Exhibit (g)(1)
AMENDMENT, dated June 12, 2001 to the December 13, 1994 custody
agreement (as amended and restated as of May 1, 1995) ("Agreement"), between The
Glenmede Fund, Inc. ("Customer"), having a place of business at Xxx Xxxxx
Xxxxxx, Xxxxxxxxx, XX 00000, and The Chase Manhattan Bank ("Bank"), having a
place of business at 000 Xxxx Xxx., Xxx Xxxx, X.X. 00000-0000.
It is hereby agreed as follows:
Section 1. Except as modified hereby, the Agreement is confirmed in all
respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
Section 2. The Agreement is amended as follows:
A. Delete the phrase "the second paragraph of" in the eighth line of
Section 1 of the Agreement.
B. Section 3 to the Agreement is amended and restated as follows:
3. (a). Compliance with Securities and Exchange Commission rule 17f-5
("rule 17f-5").
(1) Customer's board of directors (or equivalent body) (hereinafter
"Board") hereby delegates to Bank, and Bank hereby accepts the delegation to it
of, the obligation to perform as Customer's "Foreign Custody Manager" (as that
term is defined in rule 17f-5(a)(3)), including for the purpose of selecting
Eligible Foreign Custodians (as that term is defined in rule 17f-5(a)(1), as the
same may be amended from time to time, or that have otherwise been made exempt
by SEC exemptive order, rule other appropriate SEC action) to hold Customer's
Foreign Assets and of evaluating the contractual arrangements with such Eligible
Foreign Custodians (as set forth in rule 17f-5(c)(2) and monitoring such foreign
custody arrangements (as set forth in rule 17f-5(c)(3)).
(2) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Customer's Board of the placement
of Foreign Assets with particular Eligible Foreign Custodians and of
any material change in the arrangements with such Eligible Foreign
Custodians, with such reports to be provided to Customer's Board at
such times as the Board deems reasonable and appropriate based on the
circumstances of Customer's foreign custody arrangements but until
further notice from Customer requesting a different schedule, such
reports shall be provided not less than quarterly in summary form, with
a more detailed report annually.
(ii) exercise such reasonable care, prudence and diligence in
performing as Customer's Foreign Custody Manager as a person having
responsibility for the safekeeping of Foreign Assets would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined
that Foreign Assets placed and maintained in the safekeeping of such
Eligible Foreign Custodian shall be subject to reasonable care, based
on the standards applicable to custodians in the relevant market, after
having considered all factors relevant to the safekeeping of such
Assets, including, without limitation, those factors set forth in rule
17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible Foreign
Custodian requires that the Eligible Foreign Custodian will provide
reasonable care for Foreign Assets based on the standards applicable to
custodians in the relevant market as provided in rule 17f-5(c)(2); and
(v) have established a system to monitor the continued appropriateness
of maintaining Foreign Assets with particular Eligible Foreign
Custodians and performance of the governing contractual arrangements;
it being understood, however, that in the event that Bank shall have
determined that the
existing Eligible Foreign Custodian in a given country would no longer
afford Foreign Assets reasonable care and that no other Eligible
Foreign Custodian in that country would afford reasonable care, Bank
shall promptly so advise Customer and shall then act in accordance with
the Instructions of Customer with respect to the disposition of the
affected Foreign Assets.
Subject to (2)(i)-(v) above, Bank is hereby authorized to place and maintain
Foreign Assets on behalf of Customer with Eligible Foreign Custodians pursuant
to a written contract deemed appropriate by Bank.
(3) Except as expressly provided herein and in Section 3.(b) hereof,
Customer shall be solely responsible to assure that the maintenance of Foreign
Assets hereunder complies with the rules, regulations, interpretations and
exemptive orders promulgated by or under the authority of the SEC.
(4) Bank represents to Customer that it is a U.S. Bank as defined in
rule 17f-5(a)(7). Customer represents to Bank that: (i) the Assets being placed
and maintained in Bank's custody are subject to the Investment Company Act of
1940, as amended (the "1940 Act") as the same may be amended from time to time;
(ii) its Board (or other governing body) has determined that it is reasonable to
rely on Bank to perform as Customer's Foreign Custody Manager; and (iii) its
Board (or other governing body) or its investment adviser shall have determined
that Customer may maintain Foreign Assets in each country in which Customer's
Foreign Assets shall be held hereunder and determined to accept the risks
arising therefrom (including, but not limited to, a country's financial
infrastructure, prevailing custody and settlement practices, laws applicable to
the safekeeping and recovery of Foreign Assets held in custody, and the
likelihood of nationalization, currency controls and the like) (collectively
("Country Risk")). Nothing contained herein shall require Bank to make any
selection on behalf of Customer that would entail consideration of Country Risk
and, except as may be provided in (5) below, to engage in any monitoring of
Country Risk.
(5) Bank shall provide to Customer such information relating to Country
Risk as is specified in Appendix 1-A hereto. Customer hereby acknowledges that:
(i) such information is solely designed to inform Customer of market conditions
and procedures and is not intended as a recommendation to invest or not invest
in particular markets; and (ii) Bank has gathered the information from sources
it considers reliable, but that Bank shall have no responsibility for
inaccuracies or incomplete information.
(6) Bank may act hereunder through the subcustodians listed on Exhibit
B hereof with which Bank has entered into subcustodial agreements
("Subcustodians"). At the request of Customer, Bank may, but need not, add to
Exhibit B an Eligible Foreign Custodian where Bank has not acted as Foreign
Custody Manager with respect to the selection thereof. Bank shall notify
Customer in the event that it elects to add any such entity.
(7) The term Subcustodian as used herein shall mean the following:
(a) a "U.S. Bank," which shall mean a U.S. bank as defined in rule
17f-5(a)(7); and
(b) an "Eligible Foreign Custodian," which, as defined in rule
17f-5(a)(1) and (5), shall mean (i) a banking institution or trust
company, incorporated or organized under the laws of a country other
than the United States, that is regulated as such by that country's
government or an agency thereof, and (ii) a majority-owned direct or
indirect subsidiary of a U.S. Bank or bank holding company which
subsidiary is incorporated or organized under the laws of a country
other than the United States. In addition, an Eligible Foreign
Custodian shall also mean any other entity that shall have been so
qualified by exemptive order, rule or other appropriate action of the
SEC.
(c) For purposes of provisions of the Agreement imposing liability on
Bank, the term Subcustodian shall not include any Eligible Foreign
Custodian as to which Bank has not acted as Foreign Custody Manager or,
for purposes of clarity, any securities depository."
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3.(b). Compliance with Securities and Exchange Commission rule 17f-7
("rule 17f-7").
(1) Bank shall provide an analysis in accordance with rule
17f-7(a)(1)(i)(A) of the custody risks associated with maintaining Customer's
Foreign Assets with each Eligible Securities Depository used by Bank as of the
date hereof (or, in the case of an Eligible Securities Depository not used by
Bank as of the date hereof, prior to the initial placement of Customer's Foreign
Assets at such Depository) and at which any Foreign Assets of Customer are held
or are expected to be held. The foregoing analysis will be provided to Customer
at Bank's Website. In connection with the foregoing, Customer shall notify Bank
of any Eligible Securities Depository at which it does not choose to have its
Foreign Assets held. Bank shall monitor the custody risks associated with
maintaining Customer's Foreign Assets at each such Eligible Securities
Depository on a continuing basis and shall promptly notify (which may be
electronic) Customer or its adviser of any material changes in such risks.
(2) Bank shall exercise reasonable care, prudence and diligence in
performing the requirements set forth in Section 3(b)(1) above, and shall be
liable to the Customer for any loss which shall occur as the result of the
Bank's negligence in performing such requirements.
(3) Based on the information available to it in the exercise of
diligence, Bank shall determine the eligibility under rule 17f-7 of each
depository before including it on Appendix 1-B hereto and shall promptly advise
Customer if any Eligible Securities Depository ceases to be eligible. (Eligible
Securities Depositories used by Bank as of the date hereof are set forth in
Appendix 1-B hereto, and as the same may be amended on notice to Customer from
time to time.)
(4) Bank need not commence performing any of the duties set forth in
this Section 3(b) prior to the date first above written, but Bank shall advise
Customer if it is prepared to commence such duties prior to such date as to
particular depositories.
3.(c). The term "securities depository" as used herein when referring
to a securities depository located outside the U.S. shall mean an "Eligible
Securities Depository" which, in turn, shall have the same meaning as in rule
17f-7(b)(1)(i)-(vi) as the same may be amended from time to time, or that has
otherwise been made exempt by an SEC exemptive order, rule other appropriate SEC
action, except that prior to the compliance date with rule 17f-7 for a
particular securities depository the term "securities depositories" shall be as
defined in (a)(1)(ii)-(iii) of the 1997 amendments to rule 17f-5. The term
"securities depository" as used herein when referring to a securities depository
located in the U.S. shall mean a "securities depository" as defined in SEC rule
17f-4(a).
C. Add the following language after the word "administration" in the
seventh line of the first sentence of Section 4(e) of the Agreement:: "or, in
the case of cash deposits, except for liens or rights in favor of creditors of
the Subcustodian arising under bankruptcy, insolvency or similar laws."
D. Section 4 (h) and 12 of the Agreement are amended to delete all
references to "eligible foreign securities depository" contained therein.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
THE GLENMEDE FUND, INC. THE CHASE MANHATTAN BANK
By: /s/ Xxxx Xxx X. Xxxxx By: /s/ Xxxxxxx Xxxx
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Name: Xxxx Xxx X. Xxxxx Name: Xxxxxxx Xxxx
Title: President Title: Vice President
Date: 6/14/01 Date: June 13, 0000
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Xxxxxxxx 1-A
Information Regarding Country Risk
1. To aid Customer in its determinations regarding Country Risk, Bank
shall furnish annually and upon the initial placing of Foreign Assets into a
country the following information:
A Opinions of local counsel concerning:
i. Whether applicable foreign law would restrict the access afforded
Customer's independent public accountants to books and records
kept by an Eligible Foreign Custodian located in that country.
ii. Whether applicable foreign law would restrict the Customer's
ability to recover its assets in the event of the bankruptcy of
an Eligible Foreign Custodian located in that country.
iii. Whether applicable foreign law would restrict the Customer's
ability to recover assets that are lost while under the control
of an Eligible Foreign Custodian located in the country.
B. Written information concerning:
i. The likelihood of expropriation, nationalization, freezes, or
confiscation of Customer's assets.
ii. Whether difficulties in converting Customer's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.
C. A market report with respect to the following topics:
(i) securities regulatory environment, (ii) foreign ownership
restrictions, (iii) foreign exchange, (iv) securities settlement and
registration, (v) taxation, (vi) market settlement risk, (vii)
Eligible Securities Depositories (including Depository evaluation), if
any.
2. Bank shall furnish the following additional information:
Market flashes, including with respect to changes in the
information in market reports.
Appendix 1-B
ELIGIBLE SECURITIES DEPOSITORIES
