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EXHIBIT-99.B8.1
AMENDMENT TO THE CUSTODIAN AGREEMENT
AMENDMENT entered into as of this 26th day of August, 1996 to the
Custodian Agreement among STRONG SHORT-TERM GLOBAL BOND FUND, INC. (the "Fund")
and XXXXX BROTHERS XXXXXXXX & CO. (the "Custodian") dated as of March 2,1994
(the "Agreement").
In consideration of the Custodian's offering subcustodial services to the
Funds in Russia, the Funds and the Custodian agree that the Agreement is hereby
amended as follows:
1. Section 2. I., Safekeeping , is amended by the addition of the
following phrase at the end of said Section:
"provided, however, that the Custodian's responsibility for safekeeping
equity securities of Russian issuers ("Russian Equities") hereunder shall be
limited to the safekeeping of relevant share extracts from the share
registration books maintained by the entities providing share registration
services to issuers of Russian Equities (each a "Registrar") indicating an
investor's ownership of such securities (each a "Share Extract")."
2. Section 2.3, Registration, is amended by the addition of the
following at the end of said Section:
"However, with respect to Russian Equities, the Custodian shall instruct a
Subcustodian to ensure that registration thereof shall be reflected on the
books of the issuer's Registrar, subject to the following conditions, but shall
in no event be liable for losses or costs incurred as a result of delays or
failures in the registration process, including without limitation the
inability to obtain or enforce relevant Share Extracts, unless such delays or
failures are due to the Custodian's or Subcustodian's negligence, fraud, or
willful default. Such registration may be in the name of a nominee of a
Subcustodian. In the event registration is in the name of a Fund, such Fund
hereby acknowledges that only the Custodian or Subcustodian may give
instructions to the Registrar to transfer or engage in other transactions
involving the Russian Equities so registered.
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A Subcustodian may from time to time enter into contracts with Registrars
with respect to the registration of Russian Equities ("Registrar Contracts").
The Custodian shall provide the Funds with a list of the Russian Equities with
respect to which the Subcustodian has entered into a Registrar Contract, and
will promptly provide the Funds with updates to that list whenever the
Subcustodian enters into any new Registrar Contracts. Such Registrar Contracts
will include (i) regular share confirmations by the Subcustodian, (ii)
reregistrations within set timeframes, (iii) use of a Subcustodian's nominee
name, (iv) direct access by auditors of the Subcustodian or its clients to
share registers, and (v) specification of the Registrar's responsibilities and
liabilities. It is hereby acknowledged and agreed that the Custodian does not
represent or warrant that such Registrar Contracts are enforceable.
If a Fund instructs the Custodian to settle a purchase of a Russian
Equity, the Custodian will instruct a Subcustodian to use reasonable efforts to
reregister the Russian Equity and obtain a Share Extract in a timely manner.
After completion of reregistration of a Russian Equity in respect of which
a Subcustodian has entered into a Registrar Contract, the Custodian shall
instruct the Subcustodian to monitor such registrar using reasonable efforts
and to promptly notify the Custodian upon the Subcustodian's obtaining
knowledge of the occurrence of any of the following events ("Registrar
Events"): (i) a Registrar has eliminated a shareholder from the register or has
altered registration records; (ii) a Registrar has refused to register
securities in the name of a particular purchaser and the purchaser or seller
has alleged that the registrar's refusal to so register was unlawful; (iii) a
Registrar holds for its own account shares of an issuer for which it serves as
registrar; (iv) if a Registrar Contract is in effect with a Registrar, and the
Registrar notifies the Subcustodian that it will no longer be able materially
to comply with the terms of the Registrar Contract; or the Subcustodian has
actual knowledge that a registrar has engaged in conduct that indicates it will
not materially comply with the provisions. or (v) if the Registrar has
materially breached such Contract. The Custodian shall promptly inform the
Fund of the occurrence of a Registrar Event provided the Subcustodian hasl
actual notice of the Registrar Event.
It shall be the sole responsibility of each Fund to promptly contact the
Custodian prior to executing any transaction in a Russian Equity to determine
whether a Registrar Contract exists in respect of an issuer not included on the
list provided to the Fund.
If a Fund instructs the Custodian by Proper Instruction to settle a
purchase of a Russian Equity in respect of which the Subcustodian has not
entered into a Registrar Contract, then the Custodian shall instruct the
Subcustodian to endeavor to settle such transaction in accordance with the
Proper Instruction and with the provisions of Section 2.4 of this Agreement,
notwithstanding the absence of any such Registrar Contract and subject to the
requirement that the Custodian provide and promptly update the Registrar
Contract list with the respect to Russian Equities and without the Custodian
being required to notify the Fund that no such Registrar Contract is then in
effect, and it being understood that neither the Custodian nor the Subcustodian
shall be required to follow the procedure set forth in the second preceding
paragraph."
3. Section 2.4, Purchases, is amended by the addition of the
following at the end of said Section:
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"Without limiting the generality of the foregoing, the following
provisions shall apply with respect to settlement of purchases of securities in
Russia. Unless otherwise instructed by Proper Instructions acceptable to the
Custodian, the Custodian shall only authorize a Subeustodian to make payment
for purchases of Russian Equities upon receipt of the relevant Share Extract in
respect of the Fund's purchases. With respect to securities other than Russian
Equities, settlement of purchases shall be made in accordance with securities
processing or settlement practices which the Custodian in its discretion
determines to be a market practice. Subject to the exercise of reasonable
care, the Custodian shall only be responsible for securities purchased upon
actual receipt of such securities at the premises of its Subcustodian, provided
that the Custodian's responsibility for securities represented by Share
Extracts shall be limited to the safekeeping of the relevant Share Extract upon
actual receipt of such Share Extract at the premises of the Subcustodian."
4. Section 2.5, Exchanges, is amended by inserting after the word
"exchange" in the second line thereof, the following phrase:
", in accordance with the registration procedures described in Section
2.3, of this Agreement,"
5. Section 2.6. Sales of Securities, is amended by the addition of
the following at the end of said Section:
"Without limiting the generality of the foregoing, the following
provisions shall apply with respect to settlement of sales of securities
in Russia. Unless otherwise expressly instructed by Proper Instructions
acceptable to the Custodian, settlement of sales of securities shall be
made in accordance with securities processing or settlement practices
which the Custodian in its discretion determines to be a market practice.
Each Fund hereby expressly acknowledges that such market practice might
require delivery of securities prior to receipt of payment and that the
Fund bears the risk of payment in instances where delivery of securities
is made prior to receipt of payment therefor in accordance with Proper
Instructions received by the Custodian or pursuant to the Custodian's
determination in its discretion that such delivery is in accordance with
marketpractice. Subject to the exercise of reasonable care, the Custodian
shall not be responsible for any securities delivered from the premises of
the Subcustodian from the time they leave such premises."
6. Section 2 .8, Exercise of Rights; Tender Offers, is replaced in
its entirety with the following:
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Section 2.8, Exercise of Rights Tender Offers -- Upon timely receipt of
Proper Instructions, to use reasonable efforts to take any action required by
the terms of a rights offer, tender offer, put, call, merger, consolidation,
reorganization or other corporate action affecting securities held on behalf of
a Fund. The Custodian shall use reasonable efforts to act on such Proper
Instructions but will not be held liable for any losses or costs incurred as a
result of such actions or as a result of the Custodian's inability for reasons
beyond its control to take the actions requested by such Proper Instructions,
provided however, that the Custodian or Subcustodian was not negligent in
performing its duties under this section. The Custodian shall promptly inform
the Fund whenever it is unable to take any actions requested by Proper
Instructions."
7. Section 2.9, Stock Dividends, Rights, Etc., is modified by the
addition of the following paragraph at the end of said Section:
"With respect to Russian Equities, to request a Subeustodian to
obtain a Share Extract with respect to all Russian Equities issued by
reason of a stock dividend, bonus issue or other distribution resulting
from a corporate action not requiring instructions from the shareholder of
the security, provided that the Custodian shall not be responsible for its
inability to obtain any such Share Extract or for the failure of a
Registrar or any agent thereof to record the Fund's ownership on the
issuer's records, unless such inability is due to the negligence, fraud,
or willful default of the Custodian or Subcustodian or Agent selected by
the Custodian or Subcustodian"
8. Section 3, Powers and Duties of the Custodian with Respect to the
Appointment of Subcustodians, is modified by the insertion of the following at
the end of the first paragraph of Section 3:
"With respect to Russia, each Fund hereby expressly acknowledges that a
Subcustodian for Russian securities may utilize the services of
Rosvneshtorgbank (also called Vneshtorgbank RF) ("VTB") which, as of the
date of this amendment, meets the requirements of Rule 17f-5 under
the Investment Company Act of 1940. Each Fund acknowledges that the
rights of the Subcustodian against the VTB may consist only of a
contractual claim Neither the Custodian nor the Subeustodian shall be
responsible or liable to a Fund or its shareholders for the acts or
omissions of the VTB unless any loss results from the negligence, fraud or
willful default of the Custodian or Subcustodian.. In the event of a loss
of securities or cash held on behalf of a Fund through the VTB, the
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Custodian shall not be responsible to a Fund or its shareholders unless
and to the extent it in fact recovers from the Subcustodian."
9. Section 6.2, Liability of the Custodian with Respect to Use of
Securities Systems
and Foreign Depositories, is amended by the insertion of the following at the
end of said Section:
"Notwithstanding anything in this Agreement to the contrary, neither the
Custodian nor the Subcustodian shall be responsible or liable to a Fund or
its shareholders for the acts or omissions of a Foreign Depository in
Russia, and in addition, neither the Custodian nor a Subcustodian
shall be responsible or liable to a Fund or its shareholders for the
failure of the Custodian or Subcustodian to assert rights effectively
against any such Foreign Depository unless due to the negligence, fraud,
or willful default of the Custodian or Subcustodian."
10. The first paragraph of Section 6.4, Standard of Care, Liabilily;
Indemnification, is replaced in its entirety with the following:
"The Custodian shall be held only to the exercise of reasonable
care in carrying out the provisions of this Agreement, provided that
the Custodian shall not thereby be required to take any action which is in
contravention of any applicable law, rule or regulation or any order or
judgment of any court of competent jurisdiction. With respect to
securities issued by Russian issuers or settlement in Russia of securities
transactions, reasonable care shall mean reasonable practices under the
circumstances as measured by prevailing custodial practices among
international financial institutions in Russia, and negligence as used
herein shall mean the failure to exercise reasonable care as defined in
this sentence. The Custodian shall in no event be liable for
consequential or indirect losses or from loss of goodwill.
"Notwithstanding the foregoing, the Custodian shall have no
liability in respect of any loss, damage or expense suffered by a Fund or
any shareholder of a Fund insofar as such loss, damage or expense
arises from investment risk inherent in investing in capital markets or in
holding assets in a particular country or jurisdiction, including without
limitation, (i) political, legal, economic, settlement and custody
infrastructure, and currency and exchange rate risks; (ii) investment and
repatriation restrictions; (iii) a Fund's inability to protect and enforce
any local legal rights including rights of title and beneficial ownership;
(iv) corruption and crime in the local market; (v) unreliable information
which emanates from the local market; (vi) volatility of banking and
financial systems and infrastructure; (vii) bankruptcy and insolvency
risks of any and all local banking agents, counterparties to cash and
securities transactions or registrars or transfer agents; and (vii) risk
of issuer insolvency or default.
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"It is understood that no Registrar, whether or not any such
Registrar has entered into a contract or other arrangement with a
Subcustodian or Foreign Depository, is or shall be considered or deemed to
be a Foreign Depository or an agent of the Custodian or any Subcustodian,
and accordingly neither the Custodian nor the Subcustodian shall be
responsible for or liable to a Fund or to the shareholders of a Fund for
the acts or omissions of any such Registrar unless such acts or omissions
result from the negligence, fraud or willful default of the Custodian or
Subeustodian. It is also agreed that each Fund shall be responsible for
preparation and filing of tax returns, reports and other documents on any
activities it undertakes in Russia which are to be filed with any relevant
governmental or other authority and for the payment of any taxes, levies,
duties or similar liability the Fund incurs in respect of property held or
sold in Russia or of payments or distributions received in respect thereof
in Russia. Accordingly, each Fund hereby agrees to indemnify and hold
harmless the Custodian from any loss, cost or expense resulting from the
imposition or assessment of any such tax, duty, levy or liability or any
expenses related thereto."
11. A new Section 15., Risk Disclosure Acknowledgment, is added at the
end of the present Section 14:
"Each Fund hereby acknowledges that it has received, has read and
has understood the Custodian's Risk Disclosure Statement, a copy of which
is attached hereto and is incorporated herein by reference. Each Fund
further acknowledges that the Risk Disclosure Statement is not
comprehensive, and warrants and represents to the Custodian that it has
undertaken its own review of the risks associated with investment in
Russia and has concluded that such investment is appropriate for the Fund
and in no way conflicts with the Fund's constitutive documents, investment
objective, duties to its shareholders or with any regulatory requirements
applicable to the Fund."
12. A new Section 16., Registrar System Reports, is added at the end of
the new section 15:
"Credit Suisse (Moscow) Ltd. will prepare for distribution to the
Board of Directors a quarterly report identifying any concerns Credit
Suisse (Moscow) Ltd. has regarding the Russian share registration system
that should be brought to the Board of Directors' attention. This report
will include detailed information regarding the steps Credit Suisse
(Moscow) Ltd. has taken during the reporting period to ensure that the
Fund's interests continue to be appropriately recorded. This duty to
report will commence upon Board of Director approval of investment in
Russia. The first quarterly report will be submitted to the Board of
Directors after the first full quarter of the fund's investment in Russia.
Each report will contain only new information from the date of the last
quarterly report."
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Except as amended above, all the provisions of the Agreement as heretofore
in effect shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first
set forth above.
STRONG SHORT-TERM XXXXX BROTHERS XXXXXXXX & CO.
GLOBAL BOND FUND, INC.
/s/ Xxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxxx: Xxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Vice President Title: Partner
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