold all
confirmations, certificates and other documents and agreements
received by the Custodian and evidencing or relating to such foreign
exchange transactions in safekeeping. The Fund accepts full
responsibility for its use of third-party foreign exchange dealers and
for execution of said foreign exchange contracts and options and
understands that the Fund shall be responsible for any and all costs
and interest charges which may be incurred by the Fund or the
Custodian as a result of the failure or delay of third parties to
deliver foreign exchange. The Custodian or Subcustodian shall
respectively be responsible for any failure or delay of third parties
to deliver foreign exchange when either of those parties respectively
is a parent, subsidiary or otherwise affiliated with such third party.
15
7.4.2 FOREIGN EXCHANGE WITH THE CUSTODIAN AS PRINCIPAL. The
Custodian may undertake foreign exchange transactions with the Fund as
principal as the Custodian and the Fund may agree from time to time.
In such event, the foreign exchange transaction will be performed in
accordance with the particular agreement of the parties, or in the
event a principal foreign exchange transaction is initiated by
Instruction in the absence of specific agreement, such transaction
will be performed in accordance with the usual commercial terms of the
Custodian.
7.5 DELAYS. If no event of Force Majeure shall have occurred and be
continuing and in the event that a delay shall have been caused by the
negligence, bad faith or willful misconduct of the Custodian in carrying
out an Instruction to credit or transfer cash, the Custodian shall be
liable to the Fund: (a) with respect to Principal Accounts, for interest to
be calculated at the rate customarily paid on such deposit and currency by
the Custodian on overnight deposits at the time the delay occurs for the
period from the day when the transfer should have been effected until the
day it is in fact effected; and, (b) with respect to Agency Accounts, for
interest to be calculated at the rate customarily paid on such deposit and
currency by the Subcustodian on overnight deposits at the time the delay
occurs for the period from the day when the transfer should have been
effected until the day it is in fact effected. The Custodian shall not be
liable for delays in carrying out such Instructions to transfer cash which
are not due to the Custodian's own negligence, bad faith or willful
misconduct. The Custodian shall make reasonable attempts where possible to
mitigate any such delays.
16
7.6 ADVANCES. If, for any reason in the conduct of its safekeeping
duties pursuant to Section 5 hereof or its administration of the Fund's
assets pursuant to Section 6 hereof, the Custodian or any Subcustodian
advances monies to facilitate settlement or otherwise for benefit of the
Fund (whether or not any Principal or Agency Account shall be overdrawn
either during, or at the end of, any Business Day), Fund hereby does:
7.6.1 grant to the Custodian a continuing security interest in
certain Investments (as mutually agreed from time to time) as security
for such Advance, such security interest to be effective only as long
as such Advance remain outstanding; and,
7.6.2 agree that the Custodian may secure the resulting Advance
by perfecting a security interest in such Investments under Applicable
Law.
The Custodian shall promptly notify the Fund of any such Advances and the time
at which such Advances must be repaid. Such Advances shall be deemed a loan
payable on demand, bearing interest at the rate customarily charged by the
Custodian on similar loans. Neither the Custodian nor any Subcustodian shall be
obligated to advance monies to the Fund, and in the event that such Advance
occurs, any transaction giving rise to an Advance shall be for the account and
risk of the Fund and shall not be deemed to be a transaction undertaken by the
Custodian for its own account and risk. If such Advance shall have been made by
a Subcustodian or any other person, the Custodian may assign any rights granted
to the Custodian hereunder to such Subcustodian or other person. If the Fund
shall fail to repay when due the principal balance of an Advance and accrued and
unpaid interest thereon, the Custodian or its assignee, as the case may be,
shall be entitled to utilize the available cash balance in the applicable Series
Agency or Principal Account and to dispose of any agreed upon Investments to the
extent necessary to recover payment of all principal of, and interest on, such
Advance in full. The Custodian may assign any rights it has hereunder to a
Subcustodian or third party. Any security interest in Investments taken
hereunder shall be treated as Financial Assets credited to Securities Accounts
under Articles 8 and 9 of the UCC. Accordingly, the Custodian shall have the
rights and benefits of a secured creditor that is a Securities Intermediary
under such Articles 8 and 9.
17
7.7 INTEGRATED ACCOUNT. For purposes hereof, deposits maintained in
all Principal Accounts for each Series of each Fund (whether or not
denominated in Dollars) shall collectively constitute a single and
indivisible current account with respect to that Series' obligations to the
Custodian, or its assignee, and balances in such Principal Accounts shall
be available for satisfaction of that Series' obligations under this
Section 7. The Custodian shall further have a right of offset against the
balances in any Agency Account maintained hereunder to the extent that the
aggregate of all Principal Accounts is overdrawn.
8. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Subject to the provisions
hereinafter set forth in this Section 8, the Fund hereby authorizes the
Custodian to utilize Securities Depositories to act on behalf of the Fund and to
appoint from time to time and to utilize Subcustodians. With respect to
securities and funds held by a Subcustodian, either directly or indirectly
(including by a Securities Depository or Clearing Corporation), notwithstanding
any provisions of this Agreement to the contrary, payment for securities
purchased and delivery of securities sold may be made prior to receipt of
securities or payment, respectively, and securities or payment may be received
in a form, in accordance with (a) governmental regulations, (b) rules of
Securities Depositories and clearing agencies, (c) generally accepted trade
practice in the applicable local market, (d) the terms and characteristics of
the particular Investment, or (e) the terms of Instructions.
8.1 DOMESTIC SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The Custodian
may deposit and/or maintain, either directly or through one or more agents
appointed by the Custodian, Investments of the Fund in any Securities
Depository in the United States, including The Depository Trust Company,
provided such Depository meets applicable requirements of the Federal
Reserve Bank or of the Securities and Exchange Commission. The Custodian
may, at any time and from time to time, appoint any bank as defined in
Section 2(a)(5) of the 1940 Act meeting the requirements of a custodian
under Section 17(f) of the 1940 Act and the rules and regulations
thereunder, to act on behalf of the Fund as a Subcustodian for purposes of
holding Investments of the Fund in the United States.
18
8.2 FOREIGN SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Unless
instructed otherwise by the Fund, the Custodian may deposit and/or maintain
non-U.S. Investments of the Fund in any non-U.S. Securities Depository
provided such Securities Depository meets the requirements of an "eligible
securities depository" under Rule 17f-7 promulgated under the 1940 Act, or
any successor rule or regulation ("Rule 17f-7") or which by order of the
Securities and Exchange Commission is exempted therefrom. Prior to the time
that securities are placed with such depository, but subject to the
provisions of Section 8.2.5 below, the Custodian shall have prepared an
analysis of the custody risks associated with maintaining assets with the
Securities Depository and shall have established a system to monitor such
risks on a continuing basis in accordance with Subsection 8.2.3 of this
Section. Additionally, the Custodian may, at any time and from time to
time, appoint (a) any bank, trust company or other entity meeting the
requirements of an "eligible foreign custodian" under Rule 17f-5 under the
1940 Act or which by order of the Securities and Exchange Commission is
exempted therefrom, or (b) any bank as defined in Section 2(a)(5) of the
1940 Act meeting the requirements of a custodian under Section 17(f) of the
1940 Act and the rules and regulations thereunder, to act on behalf of the
Fund as a Subcustodian for purposes of holding Investments of the Fund
outside the United States. Such appointment of foreign Subcustodians shall
be subject to approval of the Fund in accordance with Subsections 8.2.1 and
8.2.2 hereof, and the use of non-U.S. Securities Depositories shall be
subject to the terms of Subsections 8.2.3, 8.2.4 and 8.2.5 hereof. An
Instruction to open an account in a given country shall comprise
authorization of the Custodian to hold assets in such country in accordance
with the terms of this Agreement. The Custodian shall not be required to
make independent inquiry as to the authorization of the Fund to invest in
such country.
19
8.2.1 BOARD APPROVAL OF FOREIGN SUBCUSTODIANS. Unless and except
to the extent that the Board has delegated to, and the Custodian has
accepted delegation of, review of certain matters concerning the
appointment of Subcustodians pursuant to Subsection 8.2.2, the
Custodian shall, prior to the appointment of any Subcustodian for
purposes of holding Investments of the Fund outside the United States,
obtain written confirmation of the approval of the Board of Trustees
or Directors of the Fund with respect to (a) the identity of a
Subcustodian, and (b) the Subcustodian agreement which shall govern
such appointment, such confirmation to be signed by an Authorized
Person. Each such duly approved Subcustodian shall be listed on the
Global Custody Network listing attached hereto as the same may from
time to time be amended.
8.2.2 DELEGATION OF BOARD REVIEW OF SUBCUSTODIANS. From time to
time, the Custodian may agree to perform certain reviews of
Subcustodians and of Subcustodian Contracts as delegate of the Fund's
Board. In such event, the Custodian's duties and obligations with
respect to this delegated review will be performed in accordance with
the terms of the attached 17f-5 Delegation Schedule to this Agreement.
8.2.3 MONITORING AND RISK ASSESSMENT OF SECURITIES DEPOSITORIES.
Prior to the placement of any assets of the Fund with a Securities
Depository, the Custodian: (a) shall provide to the Fund or its
authorized representative an assessment of the custody risks
associated with maintaining assets with such Securities Depository;
and (b) shall have established a system to monitor the custody risks
associated with maintaining assets with such Securities Depository on
a continuing basis and to promptly notify the Fund or its Investment
Adviser of any material changes in such risk. In performing its duties
under this subsection, the Custodian shall use reasonable care,
prudence and diligence and may rely on such reasonable sources of
information as may be available including but not limited to: (i)
published ratings; (ii) information supplied by a Subcustodian that is
a participant in such Securities Depository; (iii) industry surveys or
publications; (iv) information supplied by the depository itself, by
its auditors (internal or external) or by the relevant Foreign
Financial Regulatory Authority. It is acknowledged that information
procured through some or all of these sources may not be independently
verifiable by the Custodian and that direct access to Securities
Depositories is limited in most circumstances. Accordingly, the
Custodian shall not be responsible for errors or omissions in its
duties hereunder provided that it has performed its monitoring and
assessment duties with reasonable care. The risk assessment shall be
provided to the Fund or its Investment Adviser by such means as the
Custodian shall reasonably establish. Advice of material change in
such assessment may be provided by the Custodian in the manner
established as customary between the Fund and the Custodian for
transmission of material market information.
8.2.4 WITHDRAWAL OF ASSETS FROM ELIGIBLE SECURITIES DEPOSITORY.
If the Fund or its authorized representative determines that a custody
arrangement with an Eligible Securities Depository no longer meets the
requirements of Rule 17f-7(a), the Fund or its Investment Adviser
shall Instruct the Custodian to remove the Fund's Assets from the
Depository as soon as reasonably practicable.
20
8.2.5 SPECIAL TRANSITIONAL RULE. It is acknowledged that Rule
17f-7 has an effective date of July 1, 2001 and that the Custodian
will require a period of time to fully prepare risk assessment
information and to establish a risk monitoring system as provided in
Subsection 8.2.3. Accordingly, until July 1, 2001, the Custodian shall
use reasonable efforts to implement the measures required by
Subsection 8.2.3, and shall in the interim provide to the Fund or its
Investment Adviser the depository information customarily provided and
shall promptly inform the Fund or its Investment Adviser of any
material development affecting the custody risks associated with the
maintenance of assets with a particular Securities Depository of which
it becomes aware in the course of its general duties under this
Agreement or from its duties under Subsection 8.2.3 as such duties
have been implemented at any given time.
8.3 RESPONSIBILITY FOR SUBCUSTODIANS. Except as provided in the last
sentence of this Section 8.3, the Custodian shall be liable to the Fund for
any loss or damage to the Fund caused by or resulting from the acts or
omissions of any Subcustodian to the extent that such acts or omissions
would be deemed to be negligence, gross negligence, willful misconduct or
bad faith in accordance with the terms of the relevant subcustodian
agreement under the laws, circumstances and practices prevailing in the
place where the act or omission occurred. The liability of the Custodian in
respect of the countries and subcustodians listed on the attached
Subcustodian Liability Appendix to this Agreement, as such Appendix may be
amended from time to time, shall be subject to the additional condition
that the Custodian actually recovers such loss or damage from the
Subcustodian.
8.4 NEW COUNTRIES. The Fund shall be responsible for informing the
Custodian sufficiently in advance of a proposed investment which is to be
held in a country in which no Subcustodian is authorized to act in order
that the Custodian shall, if it deems appropriate to do so, have sufficient
time to establish a subcustodial arrangement in accordance herewith. In the
event, however, the Custodian is unable to establish such arrangements
prior to the time such Investment is to be acquired, the Custodian is
authorized to designate at its discretion a local safekeeping agent, and
the use of such local safekeeping agent shall be at the sole risk of the
Fund, and accordingly the Custodian shall be responsible to the Fund for
the actions of such agent if and only to the extent the Custodian shall
have recovered from such agent for any damages caused the Fund by such
agent. Notwithstanding the above, the Custodian shall be liable to the
extent that (a) such local safekeeping agent is a parent, subsidiary or
otherwise affiliated with the Custodian or (b) the Custodian's negligence,
bad faith or willful misconduct is the direct cause of the local
safekeeping agent failing to make the repayment or (c) a transaction or
other matter between the Custodian and the local safekeeping agent
unrelated to the Funds was the cause of the loss or damage. Under (a), (b)
or (c) the Custodian shall be liable.
21
9. RESPONSIBILITY OF THE CUSTODIAN. In performing its duties and obligations
hereunder, the Custodian shall use reasonable care under the facts and
circumstances prevailing in the market where performance is effected. Subject to
the specific provisions of this Section, the Custodian shall be liable for any
direct damage incurred by the Fund in consequence of the Custodian's negligence,
bad faith or willful misconduct. The Custodian hereby indemnifies the Fund and
agrees to hold the Fund harmless from and against all claims and liabilities,
including counsel fees and taxes, incurred or assessed against the Fund to the
extent that such claim or liability arises from the negligence, gross
negligence, bad faith or willful misconduct on the part of the Custodian itself.
If a Fund gives written notice of claim to the Custodian, the Custodian shall
promptly give a written response to the Fund. Not more than 30 days following
the date of such response, unless the Custodian shall not be liable, the
Custodian will pay the amount of such claim or reimburse the Fund for any
payment made by the Fund in respect thereof. In no event shall the Custodian be
liable hereunder for any special, indirect, punitive or consequential damages
arising out of, pursuant to or in connection with this Agreement even if the
Custodian has been advised of the possibility of such damages. It is agreed that
the Custodian shall have no duty to assess the risks inherent in the Fund's
Investments or to provide investment advice with respect to such Investments and
that the Fund as principal shall bear any risks attendant to particular
Investments such as failure of counterparty or issuer. The Custodian shall
provide the Fund with its Market Practice Reports in respect of any foreign
market where a Series shall place and maintain Investments. In addition, the
Custodian shall provide the Fund with access to its Global Updates which address
topical "market" events.
22
9.1 FORCE MAJEURE The Custodian shall not be responsible for any
failure to perform its duties and correspondingly, shall not be liable for
any loss, cost, damage or expense attributable to its failure to perform in
consequence of a force majeure event. Force Majeure shall mean any
circumstance or event which is beyond the reasonable control of the
Custodian, a Subcustodian or any agent of the Custodian or a Subcustodian
and which adversely affects the performance by the above parties, including
any event caused by, arising out of or involving (a) an act of God, (b)
accident, fire, water damage or explosion, (c) any third party computer,
system or other equipment failure or malfunction caused by any computer
virus or the malfunction or failure of any communications medium, (d) any
third party interruption of the power supply or other utility service, (e)
any strike or other work stoppage, whether partial or total, (f) any delay
or disruption resulting from or reflecting the occurrence of any Sovereign
Risk, (g) any disruption of, or suspension of trading in, the securities,
commodities or foreign exchange markets, whether or not resulting from or
reflecting the occurrence of any Sovereign Risk, (h) any encumbrance on the
transferability of a currency or a currency position on the actual
settlement date of a foreign exchange transaction, whether or not resulting
from or reflecting the occurrence of any Sovereign Risk, or (i) any other
cause similarly beyond the reasonable control of the Custodian, provided
always that this shall not affect the Custodian's duty to indemnify the
Fund for other losses, claims and liabilities for which the Custodian is
bound to indemnify the Fund pursuant to Section 9. The Custodian and the
Subcustodian shall take reasonable steps to mitigate additional damages.
The Custodian shall notify the Fund when it becomes aware of a situation
outlined above. The Fund shall not be responsible for temporary delays in
the performance of its duties and obligations and correspondingly shall not
be liable for any loss, cost, damage or expense attributable to such delay
in consequence of a Force Majeure event as described above affecting the
Fund's principal place of business operations or administration; provided
always that this shall not affect the Fund's duty to indemnify the
Custodian for losses, claims and liabilities for which the Fund is bound to
indemnify the Custodian pursuant to Section 10.
9.2 Limitations of Performance. The Custodian shall not be responsible
under this Agreement for any failure to perform its duties, and shall not
be liable hereunder for any loss or damage in association with such failure
to perform, for or in consequence of the following causes:
23
9.2.1 COUNTRY RISK. Country Risk shall mean, with respect to the
acquisition, ownership, settlement or custody of Investments in a
jurisdiction, all risks relating to, or arising in consequence of,
systemic and markets factors affecting the acquisition, payment for or
ownership of Investments including (a) the prevalence of crime and
corruption, (b) the inaccuracy or unreliability of business and
financial information, (c) the instability or volatility of banking
and financial systems, or the absence or inadequacy of an
infrastructure to support such systems, (d) custody and settlement
infrastructure of the market in which such Investments are transacted
and held, (e) the acts, omissions and operation of any Securities
Depository, (f) the risk of the bankruptcy or insolvency of banking
agents, counterparties to cash and securities transactions, registrars
or transfer agents, and (g) the existence of market conditions which
prevent the orderly execution or settlement of transactions or which
affect the value of assets. The Custodian shall provide the Fund with
its Market Practice Reports in respect of any foreign market where a
Series shall place and maintain Investments. Such Market Practice
Report may describe some of the Country Risks outlined above. In
addition, the Custodian shall provide the Fund with access to its
Global Updates which may describe some timely Country Risks outlined
above.
9.2.2 SOVEREIGN RISK. Sovereign Risk shall mean, in respect of
any jurisdiction, including the United States of America, where
Investments are acquired or held hereunder or under a Subcustody
Agreement, (a) any act of war, terrorism, riot, insurrection or civil
commotion, (b) the imposition of any investment, repatriation or
exchange control restrictions by any Governmental Authority, (c) the
confiscation, expropriation or nationalization of any Investments by
any Governmental Authority, whether de facto or de jure, (d) any
devaluation or revaluation of the currency, (e) the imposition of
taxes, levies or other charges affecting Investments, (f) any change
in the Applicable Law, or (g) any other economic or political risk
incurred or experienced. The Custodian shall provide the Fund with its
Market Practice Reports in respect of any foreign market where a
Series shall place and maintain Investments. Such Market Practice
Report may describe some of the Sovereign Risks outlined above. In
addition, the Custodian shall provide the Fund with access to its
Global Updates which may describe some timely Sovereign Risks outlined
above.
9.3. LIMITATIONS ON LIABILITY. The Custodian shall not be liable for
any loss, claim, damage or other liability arising from the following
causes:
9.3.1 FAILURE OF THIRD PARTIES. The failure of any third party
including: (a) any issuer of Investments or book-entry or other agent
of an issuer; (b) any counterparty with respect to any Investment,
including any issuer of exchange-traded or other futures, option,
derivative or commodities contract; (c) failure of an Investment
Advisor, Foreign Custody Manager or other agent of the Fund; or (d)
failure of other third parties similarly beyond the control or choice
of the Custodian unless: (a) any such third party is a parent,
subsidiary or otherwise affiliated with the Custodian or (b) the
Custodian's negligence, bad faith or willful misconduct was the direct
cause of the failure of the third party or (c) a transaction or other
matter between the Custodian and the third party unrelated to the
Funds was the cause of the failure of the third party. Under (a), (b)
or (c) the Custodian shall be liable for the failure of such third
party.
9.3.2 INFORMATION SOURCES. The Custodian may rely upon
information received from issuers of Investments or agents of such
issuers, information received from Subcustodians and from other
commercially reasonable sources such as commercial data bases and the
like, but shall not be responsible for specific inaccuracies in such
information, provided that the Custodian has relied upon such
information in good faith, or for the failure of any commercially
reasonable information provider.
9.3.3 RELIANCE ON INSTRUCTION. Action by the Custodian or the
Subcustodian in accordance with an Instruction, even when such action
conflicts with, or is contrary to any provision of, the Fund's
declaration of trust, certificate of incorporation or by-laws,
Applicable Law, or actions by the trustees, directors or shareholders
of the Fund. If the Custodian or Subcustodian is aware of any of the
above, it shall promptly contact an officer of the Fund.
24
9.3.4 RESTRICTED SECURITIES. The limitations inherent in the
rights, transferability or similar investment characteristics of a
given Investment of the Fund.
10. INDEMNIFICATION. The Fund hereby indemnifies the Custodian and each
Subcustodian, and their respective agents, nominees and the partners, employees,
officers and directors, and agrees to hold each of them harmless from and
against all claims and liabilities, including counsel fees and taxes, incurred
or assessed against any of them in connection with the performance of this
Agreement and any Instruction except to the extent that such claim or liability
is the result of the negligence, bad faith or willful misconduct of the
Custodian or Subcustodian. If a Subcustodian or any other person indemnified
under the preceding sentence, gives written notice of claim to the Custodian,
the Custodian shall promptly give written notice to the Fund. Not more than
thirty days following the date of such notice, unless the Custodian shall be
liable under Section 8 hereof in respect of such claim, the Fund will pay the
amount of such claim or reimburse the Custodian for any payment made by the
Custodian in respect thereof.
11. REPORTS AND RECORDS. The Custodian shall:
11.1 create and maintain records relating to the performance of its
obligations under this Agreement;
11.2 make available to the Fund, its auditors, agents and employees,
upon reasonable request and during normal business hours of the Custodian,
all records maintained by the Custodian pursuant to Section 11.1 above,
subject, however, to all reasonable security requirements of the Custodian
then applicable to the records of its custody customers generally; and
11.3 make available to the Fund all Electronic Reports; it being
understood that the Custodian shall not be liable hereunder for the
inaccuracy or incompleteness thereof or for errors in any information
included therein except to the extent that such inaccuracy, incompleteness
or errors are the result of the Custodian's negligence, bad faith or
willful misconduct.
25
All such reports and records shall, to the extent applicable, be maintained
and preserved in conformity with the 1940 Act and the rules and regulations
thereunder. The Fund shall examine all records, howsoever produced or
transmitted, promptly upon receipt thereof and notify the Custodian promptly of
any discrepancy or error therein. Unless the Fund delivers written notice of any
such discrepancy or error within a reasonable time after its receipt thereof,
such records shall be deemed to be true and accurate. It is understood that the
Custodian now obtains and will in the future obtain information on the value of
assets from outside sources which may be utilized in certain reports made
available to the Fund. The Custodian deems such sources to be reliable but it is
acknowledged and agreed that the Custodian does not verify nor represent nor
warrant as to the accuracy or completeness of such information and accordingly
shall be without liability in selecting and using such sources and furnishing
such information as long as the Custodian has shown due diligence in attempting
to receive complete and accurate information.
12. MISCELLANEOUS.
12.1 PROXIES, ETC. The Fund will promptly execute and deliver, upon
request, such proxies, powers of attorney or other instruments as may be
necessary or desirable for the Custodian to provide, or to cause any
Subcustodian to provide, custody services.
12.2 ENTIRE AGREEMENT. Except as specifically provided herein, this
Agreement constitutes the entire agreement between the Fund and the
Custodian with respect to the subject matter hereof. Accordingly, this
Agreement supersedes any custody agreement or other oral or written
agreements heretofore in effect between the Fund and the Custodian with
respect to the custody of the Fund's Investments.
12.3 WAIVER AND AMENDMENT. No provision of this Agreement may be
waived, amended or modified, and no addendum to this Agreement shall be or
become effective, or be waived, amended or modified, except by an
instrument in writing executed by the party against which enforcement of
such waiver, amendment or modification is sought; provided, however, that
an Instruction shall, whether or not such Instruction shall constitute a
waiver, amendment or modification for purposes hereof, be deemed to have
been accepted by the Custodian when it commences actions pursuant thereto
or in accordance therewith.
26
12.4 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS OF, THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW OF SUCH STATE.
12.5 NOTICES. Notices and other writings contemplated by this
Agreement, other than Instructions, shall be delivered (a) by hand, (b) by
first class registered or certified mail, postage prepaid, return receipt
requested, (c) by a nationally recognized overnight courier or (d) by
facsimile transmission, provided that any notice or other writing sent by
facsimile transmission shall also be mailed, postage prepaid, to the party
to whom such notice is addressed. All such notices shall be addressed, as
follows:
If to the Fund:
Vanguard Group
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attn: Assistant Treasurer
Telephone: (000) 000-0000
Facsimile (000) 000-0000
If to the Custodian:
Xxxxx Brothers Xxxxxxxx & Co.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Manager, Investor Services Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000,
or such other address as the Fund or the Custodian may have designated
in writing to the other.
27
12.6 HEADINGS. Paragraph headings included herein are for convenience
of reference only and shall not modify, define, expand or limit any of the
terms or provisions hereof.
12.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement
shall become effective when one or more counterparts have been signed and
delivered by the Fund and the Custodian.
12.8 CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all
information provided by each party to the other regarding its business and
operations. All confidential information provided by a party hereto shall
be used by any other party hereto solely for the purpose of rendering or
obtaining services pursuant to this Agreement and, except as may be
required in carrying out this Agreement, shall not be disclosed to any
third party without the prior consent of such providing party. The
foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other than
through a breach of this Agreement, or that is required to be disclosed by
or to any bank examiner of the Custodian or any Subcustodian, any
Regulatory Authority, any auditor of the parties hereto, or by judicial or
administrative process or otherwise by Applicable Law.
12.9 COUNSEL. In fulfilling its duties hereunder, the Custodian shall
be entitled to receive and act upon the advice of (i) counsel regularly
retained by the Custodian in respect of such matters, (ii) counsel for the
Fund or (iii) such counsel as the Fund and the Custodian may agree upon,
with respect to all matters, and the Custodian shall be without liability
for any action reasonably taken or omitted pursuant to such advice (except
to the extent that such action was due to the Custodian's negligence, bad
faith or willful misconduct).
28
13. DEFINITIONS. The following defined terms will have the respective meanings
set forth below.
13.1 advance shall mean any extension of credit by or through the
Custodian or by or through any Subcustodian and shall include amounts paid
to third parties for the account of the Fund or in discharge of any
expense, tax or other item payable by the Fund.
13.2 AGENCY ACCOUNT shall mean any deposit account opened on the books
of a Subcustodian or other banking institution in accordance with Section
7.1.
13.3 AGENT shall have the meaning set forth in the last paragraph of
Section 6.
13.4 APPLICABLE LAW shall mean with respect to each jurisdiction, all
(a) laws, statutes, treaties, regulations, guidelines (or their
equivalents); (b) orders, interpretations, licenses and permits; and (c)
judgments, decrees, injunctions, writs, orders and similar actions by a
court of competent jurisdiction; compliance with which is required or
customarily observed in such jurisdiction.
13.5 AUTHORIZED PERSON shall mean any person or entity authorized to
give Instructions on behalf of the Fund in accordance with Section 4.1.
13.6 BOOK-ENTRY AGENT shall mean an entity acting as agent for the
issuer of Investments for purposes of recording ownership or similar
entitlement to Investments, including without limitation a transfer agent
or registrar.
13.7 CLEARING CORPORATION shall mean any entity or system established
for purposes of providing securities settlement and movement and associated
functions for a given market.
13.8 DELEGATION AGREEMENT shall mean any separate agreement entered
into between the Custodian and the Fund or its authorized representative
with respect to certain matters concerning the appointment and
administration of Subcustodians delegated to the Custodian pursuant to Rule
17f-5 under the 1940 Act.
13.9 FOREIGN CUSTODY MANAGER shall mean the Fund's foreign custody
manager appointed pursuant to Rule 17f-5 under the 1940 Act.
13.10 FOREIGN FINANCIAL REGULATORY AUTHORITY shall have the meaning
given by Section 2(a)(50) of the 0000 Xxx.
13.11 FUNDS TRANSFER SERVICES AGREEMENT shall mean any separate
agreement entered into between the Custodian and the Fund or its authorized
representative with respect to certain matters concerning the processing of
payment orders from Principal Accounts of the Fund.
13.12 INSTRUCTION(S) shall have the meaning assigned in Section 4.
13.13 INVESTMENT ADVISOR shall mean any investment advisor as defined
in Section 202(a)(11) of the Investment Advisors Act of 1940.
13.14 INVESTMENTS shall mean any investment asset of the Fund,
including without limitation securities, bonds, notes, and debentures as
well as receivables, derivatives, contractual rights or entitlements and
other intangible assets.
29
13.15 MARGIN ACCOUNT shall have the meaning set forth in Section 6.4
hereof.
13.16 PRINCIPAL ACCOUNT shall mean deposit accounts of the Fund
carried on the books of BBH&Co. as principal in accordance with Section 7.
13.17 SAFEKEEPING ACCOUNT shall mean an account established on the
books of the Custodian or any Subcustodian for purposes of segregating the
interests of the Fund (or clients of the Custodian or Subcustodian) from
the assets of the Custodian or any Subcustodian.
13.18 SECURITIES DEPOSITORY shall mean a central or book entry system
or agency established under Applicable Law for purposes of recording the
ownership and/or entitlement to investment securities for a given market
that, if a foreign Securities Depository, meets the requirements of an
"Eligible Securities Depository" as defined in Rule 17f-7 under the 0000
Xxx.
13.19 SUBCUSTODIAN shall mean each foreign bank appointed by the
Custodian pursuant to Section 8, but shall not include Securities
Depositories.
13.20 TRI-PARTY AGREEMENT shall have the meaning set forth in Section
6.4 hereof.
13.21 1940 Act shall mean the Investment Company Act of 1940.
14. COMPENSATION. The Fund agrees to pay to the Custodian for its services under
this Agreement such amount as may be agreed upon in writing from time to time
("Fee Schedule").
15. SEVERAL OBLIGATIONS OF THE FUNDS: With respect to any obligations of the
Funds and their related accounts arising hereunder, the Custodian shall look for
payment or satisfaction of any such obligation solely to the assets and property
of the Fund and such accounts to which such obligation relates as though each
investment company had separately contracted with the Custodian by separate
written instrument with respect to each Fund and its accounts. The Custodian and
each Subcustodian realize that the Fund is comprised of one or more Series. The
Custodian and each Subcustodian agree that it will honor and abide by any and
all Instructions or notices which the Custodian or Subcustodian may receive from
time to time from the Fund with respect to designating, marking, allocating or
otherwise attributing securities to or for the benefit of any one Series.
30
16. TERMINATION. This Agreement may be terminated by either party in accordance
with the provisions of this Section. The provisions of this Agreement and any
other rights or obligations incurred or accrued by any party hereto prior to
termination of this Agreement shall survive any termination of this Agreement.
This Agreement may be terminated as to one or more Funds (but less than
all the Funds) by delivery of an amended List of Funds deleting all such Funds,
in which case termination as to the deleted Funds shall take effect sixty days
after the date of such delivery. The execution and delivery of an amended List
of Funds which deletes one or more Funds, shall constitute a termination hereof
only with respect to such deleted Funds, shall be governed by the provisions of
Section 16.2 as to the identification of a successor custodian and the delivery
of Investments of the Fund so deleted to such successor custodian, and shall not
affect the obligations of the Custodian hereunder with respect to the other
Funds set forth in the List of Funds, as amended from time to time.
16.1 Notice and Effect. This Agreement may be terminated by either
party by written notice effective no sooner than sixty days following the
date that notice to such effect shall be delivered to other party at its
address set forth in paragraph 12.5 hereof.
16.2 SUCCESSOR CUSTODIAN. In the event of the appointment of a
successor custodian, it is agreed that the Investments of the Fund held by
the Custodian or any Subcustodian shall be delivered to the successor
custodian in accordance with reasonable Instructions. The Custodian agrees
to cooperate with the Fund in the execution of documents and performance of
other actions necessary or desirable in order to facilitate the succession
of the new custodian. If no successor custodian shall be appointed, the
Custodian shall in like manner transfer the Fund's Investments in
accordance with Instructions.
31
16.3 DELAYED SUCCESSION. If no Instruction has been given as of the
effective date of termination, Custodian may at any time on or after such
termination date and upon ten days written notice to the Fund either (a)
deliver the Investments of the Fund held hereunder to the Fund at the
address designated for receipt of notices hereunder; or (b) deliver any
investments held hereunder to a bank or trust company having a
capitalization of $2M USD equivalent and operating under the Applicable law
of the jurisdiction where such Investments are located, such delivery to be
at the risk of the Fund. In the event that Investments or moneys of the
Fund remain in the custody of the Custodian or its Subcustodians after the
date of termination owing to the failure of the Fund to issue Instructions
with respect to their disposition or owing to the fact that such
disposition could not be accomplished in accordance with such Instructions
despite diligent efforts of the Custodian, the Custodian shall be entitled
to compensation for its services with respect to such Investments and
moneys during such period as the Custodian or its Subcustodians retain
possession of such items and the provisions of this Agreement shall remain
in full force and effect until disposition in accordance with this Section
is accomplished.
32
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
By: /s/ Xxxxxx Xxxxxxx
Assistant Treasurer
On behalf of the Funds included on the List of Funds attached hereto
XXXXX BROTHERS XXXXXXXX & CO.
By: /s/ Xxxxxxx X. Xxxxxx
Partner
33
LIST OF FUNDS
SCHEDULE TO THE
CUSTODIAN AGREEMENT
BETWEEN
CERTAIN OPEN-END MANAGEMENT INVESTMENT COMPANIES ("FUNDS")
and XXXXX BROTHERS XXXXXXXX & CO.
The following is a list of Funds and their Series for which the Custodian serves
under an Amended Custodian Agreement dated as of June 25, 2001 (the
"Agreement"):
The following series of Vanguard International Equity Index Funds:
Vanguard Emerging Markets Stock Index Fund
Vanguard European Stock Index Fund
Vanguard Pacific Stock Index Fund
The following series of Vanguard Horizon Funds:
Vanguard Global Asset Allocation Fund
Vanguard Global Equity Fund
The following series of Vanguard Tax-Managed Funds
Vanguard Tax-Managed International Fund
The following series of Vanguard Trustees' Equity Fund:
Vanguard International Value Fund
Vanguard Variable Insurance Funds-International Portfolio
IN WITNESS WHEREOF, each of the parties hereto has caused this Schedule to be
executed in its name and on behalf of such Funds.
FUNDS XXXXX BROTHERS XXXXXXXX & CO.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Assistant Treasurer Title: Partner
34
17f-5 DELEGATION SCHEDULE
By the terms of this Delegation Schedule between certain open-end
management investment companies (each investment company, a "Fund") organized
under the laws of the State of Delaware and registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 (the "1940 Act"),
on behalf of certain of their series (each series a "Series"), each Fund hereby
appoints XXXXX BROTHERS XXXXXXXX & CO., a New York limited partnership with an
office in Boston, Massachusetts (the "Delegate") as its delegate to perform
certain functions with respect to the custody of Fund Assets outside the United
States.
1. Maintenance of Fund Assets Abroad. The Fund, acting through its Board or
its duly authorized representative, hereby instructs Delegate pursuant to the
terms of the Custodian Agreement to place and maintain the Fund's Assets in
countries outside the United States in accordance with Instructions received
from the Fund or the Fund's investment advisor. Such instruction shall represent
a Proper Instruction under the terms of the Custodian Agreement. The Fund
acknowledges that - (a) the Delegate shall perform services hereunder only with
respect to the countries where it accepts Delegation as Foreign Custody Manager
as indicated on the BBH Global Custody Network listing; (b) depending on
conditions in the particular country, advance notice may be required before the
Delegate shall be able to perform its duties hereunder in or with respect to
such country (such advance notice to be reasonable in light of the specific
facts and circumstances attendant to performance of duties in such country); and
(c) nothing in this Delegation Schedule shall require the Delegate to provide
delegated or custodial services in any country, and there may from time to time
be countries as to which the Delegate determines it will not provide delegation
services; such countries shall be indicated on the BBH Global Custody Network
listing.
2. Delegation. Pursuant to the provisions of Rule 17f-5 under the 1940 Act
as amended, the Board hereby delegates to the Delegate, and the Delegate hereby
accepts such delegation and agrees to perform, only those duties set forth in
this Delegation Schedule concerning the safekeeping of the Fund's Assets in each
of the countries as to which it acts as the Board's delegate. The Delegate is
hereby authorized to take such actions on behalf of or in the name of the Fund
as are reasonably required to discharge its duties under this Delegation
Schedule, including, without limitation, to cause the Fund's Assets to be placed
with a particular Eligible Foreign Custodian in accordance herewith. The Fund
confirms to the Delegate that the Fund or its investment adviser has considered
the Sovereign Risk and prevailing Country Risk as part of its continuing
investment decision process, including such factors as may be reasonably related
to the systemic risk of maintaining the Fund's Assets in a particular country,
including, but not limited to, financial infrastructure, prevailing custody and
settlement systems and practices (including the use of any Compulsory Securities
Depository), and the laws relating to the safekeeping and recovery of the Fund's
Assets held in custody pursuant to the terms of the Custodian Agreement.
3. Selection of Eligible Foreign Custodian and Contract Administration. The
Delegate shall perform the following duties with respect to the selection of
Eligible Foreign Custodians and administration of certain contracts governing
the Fund's foreign custodial arrangements:
(a) Selection of Eligible Foreign Custodian. The Delegate shall place and
maintain the Fund's Assets with an Eligible Foreign Custodian; provided that the
Delegate shall have determined that the Fund's Assets will be subject to
reasonable care based on the standards applicable to custodians in the relevant
market after considering all factors relevant to the safekeeping of such assets
including, without limitation:
(i) The Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical
protections available for certificated securities (if applicable), the
controls and procedures for dealing with any Eligible Securities
Depository, the method of keeping custodial records, and the security
and data protection practices;
(ii) Whether the Eligible Foreign Custodian has the requisite
financial strength to provide reasonable care for the Fund's Assets;
(iii) The Eligible Foreign Custodian's general reputation and
standing; and
(iv) Whether the Fund will have jurisdiction over and be able to
enforce judgments against the Eligible Foreign Custodian, such as by
virtue of the existence of any offices of such Eligible Foreign
Custodian in the United States or such Eligible Foreign Custodian's
appointment of an agent for service of process in the United
States or consent to jurisdiction in the United States.
2
The Delegate shall be required to make the foregoing determination to the best
of its knowledge and belief based only on information reasonably available to
it.
(b) Contract Administration. The Delegate shall cause that the foreign
custody arrangements with an Eligible Foreign Custodian shall be governed by a
written contract that the Delegate has determined will provide reasonable care
for Fund assets based on the standards applicable to custodians in the relevant
market. Each such contract shall, except as set forth in the last paragraph of
this subsection (b), include provisions that provide:
(i) For indemnification or insurance arrangements (or any
combination of the foregoing) such that the Fund will be adequately
protected against the risk of loss of Assets held in accordance with
such contract;
(ii) That the Fund's Assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the
Eligible Foreign Custodian or its creditors, except a claim of payment
for their safe custody or administration or, in the case of cash
deposits, liens or rights in favor of creditors of such Custodian
arising under bankruptcy, insolvency or similar laws;
(iii) That beneficial ownership of the Fund's Assets will be
freely transferable without the payment of money or value other than
for safe custody or administration;
(iv) That adequate records will be maintained identifying the
Fund's Assets as belonging to the Fund or as being held by a third
party for the benefit of the Fund;
(v) That the Fund's independent public accountants will be given
access to those records described in (iv) above or confirmation of the
contents of such records; and
(vi) That the Fund will receive sufficient and timely periodic
reports with respect to the safekeeping of the Fund's Assets,
including, but not limited to, notification of any transfer to or from
the Fund's account or a third party account containing the Fund's
Assets.
Such contract may contain, in lieu of any or all of the provisions
specified in this Section 3 (b), such other provisions that the
Delegate determines will provide, in their entirety, the same or a
greater level of care and protection for the Fund's Assets as the
specified provisions, in their entirety.
3
(c) Limitation to Delegated Selection. Notwithstanding anything in this
Delegation Schedule to the contrary, the duties under this Section 3 shall apply
only to Eligible Foreign Custodians selected by the Delegate and shall not apply
to Securities Depositories or to any Eligible Foreign Custodian that the
Delegate is directed to use pursuant to Section 7.
4. Monitoring. The Delegate shall establish a system to monitor at
reasonable intervals (but at least annually) the appropriateness of maintaining
the Fund's Assets with each Eligible Foreign Custodian that has been selected by
the Delegate pursuant to Section 3 of this Delegation Schedule. The Delegate
shall monitor the continuing appropriateness of placement of the Fund's Assets
in accordance with the criteria established under Section 3(a) of this
Delegation Schedule. The Delegate shall monitor the continuing appropriateness
of the contract governing the Fund's arrangements in accordance with the
criteria established under Section 3(b) of this Delegation Schedule.
5. Reporting. At least annually and more frequently as mutually agreed
between the parties, the Delegate shall provide to the Fund's Board written
reports specifying placement of the Fund's Assets with each Eligible Foreign
Custodian selected by the Delegate pursuant to Section 3 of this Delegation
Schedule and shall promptly report as to any material changes to such foreign
custody arrangements. Delegate will prepare such a report with respect to any
Eligible Foreign Custodian that the Delegate has been instructed to use pursuant
to Section 7 only to the extent specifically agreed with respect to the
particular situation. Upon request by the Fund, the Delegate will identify the
name, address and principal place of business of any Eligible Foreign Custodian
of the Fund's Investments and the name and address of the governmental agency or
other regulatory authority that supervises or regulates such Eligible Foreign
Custodian.
6. Withdrawal of Fund's Assets. If the Delegate determines that an
arrangement with a specific Eligible Foreign Custodian selected by the Delegate
under Section 3 of this Delegation Schedule no longer meets the requirements of
said Section, Delegate shall withdraw the Fund's Assets from the non-complying
arrangement as soon as reasonably practicable; provided, however, that if in the
reasonable judgment of the Delegate, such withdrawal would require liquidation
of any of the Fund's Assets or would materially impair the liquidity, value or
other investment characteristics of the Fund's Assets, it shall be the duty of
the Delegate to provide information regarding the particular circumstances and
to act only in accordance with Proper Instructions of an Authorized Person with
respect to such liquidation or other withdrawal.
4
7. Direction as to Eligible Foreign Custodian. Notwithstanding this
Delegation Schedule, the Fund, acting through its Board or its other authorized
representative, may direct the Delegate to place and maintain the Fund's Assets
with a particular Eligible Foreign Custodian, including without limitation with
respect to investment in countries as to which the Custodian will not provide
delegation services. In such event, the Delegate will notify the Fund that the
Delegate will not provide delegation services in that country. In addition, the
Delegate shall be entitled to rely on any such instruction as a Proper
Instruction under the terms of the Custodian Agreement and shall have no duties
under this Delegation Schedule with respect to such arrangement save those that
it may undertake specifically in writing with respect to each particular
instance.
8. Standard of Care. In carrying out its duties under this Delegation
Schedule, the Delegate agrees to exercise reasonable care, prudence and
diligence such as a person having responsibility for safekeeping the Fund's
Assets would exercise.
9. Representations. The Delegate hereby represents and warrants that it is
a U.S. Bank and that this Delegation Schedule has been duly authorized, executed
and delivered by the Delegate and is a legal, valid and binding agreement of the
Delegate.
The Fund hereby represents and warrants that its Board of Trustees has
determined that it is reasonable to rely on the Delegate to perform the
delegated responsibilities provided for herein and that this Delegation Schedule
has been duly authorized, executed and delivered by the Fund and is a legal,
valid and binding agreement of the Fund.
10. Effectiveness; termination. This Delegation Schedule shall be effective
as of the date on which this Delegation Schedule shall have been accepted by the
Delegate, as indicated by the date set forth below the Delegate's signature.
This Delegation Schedule may be terminated at any time, without penalty, by
written notice from the terminating party to the non-terminating party. Such
termination shall be effective on the 60th day following the date on which the
non-terminating party shall receive the foregoing notice. The foregoing to the
contrary notwithstanding, this Delegation Schedule shall be deemed to have been
terminated concurrently with the termination of the Custodian Agreement.
5
11. Notices. Notices and other communications under this Delegation
Schedule are to be made in accordance with the arrangements designated for such
purpose under the Custodian Agreement unless otherwise indicated in a writing
referencing this Delegation Schedule and executed by both parties.
12. Definitions. Capitalized terms in this Delegation Schedule have the
following meanings:
a. Compulsory Securities Depository - shall mean a Securities
Depository the use of which is mandatory (i) under applicable law
or regulation; (ii) because securities cannot be withdrawn from
the depository; or, (iii) because maintaining securities outside
the Securities Depository is not consistent with prevailing
custodial practices.
b. Country Risk - shall have meaning set forth in Section 9.2.1
of the Custodian Agreement.
c. Eligible Foreign Custodian - shall have the meaning set forth
in Rule 17f-5(a)(1) under the 1940 Act and shall also include a
U.S. Bank.
d. Eligible Securities Depository - shall have the meaning set
forth in Rule 17f-7(b)(1) under the 1940 Act.
e. Fund's Assets - shall mean any of the Fund's investments
(including foreign currencies) for which the primary market is
outside the United States, and such cash and cash equivalents as
are reasonably necessary to effect the Fund's transactions in such
investments.
6
f. Proper Instructions - shall have the meaning set forth in the
Custodian Agreement.
g. Sovereign Risk - shall have the meaning set forth in Section
9.2.2 of the Custodian Agreement.
h. U.S. Bank - shall have the meaning set forth in Rule 17f-5(a)
(7) under the 1940 Act.
13. Governing Law and Jurisdiction. This Delegation Schedule shall be
construed in accordance with the laws of the State of New York.
14. Fees. Delegate shall perform its functions under this Delegation
Schedule for the compensation determined under the Custodian Agreement.
15. Integration. This Delegation Schedule sets forth all of the Delegate's
duties with respect to the selection and monitoring of Eligible Foreign
Custodians, the administration of contracts with Eligible Foreign Custodians,
the withdrawal of assets from Eligible Foreign Custodians and the issuance of
reports in connection with such duties. The terms of the Custodian Agreement
shall apply generally as to matters not expressly covered in this Delegation
Schedule, including dealings with the Eligible Foreign Custodians in the course
of discharge of the Delegate's obligations under the Custodian Agreement.
7
NOW THEREFORE, the parties have caused this Delegation Schedule to be executed
by its duly authorized representatives, effective as of the date written below.
XXXXX BROTHERS XXXXXXXX & CO. ON BEHALF OF THE FUNDS INCLUDED IN
THE LIST OF FUNDS ATTACHED TO THE
AMENDED AND RESTATED CUSTODIAN
AGREEMENT
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Partner Title: Assistant Treasurer
Date: June 25, 2001 Date: June 25, 2001
8
XXXXX BROTHERS XXXXXXXX - GLOBAL CUSTODY NETWORK
VANGUARD
GLOBAL CUSTODY NETWORK LISTING
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
ARGENTINA CITIBANK NA, BUENOS AIRES CVSA
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
AUSTRALIA NATIONAL AUSTRALIA BANK LTD. (NAB) Austraclear
National Australia Bank Agt. 5/1/85 CHESS
Agreement Amendment 2/13/92 RBA
Omnibus Amendment 11/22/93
AUSTRIA BANK AUSTRIA AG OeKB
Creditanstalt Bankverein Agreement
12/18/89
Omnibus Amendment 1/17/94
BAHRAIN HSBC BANK MIDDLE EAST, BAHRAIN FOR None
HONGKONG & SHANGHAI BANKING CORP. LTD.
(HSBC)
Hongkong & Shanghai Banking Corp.
Agt. 4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
BBME Supplement 5/14/96
Side Letter Agreement dated 7/28/97
BANGLADESH STANDARD CHARTERED BANK (SCB), DHAKA None
Standard Chartered Bank Agreement
2/18/92
Omnibus Amendment 6/13/94
Appendix 0/0/00
XXXXXXX XXXX XXXXXXXX XXXXXXX (XXX) CIK
Banque Bruxelles Xxxxxxx Agt. 11/15/90
Omnibus Amendment 3/1/94
BERMUDA BANK OF N.T. XXXXXXXXXXX & SON LTD. None
The Bank of N.T. Xxxxxxxxxxx & Son Ltd.
Agreement 5/27/97
BOTSWANA STANBIC BANK BOTSWANA LTD FOR STANDARD None
BANK OF SOUTH AFRICA (SBSA)
Standard Bank of South Africa Agreement
3/11/94
Subsidiary Amendment 9/29/97
BRAZIL BANKBOSTON NA, SAO PAULO CBLC
The First National Bank of Boston
Agreement 1/5/88
Omnibus Amendment 2/22/94
Amendment 7/29/96
BULGARIA ING BANK NV, SOFIA BNB
ING Bank N.V. Agreement 9/15/97
CANADA ROYAL BANK OF CANADA (RBC) Bank of Canada
The Royal Bank of Canada Agreement
2/23/96
Page 1 of 7
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
CHILE CITIBANK NA, XXXXXXXX DCV
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
CHINA STANDARD CHARTERED BANK (SCB), SHENZHEN SSCC
Standard Chartered Bank Agreement 2/18/92
Omnibus Amendment 6/13/94
Appendix 4/8/96
CHINA STANDARD CHARTERED BANK (SCB), SHANGHAI SSCCRC
Standard Chartered Bank Agreement 2/18/92
Omnibus Amendment 6/13/94
Appendix 4/8/96
COLOMBIA CITITRUST COLOMBIA SA, SOCIEDAD DCV
FIDUCIARIA FOR CITIBANK NA
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank, N.A./Cititrust Colombia Agreement 12/2/91
Citibank, N.A. Subsidiary Amendment 10/19/95
CROATIA BANK AUSTRIA CREDITANSTALT CROATIA DD SDA
FOR BANK AUSTRIA AG CNB
Creditanstalt Bankverein Agreement Ministry of Finance
12/18/89
Omnibus Amendment 1/17/94
Creditanstalt AG / Bank Austria
Creditanstalt Croatia d.d. Agt. 9/1/98
CYPRUS CYPRUS POPULAR BANK LTD. None
(aka Laiki Bank)
Cyprus Popular Bank Ltd. Agt. 2/18/98
***BBH'S RESPONSIBILITY FOR THIS SUBCUSTODIAN IS CONDITIONED
ON THE ABILITY OF BBH TO RECOVER FROM THE SUBCUSTODIAN. IN
ADDITION, BBH DOES NOT ACCEPT DELEGATION IN THIS MARKET.***
CZECH REPUBLIC CITIBANK AS FOR CITIBANK NA CNB-TKD System
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank NA / Citibank AS Agreement
6/24/96
DENMARK DANSKE BANK VP
Den Danske Bank Agreement 1/1/89
Omnibus Amendment 00/0/00
XXXXXXX CITIBANK NA, QUITO DECEVALE
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank, Quito Side Letter 7/3/95
EGYPT CITIBANK NA, CAIRO MCSD
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
FINLAND XXXXXX BANK PLC FCSD
Union Bank of Finland Agreement 2/27/89
Omnibus Amendment 4/6/94
FRANCE CREDIT AGRICOLE INDOSUEZ (CAI) BdF
Banque Indosuez Agreement 7/19/90
Omnibus Amendment 3/10/94
Page 2 of 7
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
GERMANY DRESDNER BANK CBF
Dresdner Bank Agreement 00/0/00
XXXXX XXXXXXXX XXXX (XXXXX) LIMITED FOR None
STANDARD BANK OF SOUTH AFRICA (SBSA)
Standard Bank of South Africa
Agreement 3/11/94
***BBH'S RESPONSIBILITY FOR THIS SUBCUSTODIAN IS CONDITIONED
ON THE ABILITY OF BBH TO RECOVER FROM THE SUBCUSTODIAN. IN
ADDITION, BBH DOES NOT ACCEPT DELEGATION IN THIS MARKET.***
GREECE CITIBANK NA, ATHENS CSD
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
HONG KONG HONGKONG & SHANGHAI BANKING CMU
CORPORATION LTD.
Hongkong & Shanghai Banking Corp.
Agt. 4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
HUNGARY CITIBANK BUDAPEST RT. FOR CITIBANK NA KELER Ltd.
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank, N.A. Subsidiary Amendment 10/19/95
Citibank, N.A. / Citibank Budapest
Agreement 6/23/92
Citibank, N.A. / Citibank Budapest
Amendment 9/29/92
INDIA DEUTSCHE BANK AG, MUMBAI NSDL
Deutsche Bank Agreement 8/21/96
Deutsche Bank Agreement 2/19/96
INDONESIA CITIBANK NA, JAKARTA PT KSEI
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
IRELAND ALLIED IRISH BANKS PLC (AIB) CREST
Allied Irish Banks Agreement 1/10/89
Omnibus Amendment 4/8/94
ISRAEL BANK HAPOALIM BM TASECH
Bank Hapoalim Agreement 8/27/92
ITALY INTESA BCI SPA Monte Titoli S.P.A.
Banca Commerciale Italiana Agreement
5/8/89
Agreement Amendment 10/8/93
Omnibus Amendment 12/14/93
JAPAN BANK OF TOKYO - MITSUBISHI, LTD. (BTM) BoJ
Bank of Tokyo - Mitsubishi Agreement
6/17/96
Page 3 of 7
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
JORDAN HSBC BANK MIDDLE EAST, JORDAN FOR None
HONGKONG & SHANGHAI BANKING CORP. (HSBC)
Hongkong & Shanghai Banking Corp. Agt.
4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
BBME Supplement 5/14/96
Side letter Agreement dated 7/28/97
KENYA STANBIC BANK KENYA LIMITED FOR STANDARD None
BANK OF SOUTH AFRICA (SBSA)
Standard Bank of South Africa Agreement
3/11/94
Subsidiary Amendment 9/29/97
KOREA CITIBANK NA, SEOUL KSD
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank, Seoul Agreement Supplement
10/28/94
LEBANON HSBC BANK MIDDLE EAST, LEBANON FOR Midclear
HONGKONG & SHANGHAI BANKING CORP. (HSBC)
Hongkong & Shanghai Banking Corp. Agt.
4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
BBME Supplement 5/14/96
Side letter Agreement dated 7/28/97
LUXEMBOURG KREDIETBANK LUXEMBOURG (KBL) CBL
Kredietbank Luxembourg Agt. 4/7/98
MALAYSIA HSBC BANK MALAYSIA BERHAD (HBMB) BNM
FOR HONGKONG SHANGHAI BANKING CORP.
(HSBC)
Hongkong & Shanghai Banking Corp. Agt.
4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
Malaysia Subsidiary Supplement 5/23/94
Side letter Agreement dated 7/28/97
MAURITIUS HONGKONG & SHANGHAI BANKING CORP. LTD. CDS
(HSBC), MAURITIUS
Hongkong & Shanghai Banking Corp. Agt.
4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
MEXICO CITIBANK MEXICO SA FOR CITIBANK NA Banxico
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank Mexico, S.A. Amendment 2/28/95
MOROCCO CITIBANK MAGHREB, CASABLANCA FOR MCLR
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Side Letter Agreement pending
NAMIBIA STANDARD BANK NAMIBIA FOR STANDARD BANK None
OF SOUTH AFRICA (SBSA)
Standard Bank of South Africa Agreement
3/11/94
Subsidiary Amendment 10/3/96
NETHERLANDS FORTIS BANK NECIGEF
MeesPierson NV Agreement 6/4/99
Page 4 of 7
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
NEW ZEALAND NATIONAL AUSTRALIA BANK LTD. (NAB), NZCSD
AUCKLAND
National Australia Bank Agt. 5/1/85
Agreement Amendment 2/13/92
Omnibus Amendment 11/22/93
New Zealand Addendum 3/7/89
NORWAY DEN NORSKE BANK VPS
Den norske Bank Agreement 11/16/94
OMAN HSBC BANK MIDDLE EAST, OMAN FOR MDSRC
HONGKONG & SHANGHAI BANKING CORP. LTD.
(HSBC)
Hongkong & Shanghai Banking Corp. Agt.
4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
BBME Supplement 5/14/96
Side letter Agreement dated 7/28/97
PAKISTAN STANDARD CHARTERED BANK (SCB), KARACHI CDC
Standard Chartered Bank Agreement 2/18/92
Omnibus Amendment 6/13/94
Appendix 0/0/00
XXXX XXXXXXXX XX, XXXX XXXXXX
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
PHILIPPINES CITIBANK NA, MANILA PCD
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
POLAND BANK HANDLOWY W WARSZA XXX XX (BHW) CRBS
FOR CITIBANK NA
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank Subsidiary Amendment 10/30/95
Citibank, N.A. / Citibank Poland S.A.
Agt. 11/6/92
PORTUGAL BANCO COMERCIAL PORTUGUES SA (BCP) CVM
Banco Comercial Portugues 5/18/98
ROMANIA ING BANK NV, BUCHAREST BSE
ING Bank N.V. Agreement 9/29/97 NBR
SNCDD
RUSSIA CREDIT SUISSE FIRST BOSTON AO (CSFB AO) VTB
FOR CREDIT SUISSE, ZURICH
Credit Suisse First Boston Agreement
8/18/99
Credit Suisse, Zurich Agreement 4/30/96
***REQUIRES SIGNED AMENDMENT TO THE CUSTODIAN AGREEMENT PRIOR
TO INVESTMENT.***
RUSSIA CITIBANK T/O FOR CITIBANK NA VTB
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Citibank, N.A. Subsidiary Amendment
10/19/95
Citibank N.A. / Citibank T/O Agt. 6/16/97
Side Letter Agt. 8/18/97
***REQUIRES SIGNED AMENDMENT TO THE CUSTODIAN AGREEMENT PRIOR
TO INVESTMENT.***
Page 5 of 7
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
SINGAPORE HONGKONG & SHANGHAI BANKING CORP. LTD. CDP
(HSBC), SINGAPORE
Hongkong & Shanghai Banking Corp. Agt.
4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
SLOVAKIA ING BANK NV, BRATISLAVA NBS
ING Bank N.V. Agreement 9/1/98
SLOVENIA BANK AUSTRIA CREDITANSTALT DD LJUBLJANA KDD
Creditanstalt Bankverein Agreement
12/18/89
Omnibus Amendment 1/17/94
Master Subcustodian Agreement 4/17/98
Amendment dated 4/17/98
Amendment dated 00/00/00
XXXXX XXXXXX XXXXXXXX XXXX XX XXXXX XXXXXX (SBSA) CDL
Standard Bank of South Africa Agreement
3/11/94
SPAIN BANCO SANTANDER CENTRAL HISPANO SA Banco de Espana
(BSCH)
Banco de Santander Agreement 12/14/88
SRI LANKA HONGKONG & SHANGHAI BANKING CORP. LTD. CDS
(HSBC), COLOMBO
Hongkong & Shanghai Banking Corp. Agt.
4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
SWAZILAND STANDARD BANK SWAZILAND LTD FOR None
STANDARD BANK OF SOUTH AFRICA (SBSA)
Standard Bank of South Africa Agreement
3/11/94
Subsidiary Amendment 9/29/97
SWEDEN SKANDINAVISKA ENSKILDA BANKEN (SEB) VPC
Skandinaviska Enskilden Banken Agreement
2/20/89
Omnibus Amendment 12/3/93
SWITZERLAND UBS AG SIS
Union Bank of Switzerland Agreement
12/20/88
Omnibus Amendment 11/29/94
TAIWAN STANDARD CHARTERED BANK (SCB), TAIPEI TSCD
Standard Chartered Bank Agreement 2/18/92
Omnibus Amendment 6/13/94
Appendix 4/8/96
THAILAND HONGKONG & SHANGHAI BANKING CORP. LTD. TSDC
(HSBC), BANGKOK
Hongkong & Shanghai Banking Corp. Agt.
4/19/91
Omnibus Supplement 12/29/93
Schedule 5/14/96
TRANSNATIONAL XXXXX BROTHERS XXXXXXXX & CO. (BBH&CO.) CBL
XXXXXX XXXXXXXX XX, XXXXXXXX CBT
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
Page 6 of 7
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
UNITED KINGDOM HSBC BANK PLC CMO
Midland Bank Agreement 8/8/90
Omnibus Amendment 12/15/93
URUGUAY BANKBOSTON NA, MONTEVIDEO None
The First National Bank of Boston
Agreement 1/5/88
Omnibus Amendment 2/22/94
Amendment 7/29/96
Uruguay Amendment 10/18/96
VENEZUELA CITIBANK NA, CARACAS CVV
Citibank, N.A., New York Agt. 7/16/81
New York Agreement Amendment 8/31/90
New York Agreement Amendment 7/26/96
ZAMBIA STANBIC BANK ZAMBIA LTD FOR STANDARD BoZ
BANK OF SOUTH AFRICA (SBSA)
Standard Bank of South Africa Agreement
3/11/94
Subsidiary Amendment 10/3/96
ZIMBABWE STANBIC BANK ZIMBABWE LTD FOR STANDARD None
BANK OF SOUTH AFRICA (SBSA)
Standard Bank of South Africa Agreement
3/11/94
Subsidiary Amendment 10/3/96
Page 7 of 7
XXXXX BROTHERS XXXXXXXX - GLOBAL CUSTODY NETWORK
VANGUARD
SUBCUSTODIAN LIABILITY APPENDIX
COUNTRY SUBCUSTODIAN DEPOSITORIES
------- ------------ ------------
CYPRUS THE CYPRUS POPULAR BANK LTD. None
(aka Laiki Bank)
Cyprus Popular Bank Ltd. Agt. 2/18/98
GHANA MERCHANT BANK (GHANA) LIMITED FOR None
STANDARD BANK OF SOUTH AFRICA (SBSA)
Standard Bank of South Africa
Agreement 3/11/94
AMENDMENT TO THE AMENDED AND RESTATED CUSTODIAN AGREEMENT
AMENDMENT entered into as of this 16th day of August, 2007 to the Amended and
Restated Custodian Agreement between certain open-ended management investment
companies (each investment company a "Fund") on behalf of certain of their
series and XXXXX BROTHERS XXXXXXXX & CO. (the "Custodian") dated as of June 25,
2001 (the "Agreement").
In consideration of the Custodian's offering subcustodial services to the
Fund in Russia, the Fund and the Custodian agree that the Agreement is hereby
amended as follows:
1. SECTION 5. SAFEKEEPING OF FUND ASSETS is amended by the addition of
the following phrase at the end of said Section:
"The Custodian's responsibility for safekeeping equity securities of
Russian issuers ("Russian Equities") hereunder shall be limited to the
safekeeping of relevant share extracts from the share registration
books maintained by the entities providing share registration services
to issuers of Russian Equities (each a "Registrar") indicating an
investor's ownership of such securities (each a "Share Extract")."
.
2. SECTION 5.1 USE OF SECURITIES DEPOSITORIES is amended by the
addition of the following at the end of said Section:
"With respect to Russia, the Fund hereby expressly acknowledges
that a Subcustodian for Russian securities may from time to time
delegate any of its duties and responsibilities to any securities
depository, clearing agency, share registration agent or
sub-subcustodian (collectively, "Russian Agent") in Russia, including
without limitation Rosvneshtorgbank (also called Vneshtorgbank RF)
("VTB"). The Fund acknowledges that the rights of the Subcustodian
against any such Russian Agent may consist only of a contractual claim
against the Russian Agent.
Notwithstanding any provision of this Agreement to the
contrary, neither the Custodian nor the Subcustodian shall be
responsible or liable to the Fund or its shareholders for the acts or
omissions of any such Russian Agent In the event of a loss of
securities or cash held on behalf of a Fund through any Russian Agent,
the Custodian shall not be responsible to the Fund or its shareholders
unless and to the extent it in fact recovers from the Subcustodian."
3. SECTION 5.4 BOOK ENTRY ASSETS, is amended by the addition of the
following at the end of said Section:
"With respect to Russian Equities, the Custodian shall instruct
a Subcustodian to endeavor to assure that registration thereof shall be
reflected on the books of the issuer's Registrar, subject to the
following conditions, but shall in no event be liable for losses or
costs incurred as a result of delays or failures in the registration
process, including without limitation the inability to obtain or enforce
relevant Share Extracts, unless such losses or costs are a consequence
of the Custodian's negligence, bad faith or willful misconduct Such
registration may be in the name of a nominee of a Subcustodian In the
event registration is in the name of a Fund, the Fund hereby
acknowledges that only the Custodian or Subcustodian may give
instructions to the Registrar to transfer or engage in other
transactions involving the Russian Equities so registered.
A Subcustodian may from time to time enter into contracts with
Registrars with respect to the registration of Russian Equities
("Registrar Contracts"). Such Registrar Contracts shall provide for (i)
regular (but in no event less than quarterly ) share confirmations by
the Subcustodian, (ii) registrations within set timeframes, (iii) use of
a Subcustodian's nominee name, (iv) direct access by auditors of the
Subcustodian or its clients to share registers, and (v) specification of
the Registrar's responsibilities and liabilities. It is hereby
acknowledged and agreed that the Custodian does not represent or warrant
that such Registrar Contracts are enforceable.
If the Fund instructs the Custodian to settle a purchase of a
Russian Equity, the Custodian will instruct a Subcustodian to endeavor
on a best efforts basis to reregister the Russian Equity and obtain a
Share Extract in a timely manner.
After completion of reregistration of a Russian Equity in
respect of which a Subcustodian has entered into a Registrar Contract,
the Custodian shall instruct the Subcustodian to monitor such registrar
on a best efforts basis and to notify the Custodian upon the
Subcustodian obtaining knowledge of the occurrence of any of the
following events ("Registrar Events"): (i) a Registrar has eliminated a
shareholder from the register or has altered registration records and
that shareholder alleges that such elimination or alteration was
unlawful; (ii) a Registrar has refused to register securities in the
name of a particular purchaser and the purchaser or seller has alleged
that the registrar's refusal to so register was unlawful; (iii) a
Registrar holds for its own account shares of an issuer for which it
serves as registrar, (iv) if a Registrar Contract is in effect with a
Registrar, the Registrar notifies the Subcustodian that it will no
longer be able materially to comply with the terms of the Registrar
Contract; or (v) if a Registrar Contract is in effect with a Registrar,
the Registrar has materially breached such Contract. The Custodian shall
inform the Fund of the occurrence of a Registrar Event provided the
Custodian has in fact received actual notice thereof from the
Subcustodian.
It shall be the sole responsibility of the Fund to contact the
Custodian prior to executing any transaction in a Russian Equity to
determine whether a Registrar Contract exists in respect of such issuer.
If the Fund instructs the Custodian by Proper Instruction to
settle a purchase of a Russian Equity in respect of which the
Subcustodian has not entered into a Registrar Contract, then the
Custodian shall instruct the Subcustodian to endeavor to settle such
transaction in accordance with the Proper Instruction and with the
provisions of Section 6.1 of this Agreement, notwithstanding the absence
of any such Registrar Contract and without the Custodian being required
to notify the Fund that no such Registrar Contract is then in effect,
and it being understood that neither the Custodian nor the Subcustodian
shall be required to follow the procedure set forth in the second
preceding paragraph."
4. SECTION 6. ADMINISTRATIVE DUTIES OF THE CUSTODIAN is amended by the
addition of the following at the end of said Section:
"With respect to Russia, the Fund hereby expressly acknowledges the
nominee concept of account ownership is not recognized in Russia. Although the
account with the Subcustodian will be opened in the name of BBH&Co. in the name
of the Fund and on the Fund's behalf as custodian, the Fund may not be
considered the beneficial owner of the assets in that account under Russian law.
The Fund hereby expressly acknowledges that an unincorporated entity
may not be recognized as a legal entity in Russia In addition, only recognized
legal entities may grant a power of attorney to a custodian in Russia.
Accordingly, market participants (i.e. registrars) (i) may not recognize an
unincorporated entity as a valid legal entity in Russia, (ii) may require
documentation in support of legal status that does not exist based upon an
unincorporated entity legal structure under applicable law, or (iii) may refuse
to accept the supporting documentation that an unincorporated entity provides.
In addition and based upon entity status and/or an inability to produce
requested or adequate documentation in support of legal status, third parties in
Russia (i) may refuse to accept a power of attorney given by us to Subcustodian
for the purpose of exercising voting and other rights on our behalf in
connection with Russian securities undergoing corporate actions, and (ii) may
not pay or may delay receipt of entitlements to our account."
5. SECTION 6.1 PURCHASE OF INVESTMENTS is amended by the addition of
the following at the end of said Section:
"Without limiting the generality of the foregoing, the
following provisions shall apply with respect to settlement of
purchases of securities in Russia. Unless otherwise instructed by
Proper Instructions acceptable to the Custodian, the Custodian shall
only authorize a Subcustodian to make payment for purchases of Russian
Equities upon receipt of the relevant Share Extract in respect of the
Portfolio's purchases. With respect to securities other than Russian
Equities, settlement of purchases shall be made in accordance with
securities processing or settlement practices which the Custodian in
its discretion determines to be a market practice. The Custodian shall
only be responsible for securities purchased upon actual receipt of
such securities at the premises of its Subcustodian, provided that the
Custodian's responsibility for securities represented by Share Extracts
shall be limited to the safekeeping of the relevant Share Extract upon
actual receipt of such Share Extract at the premises of the
Subcustodian"
6. SECTION 6.2 SALE OF INVESTMENTS amended by the addition of the
following at the end of said Section:
"Without limiting the generality of the foregoing, the
following provisions shall apply with respect to settlement of sales of
securities in Russia Unless otherwise expressly instructed by Proper
Instructions acceptable to the Custodian, settlement of sales of
securities shall be made in accordance with securities processing or
settlement practices which the Custodian in its discretion determines
to be a market practice. The Fund hereby expressly acknowledges that
such market practice might require delivery of securities prior to
receipt of payment and that the Fund bears the risk of payment in
instances where delivery of securities is made prior to receipt of
payment
therefor in accordance with Proper Instructions received by the
Custodian or pursuant to the Custodian's determination in its
discretion that such delivery is in accordance with market practice.
The Custodian shall not be responsible for any securities delivered
from the premises of the Subcustodian from the time they leave such
premises."
7. SECTION 6.13 TAXES is amended by the insertion of the following
at the end of said Section:
"It is agreed that the Fund shall be responsible for preparation
and filing of tax returns, reports and other documents on any
activities it undertakes in Russia which are required under applicable
law to be filed by the Fund with any relevant governmental or other
authority in Russia and for the payment of any taxes, levies, duties
or similar liability the Fund is required under applicable law to pay
to any relevant governmental authority in Russia in respect of
property held or sold in Russia or of payments or distributions
received in respect thereof in Russian
8. A NEW SECTION 16.15 RISK ACKNOWLEDGMENT is added after the end
of the said Section 16.14:
"The Fund hereby acknowledges and represents to the Custodian
that it has undertaken its own review of the risks associated with
investment in Russia and has concluded that such investment is
appropriate for the Fund and in no way conflicts with the Fund's
constitutive documents, investment objective, duties to its
shareholders or with any regulatory requirements applicable to the
Fund."
MISCELLANEOUS
a) Other than as amended hereby, all terms and provisions of
the Agreement are hereby ratified and affirmed as of the
date hereof and are hereby extended to give effect to the
terms hereof.
b) By signing below where indicated, each of the Custodian and
the Fund hereby ratifies and affirms each of the respective
representations and warranties set forth in the Agreement
and confirms that each such respective representation and
warranty remains true and correct as of the date hereof.
c) Upon receipt by the Custodian of a fully executed copy of
this Amendment, this Amendment shall be deemed to be
executed as an instrument under seal and governed by such
laws as provided in the Agreement. This Amendment may be
executed in original counterparts, each of which shall be
deemed an original, but all of which together shall
constitute one and the same Amendment. This Amendment
together with the Agreement represents the entire agreement
and understanding of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first set forth above.
The undersigned acknowledges that (I/we) have received a copy of this document
XXXXX BROTHERS XXXXXXXX & CO. VANGUARD INTERNATIONAL EQUITY
INDEX FUNDS
BY: /s/ Xxxxx Xxxxxxxx BY: /s/ Xxxxxx X Xxxxxxx
--------------------------------------------------- ----------------------------------------------------
On behalf of the series included on Schedule
A attached hereto
Title: Treasurer
----------------------------------------------------
Schedule A
Vanguard Emerging Markets Stock Index Fund
Vanguard FTSE All-World ex US-Index Fund
Page 1 of 1
LIST OF FUNDS
AMENDED SCHEDULE TO THE CUSTODIAN AGREEMENT
BETWEEN
CERTAIN OPEN-END MANAGEMENT INVESTMENT COMPANIES ("FUNDS")
and XXXXX BROTHERS XXXXXXXX & CO.
The following is a list of Funds and their Series for which the Custodian serves
under an Amended Custodian Agreement dated as of June 25, 2001 (the
"Agreement"):
The following series of Vanguard Horizon Funds:
Vanguard Global Equity Fund
The following series of Vanguard International Equity Index Funds:
Vanguard Emerging Markets Stock Index Fund
Vanguard European Stock Index Fund
Vanguard FTSE All-World ex-US Index Fund
Vanguard Pacific Stock Index Fund
The following series of Vanguard Xxxxxxxxxx Funds:
Vanguard Market Neutral Fund
The following series of Vanguard Tax-Managed Funds
Vanguard Tax-Managed International Fund
The following series of Vanguard Trustees' Equity Fund:
Vanguard International Value Fund
The following series of Vanguard Valley Forge Funds:
Vanguard Managed Payout Real Growth Fund
Vanguard Managed Payout Moderate Growth Fund
Vanguard Managed Payout Capital Preservation Fund
The following series of Vanguard Variable Insurance Funds:
International Portfolio
The following series of Vanguard World Funds:
Vanguard Consumer Discretionary Index Fund
Vanguard Consumer Staples Index Fund
Vanguard Energy Index Fund
Vanguard Financials Index Fund
Vanguard Health Care Index Fund
Vanguard Industrials Index Fund
Vanguard Information Technology Index Fund
Vanguard Materials Index Fund
Vanguard Mega Cap 300 Index Fund
Vanguard Mega Cap 300 Growth Index Fund
Vanguard Mega Cap 300 Value Index Fund
Vanguard Telecommunication Services Index Fund
Vanguard Utilities Index Fund
IN WITNESS WHEREOF, each of the parties hereto has caused this Schedule to be
executed in its name and on behalf of such Funds on October 10, 2007.
FUNDS XXXXX BROTHERS XXXXXXXX & CO.
By: /s/Xxxxxx X. Xxxxxxx By: /s/Xxxxx X. Xxxx
------------------------ ---------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxx
Title: Treasurer Title: Managing Director
LIST OF FUNDS
AMENDED SCHEDULE TO THE CUSTODIAN AGREEMENT
BETWEEN
CERTAIN OPEN-END MANAGEMENT INVESTMENT COMPANIES ("FUNDS")
and XXXXX BROTHERS XXXXXXXX & CO.
The following is a list of Funds and their Series for which the Custodian serves
under an Amended Custodian Agreement dated as of June 25, 2001 (the
"Agreement"):
The following series of Vanguard Horizon Funds:
Vanguard Global Equity Fund
The following series of Vanguard International Equity Index Funds:
Vanguard Emerging Markets Stock Index Fund
Vanguard European Stock Index Fund
Vanguard FTSE All-World ex-US Index Fund
Vanguard Pacific Stock Index Fund
The following series of Vanguard Xxxxxxxxxx Funds:
Vanguard Market Neutral Fund
The following series of Vanguard Tax-Managed Funds
Vanguard Tax-Managed International Fund
The following series of Vanguard Trustees' Equity Fund:
Vanguard International Value Fund
The following series of Vanguard Valley Forge Funds:
Vanguard Managed Payout Growth Focus Fund
Vanguard Managed Payout Growth and Distribution Fund
Vanguard Managed Payout Distribution Focus Fund
The following series of Vanguard Variable Insurance Funds:
International Portfolio
The following series of Vanguard World Funds:
Vanguard Consumer Discretionary Index Fund
Vanguard Consumer Staples Index Fund
Vanguard Energy Index Fund
Vanguard Financials Index Fund
Vanguard Health Care Index Fund
Vanguard Industrials Index Fund
Vanguard Information Technology Index Fund
Vanguard Materials Index Fund
Vanguard Mega Cap 300 Index Fund
Vanguard Mega Cap 300 Growth Index Fund
Vanguard Mega Cap 300 Value Index Fund
Vanguard Telecommunication Services Index Fund
Vanguard Utilities Index Fund
IN WITNESS WHEREOF, each of the parties hereto has caused this
Schedule to be executed in its name and on behalf of such Funds on
March 6, 2008
FUNDS XXXXX BROTHERS XXXXXXXX & CO.
By: /s/Xxxxxx X. Xxxxxxx By: /s/Xxxxx X. Xxxx
------------------------ --------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxx
Title: Treasurer Title:Treasurer
LIST OF FUNDS
AMENDED SCHEDULE TO THE CUSTODIAN AGREEMENT
BETWEEN
CERTAIN OPEN-END MANAGEMENT INVESTMENT COMPANIES ("FUNDS")
and XXXXX BROTHERS XXXXXXXX & CO.
The following is a list of Funds and their Series for which the Custodian serves
under an
Amended Custodian Agreement dated as of June 25, 2001 (the "Agreement"):
The following series of Vanguard Horizon Funds:
Vanguard Global Equity Fund
The following series of Vanguard International Equity Index Funds:
Vanguard Emerging Markets Stock Index Fund
Vanguard European Stock Index Fund
Vanguard FTSE All-World ex-US lndex Fund
Vanguard Pacific Stock Index Fund
Vanguard Total World Stock Index Fund
The following series of Vanguard Xxxxxxxxxx Funds:
Vanguard Market Neutral Fund
The following series of Vanguard Tax-Managed Funds
Vanguard Tax-Managed International Fund
The following series of Vanguard Trustees' Equity Fund:
Vanguard International Value Fund
The following series of Vanguard Valley Forge Funds:
Vanguard Managed Payout Growth Focus Fund
Vanguard Managed Payout Growth and Distribution Fund
Vanguard Managed Payout Distribution Focus Fund
The following series of Vanguard Variable Insurance Funds
International Portfolio
The following series of Vanguard World Funds:
Vanguard Consumer Discretionary lndex Fund
Vanguard Consumer Staples lndex Fund
Vanguard Energy lndex Fund
Vanguard Financials Index Fund
Vanguard Health Care Index Fund
Vanguard Industrials Index Fund
Vanguard Information Technology Index Fund
Vanguard Materials Index Fund
Vanguard Mega Cap 300 Index Fund
Vanguard Mega Cap 300 Growth Index Fund
Vanguard Mega Cap 300 Value lndex Fund
Vanguard Telecommunication Services lndex Fund
Vanguard Utilities Index Fund
IN WITNESS WHEREOF, each of the parties hereto has caused this Schedule to be
executed in its name and on behalf of such Funds on April 21, 2008.
FUNDS XXXXX BROTHERS XXXXXXXX & CO.
By: /s/Xxxxxx X. Xxxxxxx By: /s/X. Xxxxx Xxxxxxxx
------------------------ ------------------------
Name: Xxxxxx X. Xxxxxxx Name: X. Xxxxx Xxxxxxxx
Title: Treasurer Title: Managing Director
LIST OF FUNDS
AMENDED SCHEDULE TO THE CUSTODIAN AGREEMENT
BETWEEN
CERTAIN OPEN-END MANAGEMENT INVESTMENT COMPANIES ("FUNDS")
and XXXXX BROTHERS XXXXXXXX & CO.
The following is a list of Funds and their Series for which the Custodian serves
under an Amended Custodian Agreement dated as of June 25, 2001 (the
"Agreement"):
The following series of Vanguard Horizon Funds:
Vanguard Global Equity Fund
The following series of Vanguard International Equity Index Funds:
Vanguard Emerging Markets Stock Index Fund
Vanguard European Stock Index Fund
Vanguard FTSE All-World ex-US Index Fund
Vanguard FTSE All-World ex-US Small-Cap Index Fund
Vanguard Pacific Stock Index Fund
Vanguard Total World Stock Index Fund
The following series of Vanguard Xxxxxxxxxx Funds:
Vanguard Market Neutral Fund
The following series of Vanguard STAR Funds:
Vanguard Developed Markets Index Fund
Vanguard Institutional Developed Markets Index Fund
The following series of Vanguard Tax-Managed Funds
Vanguard Tax-Managed International Fund
The following series of Vanguard Trustees' Equity Fund:
Vanguard International Value Fund
The following series of Vanguard Valley Forge Funds:
Vanguard Managed Payout Growth Focus Fund
Vanguard Managed Payout Growth and Distribution Fund
Vanguard Managed Payout Distribution Focus Fund
The following series of Vanguard Variable Insurance Funds:
International Portfolio
The following series of Vanguard World Funds:
Vanguard Consumer Discretionary Index Fund
Vanguard Consumer Staples Index Fund
Vanguard Energy Index Fund
Vanguard Financials Index Fund
Vanguard Health Care Index Fund
Vanguard Industrials Index Fund
Vanguard Information Technology Index Fund
Vanguard Materials Index Fund
Vanguard Mega Cap 300 Index Fund
Vanguard Mega Cap 300 Growth Index Fund
Vanguard Mega Cap 300 Value Index Fund
Vanguard Telecommunication Services Index Fund
Vanguard Utilities Index Fund
IN WITNESS WHEREOF, each of the parties hereto has caused this Schedule to be
executed in its name and on behalf of such Funds on ___April 30__________, 2009.
FUNDS XXXXX BROTHERS XXXXXXXX & CO.
By: __/s/Xxxxxx X. Higgins_______ By: ____/s/X. Xxxxx Reynolds_____
Name: Xxxxxx X. Xxxxxxx Name: ___F. Xxxxx Reynolds_______
Title: Chief Financial Officer Title: __Managing Director_______
