MUTUAL FUND CUSTODY AGREEMENT
VANGUARD FUNDS
Wachovia Bank, National Association
Table of Contents
Paragraph Page
1. Definitions 1
2. Appointment 3
3. Delivery of Documents 3
4. Delivery and Registration of the Property 3
5. Voting and Other Rights 4
6. Receipt and Disbursement of Money 5
7. Receipt and Delivery of Securities 5
8. Scope of Responsibilities as Foreign Custody Manager 6
9. Eligible Securities Depositories; Compliance with Rule 17f-7 9
10. Foreign Market Transactions 10
11. Pledge or Encumbrance of Securities or Cash 10
12. Foreign Exchange 10
13. Lending of Securities 11
14. Overdrafts or Indebtedness 11
15. Use of Securities Depository or the Book-Entry System 11
16. Instructions Consistent With The Declaration 13
17. Transactions Not Requiring Proper Instructions 14
18. Transactions Requiring Proper Instructions 16
19. Purchase and Sale of Securities 17
20. Tax Reclaims 18
21. Records 19
22. Cooperation with Accountants 19
23. Reports to Customer by Independent Public Accountants 19
24. Confidentiality 19
25. Equipment 20
26. Right to Receive Advice 20
27. Compensation 21
28. Representations 21
29. Several Obligations of the Trusts 21
30. Performance of Duties and Standard of Care 22
31. Indemnification 22
32. Effective Period; Termination and Amendment 23
33. Successor Custodian 23
34. Notices 24
35. Further Actions 24
36. Additional Funds 24
37. Miscellaneous 24
ATTACHMENT A Authorized Persons
ATTACHMENT B Trusts and Funds
EXHIBIT A Provision of Additional Information
EXHIBIT B Eligible Securities Depositories
EXHIBIT C List of Foreign Markets
MUTUAL FUND CUSTODY AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT is made as of March 6, 2003, by and
among each Delaware statutory trust listed on Attachment B hereto (each a
"Trust"), severally and for and on behalf of certain of their respective
portfolios listed on Attachment B hereto (each a "Fund") and Wachovia Bank,
National Association ("Wachovia"), a national bank. Each Trust for which
Wachovia serves as custodian under this Agreement shall individually be referred
to as "Customer."
1. Definitions.
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"Account" is defined in Paragraph 6 of this Agreement.
"Authorized Person" means any person (including an investment manager or
other agent) who has been designated by written notice from Customer or its
designated agent to act on behalf of Customer hereunder. Such person shall
continue to be an Authorized Person until such time as Wachovia receives Proper
Instructions from Customer or its designated agent that any such person is no
longer an Authorized Person.
"Board" means the board of trustees or board of directors, as applicable,
of a Trust.
"Book-Entry System" means the Federal Reserve/Treasury book-entry system
for receiving and delivering Securities, its successor or successors and its
nominee or nominees.
"Business Day" means any day on which Wachovia, the Book-Entry System, and
relevant Depositories are open for business.
"Country Risks" means the systemic risks arising from holding Foreign
Assets in a particular country, including, but not limited to, those arising
from a country's financial infrastructure, prevailing custody and settlement
practices; expropriation, nationalization or other governmental actions; and
laws applicable to the safekeeping and recovery of assets held in custody in
such country.
"Customer" means, individually, each Trust and their respective Funds as
listed on Attachment B hereto.
"Eligible Foreign Custodian" means an Eligible Foreign Custodian as defined
in Rule 17f-5(a)(1) under the 1940 Act or any other entity that the SEC
qualifies as such by exemptive order, no-action letter, rule or other
appropriate SEC action.
"Eligible Securities Depository" means an Eligible Securities Depository as
defined in Rule 17f-7(b)(1) under the 1940 Act or any entity that the SEC
qualifies as such by exemptive order, no-action letter, rule or other
appropriate SEC action.
"Wachovia" shall include any office, branch or subsidiary of Wachovia Bank,
National Association.
"Foreign Assets" means Customer'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 Customer's
transactions in such investments.
"Foreign Custody Manager" means a Foreign Custody Manager as defined in
Rule 17f-5(a)(3) under the 1940 Act.
"Foreign Market" means each market so identified in Exhibit C hereto.
"Fund" means each separate portfolio of shares offered by each Trust
representing interests in a separate portfolio of securities and other assets
and listed on Attachment B hereto.
"NASD" means National Association of Securities Dealers.
"Proper Instruction" is defined in paragraph 16 to this Agreement
"Property" means any and all Securities, cash, and other property of
Customer which Customer may from time to time deposit, or cause to be deposited,
with Wachovia or which Wachovia may from time to time hold for Customer; all
income of any Securities or other property; all proceeds of the sales of any
Securities or other property; and all proceeds of the sale of securities issued
by Customer, which Wachovia receives from time to time from or on behalf of
Customer.
"Rule 17f-5" means 17 C.F.R.ss.270.17f-5 under the 1940 Act, as amended
from time to time.
"Rule 17f-7" means 17 C.F.R.ss.270.17f-7 under the 1940 Act, as amended
from time to time.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities" shall include, without limitation, any common stock and other
equity securities; bonds, debentures and other debt securities; notes; forwards,
swaps, futures, derivatives, mortgages or other obligations; and any instruments
representing rights to receive, purchase, or subscribe for the same, or
representing any other rights or interests therein (whether represented by a
certificate or held by a Securities Depository, subcustodian, Eligible Foreign
Custodian, or Eligible Securities Depository).
"Securities Depository" shall include the Book-Entry System, the Depository
Trust Company, any other domestic securities depository, book-entry system or
clearing agency registered with the SEC or its successor or successors and its
nominee or nominees, and any other entity permitted to hold Securities under
Rule 17f-4 under the 1940 Act, and shall also mean any other registered clearing
agency that acts as a securities depository, its successor or successors.
"Trust" means each open-end registered investment company organized as a
Delaware statutory trust and listed on Attachment B hereto.
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"U.S. Bank" means a U.S. Bank as defined in Rule 17f-5(a)(7) under the 1940
Act.
"1940 Act" means the Investment Company Act of 1940, as amended.
All terms in the singular shall have the same meaning in the plural unless the
context otherwise provides and vice versa.
2. Appointment.
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a. Appointment as Custodian. Each Trust is registered as an open-end
management investment company under the 1940 Act, and each Trust desires to
retain Wachovia to serve as the custodian for those Funds of the Trusts listed
in Attachment B hereto, and Wachovia is willing to furnish these services. Each
Trust hereby appoints Wachovia to act as custodian of its Funds' Securities,
cash and other Property on the terms set forth in this Agreement. Wachovia
accepts this appointment and agrees to furnish the services set forth below for
the compensation as provided in Paragraph 27 of this Agreement.
b. Appointment as Foreign Custody Manager. Customer hereby appoints
Wachovia as a Foreign Custody Manager to perform the responsibilities set forth
in Paragraph 8 of this Agreement with respect to Foreign Assets, and Wachovia
hereby accepts such appointment as Customer's Foreign Custody Manager.
3. Delivery of Documents. Customer will promptly furnish to Wachovia copies,
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properly certified or authenticated, of contracts, documents and other related
information that Wachovia may reasonably request or requires to properly
discharge its duties. These documents may include but are not limited to the
following:
a. Resolutions of Customer's Board authorizing the appointment of Wachovia
as custodian of the Property of Customer and approving this Agreement;
b. Incumbency and signature certificates identifying and containing the
signatures of those authorized to select Customer's Authorized Persons;
c. Each Fund's most recent prospectus including all amendments and
supplements thereto (each, a "Prospectus").
Upon Wachovia's request, Customer will furnish Wachovia from time to time
with copies of all amendments of or supplements to the foregoing documents, if
any.
4. Delivery and Registration of the Property. Customer will deliver or cause
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to be delivered to Wachovia all Property it owns, including cash received for
the issuance of its shares, at any time during the period of this Agreement,
except for Securities and monies to be delivered to any subcustodian appointed
pursuant to Paragraph 7. Wachovia will not be responsible for Securities and
monies until Wachovia or any subcustodian actually receives them. All Securities
delivered to Wachovia or to any subcustodian, Securities Depository, Eligible
Foreign Custodian, or Eligible Securities Depository (other than in bearer form)
shall be registered in the name of the Customer on behalf of each Fund, or in
the name of a nominee of Customer, in the name of Wachovia or any nominee of
Wachovia (with or without indication of fiduciary status), in the name of any
subcustodian or any nominee of a subcustodian appointed pursuant to Paragraph 7,
any Eligible Foreign Custodian appointed pursuant to Paragraph 8, or any
Eligible Securities Depository appointed pursuant to Paragraph 9, or shall be
properly endorsed and in form for transfer satisfactory to Wachovia.
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5. Voting and Other Rights.
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a. Customer shall exercise voting and other rights and powers for all
Securities, however registered. Wachovia's only duty shall be to mail for
delivery on the next Business Day to Customer any documents received, including
proxy statements and offering circulars, with any proxies executed by the
nominee for Securities registered in a nominee name. Wachovia reserves the right
to provide any documents received, or parts thereof, in the language received.
Customer acknowledges that in certain countries Wachovia may be unable to vote
individual proxies but be able only to vote proxies on a net basis. Wachovia
shall vote or cause proxies to be voted only as expressly directed in writing
pursuant to Proper Instructions of Customer's Authorized Person. In the absence
of Proper Instructions, neither Wachovia nor any subcustodian or Eligible
Foreign Custodian shall vote or cause proxies to be voted, and they shall expire
without liability to Wachovia. Wachovia will not advise or act for Customer in
any legal proceedings, including bankruptcies, involving Securities Customer
holds or previously held or the issuers of these Securities, except as Customer
and Wachovia expressly agree upon in writing.
b. Wachovia shall notify, make available or transmit promptly to Customer
all official notices, circulars, reports and announcements that Wachovia
receives regarding the Securities and Foreign Assets held by Customer. Wachovia
shall also promptly notify Customer of any rights or discretionary actions and
of the date or dates by when the rights must be exercised or action must be
taken, provided that Wachovia has received, from the issuer, from persons making
a tender or exchange offer, from a subcustodian, from a Securities Depository,
from an Eligible Foreign Custodian or Eligible Securities Depository, or from a
nationally or internationally recognized bond or corporate action service to
which Wachovia subscribes (each, a "Notice Provider"), timely notice of rights,
discretionary corporate actions, or dates such rights must be exercised or such
actions must be taken. If Customer desires to take action on any tender offer,
exchange offer or any other similar transaction, Customer shall notify Wachovia
before the time at which Wachovia is to take action. Absent Wachovia's failure
to promptly transmit such written information that it has received to Customer,
or absent Wachovia's timely receipt of Proper Instructions, Wachovia shall not
be liable for failure to take any action relating to or to exercise any rights
the Securities confer. Wachovia shall use due diligence in attempting to receive
complete and accurate information, and shall use reasonable care in forwarding
information to Customer.
c. Wachovia shall retain shares with respect to tender offers for less than
5% of outstanding shares at less than 99% of the current market value, without
obligation to provide notice of such officers.
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6. Receipt and Disbursement of Money.
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a. Wachovia shall open and maintain a custody account for Customer (the
"Account") subject only to draft or order by Wachovia acting pursuant to the
terms of this Agreement, and shall hold in the Account, subject to the
provisions in this Paragraph 6, all cash it receives by or for Customer.
Wachovia shall make payments of cash to, or for the account of, Customer from
cash, based on Proper Instructions.
b. Wachovia is hereby authorized to endorse and collect all checks, drafts
or other orders for the payment of money received as custodian for Customer.
7. Receipt and Delivery of Securities.
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a. Except as provided in this Paragraph 7, and in Paragraphs 8 and 9 of
this Agreement, Wachovia shall hold and segregate (physically, where Securities
are held in certificate form) all Securities and non-cash Property it receives
for Customer on behalf of each Fund in one or more Accounts. Wachovia will hold
or dispose of all Securities and non-cash Property for Customer pursuant to the
terms of this Agreement. In the absence of Proper Instructions, Wachovia shall
have no power or authority to withdraw, deliver, assign, hypothecate, pledge or
otherwise dispose of any Securities and other Property, except in accordance
with this Agreement.
b. Wachovia may, at its own expense, employ subcustodians for the receipt
of certain non-Foreign Assets Wachovia is to hold for the account of Customer
pursuant to this Agreement; provided that each subcustodian has an aggregate
capital, surplus and undivided profits, as shown by its last published report,
of not less than twenty million dollars ($20,000,000) and that such subcustodian
agrees with Wachovia to comply with all relevant provisions of the 1940 Act and
applicable rules and regulations thereunder. Securities and cash held through
subcustodians shall be held subject to the terms and conditions of Wachovia's
agreements with the subcustodians. Wachovia will be liable for acts or omissions
of any subcustodian to the same extent that Wachovia is liable to Customer under
this Agreement.
c. Wachovia shall hold Securities through a Securities Depository only if
(a) the Securities Depository and any of its creditors may not assert any right,
charge, security interest, lien, encumbrance or other claim of any kind to
Securities except a claim of payment for their safe custody or administration,
and (b) beneficial ownership of Securities may be freely transferred without the
payment of money or value other than for safe custody or administration.
d. Wachovia may from time to time establish pursuant to a written agreement
with and for the benefit of a broker, dealer, futures commission merchant or
other third party identified in Proper Instructions such Accounts on such terms
and conditions as Customer and Wachovia shall reasonably agree upon; and
Wachovia shall transfer to such Account such Securities and money as Customer
may specify in Proper Instructions.
e. Wachovia shall furnish Customer with confirmations and a summary of all
transfers to or from the account of each Fund during said day. Where Securities
are transferred to the account of a Fund established at a Securities Depository
or Book-Entry System, Wachovia shall also by book-entry or otherwise identify
the Securities belonging to the Fund. At least monthly and from time to time,
Wachovia shall furnish Customer with a detailed statement of the Property held
for each Fund under this Agreement.
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8. Scope of Responsibilities as Foreign Custody Manager.
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a. Authorization. Subject to the terms and conditions herein, Wachovia is
hereby authorized to: (i) place and maintain Foreign Assets on behalf of
Customer with Eligible Foreign Custodians pursuant to a written contract
determined appropriate by Wachovia in accordance with the terms and conditions
herein and (ii) withdraw Foreign Assets from Eligible Foreign Custodians in
accordance with the terms and conditions herein.
b. Selection. Wachovia shall place and maintain Foreign Assets in the care
of one or more Eligible Foreign Custodians. In performing its responsibilities
to place and maintain Foreign Assets with an Eligible Foreign Custodian,
Wachovia shall determine that the Eligible Foreign Custodian will hold Foreign
Assets in the exercise of reasonable care, based on the standards applicable to
custodians in the jurisdiction or market in which the Foreign Assets will be
held by that Eligible Foreign Custodian, 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), its methods of
keeping custodial records, its security and data protection practices,
and its settlement practices;
(ii) whether the Eligible Foreign Custodian has the financial strength to
provide reasonable care for Foreign Assets and to protect Foreign
Assets against the Eligible Foreign Custodian's insolvency;
(iii) the Eligible Foreign Custodian's general reputation and standing; and
(iv) whether Customer will have jurisdiction over, and be able to enforce
judgments against, the Eligible Foreign Custodian in the United
States.
c. Contracts. Wachovia shall ensure that Customer's foreign custody
arrangements with each Eligible Foreign Custodian are governed by a written
contract with such Eligible Foreign Custodian. Wachovia shall determine that the
written contract governing the foreign custody arrangements with each Eligible
Foreign Custodian that Wachovia selects will provide reasonable care for Foreign
Assets held by that Eligible Foreign Custodian, as described in subparagraph b.
of this Paragraph 8. Each written contract will include terms that provide:
(i) for indemnification and/or insurance arrangements that will adequately
protect Customer against the risk of loss of the Foreign Assets held
in accordance with such contract;
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(ii) that the Foreign 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 for the Eligible
Foreign Custodian's services under the contract or, in the case of
cash deposits, liens or rights in favor of creditors of such Eligible
Foreign Custodian arising under bankruptcy, insolvency or similar
laws;
(iii)that beneficial ownership of the Foreign Assets will be freely
transferable without the payment of money or value, other than
payments for the Eligible Foreign Custodian's services under the
contract;
(iv) that the Eligible Foreign Custodian will maintain adequate records
identifying the Foreign Assets held under the contract as belonging to
Customer or as being held by a third party for the benefit of
Customer;
(v) that Customer's independent public accountants will be given access to
those records described in (iv) above, or confirmation of the contents
of those records;
(vi) that Customer will receive periodic reports with respect to the
safekeeping of the Foreign Assets, including, but not limited to,
notification of any transfer of the Foreign Assets to or from the
account of Customer or a third party account containing the Foreign
Assets held for the benefit of Customer; and
(vii)that the Eligible Foreign Custodian will indemnify and hold harmless
Wachovia (or its agent) or Customer from and against any loss,
expense, liability or claim incurred by Wachovia (or its agent) or
Customer to the extent such loss, expense, liability or claim arises
from the Eligible Foreign Custodian's negligence, bad faith, or
willful misconduct.
or, in lieu of any or all of the terms set forth in (i) through (vi) above, such
other terms that Wachovia determines will provide, in their entirety, the same
or greater level of care and protection for the Foreign Assets as the provisions
set forth in (i) through (vi) above in their entirety.
d. Monitoring. Wachovia will establish and maintain a system to monitor:
(i) the appropriateness of maintaining Foreign Assets with each Eligible Foreign
Custodian; (ii) Material Changes to Customer's foreign custody arrangements, as
defined in subparagraph f. of this Paragraph 8. below; and (iii) the performance
of the contracts described in subparagraph c. of this Paragraph 8. above (the
"Monitoring System").
e. Withdrawing Trust Assets. In the event that a foreign custody
arrangement no longer meets the terms and conditions set forth in Rule 00x-0,
Xxxxxxxx will promptly notify Customer and will then act in accordance with
Customer's Proper Instructions with respect to the disposition of the affected
Foreign Assets.
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f. Reporting Requirements. Wachovia shall notify Customer's Board of the
placement of Foreign Assets with an Eligible Foreign Custodian and any Material
Changes in Customer's foreign custody arrangements by providing a written report
to Customer's Board at the end of each calendar quarter or at such times as
Customer's Board deems reasonable and appropriate. With respect to Material
Changes, Wachovia shall provide Customer's Board with a written report promptly
after the occurrence of the Material Change. "Material Changes" include, but are
not limited to: a decision to remove all Foreign Assets from a particular
Eligible Foreign Custodian; any event that may adversely and materially affect
an Eligible Foreign Custodian's financial or operational strength; Wachovia's
inability to perform its duties in accordance with the standard of care under
this Paragraph 8; a change in control of an Eligible Foreign Custodian; the
failure of an Eligible Foreign Custodian to comply with the standards in or the
terms of Rule 17f-5; any material change in any contract governing Customer's
foreign custody arrangements; the failure of Wachovia or a foreign custody
arrangement to meet the standards in Rule 17f-5; any event that may adversely
affect Wachovia's ability to comply with Rule 17f-5; and a Material Change in
any (i) information provided to the Board regarding Wachovia's expertise in
foreign custody issues and risks (ii) Wachovia's use of third party experts to
perform its foreign custody responsibilities, (iii) Customer's Board's ability
to monitor Wachovia's performance, or (iv) Wachovia's financial strength or its
ability to indemnify Customer.
g. Provision of Information. Wachovia shall provide to Customer (or
Customer's investment adviser(s)) such information as is specified in Exhibit A
hereto, as may be amended from time to time by the parties. Customer hereby
acknowledges that such information is solely designed to inform Customer of
market conditions and procedures, but is not intended to influence Customer's
investment decisions (or those of its investment adviser(s)). Wachovia will use
reasonable care in gathering such information. Wachovia agrees to promptly
notify Customer (or its investment adviser(s)) at the time that Wachovia becomes
aware of a material change to the information provided or if Wachovia learns
that any information previously provided is incomplete or inaccurate. Wachovia
will provide to Customer (or its investment adviser(s)) upon reasonable request
a written statement as may reasonably be required to document its compliance
with the terms of this Agreement, as well as information regarding the following
factors: (i) Wachovia's expertise in foreign custody issues and risks; (ii)
Wachovia's use of third party experts to perform its foreign custody
responsibilities; (iii) the Board's ability to monitor Wachovia's performance;
and (iv) Wachovia's financial strength and its ability to indemnify Customer if
necessary. With respect to each Eligible Foreign Custodian employed by Customer
under subparagraph i. of this Paragraph 8. below, Wachovia agrees to provide to
Customer (or its investment adviser(s)) any information it possesses regarding
Country Risk or the risks associated with placing or maintaining Foreign Assets
with the Eligible Foreign Custodian.
h. Standard of Care as Foreign Custody Manager. In performing its delegated
responsibilities as Customer's Foreign Custody Manager, Wachovia agrees to
exercise reasonable care, prudence and diligence such as a person having
responsibility for the safekeeping of Foreign Assets under the 1940 Act would
exercise. In particular, regardless of whether assets are maintained in the
custody of an Eligible Foreign Custodian or an Eligible Securities Depository,
Wachovia shall be liable to Customer for the acts or omissions of an Eligible
Foreign Custodian where that Eligible Foreign Custodian has not acted with
reasonable care, except to the extent Customer has directed Wachovia to use a
particular Eligible Foreign Custodian.
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i. Direction of Eligible Foreign Custodians. Customer may direct Wachovia
to place and maintain Foreign Assets with a particular Eligible Foreign
Custodian. In such event, Wachovia will have no duties under this Paragraph 8
with respect to such arrangement, except those included under Paragraph 8.g and
those that it may undertake specifically in writing.
j. Best Customer. If at any time Wachovia is or becomes a party to an
agreement to serve as Foreign Custody Manager to an investment company that
provides for either: (i) a standard of care with respect to the selection of
Eligible Foreign Custodians in any jurisdiction higher than that set forth in
subparagraph b. of this Paragraph 8., or (ii) a standard of care with respect to
exercise of Wachovia's duties other than that set forth in subparagraph h. of
this Paragraph 8., Wachovia agrees to notify Customer of this fact and to raise
the applicable standard of care hereunder to the standard specified in such
other agreement.
k. Condition Precedent. As a condition precedent to Wachovia's performance
under this Paragraph 8, Customer shall deliver to Wachovia a certificate from
each Trust's secretary containing the resolution of the Trust's Board regarding
the Board's determination that it is reasonable to rely on Wachovia to perform
the responsibilities delegated pursuant to this Agreement to Wachovia as Foreign
Custody Manager of the Trust.
l. Limitations. Wachovia shall have only such duties as are expressly set
forth herein. In no event shall Wachovia be liable for any Country Risks
associated with investments in a particular country.
m. Representations with respect to Rule 17f-5. Wachovia represents to
Customer that it is a U.S. Bank as defined in Rule 17f-5(a)(7).
9. Eligible Securities Depositories; Compliance with Rule 17f-7. Wachovia shall
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provide an analysis of the custody risks associated with maintaining Customer's
Foreign Assets with each Eligible Securities Depository 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. Wachovia 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 Customer and its investment adviser(s) of any material changes
in such risks. Wachovia shall exercise reasonable care, prudence and diligence
in performing the requirements set forth in this Paragraph. Based on the
information available to it in the exercise of the foregoing standard of care,
Wachovia shall determine the eligibility under Rule 17f-7 of each Depository
before including it on Exhibit B hereto and shall promptly advise Customer (and
its investment adviser(s)) if any Eligible Securities Depository ceases to be
eligible and will withdraw Customer's foreign assets from the depository as soon
as reasonably practical. For purposes of this Paragraph 9, Customer (and its
investment adviser(s)) shall be deemed to have considered the Country Risk
incurred by placing and maintaining Foreign Assets in each country in which each
such Eligible Securities Depository operates. Wachovia's responsibilities under
this Paragraph 9 shall not include, or be deemed to include, any evaluation of
Country Risks associated with investment in a particular country.
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10. Foreign Market Transactions. Customer agrees that all settlements of Foreign
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Assets transactions shall be transacted in accordance with the local laws,
customs, market practices and procedures to which Eligible Foreign Custodians
and Eligible Securities Depositories are subject in each Foreign Market,
including, without limitation, delivering Foreign Assets to the purchaser,
dealer, or an agent for such purchaser or dealer, with the expectation of
receiving later payment for the Foreign Assets from the purchaser, dealer, or
agent. Wachovia shall provide a report of settlement practices in Foreign
Markets as described in Exhibit A.
11. Pledge or Encumbrance of Securities or Cash. Except as provided in this
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Agreement, Wachovia may not pledge, assign, hypothecate or otherwise encumber
Securities or cash in any Account without Customer's prior written consent.
12. Foreign Exchange.
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a. For the purpose of settling Securities and foreign exchange
transactions, Customer shall provide Wachovia with sufficient immediately
available funds for all transactions by such time and date as conditions in the
relevant market dictate. As used herein, "sufficient immediately available
funds" shall mean either (i) sufficient cash denominated in U.S. dollars to
purchase the necessary foreign currency, or (ii) sufficient applicable foreign
currency to settle the transaction. Wachovia shall provide Customer with
immediately available funds, which result from the actual settlement of all sale
transactions each day, based upon advices Wachovia receives from Customer's
Eligible Foreign Custodians and Eligible Securities Depositories. Such funds
shall be in U.S. dollars or such other currency as Customer may specify to
Wachovia.
b. Any foreign exchange transaction Wachovia effects in connection with
this Agreement may be entered with Wachovia acting as principal or otherwise
through customary banking channels. Customer may issue standing Proper
Instructions with respect to foreign exchange transactions but Wachovia may
establish rules or limitations concerning any foreign exchange facility made
available to Customer. Customer shall bear all risks of investing in Securities
or holding cash denominated in a foreign currency. In particular (and except to
the extent that this paragraph is inconsistent with Paragraphs 8 or 9), Customer
shall bear the risks that (i) a transfer to, by or for the account of Customer
of Securities or cash held outside Customer's jurisdiction or denominated in a
currency other than its home jurisdiction, or (ii) the conversion of cash from
one currency into another, may be prohibited, limited, or be subject to burdens
or costs, because of (w) Eligible Securities Depository rules or procedures, (x)
exchange controls, (y) asset freezes, or (z) other laws, rules, regulations or
orders. Wachovia shall not be obligated to substitute another currency for a
currency (including a currency that is a component of a composite currency unit
such as the Euro) whose transferability, convertibility or availability has been
affected by such law, regulation, rule or procedure. Wachovia shall not be
liable to Customer of any loss resulting from any of the foregoing events.
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13. Lending of Securities. Promptly after Customer or its agent lends Securities
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in Customer's account, Customer shall deliver or cause to be delivered to
Wachovia a certificate specifying information reasonably required by Wachovia to
deliver the securities. Wachovia shall not lend Securities except as Customer or
its agent instructs. Wachovia shall deliver Securities so designated to the
broker-dealer or financial institution to which the loan was made upon the
receipt of the total amount designated as to be delivered against the loan of
Securities. Promptly after each termination of a loan of Securities, Customer
shall deliver to Wachovia a certificate specifying information reasonably
required by Wachovia to return the securities. Wachovia shall receive all
Securities returned from a broker-dealer or other financial institution to which
the Securities were loaned, and upon receipt thereof shall pay the total amount
payable upon the return of the Securities as set forth in the certificate.
Securities returned to Wachovia shall be held as they were before the loan.
Wachovia shall have no liability of any sort for any loss arising in connection
with the loan of securities outside of the performance of its obligations under
this agreement.
14. Overdrafts or Indebtedness. If Wachovia in its sole discretion advances
--------------------------
funds in any currency hereunder or if there shall arise for whatever reason an
overdraft in an Account (including, without limitation, overdrafts incurred in
connection with the settlement of securities transactions, funds transfers or
foreign exchange transactions) or if Customer is for any other reason indebted
to Wachovia pursuant to this Agreement, Customer agrees to repay Wachovia on
demand the amount of the advance, overdraft or indebtedness plus accrued
interest at a rate agreed to between Customer and Wachovia, or in the absence of
such an agreement, the rate that Wachovia ordinarily charges to its
institutional custody customers in the relevant currency. Wachovia shall
promptly notify Customer of any advance and the time at which such advance must
be paid.
To secure repayment of Customer's obligations to Wachovia hereunder,
Customer hereby pledges and grants to Wachovia a lien and security interest in,
and right of set off against the securities account of the relevant Fund as
shall have a fair market value equal to the aggregate amount of all overdrafts
of such Fund, together with accrued interest, as security for any and all
amounts which are now owing to Wachovia with respect to that Fund under any
provision of this Agreement, whether or not matured or contingent. Such lien and
security interest shall be effective only so long as such advance, overdraft, or
accrued interest thereon remains outstanding. In this regard, Wachovia shall be
entitled to all the rights and remedies of a pledgee and secured creditor under
applicable laws, rules or regulations then in effect.
15. Use of Securities Depository or the Book-Entry System.
-----------------------------------------------------
a. Upon receipt of Proper Instructions, Wachovia may (i) deposit in a
Depository or the Book-Entry System all Securities of Customer eligible for
deposit therein and (ii) use a Depository, or the Book-Entry System to the
extent possible in connection with the performance of its duties hereunder,
including without limitation, settlements of Customer's purchases and sales of
Securities, and deliveries and returns of securities collateral in connection
with borrowings. Without limiting the generality of this use, it is agreed that
the following provisions shall apply thereto:
11
b. Securities and any cash of Customer deposited in a Securities Depository
or Book-Entry System will at all times (1) be represented in an account of
Wachovia in the Securities Depository or Book-Entry System (the "Account") and
(2) be segregated from any assets and cash Wachovia controls in other than a
fiduciary or custodian capacity but may be commingled with other assets held in
these capacities. Securities and cash Wachovia deposits in a Depository or
Book-Entry System will be held subject to the rules, terms and conditions of the
Depository or Book-Entry System. Wachovia shall identify on its books and
records the Securities and cash belonging to Customer, whether held directly or
indirectly through Depositories or the Book-Entry System. Wachovia shall not be
responsible for Securities or cash until actually received. Wachovia will effect
payment for Securities and receive and deliver Securities in accordance with
accepted industry practices as set forth in subparagraph c. of this Paragraph 15
below, unless Customer has given Wachovia Proper Instructions to the contrary.
c. Wachovia shall pay for Securities purchased for the account of Customer
upon (i) receipt of advice from the Securities Depository or Book-Entry System
that the Securities have been transferred to Customer, and (ii) the making of an
entry on the records of Wachovia to reflect the payment and transfer for the
account of Customer. Upon receipt of Proper Instructions, Wachovia shall
transfer Securities sold for the account of Customer upon (i) receipt of advice
from the Securities Depository or Book-Entry System that payment for the
Securities has been transferred to the Account, and (ii) the making of an entry
on the records of Wachovia to reflect the transfer and payment for the account
of Customer. Copies of all advices from the Securities Depository or Book-Entry
System of transfers of Securities for the account of Customer shall identify
Customer, and Wachovia shall maintain these copies for Customer and provide them
to Customer at its request.
d. Wachovia shall provide Customer with any report Wachovia obtains on the
Securities Depository or Book-Entry System's accounting system, internal
accounting controls and procedures for safeguarding Securities deposited in the
Securities Depository or Book-Entry System.
e. All books and records Wachovia maintains that relate to Customer's
participation in a Securities Depository or Book-Entry System will at all times
during Wachovia's regular business hours be open to the inspection of Customer's
duly authorized employees or agents, and Customer will be furnished with all
information in respect of the services rendered to it as it may require.
f. Notwithstanding anything to the contrary in this Agreement, Wachovia
shall be liable to Customer for any loss or damage to Customer resulting from
any negligence, misfeasance or misconduct of Wachovia or any of its agents or of
any of its or their employees in connection with its or their use of the
Securities Depository or Book-Entry Systems or from failure of Wachovia or any
agent to enforce effectively the rights it may have against the Securities
Depository or Book-Entry System; at the election of Customer on a case by case
basis, it shall be entitled to be subrogated to the rights of Wachovia for any
claim against the Securities Depository or Book-Entry System or any other person
that Wachovia may have as a consequence of any loss or damage if and to the
extent that Customer has not been made whole for any loss or damage.
16. Instructions Consistent With The Declaration.
---------------------------------------------
12
a. Unless otherwise provided in this Agreement, Wachovia shall act only
upon Proper Instructions. Proper Instructions include any notices, instructions
or other instruments in writing that Wachovia receives from an Authorized Person
by letter, telex, facsimile transmission, Wachovia's on-line communication
system, or any other method whereby Wachovia is able to verify with a reasonable
degree of certainty the identity of the sender of the communications or the
sender is required to provide a password or other identification code. Oral
instructions will be considered Proper Instructions if Wachovia reasonably
believes that an Authorized Person has given the oral instructions. Customer
shall cause all oral instructions to be confirmed in writing by the close of
business of the same day that the oral instructions are given to Wachovia.
Proper Instructions that conflict with earlier Proper Instructions will
supersede earlier Instructions unless Wachovia has already acted in reliance on
the earlier Instructions. However, Customer agrees that where Wachovia does not
receive confirming Proper Instructions or receives contrary Proper Instructions,
the validity or enforceability of transactions the oral instructions authorize
and which Wachovia carries out shall not be affected. Wachovia agrees to notify
Customer as soon as reasonably practicable if Wachovia does not receive
confirming Proper Instructions or receives conflicting Proper Instructions.
Wachovia may assume that any Proper Instructions received hereunder are not
in any way inconsistent with any provision of Customer's Declaration of Trust or
By-Laws or any vote or resolution of a Trust's Board, or any committee thereof.
Wachovia shall be entitled to rely upon any Proper Instructions it actually
receives pursuant to this Agreement and which it reasonably believes an
Authorized Person has given. Customer agrees that Wachovia shall incur no
liability in acting in good faith upon Proper Instructions that Wachovia
reasonably believes an Authorized Person has given to Wachovia.
b. In accordance with Proper Instructions from Customer, as accepted
industry practice requires or as Wachovia may elect in effecting Proper
Instructions, Wachovia shall be deemed to make a loan to Customer, payable on
demand, bearing interest at a rate agreed to between Customer and Wachovia, or
in the absence of such an agreed rate, at the rate Wachovia customarily charges
for similar loans, when Wachovia advances cash or other Property arising from
the purchase, sale, redemption, transfer or other disposition of Property of
Customer, or in connection with the disbursement of funds to any party, or in
payment of uncontested fees, expenses, claims or liabilities Customer owes to
Wachovia, or to any other party that has secured judgment in a court of law
against Customer which creates an overdraft in the accounts or over-delivery of
Property.
c. Customer agrees that test arrangements, authentication methods or other
security devices to be used for Proper Instructions which Customer may give by
telephone, telex, TWX, facsimile transmission, bank wire or through an
electronic instruction system, shall be processed in accordance with terms and
conditions for the use of the arrangements, methods or devices as Wachovia may
put into effect and modify from time to time. Customer shall safeguard any test
keys, identification codes or other security devices which Wachovia makes
available to Customer and agrees that Customer shall be responsible for any
loss, liability or damage Wachovia or Customer incurs as a result of Wachovia's
acting in accordance with instructions from any unauthorized person using the
proper security device unless the loss, liability or damage was incurred as a
result of Wachovia's negligence, bad faith, or willful misconduct. Wachovia may,
but is not obligated to, electronically record any instructions given by
telephone and any other telephone discussions about the Account.
17. Transactions Not Requiring Proper Instructions. Wachovia is authorized to
-----------------------------------------------
take the following action without Proper Instructions:
a. Collection of Income and Other Payments. Wachovia shall:
---------------------------------------
13
i. Collect and receive on a timely basis for the account of Customer, all
income and other payments and distributions, including (without
limitation) stock dividends, rights, warrants and similar items,
included or to be included in the Property of Customer, and promptly
advise Customer of the receipt and shall credit the income, as
collected, to Customer. Wachovia shall promptly advise Customer of any
such amounts due but not paid. Without limiting the generality of the
foregoing, Wachovia shall detach and present for payment all coupons
and other income items requiring presentation as and when they become
due and shall collect interest when due on Securities held hereunder.
Any income due Customer on Securities loaned pursuant to the
provisions of Paragraph 13 that is credited to Wachovia for the
benefit of Customer shall be credited by Wachovia to Customer's
account. Wachovia shall, to the extent practicable, credit the Account
with interest, dividends or principal payments on payable or
contractual settlement date, in anticipation of receiving the same
from a payor, Securities Depository, broker or other agent Customer or
Wachovia employs. Any such crediting and posting shall be at
Customer's sole risk, and Wachovia shall be authorized to reverse any
advance posting in the event Wachovia does not receive good funds from
any payor, Securities Depository, broker or agent of Customer.
Wachovia shall (where practical, in its discretion) provide Customer
with advance notice of two Business Days prior to any such reversal;
ii. Endorse and deposit for collection in the name of Customer, checks,
drafts, or other orders for the payment of money on the same day as
received;
iii. Present for payment and collect the amount payable upon all Securities
which may mature or be called, redeemed or retired, or otherwise
become payable on the date the Securities become payable, promptly
deposit or withdraw such proceeds as designated therein and promptly
advise Customer of any such amounts due but not paid;
iv. Take any action which may be necessary and proper in connection with
the collection and receipt of the income and other payments and the
endorsement for collection of checks, drafts and other negotiable
instruments;
v. Effect an exchange of the shares where the par value of stock is
changed, and to surrender Securities at maturity or when advised of an
earlier call for redemption or when Securities otherwise become
available, against payment therefor in accordance with accepted
industry practice. Customer understands that Wachovia subscribes to
one or more nationally recognized services that provide information on
calls for redemption of bonds or other corporate actions. Wachovia
shall transmit promptly to Customer written information with respect
to materials received by Wachovia (or its agent) via Eligible Foreign
Custodians from issuers of the foreign securities being held for
Customer. Wachovia will use reasonable care in facilitating the
exercise of voting and other shareholder rights by Customer, subject
always to the laws, regulations and practical constraints that may
exist in the country where such securities are issued. Customer
acknowledges that local conditions may have the effect of severely
limiting the ability of Customer to exercise shareholder rights.
Subject to the foregoing acknowledgement and the standard of care to
which Wachovia is held under this Agreement, Wachovia shall not be
liable for any untimely exercise of any tender, exchange or other
right or power in connection with foreign securities or other property
of Customer at any time held by it unless Wachovia receives Proper
Instructions from Customer with regard to the exercise of any such
right or power before the date on which Wachovia is to take action to
exercise such right or power.
14
vi. Wachovia shall notify Customer of any rights, duties, limitations,
conditions or other information set forth in any Security (including
mandatory or optional put, call and similar provisions), and of the
date or dates by which such rights must be exercised or such action
must be taken, provided that Wachovia has actually received, from the
issuer or the relevant Securities Depository, or from the relevant
Eligible Foreign Custodian or Eligible Securities Depository, or a
nationally or internationally recognized bond or corporate action
service to which Wachovia subscribes (each a "Notice Provider"),
timely notice in regard to the Securities (a "Notice"). Wachovia shall
use due diligence in attempting to receive complete and accurate
information, and shall use reasonable care in forwarding information
to Customer.
vii. When fractional shares of stock of a declaring corporation are
received as a stock distribution, unless specifically instructed to
the contrary in writing, Wachovia is authorized to sell the fraction
received and credit Customer's account. Unless specifically instructed
to the contrary in writing, Wachovia is authorized to exchange
Securities in bearer form for Securities in registered form. If
Customer owns Property that is registered in the name of a nominee of
Wachovia and the issuer of any such Property calls the Property for
partial redemption, Wachovia is authorized to allot the called portion
to the beneficial holders of the Property in a manner it deems fair
and equitable in its sole discretion;
viii.Forward to Customer copies of all information or documents that it
may receive from an issuer of Securities which, in the opinion of
Wachovia, are intended for Customer as the beneficial owner of
Securities; and
ix. Execute, as custodian, any certificates of ownership, affidavits,
declarations or other certificates in connection with the collection
or receipt of income, bond and note coupons, or other payments from
Securities or in connection with transfers of Securities.
b. Miscellaneous Transactions. Wachovia is authorized to deliver or cause
---------------------------
to be delivered Property against payment or other consideration or written
receipt therefor in the following cases:
i. for examination by a broker selling for the Account of Customer in
accordance with street delivery custom;
ii. for the exchange of interim receipts or temporary Securities for
definitive securities; and
iii. for transfer of Securities into the name of Customer or Wachovia or a
nominee of either, or to the issuer thereof for exchange of Securities
for a different number of bonds, certificates, or other evidence,
representing the same aggregate face amount or number of units bearing
the same interest rate, maturity date and call provisions, if any;
provided that, in any case, the new Securities are to be delivered to
Wachovia.
18. Transactions Requiring Proper Instructions. In addition to the actions
---------------------------------------------
requiring Proper Instructions set forth in this Agreement, upon receipt of
Proper Instructions and not otherwise, Wachovia, directly or through the use of
a Depository or the Book-Entry System, shall:
15
a. Execute and deliver to the persons as may be designated in Proper
Instructions, proxies, consents, authorizations, and any other instruments
whereby the authority of Customer as owner of any Securities may be exercised;
b. Deliver any Securities held for Customer against receipt of other
Securities or cash or take such other steps as shall be stated in Proper
Instructions in connection with the liquidation, reorganization, refinancing,
merger, consolidation or recapitalization of any corporation, or the exercise of
any conversion privilege;
c. Release Securities belonging to Customer to any bank or trust company
for the purpose of pledge or hypothecation to secure any loan Customer incurs;
d. Deliver Securities in accordance with the provisions of any agreement
among Customer, Wachovia and a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the NASD relating to compliance with the
rules of The Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or organizations, regarding
escrow or other arrangements in connection with Customer transactions;
e. Deliver Securities in accordance with the provisions of any agreement
among Customer, Wachovia and a Futures Commission Merchant registered under the
Commodity Exchange Act, relating to compliance with the rules of the Commodity
Futures Trading Commission, or any similar organization or organizations,
regarding account deposits in connection with Customer transactions;
f. Surrender Securities, in connection with their exercise, warrants,
rights or similar actions, provided that in each case, the new Securities and
cash, if any, are to be delivered to Wachovia;
g. Deliver Securities upon receipt of payment for any repurchase agreement
Customer enters into;
h. Deliver Securities pursuant to any other proper corporate purpose, but
only upon receipt of Proper Instructions; and
i. Deliver Securities held for Customer pursuant to security lending
agreements concerning the lending of Customer's Securities into which
Customer may enter, from time to time.
19. Purchase and Sale of Securities.
-------------------------------
a. Promptly after Customer's investment adviser (or any sub-adviser)
purchases Securities, Customer shall deliver to Wachovia (as custodian) Proper
Instructions specifying for each purchase all information Wachovia may
reasonably request to settle such purchase. Wachovia shall upon receipt of
Securities purchased by or for a Fund pay out of the monies held for the account
of a Fund the total amount payable to the person from whom or the broker through
whom the purchase was made, provided that the same conforms to the total amount
payable as set forth in Proper Instructions.
16
b. Promptly after Customer's investment adviser (or any sub-adviser) sells
Securities, Customer shall deliver to Wachovia (as Custodian) Proper
Instructions, specifying for each sale all information Wachovia may reasonably
request to settle such sale. Wachovia shall deliver the Securities upon receipt
of the total amount payable to the Fund upon sale, provided that the same
conforms to the total amount payable as set forth in Proper Instructions.
Subject to the foregoing, Wachovia may accept payment in any form as shall be
satisfactory to it, and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in Securities.
c. Customer understands that when Wachovia is instructed to deliver
Securities against payment, delivery of the Securities and receipt of payment
therefor may not be completed simultaneously. Customer assumes full
responsibility for all credit risks involved in connection with Wachovia's
delivery of Securities pursuant to Proper Instructions of Customer.
d. Upon Customer's Proper Instructions, Wachovia shall purchase or sell
Securities and is authorized to use any broker or agent in connection with these
transactions, but shall use affiliates of Wachovia only as Customer directs.
Wachovia shall not be liable for the acts or omissions of any broker or agent
(except an affiliate of Wachovia).
e. Except as otherwise provided by law, a cash account (including
subdivisions of accounts maintained in different currencies) shall constitute
one single and indivisible Account. Consequently, Wachovia has the right to
transfer the balance of any subaccount of a cash account to any other subaccount
of a cash account. Wachovia shall notify Customer of any such transfers.
f.(i) For puts, calls and futures traded on securities exchanges, Nasdaq,
over-the-counter, or commodities exchanges, Wachovia shall take action as to put
options and call options Customer purchases or sells (writes) regarding escrow
or other arrangements in accordance with the provisions of any agreement entered
into upon receipt of Proper Instructions among Wachovia, any broker-dealer that
is a member of the NASD or futures commission merchant registered under the
Commodity Exchange Act, and, if necessary, Customer, relating to compliance with
rules of the Options Clearing Corporation or Commodities Futures Trading
Commission, and of any registered national securities exchange, or of any
similar organization or organizations.
(ii) Unless another agreement requires it to do so, Wachovia shall be under
no obligation or duty to see that Customer has deposited or is
maintaining adequate margin, if required, with any broker or futures
commission merchant in connection with any option, futures, puts or
calls, nor shall Wachovia be under any obligation or duty to present
the option to the broker or futures commission merchant for exercise
unless it receives Proper Instructions from Customer. Wachovia shall
have no responsibility for the legality of any put, call or option
sold on Customer's behalf, the propriety of any purchase or sale, or
the adequacy of any collateral delivered to a broker or futures
commission merchant in connection with a put, call or option or
deposited to or withdrawn from any Account. Wachovia specifically, but
not by way of limitation, shall not be under any obligation or duty
to: (x) periodically check with or notify Customer that the amount of
collateral a broker or futures commission merchant holds is sufficient
to protect the broker or futures commission merchant or Customer
against any loss; (y) effect the return of any collateral delivered to
a broker or futures commission merchant; or (z) advise Customer that
any option it holds has expired or is about to expire, subject to the
requirement of Paragraph 5b. to promptly transmit notices. These
obligations and duties shall be Customer's sole responsibility.
17
20. Tax Reclaims
------------
a. Subject to the provisions of this Paragraph, Wachovia shall apply for a
reduction of withholding tax and any refund of any tax paid or tax credits in
respect of income payments on Foreign Assets and other Property credited to the
Account that Wachovia believes may be available.
b. The provision of a tax reclamation service by Wachovia is conditional
upon Wachovia receiving from Customer (i) a declaration of its identity and
place of residence and (ii) certain other documentation (copies of which are
available from Wachovia). If Foreign Assets or Property credited to the Account
are beneficially owned by someone other than Customer, this information shall be
necessary with respect to the beneficial owner. Customer acknowledges that
Wachovia shall be unable to perform tax reclamation services unless it receives
this information.
c. Wachovia shall perform tax reclamation services with respect to taxation
levied by the revenue authorities of the countries advised to Customer from time
to time and Wachovia may, by notification in writing, supplement or amend the
countries in which the tax reclamation services are offered.
d. Customer confirms that Wachovia is authorized to disclose any
information requested by any revenue authority or any governmental body in
relation to the processing of any tax reclaim.
21. Records. The books and records pertaining to Customer that are in the
-------
possession of Wachovia shall be the property of Customer. Wachovia shall prepare
and maintain these books and records as the 1940 Act and other applicable
federal securities laws and rules and regulations require. Customer and
Customer's authorized representatives shall have access to Wachovia's books and
records pertaining to Customer at all times during Wachovia's normal business
hours, and Wachovia shall surrender these books and records to Customer promptly
upon request. Upon reasonable request of Customer, Wachovia shall provide copies
of any books and records to Customer and Customer's authorized representative.
22. Cooperation with Accountants. Wachovia shall cooperate with Customer's
------------------------------
independent public accountants and shall take all reasonable action in the
performance of its obligations under this Agreement to assure that the necessary
information is made available to the accountants.
18
23. Reports to Customer by Independent Public Accountants. Wachovia shall
---------------------------------------------------------
provide Customer, at such times as Customer may reasonably require, with reports
from Wachovia's independent public accountants on the accounting system,
internal accounting controls and procedures for safeguarding cash, Securities,
futures contracts and options on futures contracts, including Securities
deposited and/or maintained in a Securities Depository or Book-Entry System,
relating to the services Wachovia provides under this Agreement. These reports
shall be of sufficient scope and in sufficient detail as Customer may reasonably
require to provide reasonable assurance that the examination would disclose any
material inadequacies and, if there are no material inadequacies, the reports
shall so state.
24. Confidentiality.
---------------
Customer and Wachovia agree, and will assure that each of its employees,
officers, directors, consultants, representatives, agents and subcontractors
performing services hereunder, also agree as follows:
a. During the term of this Agreement and thereafter, except as permitted in
this Agreement or expressly in writing by each party to this Agreement, each
party shall not use, disclose, distribute, make known or communicate any
Confidential Information to any person, firm or enterprise. Wachovia may
disclose Confidential Information belonging to Customer as required to comply
with any validly issued subpoena or order, provided that, prior to compliance
with any such order, and at the request and expense of Customer, Wachovia will
cooperate with Customer to obtain a protective order. Customer may disclose
Confidential Information belonging to Wachovia as required to comply with any
validly issued subpoena or order, provided that, prior to compliance with any
such order, and at the request and expense of Wachovia, Customer will cooperate
with Wachovia to obtain a protective order. The provisions of this subparagraph
a. of Paragraph 24 shall survive termination of this Agreement and shall be
perpetual.
b. As used herein, the term "Confidential Information" shall mean all oral
or written information, of whatever kind and in whatever form, relating to a
party's business and business activities, financial, technical information and
client information (including but not limited to clients' identities), whether
in tangible or intangible form and whether or not marked as "confidential" that
may be obtained from any source as a result of this Agreement together with all
such other information designated as confidential.
c. Except as reasonably necessary to provide the services requested by
Customer hereunder, Wachovia shall not use the name(s), trademarks or trade
names of Customer, or any of its affiliates, whether registered or not, in
publicity releases or advertising or publicly in any other manner, including
company client lists, without securing the prior written approval of a Managing
Director or higher ranking officer of Customer.
25. Equipment.
---------
a. Wachovia shall notify Customer of any errors, omissions or interruptions
in, or delay or unavailability of Wachovia's ability to safeguard and hold
Securities and cash in accordance with this Agreement as promptly as
practicable, and proceed to correct the same as soon as is reasonably possible
at no additional expense to Customer.
19
b. Neither Wachovia nor Customer shall be responsible for delays or
failures in performance resulting from acts beyond the reasonable control of
such party, including acts of God, riots, acts of war or terrorism, epidemics,
fire, earthquakes, flood, or other disasters. In the event that either party is
unable to perform any of its obligations under this Agreement or to enjoy any of
its benefits because of such acts, the party who has been so affected shall
immediately give notice to the other party and shall do everything possible to
resume performance. Upon receipt of such notice, all obligations under this
Agreement shall be immediately suspended. If the period of nonperformance
exceeds ten (10) days from the receipt of notice of a force majeure event, the
party that has the ability to perform and has not been so affected may, by
giving written notice, immediately terminate this Agreement.
Wachovia shall enter into and shall maintain in effect with appropriate
parties one or more agreements making reasonable provision for back-up emergency
use of electronic data processing equipment to the extent appropriate equipment
is available.
26. Right to Receive Advice.
-----------------------
a. If Wachovia shall be in doubt as to any action it may take or omit to
take, it may request, and shall receive, clarification from Customer. If
Wachovia shall be in doubt as to any question of law involved in any action it
may take or omit to take in connection with Customer's Accounts, it may request
advice at its own cost from counsel of its own choosing (who may be counsel for
Customer or Wachovia, at the option of Wachovia). Wachovia shall be entitled to
rely on and follow the advice of its counsel, and shall be fully protected for
anything it does or omits to do in good faith in conformity with this advice.
b. Wachovia shall be protected in any action or inaction which it takes or
omits to take in reliance on any directions or advice received pursuant to
subparagraph (a) of this Paragraph 26 which Wachovia, after receipt of any
directions or advice, in good faith believes to be consistent with these
directions or advice. However, nothing in this Paragraph shall be construed as
imposing upon Wachovia any obligation (i) to seek directions or advice; or (ii)
to act in accordance with directions or advice when received, unless, under the
terms or another provision of this Agreement, the same is a condition to
Wachovia's properly taking or omitting to take action. Nothing in this
subparagraph shall excuse Wachovia when an action or omission on the part of
Wachovia constitutes willful misfeasance, bad faith, negligence or reckless
disregard of its duties under this Agreement.
27. Compensation.
------------
As compensation for the services provided by Wachovia pursuant to this
Agreement Customer will pay to Wachovia such amounts as may be agreed upon in
writing from time to time by Customer and Wachovia.
28. Representations.
---------------
20
a. Customer hereby represents to Wachovia that (i) this Agreement has been
duly authorized, executed and delivered by each Trust, constitutes a valid and
legally binding obligation of each Trust enforceable in accordance with its
terms, and no statute, regulation, rule, order, judgment or contract binding on
a Trust prohibits the Trust's execution or performance under this Agreement.
Wachovia hereby represents to Customer that (i) it is a U.S. Bank with the full
power to carry on its businesses as now conducted, and to enter into this
Agreement and to perform its obligations hereunder; and (ii) this Agreement has
been duly authorized, executed and delivered by Wachovia, constitutes a valid
and legally binding obligation of Wachovia enforceable in accordance with its
terms, and no statute, regulation, rule, order, judgment or contract binding on
Wachovia prohibits Wachovia's execution or performance of this Agreement; and
(iii) Wachovia has established, and agrees to maintain during the term of this
Agreement, the Monitoring System.
b. Wachovia hereby represents and warrants that each and every commercial
and noncommercial hardware, software, firmware, mechanical, or electrical
product ("Products") used, created, assembled, manufactured, developed, or
modified in connection with any goods or services offered or provided under this
Agreement shall, at no additional costs to Customer, be able to store and
process accurately any and all data reflected in the currency unit of the
European Monetary Union, the Euro, and related to the Euro (including, but not
limited to, calculating, comparing, storing, processing, recording, valuing,
recognizing, validating, presenting and sequencing). Customer may, at no
additional cost, require Wachovia to demonstrate compliance and/or compliance
techniques and test procedures it intends to follow or evidence of compliance by
Wachovia and relevant third party vendors, consistent with the Euro related
representations, warranties and obligations contained herein. These
representations and warranties shall be in effect so long as the service(s) or
Product(s) provided under this Agreement are used by Wachovia or provided by
Wachovia for the benefit of Customer.
29. Several Obligations of the Trusts
---------------------------------
With respect to the obligations of each Fund of each Trust arising
hereunder, Wachovia shall look for payment or satisfaction of any obligation
solely to the assets of the Fund to which such obligation relates as though
Wachovia had separately contracted by separate written instrument with respect
to each Fund.
30. Performance of Duties and Standard of Care.
------------------------------------------
a. Except as stated in Paragraphs 8 and 9 of this Agreement, in the
performance of its duties hereunder, Wachovia shall be obligated to exercise
care and diligence and act in good faith to ensure the accuracy and completeness
of all services performed under this Agreement.
b. Wachovia shall be under no duty to take any action on behalf of Customer
except as specifically set forth herein or as Wachovia may specifically agree to
in writing.
d. Wachovia may enter into subcontracts, agreements and understandings with
affiliates, whenever and on any terms and conditions as it deems necessary or
appropriate to perform its services under this Agreement, consistent with the
1940 Act and other applicable law. No subcontract, agreement or understanding
shall discharge Wachovia from its obligations under this Agreement.
e. Wachovia shall not be obligated to execute any of Customer's Proper
Instructions if Wachovia believes that to do so will or may contravene any law
or regulation, any relevant market practice, or Wachovia's general practice in
performing custody services. Wachovia shall notify Customer as soon as
practicable in the event that Wachovia determines not to execute a Proper
Instruction of Customer.
21
f. Except as stated in Paragraphs 8 and 9 of this Agreement, Wachovia shall
be responsible for its own negligent failure or that of any subcustodian it
shall appoint to perform its duties under this Agreement, but to the extent that
duties, obligations and responsibilities are not expressly set forth in this
Agreement, Wachovia shall not be liable. Without limiting the generality of the
foregoing or of any other provision of this Agreement, Wachovia in connection
with its duties under this Agreement, so long as and to the extent it is in the
exercise of reasonable care, shall not be under any duty or obligation to
inquire into and shall not be liable for or in respect of (i) the validity or
invalidity or authority or lack thereof of any advice, direction, notice or
other instrument which conforms to the applicable requirements of this
Agreement, if any, and which Wachovia reasonably believes to be genuine, (ii)
the validity of the issue of any Securities Customer purchases or sells, the
legality of the purchase or sale thereof or the propriety of the amount paid or
received therefor, (iii) the legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor, (iv) the legality of the
redemption of any Shares, or the propriety of the amount to be paid therefor, or
(v) the legality of the declaration or payment of any dividend or distribution
on Shares.
g. Each Trust assumes full responsibility for insuring that the contents of
each Registration Statement of the Trust complies with all applicable
requirements of the 1933 Act, the 1940 Act, and any laws, rules and regulations
of governmental authorities having jurisdiction.
31. Indemnification. Customer agrees to indemnify and hold harmless Wachovia and
---------------
its nominees from all taxes, charges, assessments, claims, and liabilities
(including, without limitation, liabilities arising under the Securities Act of
1933, the Securities Exchange Act of 1934, the 1940 Act, and any state and
foreign securities and blue sky laws, all as or to be amended from time to time)
and expenses, including (without limitation) attorney's fees and disbursements,
arising directly or indirectly from any action or thing which Wachovia takes or
does or omits to take or do in connection with or arising out of Wachovia's
performance of its responsibilities expressly set forth herein, provided
Wachovia has not acted with negligence or bad faith, or engaged in fraud or
willful misconduct in connection with the liabilities in question. Wachovia
similarly agrees to indemnify and hold harmless Customer from all taxes,
charges, assessments, claims, and liabilities (including, without limitation,
liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act, and any
state and foreign securities and blue sky laws, all as or to be amended from
time to time) and expenses, including (without limitation) attorney's fees and
disbursements arising directly or indirectly from Wachovia's or its nominee's or
sub-custodian's willful misfeasance, bad faith, negligence or reckless disregard
in performing its duties under this agreement. If Wachovia advances any cash for
any purpose resulting from Proper Instructions, or if Wachovia or its nominee or
subcustodian shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Agreement, except as may arise from its or its nominee's or subcustodian's own
negligent action, negligent failure to act, willful misconduct, or reckless
disregard of its duties under this Agreement or any agreement between Wachovia
and any nominee or subcustodian, Customer shall promptly reimburse Wachovia for
the advance of cash or taxes, charges, expenses, assessments, claims or
liabilities.
22
32. Effective Period; Termination and Amendment. This Agreement shall become
---------------------------------------------
effective as of its execution and shall continue in full force and effect until
terminated as hereinafter provided. The parties may mutually agree to amend this
Agreement at any time. Either party may terminate this Agreement by an
instrument in writing delivered or mailed, postage prepaid to the other party at
the address listed in Paragraph 34, the termination to take effect not sooner
than sixty (60) days after the date of delivery or mailing; provided, however,
that Wachovia shall not act under Paragraph 8 in the absence of receipt of a
certificate from Customer's secretary containing the resolution of the Board
regarding the Board's determination that it is reasonable to rely on Wachovia to
perform the responsibilities delegated pursuant to this Agreement to Wachovia as
Foreign Custody Manager of the Trust, provided further, however, that Customer
shall not amend or terminate this Agreement in contravention of any applicable
federal or state regulations, or any provision of the Declaration of Trust, and
further provided, that Customer may at any time by action of its Board (i)
substitute another bank or trust company for Wachovia by giving notice as
described above to Wachovia or (ii) immediately terminate this Agreement in the
event the Comptroller of the Currency appoints a conservator or receiver for
Wachovia or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction. Upon
termination of the Agreement, Customer shall pay to Wachovia all uncontested
compensation as may be due as of the date of termination. Termination of this
Agreement shall not affect any liabilities either party owes to the other
arising under this Agreement prior to such termination.
33. Successor Custodian. If Customer's Board shall appoint a successor
--------------------
custodian, Wachovia shall, upon termination, deliver to the successor custodian
at the office of the custodian, duly endorsed and in the form for transfer, all
Securities it then holds under this Agreement and shall transfer to an account
of the successor custodian all of Customer's Securities held in a Securities
Depository, Book-Entry System, Eligible Securities Depository, or Eligible
Foreign Custodian. If Customer does not deliver to Wachovia a written order
designating a successor custodian on or before the date when the termination
shall become effective, Wachovia shall have the right to deliver to a bank or
trust company, which is a "bank" as defined in the 1940 Act, doing business in
New York, New York, of its own selection, having an aggregate capital, surplus,
and undivided profits, as shown by its last published report, of not less than
$25,000,000, all Securities, monies, and other Property Wachovia holds and all
instruments Wachovia holds relative thereto and all other Property it holds
under this Agreement and to transfer to an account of the successor custodian
all of Customer's Securities held in any Securities Depository, Book-Entry
System, Eligible Securities Depository, or Eligible Foreign Custodian.
Thereafter, that bank or trust company shall be the successor of Wachovia under
this Agreement. If Property of Customer remains in the possession of Wachovia
after the date of termination of this Agreement owing to Customer's failure to
procure the certified copy of the vote referred to or of the Board to appoint a
successor custodian, Wachovia shall be entitled to fair compensation for its
services during the period Wachovia retains possession of the Property and the
provisions of this Agreement relating to the duties and obligations of Wachovia
shall remain in full force and effect. This Agreement shall be binding on each
of the parties' successors and assigns, but the parties agree that neither party
can assign its rights or obligations under this Agreement without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.
23
34. Notices. Notices, other than Proper Instructions, shall be served by
-------
registered mail or hand delivery to the address of the respective parties as
follows: (a) if to Wachovia, at Wachovia's address, 000 X. Xxxxx Xxxxxx, XX0000,
Xxxxxxxxxxxx, XX 00000; or (b) if to Customer, at the address of the Customer,
X.X. Xxx 0000, Xxxxxx Xxxxx, XX 00000, unless notice of a new address is given
to the other party in writing.
35. Further Actions. Each party agrees to perform further acts and execute
----------------
further documents as are necessary to effectuate the purposes of this Agreement.
36. Additional Funds. In the event that Customer has an additional Fund for
-----------------
which it desires Wachovia to render services as custodian under the terms
hereof, it shall so notify Wachovia in writing, and if the Custodian agrees to
provide these services, the Funds shall become Funds hereunder and shall be
added to Attachment B of this Agreement.
37. Miscellaneous. This Agreement embodies the entire Agreement and
-------------
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the services hereunder. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall together,
constitute only one instrument. This Agreement shall be deemed to be a contract
made in Pennsylvania and governed by Pennsylvania law. If a court decision,
statute, rule or otherwise holds or invalidates any provision of this Agreement,
the remainder of this Agreement shall not be affected. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
successors. Each Trust's Declaration of Trust is on file with the Secretary of
the State of Delaware. Each Trust's officers have executed this Agreement on
behalf of the Trust as officers and not individually and the obligations this
Agreement imposes upon a Trust are not binding upon any of the Trust's trustees,
officers or shareholders individually but are binding only upon the assets and
Property of such Trust.
24
IN WITNESS WHEREOF, the parties hereto have caused their officers
designated below to execute this Agreement as of the day and year first above
written.
Each of the open-end investment companies listed on Attachment B
By: /S/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /S/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Vice President
25
ATTACHMENT A
Each Trust's Board of Trustees delegated to Xxxx X. Xxxxxxx, Chief
Executive Officer of each Trust, Xxxxx X. Xxxxxxx, Chief Financial Officer of
The Vanguard Group, Inc., and Xxxxxx X. Xxxxxxx, Treasurer of each Trust, the
authority individually to designate Authorized Persons. The currently effective
list of Authorized Persons has been provided by Customer to Wachovia, and will
be updated by Customer as necessary.
ATTACHMENT B:
TRUSTS AND FUNDS
Vanguard Balanced Index Fund
Vanguard California Tax-Free Funds
Vanguard California Intermediate-Term Tax-Exempt Fund
Vanguard California Long-Term Tax-Exempt Fund
Vanguard California Tax-Exempt Money Market Fund
Vanguard Convertible Securities Fund
Vanguard Fenway Funds
Vanguard Growth Equity Fund
Vanguard Florida Tax-Free Funds
Vanguard Florida Long-Term Tax-Exempt Fund
Vanguard Institutional Index Fund
Vanguard Massachusetts Tax-Exempt Funds
Vanguard Massachusetts High-Grade Tax-Exempt Fund
Vanguard Municipal Bond Funds
Vanguard High-Yield Tax-Exempt Fund
Vanguard Insured Long-Term Tax-Exempt Fund
Vanguard Intermediate-Term Tax-Exempt Fund
Vanguard Limited-Term Tax-Exempt Fund
Vanguard Long-Term Tax-Exempt Fund
Vanguard Short-Term Tax-Exempt Fund
Vanguard Tax-Exempt Money Market Fund
Vanguard New Jersey Tax-Free Funds
Vanguard New Jersey Long-Term Tax-Exempt Fund
Vanguard New Jersey Tax-Exempt Money Market Fund
Vanguard New York Tax-Free Funds
Vanguard New York Long-Term Tax-Exempt Fund
Vanguard New York Tax-Exempt Money Market Fund
Vanguard Ohio Tax-Free Funds
Vanguard Ohio Long-Term Tax-Exempt Fund
Vanguard Ohio Tax-Exempt Money Market Fund
Vanguard Pennsylvania Tax-Free Funds
Vanguard Pennsylvania Long-Term Tax-Exempt Fund
Vanguard Pennsylvania Tax-Exempt Money Market Fund
Vanguard Quantitative Funds
Vanguard Growth and Income Fund
Vanguard Specialized Funds
Vanguard REIT Index Fund
Vanguard STAR Funds
Vanguard STAR Fund
Vanguard Total International Stock Index Fund
Vanguard Variable Insurance Fund
Balanced Portfolio
Diversified Value Portfolio
Equity Index Portfolio
High-Yield Bond Portfolio
Mid-Cap Index Portfolio
REIT Index Portfolio
Small Company Growth Portfolio
Total Bond Market Index Portfolio
Vanguard World Fund
Vanguard Xxxxxxx Social Index Fund
EXHIBIT A
PROVISION OF ADDITIONAL INFORMATION
For purposes of Paragraph 8 of the Agreement, Customer (or its investment
adviser(s)) shall be deemed to have considered the Country Risk as is incurred
by placing and maintaining Foreign Assets in each country for which Wachovia is
serving as Foreign Custody Manager of Customer. To aid Customer (and its
investment adviser(s)) in monitoring Country Risk, however, Wachovia shall
provide Customer (or its investment adviser(s)) the following information with
respect to the foreign countries of Eligible Foreign Custodians that Wachovia
selects pursuant to Paragraph 8.b of the Agreement: (a) opinions of local
counsel or reports concerning whether applicable foreign law would restrict the
access afforded to Customer's independent public accountants to books and
records kept by an Eligible Foreign Custodian located in that country; whether
applicable foreign law would restrict Customer's ability to recover its Foreign
Assets and cash in the event of the bankruptcy of an Eligible Foreign Custodian
located in that country; whether applicable foreign law would restrict
Customer's ability to recover Foreign Assets that are lost while under the
control of an Eligible Foreign Custodian located in the country; and (b)
periodic market reports with respect to securities settlement and registration,
taxation, and depositories (including depository evaluation), if any.
Wachovia will also periodically provide Customer (or its investment adviser(s))
the following information relating to Country Risk with respect to the foreign
countries of Eligible Foreign Custodians that Wachovia selects pursuant to
Paragraph 8.b of the Agreement, or eligible securities depositories pursuant to
Paragraph 9, as Wachovia receives this information: (y) written information
concerning each foreign country's practices with regard to expropriation,
nationalization, freezes, or confiscation of financial assets; or whether
difficulties in converting Customer's cash and cash equivalents to U.S. dollars
are reasonably foreseeable; (z) market reports with respect to each foreign
country's securities regulatory environment, foreign ownership restrictions, or
foreign exchange practices. Customer hereby acknowledges that: (i) this
information is solely designed to inform Customer (or its investment adviser(s))
of market conditions and procedures and is not intended to be considered
comprehensive or as a recommendation to invest or not invest in particular
markets; and (ii) Wachovia is not the primary source of the information and has
gathered the information from sources it considers reliable, but that Wachovia
shall have no responsibility for inaccuracies or incomplete information.
To aid Customer or its delegate in its consideration of Country Risks, Wachovia
shall furnish Customer annually and prior to the initial placing of Foreign
Assets into a country, the following information:
(i) securities settlement and registration, (ii) taxation, and (iii) compulsory
depositories.
Wachovia shall furnish additional information customarily provided to other
investment companies registered under the Investment Company Act of 1940 for
which Wachovia provides foreign custody services.
Wachovia shall furnish additional information regarding Country Risks as
Customer may reasonably request from time to time.
EXHIBIT B
EXHIBIT C
LIST OF ELIGIBLE SECURITIES DEPOSITORIES
LIST OF FOREIGN MARKETS
COUNTRY SUB-CUSTODIAN CASH CORRESPONDENT BANK
------- ------------- -------------------------------------
ARGENTINA JPMorgan Chase Bank JPMorgan Xxxxx Xxxx
Xxxxxxxx 000, 0xx Xxxxx Xxxxxx Xxxxx
0000 Buenos Aires BIC Code: XXXXXXXX
ARGENTINA
BIC Code: XXXXXXXX
AUSTRALIA JPMorgan Chase Bank Australia and New Zealand Banking
Group Ltd.
Xxxxx 00 Xxxxxxxxx
AAP Center 259, Xxxxxx BIC Code: XXXXXX0X
Xxxxxx Xxxxxx XXX 0000
XXXXXXXXX a/c A/c 70003
BIC Code: XXXXXX0X
AUSTRIA Bank Austria AG X.X. Xxxxxx AG-Frankfurt
Xxxxxx Xxxxxxx Xxxxx-3 Acct: Chase Xxxxxxxxx Xxxxxx
X-0000 Xxxxxx Acct #: 6231400604
AUSTRIA A/c 0101-05963/00 BIC Code: XXXXXXXX
BIC Code: XXXXXXXX
BELGIUM Fortis Bank N.V. J.P. Xxxxxx XX- Xxxxxxxxx
0 Xxxxxxxx Xx Xxxx Xxxx: Xxxxx Xxxxxxxxx Xxxxxx
0000 Xxxxxxxx Acct #: 6231400604
BELGIUM A/c 000-0000000-00 BIC Code: XXXXXXXX
BIC Code: XXXXXXXX00X
BERMUDA The Bank of Bermuda Limited The Bank of Bermuda Limited
0 Xxxxx Xxxxxx Xxxxxxxx
Xxxxxxxx HMDX BIC Code: XXXXXXXXXXX
BERMUDA
BIC Code: XXXXXXXXXXX
BRAZIL BankBoston, N.A. BankBoston, N.A.
Rua Libero Badaro, 000-00 Xxx Xxxxx
Xxx Xxxxx - XX 00000-000 BIC Code: N/A
BRAZIL
BIC Code: N/A
BULGARIA ING Bank N.V. ING Bank N.V.
Xxxxx Xxxxxx Sofia
12 Xxxx Bersinski Street BIC Code: XXXXXXXX
Xxxx Xxxxx Xxxxxx
0000 Xxxxx
XXXXXXXX
BIC Code: XXXXXXXX
COUNTRY SUB-CUSTODIAN CASH CORRESPONDENT BANK
------- ------------- -------------------------------------
BULGARIA ING Bank N.V. ING Bank N.V.
Xxxxx Xxxxxx Sofia
12 Xxxx Bersinski Street BIC Code: XXXXXXXX
Xxxx Xxxxx Xxxxxx
0000 Xxxxx
XXXXXXXX
BIC Code: XXXXXXXX
CANADA Royal Bank of Canada Royal Bank of Canada
000 Xxx Xxxxxx, Xxxxx 0000 Xxxxxxx
15th Floor BIC Code: XXXXXXX0
Xxxxx Xxxx Xxxxx, Xxxxx Xxxxx
Xxxxxxx Xxxxxxx X0X 0X0
XXXXXX a/c T12207321
BIC Code: XXXXXXX0XXX
CHILE Citibank, N.A. Citibank, N.A.
Avda. Xxxxxx Xxxxx 2687 Xxxxxxxx
3rd and 5th Floors BIC Code: XXXXXX00XXX
Santiago
CHILE
BIC Code: XXXXXX00XXX
COLOMBIA Cititrust Colombia S.A. Cititrust Colombia S.A. Sociedad
Fiduciaria
Sociedad Fiduciaria Santa Fe de Bogota
Carrera 9a No 99-02 BIC Code: XXXXXX00XXX
First Floor
Santa Fe de Bogota, D.C.
COLOMBIA
BIC Code: XXXXXX00XXX
DENMARK Danske Bank A/S Nordea Bank Danmark A/S
2-12 Holmens Kanal Copenhagen
DK 1092 Copenhagen K BIC Code: XXXXXXXX
Denmark a/c 4001455435
BIC Code: XXXXXXXX
EGYPT Citibank, N.A. Citibank, N.A.
4 Xxxxx Xxxxx Street Cairo
Garden City BIC Code: XXXXXXXX
Cairo
EGYPT
BIC Code: XXXXXXXX
FINLAND Nordea Bank Finland Plc X.X. Xxxxxx Ag- Frankfurt
2598 Custody Services XXXXXXXX
Xxxxxxx Xxxxx Katu 3-5 Acct: Chase Xxxxxxxxx Xxxxxx
XXX-00000 XXXXXX, Xxxxxxxx Acct #: 6231400604
FINLAND a/c 22642999 BIC Code: XXXXXXXX
BIC Code: XXXXXXXX
COUNTRY SUB-CUSTODIAN CASH CORRESPONDENT BANK
------- ------------- -------------------------------------
FRANCE BNP Paribus SA X.X. Xxxxxx AG- Xxxxxxxxx
0, Xxx X'Xxxxx Acct: Xxxxx Xxxxxxxxx Xxxxxx
00000 Xxxxx Acct #: 6231400604
FRANCE BIC Code: XXXXXXXX
BIC Code: XXXXXXXX
GERMANY Dresdner Bank AG X.X. Xxxxxx AG- Frankfurt
Xxxxxxx-Xxxxx-Xxxxx 0 Xxxx: Chase Manhattan London
60284 Frankfurt/Main Acct #: 6231400604
GERMANY A/c 4990804867808 BIC Code: XXXXXXXX
BIC # XXXXXXXX
GREECE HSBC Bank plc X.X. Xxxxxx AG- Frankfurt
Messogion 109-111 Acct: Xxxxx Xxxxxxxxx Xxxxxx
00000 Xxxxxx Acct #: 6231400604
GREECE BIC Code: XXXXXXXX
BIC Code: MIDLGRAAXGSS
HONG KONG The Hongkong and Shanghai JPMorgan Chase Bank
Banking Corporation Ltd. Hong Kong
36th Floor, Sun Hung Kai BIC Code: XXXXXXXX
Centre 00 Xxxxxxx Xxxx
Xxx Xxxx
XXXX XXXX a/c 000-000000-000
BIC Code: XXXXXXXXXXX
HUNGARY Citibank Rt. ING Bank Rt.
Szabadsag ter 0-0 Xxxxxxxx
X-0000 Xxxxxxxx V BIC Code: XXXXXXXX
HUNGARY
BIC Code: XXXXXXXXXXX
ICELAND Islandsbanki-FBA Islandsbanki-FBA
Xxxxxxxxxxxx 0 Xxxxxxxxx
000 Xxxxxxxxx BIC Code: XXXXXXXX
ICELAND
BIC Code: XXXXXXXX
INDONESIA The Hongkong and Shanghai The Hongkong and Shanghai
Banking Corporation Ltd. Banking Corporation Limited
World Trade Center 4th Floor Jakarta
Jalan Jendral Sudirman Kav. BIC Code: XXXXXXXXXXX
00-00
Xxxxxxx 00000
XXXXXXXXX
BIC Code: XXXXXXXXXXX
IRELAND Allied Irish Banks, p.l.c. X. X. Xxxxxx AG- Frankfurt
X.X. Xxx 000 Acct: Chase Manhattan London
Int'l Financial Services Acct #: 6231400604
Centre Xxxxxx 0 BIC Code: XXXXXXXX
IRELAND
BIC Code: N/A
COUNTRY SUB-CUSTODIAN CASH CORRESPONDENT BANK
------- ------------- -------------------------------------
ISRAEL Bank Leumi le-Israel B.M. Bank Leumi le-Israel B.M.
00, Xxxxxx Xxxxxx Xxxxxx Xxx Xxxx
00000 Tel Aviv BIC Code: XXXXXXXXXXX
ISRAEL
BIC Code: XXXXXXXXXXX
ITALY BNP Paribas Securities X.X. Xxxxxx AG- Frankfurt
Services S.A. Acct: Chase Manhattan London
2 Piazza San Xxxxxx Acct #: 6231400604
20121 Milan BIC Code: XXXXXXXX
ITALY a/c 6674.65
BIC Code: XXXXXXXX
IVORY COAST Societe Generale de Banques Societe Generale
en Cote d'Ivoire Paris
5 et 7, Avenue J. Anoma BIC Code: XXXXXXXX
- 01 B.P. 1355
Abidjan 01
IVORY COAST
BIC Code: XXXXXXXXXXX
JAMAICA CIBC Trust and Merchant CIBC Trust and Merchant Bank Jamaica
Ltd
Bank Jamaica Limited Kingston
00-00 Xxxxxxxxx Xxxx. BIC Code: XXXXXXXX
Kingston 10
JAMAICA
BIC Code: XXXXXXXX
JAPAN The Bank of Tokyo- JPMorgan Chase Bank
Mitsubishi, Ltd. Tokyo
3-2 Nihombashi Hongkucho BIC Code: XXXXXXXX
0-xxxxx
Xxxx-xx
Xxxxx 000
XXXXX a/c 010026000
BIC Code: XXXXXXXXXXX
KENYA Barclays Bank of Kenya Ltd. Barclays Bank of Kenya Ltd.
X/X Xxxxxxxxxxxx Xxxxxxxxxx Xxxxxxx
Services & Limited BIC Code: XXXXXXXXXXX
Xxxxxxxxx 0, Xxxxxxxx
Xxxxx, Xxxxx Xx.
Xxxxxxx
XXXXX
BIC Code: XXXXXXXXXXX
LUXEMBOURG Banque Generale du X.X. Xxxxxx AG- Frankfurt
Luxembourg S.A. Acct #: 6231400604
00 Xxxxxx X.X. Xxxxxxx BIC Code: XXXXXXXX
X-0000
XXXXXXXXXX
BIC Code: XXXXXXXX
COUNTRY SUB-CUSTODIAN CASH CORRESPONDENT BANK
------- ------------- -------------------------------------
MALAYSIA HSBC Bank Malaysia Berhad HSBC Bank Malaysia Berhad
0 Xxxxx Xxxxxx Xxxxx Xxxxxx
00000 Xxxxx Xxxxxx BIC Code: XXXXXXXX
MALAYSIA
BIC Code: XXXXXXXX
MEXICO Banco X.X. Xxxxxx, S.A. Banco X.X. Xxxxxx, X.X.
Xxxxx Optima Mexico, D.F
Xxxxx xx xxx Xxxxxx # 000 BIC Code: XXXXXXXX
Piso 00 Xxxxx xx Xxxxxxxxxxx
00000 Xxxxxx, D.F.
MEXICO a/c 300010
BIC Code: XXXXXXXX
NETHERLANDS ABN AMRO bank N.V. J.P. Xxxxxx XX- Frankfurt
Kemelstede 2 Acct: Chase Manhattan London
X.X. Xxx 0000 Acct #: 6231400604
4800 De Breda BIC Code: XXXXXXXX
NETHERLANDS
NECICOM # 0410743429
BIC Code: XXXXXX0X
NEW ZEALAND National Nominees Limited Xxxxxxxx Xxxx xx Xxx Xxxxxxx
Xxxxx 0 XXX Tower Wellington
000 Xxxxx Xxxxxx BIC Code: XXXXXX00
Auckland
New Zealand
BIC Code: XXXXXX00
NORWAY Den norske Bank ASA Den norske Bank XXX
Xxxxxxxx 00 Xxxx
PO Box 1171 Sentrum BIC Code: XXXXXXXX
X-0000 Xxxx
XXXXXX a/c 050050033070
BIC Code: XXXXXXXX
PERU Citibank, N.A. Banco de Credito del Peru
Camino Real 457 Lima
Torre Real - 5th Floor BIC Code: XXXXXXXX
Xxx Xxxxxx, Xxxx 00
XXXX
BIC Code: XXXXXX00XXX
PHILIPPINES The Hongkong and Shanghai The Hongkong and Shanghai Banking
Banking Corporation Limited
Corporation Limited Manila
30/F Discovery Suites BIC Code: XXXXXXXX
00 XXX Xxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxx
XXXXXXXXXXX
BIC Code: XXXXXXXX
COUNTRY SUB-CUSTODIAN CASH CORRESPONDENT BANK
------- ------------- -------------------------------------
POLAND Bank Handlowy w. Warszawie Bank Rozwoju Eksportu S.A.
S.A. Xxxxxx
xx. Xxxxxxxxxx 00 BIC Code: XXXXXXXX
00-000 Xxxxxx
XXXXXX
BIC Code: XXXXXXXX
PORTUGAL Banco Espirito Santo, S.A X.X. Xxxxxx AG- Frankfurt
7th floor Acct: Chase Manhattan London
Xxx Xxxxxxxx, 00 Acct #: 6231400604
0000-000 Xxxxxx BIC Code: XXXXXXXX
PORTUGAL a/c 099332090018
BIC Code: XXXXXXXX
SINGAPORE Standard Chartered Bank Oversea-Chinese Banking Corporation
3/F, 0 Xxxxxxx Xxxx Xxxxxxxxx
000000 BIC Code: XXXXXXXX
SINGAPORE a/c SG0000025464
BIC Code: XXXXXXXX
SOUTH AFRICA The Standard Bank of The Standard Bank of South Africa
Ltd.
South Africa Ltd. Johannesburg
Standard Bank Centre BIC Code: XXXXXXXX
0xx Xxxxx
0 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx 0000
XXXXX XXXXXX a/c 400564092
BIC Code: XXXXXXXX
SOUTH KOREA The Hongkong and Shanghai The Hongkong and Shanghai Banking
Banking Corporation Limited
Corporation Limited BIC Code: XXXXXXXX
0/X XXXX Xxxxxxxx
#00, Xxxxxxx-xxxx 0-xx
Xxxxx
XXXXX XXXXX
BIC Code: XXXXXXXX
SPAIN X.X. Xxxxxx Bank, S.A. J.P. Xxxxxx XX-Xxxxxxxxx
Xxxxx xx xx Xxxxxxxxxx, 00 BIC Code: XXXXXXXX
28046 Madrid
SPAIN A/c 877710
BIC Code: XXXXXX0X
SWEDEN Skandinaviska Enskilda Svenska Handelsbanken
Banken Sergels Torg 2 Xxxxxxxxx
XX-000 00 Xxxxxxxxx BIC Code: XXXXXXXX
SWEDEN a/c 00-000 000 000
BIC Code: XXXXXXXX
SWITZERLAND UBS AG UBS AG
45 Xxxxxxxxxxxxxx Xxxxxx
0000 Xxxxxx BIC Code: XXXXXXXX00X
SWITZERLAND a/c 00-000 000 000
BIC Code: XXXXXXXX00X
COUNTRY SUB-CUSTODIAN CASH CORRESPONDENT BANK
------- ------------- -------------------------------------
TAIWAN The Hongkong and Shanghai The Hongkong and Shanhai Banking
Banking Corporation Limited
Corporation Limited Taipei
International Trade Building BIC Code: XXXXXXXX
16th Floor, Taipei World Trade Cntr
000 Xxxxxxx Xxxx, Xxx. 0 Xxxxxx 000
XXXXXX
BIC Code: XXXXXXXX
THAILAND Standard Chartered Bank Standard Chartered Bank
14th Floor, Zone B Bangkok
Sathorn Nakorn Tower BIC Code: XXXXXXXX
000 Xxxxx Xxxxxxx Xxxx Xxxxxxx
Xxxxxxx 00000
XXXXXXXX a/c TH0000038460
BIC Code: XXXXXXXX
TURKEY JPMorgan Chase Bank JPMorgan Chase Bank
Emirhan Cad. No: 145 Istanbul
Atakule, A Blok Kat: 11 BIC Code: XXXXXXXX
00000-Xxxxxxxxx/Xxxxxxxx
Xxxxxxxx
XXXXXX
BIC Code: CHASTRIS
U.K. JPMorgan Chase Bank National Westminster Bank
Xxxxxx Court London
Ground Floor Sort code: 60-92-42
00 Xxxxxxxxxxx Xxxx: Chase Xxxxxxxxx Xxxx Xxxxxx
Xxxxxx XX0X 0XX SIC Code: XXXXXX0X
UNITED KINGDOM
BIC Code: XXXXXX0X
U.S.A. JPMorgan Chase Bank JPMorgan Xxxxx Xxxx
0 Xxx Xxxx Xxxxx Xxx Xxxx
Xxx Xxxx BIC Code: XXXXXX00
XX 00000
U.S.A.
BIC Code: XXXXXX00
VENEZUELA Citibank, N.A. Citibank, N.A.
Carmelitas a Xxxxxxxxxx Caracas
Edificio Citibank BIC Code: XXXXXX00XXX
Caracas 1010
VENEZUELA
BIC Code: XXXXXX00XXX
ATTACHMENT B - AMENDMENT #1
The following is an amendment ("Amendment") to the Mutual Fund Custody Agreement
dated March 6, 2003, as amended from time to time (the "Agreement"), by and
among Wachovia Bank, National Association ("Custodian") and each Delaware
statutory trust listed on Attachment B thereto (each, a "Trust" and
collectively, "Customer"). This Amendment serves to update the names of the
Trusts and certain of their portfolios (each, a "Fund") listed on Attachment B.
Custodian and Customer hereby agree that all of the terms and conditions as set
forth in the Agreement are hereby incorporated by reference with respect to the
Trusts and Funds listed below.
Attachment B is hereby amended as follows:
Vanguard Balanced Index Fund
Vanguard California Tax-Free Funds
Vanguard California Intermediate-Term Tax-Exempt Fund
Vanguard California Long-Term Tax-Exempt Fund
Vanguard California Tax-Exempt Money Market Fund
Vanguard CMT Funds
Vanguard Municipal Cash Management Fund
Vanguard Convertible Securities Fund
Vanguard Fenway Funds
Vanguard Growth Equity Fund
Vanguard Florida Tax-Free Funds
Vanguard Florida Long-Term Tax-Exempt Fund
Vanguard Institutional Index Fund
Vanguard Massachusetts Tax-Exempt Funds
Vanguard Massachusetts High-Grade Tax-Exempt Fund
Vanguard Municipal Bond Funds Vanguard High-Yield Tax-Exempt Fund Vanguard
Insured Long-Term Tax-Exempt Fund Vanguard Intermediate-Term Tax-Exempt
Fund Vanguard Limited-Term Tax-Exempt Fund Vanguard Long-Term
Tax-Exempt Fund Vanguard Short-Term Tax-Exempt Fund Vanguard Tax-Exempt
Money Market Fund
Vanguard New Jersey Tax-Free Funds
Vanguard New Jersey Long-Term Tax-Exempt Fund
Vanguard New Jersey Tax-Exempt Money Market Fund
Vanguard New York Tax-Free Funds
Vanguard New York Long-Term Tax-Exempt Fund
Vanguard New York Tax-Exempt Money Market Fund
Vanguard Ohio Tax-Free Funds
Vanguard Ohio Long-Term Tax-Exempt Fund
Vanguard Ohio Tax-Exempt Money Market Fund
Vanguard Pennsylvania Tax-Free Funds
Vanguard Pennsylvania Long-Term Tax-Exempt Fund
Vanguard Pennsylvania Tax-Exempt Money Market Fund
Vanguard Quantitative Funds
Vanguard Growth and Income Fund
Vanguard Specialized Funds
Vanguard REIT Index Fund
Vanguard STAR Funds
Vanguard STAR Fund
Vanguard Total International Stock Index Fund
Vanguard Variable Insurance Fund
Balanced Portfolio
Diversified Value Portfolio
Equity Index Portfolio
High-Yield Bond Portfolio
Mid-Cap Index Portfolio
REIT Index Portfolio
Small Company Growth Portfolio
Total Bond Market Index Portfolio
Vanguard World Fund
Vanguard Xxxxxxx Social Index Fund
AGREED TO as of May 14, 2004 BY:
Wachovia Bank, National Association Each Fund listed on Attachment B
By: /S/ XXXXX X. XXXXXX By: /S/ XXXXXX X. XXXXXXX
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President Title: Treasurer
CONSENT TO ASSIGNMENT
This Consent to Assignment (this "Consent") is dated and made effective
as of December 26, 2005 by each Delaware statutory trust listed on Attachment A
hereto (each, a "Trust" and collectively, the "Trusts"), severally and for and
on behalf of certain of their respective portfolios listed on Attachment A
hereto (each, a "Fund" and collectively, the "Funds") for the benefit of
Wachovia Bank, National Association, a national bank ("Wachovia"), and U.S.
Bank, National Association, a national bank and the lead bank of U.S. Bancorp.
("U.S. Bank").
Reference is hereby made to that certain Mutual Fund Custody Agreement
dated as of March 6, 2003, as amended on May 14, 2004 (the "Custody Agreement")
between the Trusts and Wachovia pursuant to which Wachovia provides certain
custodial services to the Trusts and the Funds on the terms and subject to the
conditions set forth in the Custody Agreement. Effective on or about December
31, 2005, Wachovia intends to assign all of its right, title and interest in and
to the Custody Agreement to U.S. Bank. Pursuant to Section 33 of the Custody
Agreement, the Trusts hereby consent to the assignment of the Custody Agreement
from Wachovia to U.S. Bank.
Except as provided herein, all of the terms and conditions of the
Custody Agreement shall remain in full force and effect.
Each of the open-end investment
companies listed on Attachment A
By: _/s Xxxxxx X. Xxxxxxx
Name: ___Thomas X. Xxxxxxx
Title: ___Treasurer
ACCEPTED AND AGREED TO BY:
Wachovia Bank, National Association
By: __/s Xxxx X. Xxxxxx
Name: __Paul X. Xxxxxx
Title: __Vice President
U.S. Bank, National Association
By: __/s Xxx X. Xxxxxxx
Name: __Joe X. Xxxxxxx
Title: __Senior Vice President
ATTACHMENT A
Trusts and Funds
Vanguard Balanced Index Fund
Vanguard California Tax-Free Funds
Vanguard California Intermediate-Term Tax-Exempt Fund
Vanguard California Long-Term Tax-Exempt Fund
Vanguard California Tax-Exempt Money Market Fund
Vanguard CMT Funds
Vanguard Municipal Cash Management Fund
Vanguard Convertible Securities Fund
Vanguard Fenway Funds
Vanguard Growth Equity Fund
Vanguard Florida Tax-Free Funds
Vanguard Florida Long-Term Tax-Exempt Fund
Vanguard Institutional Index Fund
Vanguard Massachusetts Tax-Exempt Funds
Vanguard Massachusetts Tax-Exempt Fund
Vanguard Municipal Bond Funds Vanguard High-Yield Tax-Exempt Fund Vanguard
Insured Long-Term Tax-Exempt Fund Vanguard Intermediate-Term Tax-Exempt
Fund Vanguard Limited-Term Tax-Exempt Fund Vanguard Long-Term
Tax-Exempt Fund Vanguard Short-Term Tax-Exempt Fund Vanguard Tax-Exempt
Money Market Fund
Vanguard New Jersey Tax-Free Funds
Vanguard New Jersey Long-Term Tax-Exempt Fund
Vanguard New Jersey Tax-Exempt Money Market Fund
Vanguard New York Tax-Free Funds
Vanguard New York Long-Term Tax-Exempt Fund
Vanguard New York Tax-Exempt Money Market Fund
Vanguard Ohio Tax-Free Funds
Vanguard Ohio Long-Term Tax-Exempt Fund
Vanguard Ohio Tax-Exempt Money Market Fund
Vanguard Pennsylvania Tax-Free Funds
Vanguard Pennsylvania Long-Term Tax-Exempt Fund
Vanguard Pennsylvania Tax-Exempt Money Market Fund
Vanguard Quantitative Funds
Vanguard Growth and Income Fund
Vanguard STAR Funds
Vanguard STAR Fund
Vanguard Total International Stock Index Fund
Vanguard Variable Annuity Funds
Balanced Portfolio
Diversified Value Portfolio
Equity Index Portfolio
High-Yield Bond Portfolio
Mid-Cap Index Portfolio
REIT Index Portfolio
Small Company Growth Portfolio
Total Bond Market Index Portfolio
Vanguard World Fund
FTSE Social Index Fund (fka Vanguard Xxxxxxx Social Index Fund)
