GLOBAL CUSTODIAL SERVICES
AGREEMENT
TABLE OF CONTENTS
1. DEFINITIONS...............................................................1
2. APPOINTMENT OF CUSTODIAN..................................................3
3. PROPERTY ACCEPTED.........................................................3
4. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS..............................3
5. INSTRUCTIONS..............................................................5
6. PERFORMANCE BY THE CUSTODIAN..............................................6
7. POOLING, REGISTRATION AND OTHER ACTION....................................7
8. CUSTODY CASH ACCOUNT PAYMENTS.............................................8
9. ASSURED INCOME PAYMENT SERVICE............................................8
10. WITHDRAWAL AND DELIVERY...................................................9
11. ACCESS AND RECORDS........................................................9
12. USE OF AGENTS.............................................................9
13. CITIGROUP ORGANIZATION INVOLVEMENT.......................................10
14. SCOPE OF RESPONSIBILITY..................................................10
15. LITIGATION; INDEMNITY....................................................12
16. LIEN.....................................................................13
17. FEES AND EXPENSES........................................................13
18. TAX STATUS/WITHHOLDING TAXES.............................................13
19. TERMINATION..............................................................14
20. ASSIGNMENT...............................................................14
21. JOINT AND SEVERAL LIABILITY..............................................15
22. DISCLOSURE...............................................................15
23. NOTICES..................................................................15
24. GOVERNING LAW AND JURISDICTION...........................................16
25. MISCELLANEOUS............................................................16
THIS GLOBAL CUSTODIAL SERVICES AGREEMENT is made on the 1st day of June, 2000,
by and between each open end management investment company listed on Schedule A
hereto as amended from time to time (each such investment company, a "Fund")
organized and existing under the laws of the State of Delaware and registered
with the Securities and Exchange Commission under the Investment Company Act of
1940, as amended, on behalf of certain of their series, and CITIBANK, N.A.,
acting as a custodian hereunder through its office located at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Custodian"). The Funds' principal place of
business is X.X. Xxx 0000, Xxxxxx Xxxxx, Xxxxxxxxxxxx, 00000.
1. DEFINITIONS
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"AGREEMENT" means this Global Custodial Services Agreement, as amended from
time to time, and any other terms and conditions agreed upon by the Client and
the Custodian in writing from time to time in connection with this Agreement.
"ASSURED INCOME PAYMENT SERVICE" means the Custodian's services in which
interest, dividends or other such periodic income, to which the Client is
entitled, on Securities specified by the Custodian from time to time at its
absolute discretion, are credited to the Custody Cash Account in respect of such
Securities.
"ASSURED INCOME PAYMENT STANDARDS" means the terms and conditions governing
the Assured Income Payment Service, as such terms and conditions are amended
and/or supplemented from time to time by, and at the absolute discretion of, the
Custodian.
"ASSURED PAYMENT" means, in relation to those Securities specified by the
Custodian under the Assured Income Payment Service, an amount equal to the
interest, dividends or periodic income that is due to the Client in respect of
such Securities less any taxes, duties, levies, charges or any other withholding
payments payable in respect of such interest, dividends or periodic income.
"ASSURED PAYMENT DATE" means, in relation to the payment of any interest,
dividend or periodic income of any particular Securities specified by the
Custodian under the Assured Income Payment Service, the date on which such
interest, dividend or periodic income is normally payable in respect of such
Securities or such other date as may be notified by the Custodian to the Client
from time to time.
"AUTHORIZED PERSON" means any person who has been authorized by the Client,
by notice in writing to the Custodian, to act on its behalf in the performance
of any act, discretion or duty under this Agreement. The Custodian may treat any
Authorized Person as having full authority of the Client to issue any
Instructions hereunder unless the notice of authorization contains explicit
limitations as to said authority.
"BRANCH" means any branch or office of Citibank, N.A.
"CITIGROUP ORGANIZATION" means Citigroup and any company of which Citigroup
is, now or hereafter, directly or indirectly a shareholder or owner. For the
purposes of this Agreement, each Branch shall be deemed to be a separate member
of the Citigroup Organization.
"CLEARANCE SYSTEM" means The Federal Reserve Bank of New York, The
Depository Trust Company, Participants Trust Company, Cedel Bank, S.A., the
Euroclear System operated by Xxxxxx Guaranty Trust Company of New York, the
CREST system operated by CREST CO. Limited, the Central Money Markets Office,
the Central Gilts Office and such other clearing agency, settlement system or
depository as may from time to time be used in connection with transactions
relating to Securities, and any nominee, clearing agency, or depository for any
of the foregoing, in each case authorized to act as a securities depository,
book-entry system, or clearing agency pursuant to regulations, local market
practices or exchange requirements.
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"CUSTODY ACCOUNT" means the custody account or accounts in the name of the
Client and/or such other name as the Client may reasonably designate, for the
deposit of any Property (other than cash) from time to time received by the
Custodian for the account of the Client.
"CUSTODY CASH ACCOUNT" means the cash account or accounts, which, at the
discretion of the Client, may be either a subaccount(s) of the Custody Account
or a demand deposit account(s), in the name of the Client and/or such other name
as the Client may reasonably designate, for the deposit of cash in any currency
received by the Custodian from time to time for the account of the Client,
whether by way of deposit or arising out of or in connection with any Property
in the Custody Account.
"FEE AGREEMENT" means the agreement between the Custodian and the Client
setting forth the fees, costs and expenses to be paid by the Client to the
Custodian in connection with the custodial services provided pursuant to this
Agreement, as such fee agreement may be amended upon the mutual agreement of the
Client and the Custodian from time to time.
"INSTRUCTIONS" means any and all instructions received by the Custodian
from, or reasonably believed by the Custodian in good faith to be from, any
Authorized Person, including any instructions communicated through any manual or
electronic medium or system agreed between the Client and the Custodian and on
such operational terms and conditions as the Custodian may specify from time to
time.
"PERSON" means any person, firm, company, corporation, government, state or
agency of a state, or any association or partnership (whether or not having
separate legal personality) of two or more of the foregoing.
"PROPERTY" means, as the context requires, all or any part of any
Securities, cash, or any other property from time to time held for the Client
under the terms of this Agreement.
"RULES" means any rules and regulations (whether of a local regulatory
authority, stock exchange or other entity) in any jurisdiction with which the
Custodian may from time to time be required to comply in the provision of its
services hereunder.
"SECURITIES" means bonds, debentures, notes, stocks, shares, securities or
other financial assets acceptable to the Custodian and all moneys, rights or
property which may at any time accrue or be offered (whether by way of bonus,
redemption, preference, option or otherwise) in respect of any of the foregoing
and any certificates, receipts, warrants or other instruments (whether in
registered or unregistered form) representing rights to receive, purchase or
subscribe for any of the foregoing or evidencing or representing any other
rights or interests therein (including, without limitation, any of the foregoing
not constituted, evidenced or represented by a certificate or other document but
by an entry in the books or other permanent records of the issuer, a trustee or
other fiduciary thereof, a Clearance System or other person).
"SERVICE STANDARDS" means any written service standards governing the day
to day operations of the custodial services which shall be provided to the
Client or modified by the Custodian by notice to the Client from time to time.
"SUBCUSTODIAN" means a "bank" as defined in Section 2(a)(5) of the 1940 Act
meeting the requirements of a custodian under Section 17(f) of the 1940 Act and
the rules and regulations thereunder, appointed by the Custodian for the
safe-keeping, administration, clearance and settlement of Securities.
"TAXES" means all taxes, levies, imposts, charges, assessments, deductions,
withholdings and related liabilities, including additions to tax, penalties and
interest imposed on or in respect of the Property, the transactions effected
under this Agreement or the Client; PROVIDED THAT Taxes does not include income
or franchise taxes imposed on or measured by the net income of the Custodian or
its agents.
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"1940 ACT" means the Investment Company Act of 1940, as amended.
2. APPOINTMENT OF CUSTODIAN
------------------------
(A) The Client hereby appoints the Custodian to act as its custodian in
accordance with the terms hereof and authorizes the Custodian to establish on
its books, on the terms of this Agreement, the Custody Account, to be designated
to show that the Securities belong to the Client and are segregated from the
Custodian's assets and the Custody Cash Account and the Custodian hereby accepts
such appointment.
(B) Subject to the express terms of this Agreement, the Client understands and
agrees that the obligations and duties hereunder of the Custodian shall be
performed only by the Custodian or its agents, and shall not be deemed
obligations or duties of any other member of the Citigroup Organization. The
Client agrees that the Custodian may register or record legal title to any
Securities in the name of a nominee company or a Subcustodian in the Citigroup
Organization and may appoint a member of the Citigroup Organization to be a
Subcustodian.
(C) The Client agrees to take any such action which may be necessary and to
execute further documents and provide such materials and information as may be
reasonably requested by the Custodian to enable the Custodian to perform the
duties and obligations under this Agreement, including participation in any
relevant Clearance System, and will notify the Custodian as soon as it becomes
aware of any inaccuracy in such materials or information.
(D) All custody services by the Custodian hereunder shall be provided in
accordance with the Service Standards, a copy of which the Custodian shall
supply to the Client from time to time. In the event of any conflict between any
term of this Global Custodial Services Agreement and any term of the Service
Standards, the Global Custodial Services Agreement shall prevail with respect to
such term.
(E) The Client agrees to comply with any relevant security procedures relating
to the provision of custody services under this Agreement which may be specified
by the Custodian or imposed on the Client by any relevant Clearance System,
provided the Client has written notice of any such procedures.
3. PROPERTY ACCEPTED
-----------------
(A) Subject to Section 3(C) below, the Custodian agrees to accept for custody in
the Custody Account any Securities which are capable of deposit under the terms
of this Agreement.
(B) Subject to Section 3(C) below, the Custodian agrees to accept for deposit in
the Client Cash Account, cash in any currency (which shall, if necessary, be
credited by the Custodian to different accounts in the currencies concerned),
such cash to be owed to the Client by the Custodian as banker.
(C) The Custodian may in its reasonable discretion refuse to accept (in whole or
in part) any proposed deposit in either the Custody Account or the Custody Cash
Account if the Custodian reasonably believes that the acceptance of such deposit
would violate any law, rule, regulation, practice or policy to which the
Custodian is subject. The Custodian shall promptly notify the Client of any such
refusal.
4. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
--------------------------------------------
(A) The Client hereby represents, warrants and undertakes to the Custodian
that:
(i) it is duly organized and validly existing under the laws of the
jurisdiction of its organization;
(ii) during the term of this Agreement it (and any person on whose behalf
it may act as agent or otherwise in a representative capacity) has and
will continue to have, or will take all action
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necessary to obtain, full capacity and authority to enter into this
Agreement and to carry out the transactions contemplated herein, and
has taken and will continue to take all action (including, without
limitation, the obtaining of all necessary governmental consents in
any applicable jurisdiction) to authorize the execution, delivery and
performance of obligations of the Client, and the validity and
enforceability of such obligations and the rights of the Custodian,
under this Agreement;
(iii)it has authority to deposit the Property received in the Custody
Account and the Custody Cash Account and there is no claim or
encumbrances that adversely effects any delivery or payment of
Property made in accordance with this Agreement; and
(iv) this Agreement is legal, valid and binding on the Client;
(v) on or prior to the execution of this Agreement, the Client has
provided to the Custodian certified true copies of evidence of the due
authorization for the execution, delivery and performance of this
Agreement;
(vi) except as provided in Clause 16 of this Agreement, all Property
deposited with the Custodian shall, at all times, be free from all
charges, mortgages, pledges or other such encumbrances(except as
otherwise provided by law);
(vii)the Client shall, at all times, be entitled or otherwise duly
authorized to deal with, and dispose of, all or any part of the
Property, whether through a relevant Clearance System or otherwise;
and
(viii)the Client is conducting its business in substantial compliance with
all applicable laws and requirements, both state and federal, and has
obtained all regulatory licenses, approvals and consents necessary to
carry on its business as now conducted; there is no provision of its
charter or by-laws, nor of any mortgage, indenture, credit agreement
or other contract binding on it or affecting its property which would
prohibit its execution or performance of this Agreement.
The Client agrees to inform the Custodian promptly if any statement set forth in
this Section 4(A) ceases to be true and correct as of any date after the date
hereof.
(B) The Custodian hereby represents, warrants and undertakes to the Client
that:
(i) it is duly organized and validly existing under the laws of the
jurisdiction of its organization;
(ii) during the term of this Agreement it has and will continue to have, or
will take all action necessary to obtain, full capacity and authority
to enter into this Agreement and to carry out the transactions
contemplated herein, and has taken and will continue to take all
action (including, without limitation, the obtaining of all necessary
governmental consents in any applicable jurisdiction) to authorize the
execution, delivery and performance of obligations of the Custodian
and the validity and enforceability of such obligations and the rights
of the Client, under this Agreement;
(iii)this Agreement is legal, valid and binding on the Custodian;
(iv) the Custodian is conducting its business in substantial compliance
with all applicable laws and requirements, both state and federal, and
has obtained all regulatory licenses, approvals and consents necessary
to carry on its business as now conducted; there is no provision of
its charter or by-laws, nor of any mortgage, indenture, credit
agreement or other contract binding on it or
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affecting its property which would prohibit its execution or
performance of this Agreement; and
(v) the Custodian will submit to the Client on an annual basis a copy of
its Report on Policies and Procedures Placed in Operation and Tests of
Operating Effectiveness" prepared in compliance with the requirements
of Statement of Auditing Standards No. 70 issued by the American
Institute of Certified Public Accountants, as it may be amended from
time to time.
The Custodian agrees to inform the Client promptly if any statement set forth in
this Section 4(B) ceases to be true and correct as of any date after the date
hereof.
5. INSTRUCTIONS
------------
(A) The Custodian may, in its reasonable discretion and without liability on its
part, rely and act upon (and the Client shall be bound by) any Instructions
received by the Custodian which conform to the security standards and the
requirements of this Section 5. Instructions shall continue in full force and
effect until canceled or superseded; PROVIDED THAT any Instruction canceling or
superseding a prior Instruction must be received by the Custodian at a time and
in a manner that accords the Custodian a reasonable opportunity to act upon such
Instruction. The Custodian shall be entitled to rely upon the continued
authority of any Authorized Person to give Instructions until the Custodian
receives notice from the Client to the contrary.
(B) Instructions shall be governed by and carried out subject to the prevailing
laws, rules, operating procedures and market practice of any relevant stock
exchange, Clearance System or market where or through which they are to be
executed or carried out, and shall be acted upon only during banking hours
(including applicable cut-off times) and on banking days when the applicable
financial markets are open for business.
(C) Instructions delivered to the Custodian by telephone or facsimile shall be
promptly confirmed in writing, by tested telex, SWIFT, letter, the Custodian's
proprietary electronic banking system or as provided in the Service Standards,
such confirmation shall, where relevant, be made by an Authorized Person.
However, the Custodian may, in its absolute discretion, rely and act upon
telephone or facsimile Instructions before the written confirmation is received.
(D) The Custodian has offered the Client security procedures for the
transmission of Instructions to the Custodian (and the Client acknowledges that
it has received the same and agrees that the security procedures mutually agreed
to by the Client and the Custodian are commercially reasonable). As long as the
Custodian acts in compliance with such security procedures and this Section 5,
it shall have no further duty to verify the identity or authority of the person
giving or confirming, or the genuineness or contents of, any Instruction.
(E) The Custodian is authorized to rely upon any Instructions received by any
means, provided that the Custodian and the Client have agreed upon the means of
transmission and the method of identification for such Instructions.
(F) Instructions are to be given in the English language. If the Custodian
reasonably determines that an Instruction is either unclear or materially
incomplete, the Custodian shall give prompt notice of such determination to the
Client, and the Client shall amend or otherwise reform such Instruction. The
Custodian may in its reasonable discretion and without any liability on its
part, act upon what it reasonably believes in good faith such Instructions to
be; notwithstanding any other provision hereof, the Custodian shall have the
right, in its reasonable discretion to refuse to execute any such Instruction,
in which event the Custodian shall notify the Client of such refusal without
undue delay.
(G) The Client agrees to be bound by any Instructions, whether or not
authorized, given to the Custodian in the Client's name and accepted by the
Custodian in accordance with the provisions of the security procedures and this
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Section 5.
6. PERFORMANCE BY THE CUSTODIAN
----------------------------
(A) CUSTODIAL DUTIES NOT REQUIRING FURTHER INSTRUCTIONS. In the absence of
contrary Instructions, the Custodian is authorized by the Client to, and where
applicable, the Custodian shall, carry out the following actions in relation to
the Property:
(i) except as otherwise provided in this Agreement, separately
identify the Property on its records as being held for the
account of the Client and segregate all Property held on
behalf of the Client by the Custodian from the assets of the
Custodian;
(ii) sign any affidavits, certificates of ownership or other
certificates relating to the Property which may be required by
any tax or regulatory authority or under the laws of any
relevant jurisdiction, whether governmental or otherwise, and
whether relating to ownership, or income, capital gains or
other tax, duty or levy (and the Client further agrees to
ratify and to confirm or to do, or to procure the doing of,
such things as may be necessary or appropriate to complete or
evidence the Custodian's actions under this Section 6(A)(ii)
or otherwise under the terms of this Agreement);
(iii) collect and receive, for the account of the Client, all
income, payments and distributions in respect of the Property,
and credit the same to the Custody Cash Account;
(iv) take any action which is necessary and proper in connection
with the receipt of income, payments and distributions as are
referred to in Section 6(A)(iii) above, including, without
limitation, the presentation of coupons and other interest
items;
(v) collect, receive and hold for the account of the Client any
capital arising out of or in connection with the Property
whether as a result of it being called or redeemed or
otherwise becoming payable and credit the same to the Custody
Cash Account;
(vi) take any action which is necessary and proper in connection
with the receipt of any capital as is referred to in Section
6(A)(v) above, including, without limitation, the presentation
for payment of any Property which becomes payable as a result
of its being called or redeemed or otherwise becoming payable
and the endorsement for collection of checks, drafts and other
negotiable instruments;
(vii) take any action which is necessary and proper to enable the
Custodian to provide services to the Client within, and to
observe and perform its obligations in respect of, any
relevant Clearance System;
(viii) receive and hold for the account of the Client all Securities
received by the Custodian as a result of a stock dividend,
share sub-division or reorganization, capitalization of
reserves or otherwise;
(ix) exchange interim or temporary receipts for definitive
certificates, and old or overstamped certificates for new
certificates and hold such definitive and/or new certificates
in the Custody Account;
(x) invoice the Client for any expenses incurred in handling the
Property and for similar items in connection with the
Custodian's duties under this Agreement in accordance with the
Fee Agreement; and
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(xi) promptly after the close of business on each business day,
furnish the Client with confirmations and a summary of all
transfers to or from the Custody Account and the Custody Cash
Account, either hereunder or with any Subcustodian appointed
in accordance with this Agreement, during said day, and at
least monthly and from time to time, furnish the Client with a
detailed statement of the Securities and cash held by the
Custodian for the Client.
(B) CUSTODIAL DUTIES REQUIRING INSTRUCTIONS. The Custodian is authorized by the
Client to, and where applicable, the Custodian shall, carry out the following
actions in relation to the Property only upon receipt of and in accordance with
specific Instructions:
(i) make payment for and receive Property, or deliver or dispose of
Property;
(ii) (subject to Section 7(D)) deal with subscription, rights, bonus
or scrip issues, conversions, options, warrants and other similar
interests or any other discretionary right in connection with the
Property; and
(iii)subject to the agreement of the Custodian, to carry out any
action other than those mentioned in Section 6(A) above.
7. POOLING, REGISTRATION AND OTHER ACTION
--------------------------------------
(A) Subject to applicable laws, rules and regulations, any Property may be
pooled with other property of the Custodian's customers, like with like, and the
Client is beneficially entitled to such portion of the Property that has been
pooled as shall correspond to the Property deposited with the Custodian by the
Client (as increased or diminished by subsequent sales, purchases, income,
payments or distributions from time to time PROVIDED THAT Custodian's records
shall at all times clearly indicate that portion of such pooled property which
constitutes Property of the Client.
(B) The Client understands and agrees that, except as may be specified in the
Service Standards, Property shall be registered as the Custodian may direct
either in the name of the Custodian, Subcustodian or Clearance System, or
nominee of any of them, in the jurisdiction where the Property is required to be
registered or otherwise held. Where feasible, the Custodian will arrange on
written request by the Client for the registration of Property with the issuer
or its agent in the name of the Client or its nominee. The Client understands
and agrees, however, that the Custodian shall have discretion to determine
whether such direct registration is feasible.
(C) The Custodian shall, to the extent reasonably possible, notify, make
available or deliver to the Client, in a timely manner, all official notices,
circulars, reports and announcements that are received by the Custodian in such
capacity concerning the Securities held on the Client's behalf that require
discretionary action.
(D) The Custodian shall provide proxy services to the Client only where there is
a separate agreement in relation to proxy services between the Custodian and the
Client.
(E) Upon receipt of each transaction advice and/or statement of account, the
Client shall examine the same and notify the Custodian within thirty (30) days
of the date of any such advice or statement of any discrepancy between
Instructions given and the situation shown in the transaction advice and/or
statement, and/or of any other errors therein. In the event that the Client does
not inform the Custodian in writing of any exceptions or objections within
thirty (30) days after the date of such transaction advice and/or statement, the
Client shall be deemed to have approved such transaction advice and/or
statement.
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8. CUSTODY CASH ACCOUNT PAYMENTS
-----------------------------
(A) Except as otherwise provided herein, the Custodian shall make, or cause its
agents to make, payments of cash credited to the Custody Cash Account:
(i) in connection with the purchase of Property (other than cash) for
the account of the Client in accordance with Instructions;
(ii) in payment for the account of the Client of all Taxes
(iii)for payments to be made in connection with the conversion,
exchange or surrender of Property held in the Custody Account;
(iv) for other purposes as may be specified by the Client in its
Instructions; or
(v) upon the termination of this Agreement on the terms hereof;
PROVIDED THAT, unless otherwise agreed, the payments referred to above shall not
exceed the funds available in the Custody Cash Account at any time. The Client
shall promptly reimburse the Custodian for any advance of cash or any such
taxes, charges, expenses, assessments, claims or liabilities upon request for
payment. Notwithstanding the foregoing, nothing in this Agreement shall obligate
the Custodian to extend credit, grant financial accommodation or otherwise
advance moneys to the Client or assume financial risk on behalf of the Client
for the purpose of meeting any such payments or otherwise carrying out any
Instructions.
(B) Unless otherwise provided herein, the proceeds from the sale or exchange of
Property will be credited to the Custody Cash Account on the date the proceeds
are actually received by the Custodian.
9. ASSURED INCOME PAYMENT SERVICE
------------------------------
(A) The Custodian may, at its absolute discretion, offer the Client an Assured
Income Payment Service in respect of specific Securities, as may be notified by
the Custodian to the Client from time to time. In relation to any such
Securities, the Custodian may, at its absolute discretion, cause the Custody
Cash Account to be credited with an Assured Payment on the Assured Payment Date
relevant thereto; PROVIDED THAT upon 48 hours prior notice to the Client, the
Custodian shall be entitled to reverse any credit (in whole or in part) made in
respect of that Assured Payment if the Custodian fails to receive the full
amount corresponding to such Assured Payment within a reasonable time, as
determined by the Custodian in its absolute discretion, after the relevant
Assured Payment Date, for any reason whatsoever other than as a result of the
negligence or willful default of the Custodian.
The Assured Income Payment Service shall be provided by the Custodian in
accordance with the Assured Income Payment Standards.
(B) Where the Custodian acts as a settlement bank in any relevant Clearance
System:
(i) upon the Custodian incurring any assured payment obligation, the
Client shall reimburse the Custodian for such amount.
(ii) the Custodian may without notice set, revise or disable debit
caps in respect of the maximum aggregate amount of assured
payment obligations it will incur on behalf of the Client; and
(iii)if another settlement bank in such Clearance System defaults on
an assured payment obligation
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owed to the Custodian wholly or partially, the Custodian has no
liability to make good the loss and will, where appropriate,
attribute the loss pro rata between all Clients on whose behalf
such payment should have been received by the Custodian.
10. WITHDRAWAL AND DELIVERY
-----------------------
Subject to the terms of this Agreement, the Client may at any time
demand withdrawal of all or any part of the Property in the Custody Account
and/or the Custody Cash Account. Delivery of any Property will be made without
undue delay at the expense of the Client at such location as the parties hereto
may agree; PROVIDED THAT if the Custodian has effected any transaction on behalf
of the Client the settlement of which is likely to occur after a withdrawal
pursuant to this Section 10, then the Custodian shall be entitled in its
absolute discretion to close out or complete such transaction and to retain
sufficient funds from the Property for that purpose.
11. ACCESS AND RECORDS
------------------
(A) ACCESS TO THE CUSTODIAN'S RECORDS. Except as otherwise provided in this
Agreement, during the Custodian's regular business hours and upon receipt of
reasonable notice from the Client, any officer or employee of the Client, any
independent public accountant(s) selected by the Client and any person
designated by any regulatory authority having jurisdiction over the Client shall
be entitled to examine on the Custodian's premises Property held by the
Custodian and the Custodian's records regarding Property deposited with the
Custodian and with entities authorized to hold Property in accordance with
Section 12 hereof, but only upon the Client's furnishing the Custodian with
Instructions to that effect; PROVIDED THAT such examination shall be consistent
with the Custodian's obligations of confidentiality to other parties. As such
records of the Custodian shall, to the extent applicable, be maintained and
preserved in conformity with Section 31 of the 1940 Act and the rules and Rule
31a-1 and 31a-2 thereunder. The Custodian's reasonable costs and expenses in
facilitating such examinations, including but not limited to the cost to the
Custodian of providing personnel in connection with examinations all as set
forth in the Fee Agreement, shall be borne by the Client.
(B) ACCESS TO THIRD PARTY RECORDS. The Custodian shall also, subject to
restrictions under applicable laws and regulations, seek to obtain from any
entity with which the Custodian maintains the physical possession or book-entry
record of any of the Property in the Custody Account or the Custody Cash Account
such records as may be required by the Client or its agents.
12. USE OF AGENTS
(A) The Custodian is authorized subject to any relevant Rules, to appoint agents
(each an "agent", which term includes, without limitation, service providers,
but not Clearance Systems, and which agents may be a member or members of the
Citigroup Organization) and to participate in Clearance Systems, whether in its
own name or that of the Client, and whether by participation as a member,
sponsor or settlement bank within the Clearance System, to perform any of the
duties of the Custodian under this Agreement. The Custodian may delegate to any
such agent or Clearance System any of its functions under this Agreement,
including, without limitation, the collection of any payment or payments,
whether of an income or a capital nature, due on the Property. The Custodian is
authorized, subject to any relevant Rules, to appoint Subcustodians only if (i)
the Custodian is required to use a Subcustodian to hold Property purchased by
the Customer from time to time and (ii) the Custodian provides the Customer with
prior written notice of the identity of the Subcustodian and the Property to be
deposited therewith.
(B) In the selection and use of such agents, the Custodian shall comply with any
relevant Rules and shall be responsible for any loss, claim, damage or other
liability arising from the failure of an agent to perform any of the duties
delegated to it under this Agreement if (i) the Custodian was negligent in
selecting such agent, (ii) the Custodian's negligence, fraud or willful default
was the direct cause of the failure of the agent, (iii) a transaction or other
matter between the Custodian and the agent unrelated to the Customer was the
cause of the failure of the agent or
9
(iv) the agent is a member of the Citigroup Organization. In the selection and
use of such subcustodians and participation in such Clearance Systems, the
Custodian shall comply with any relevant Rules, and shall be responsible only
for the negligence in the selection of such subcustodians and Clearance Systems
but shall otherwise have no responsibility for the performance by such
subcustodians or Clearance System of any of the duties delegated to them under
this Agreement; notwithstanding the foregoing, the Custodian shall be
responsible for the negligence, fraud or willful default of any Subcustodian
that is a Branch or subsidiary of Citibank, N.A., and shall have the same level
of responsibility to the Client for any nominee company controlled by the
Custodian or by any of the Custodian's affiliated companies as the Custodian has
for itself.
(C) Subject to paragraph (A) above and any relevant Rules and regulations, the
Property may be deposited with any Subcustodian deemed appropriate by the
Custodian or in any Clearance System deemed appropriate by the Custodian or a
Subcustodian, as the case may be. Property held in any Clearance System shall be
subject to the rules or operating procedures of such Clearance System, including
rules regarding supervision or termination of membership of such Clearance
System, and such further information provided by the Custodian to the Client, or
acknowledgments or agreements which may be required from the Client, for the
purposes of this Section 12(C) in connection with use of a Clearance System from
time to time. The Custodian will direct each Subcustodian and Clearance System
to separately identify on its books Securities held by it pursuant to this
Agreement as being held for the account of the Custodian's customers. The
Custodian will direct each Subcustodian and Clearance System to segregate any
such Securities held by such entity from the assets of the Custodian and such
entity.
The Client is hereby advised that, where the Custodian arranges for any Property
to be held overseas, there may be different settlement, legal and regulatory
requirements in overseas jurisdictions from those applying in the United States,
together with different practices for the separate identification of the
Client's Property.
13. CITIGROUP ORGANIZATION INVOLVEMENT
----------------------------------
(A) To the extent permitted by applicable law, the Client hereby authorizes the
Custodian without the need for the Custodian to obtain the Client's prior
consent:
(i) when acting on Instructions, to purchase and/or sell Property
(other than cash) from, to or through itself or any other member
of the Citigroup Organization and from and/or to any other
customer of the Custodian or any other member of the Citigroup
Organization; and
(ii) to obtain and keep, without being liable to account to the
Client, any commission payable by any third party or any other
members of the Citigroup Organization in connection with dealings
arising out of or in connection with the Custody Account and/or
the Custody Cash Account.
(B) The Client agrees and understands that if in accordance with Instructions,
an investment is made in any property, held, issued or managed by any member of
the Citigroup Organization, then such member of the Citigroup Organization may
retain a profit arising therefrom (in addition to the charges, commissions and
fees payable by the Client under this Agreement) without being liable to account
to the Client for such profit.
(C) The Client agrees and understands that (i) the Custodian and other members
of the Citigroup Organization may have banking or other business relationships
with issuers of Securities held in the Custody Account or Securities purchased
and sold for the Custody Account, and (ii) the Custodian shall not have any
obligations to the Client as a result of such relationships.
10
14. SCOPE OF RESPONSIBILITY
-----------------------
(A) Subject to the terms hereof, the Custodian shall use all reasonable care in
the performance of its duties under this Agreement and will exercise the due
care of a professional custodian for hire with respect to the Property in its
possession or control. The Custodian shall not be responsible for any loss or
damage suffered by the Client as a result of the Custodian performing such
duties unless the same results from an act of fraud, negligence or willful
default on the part of the Custodian and as provided in Section 12(B) hereof; in
which event the liability of the Custodian in connection with any Property shall
not exceed the market value of the Property, to which such loss or damage
relates, at the time of such fraud, negligence or willful default plus interest
at the rate applicable to the base currency of the Custody Cash Account (as
specified on the fee schedule) accruing from the date of such fraud, negligence
or willful default until the date of discharge. Notwithstanding the foregoing,
in no event shall the Custodian be liable to the Client for indirect, special or
consequential damages, even if advised of the possibility of such damages.
(B) The Custodian is not obliged to maintain any insurance on the Property held
under the terms of this Agreement.
(C) The Custodian's performance of this Agreement is subject to the relevant
local laws, regulations, decrees, orders and government acts, and the rules,
operating procedures and practices of any relevant stock exchange, Clearance
System or market where or through which Instructions are to be carried out and
to which the Custodian is subject and as exist in the country in which any
Securities or cash are held.
(D) Neither the Custodian nor any member of the Citigroup Organization shall be
responsible for any loss or damage, or failure to comply or delay in complying
with any duty or obligation, under or pursuant to this Agreement arising as a
direct or indirect result of any reason, cause or contingency beyond its
reasonable control, including (without limitation) natural disasters,
nationalization, currency restrictions, act of war, act of terrorism, act of
God, postal or other strikes or industrial actions, or the failure, suspension
or disruption of any relevant stock exchange, Clearance System or market. The
Custodian shall notify the Client promptly when it becomes aware of any event
described above. The Client shall not be responsible for temporary delays in the
performance of its duties and obligations hereunder and correspondingly shall
not be liable for any loss or damage attributable to such delay in consequence
of any event described above affecting the Client's principal place of business
operations or administration.
(E) Subject to Section 14(A) above, the Custodian shall not be liable for any
loss resulting from, or caused by, the collection of any Property and/or any
funds or other property paid or distributed in respect of the Property.
(F) The Custodian does not warrant or guarantee the authenticity or validity of
any Security or other Property received by the Custodian, or any other entity
authorized to hold Property under this Agreement. If the Custodian becomes aware
of any defect in title or forgery of any Property, the Custodian shall promptly
notify the Client.
(G) The Client shall be responsible for all filings, tax returns and reports on
any transactions undertaken pursuant to this Agreement, or in respect of the
Property or collections relating to the Property as may be requested by any
relevant authority, whether governmental or otherwise, and for the payment of
all unpaid calls, Taxes (including without limitation any value added tax),
imposts, levies or duties due on or with respect to any principal, interest or
other collections, or any other liability or payment arising out of or in
connection with the Property, and in so far as the Custodian is under any
obligation (whether of a governmental nature or otherwise) to pay the same on
behalf of the Client it may do so, in which event the Client will reimburse the
Custodian for all amounts so paid.
(H) The Custodian is not acting under this Agreement as an investment manager,
nor as an investment, legal or tax adviser to the Client and the Custodian's
duty is solely to act as a custodian in accordance with the terms of this
Agreement.
11
(I) The Custodian may at any time suspend or terminate its participation and
holding of assets in a Clearance System, and will give reasonable notice to the
Client of any such action. In such case, or in the event of suspension as
contemplated in Section 14(C) above, the Custodian may arrange for the relevant
Securities to be held in certificated form.
(J) The Custodian shall not be responsible for the acts or omissions, default or
insolvency of any broker, counterparty, issuer of Securities or, except as
provided in Section 12(B), Subcustodian, agent or Clearance System.
(K) The Custodian will not be liable for any information not prepared by the
Custodian or any translation of information provided to the Client.
(L) The Custodian shall only have such duties and responsibilities as are
specifically set forth or referred to in this Agreement, and no covenant or
obligation shall be implied in this Agreement against the Custodian.
15. LITIGATION; INDEMNITY
---------------------
(A) The Custodian or any of its agents, as the case may be, may (but without
being under any duty or obligation to) institute or defend legal proceedings, or
take any other action arising out of or in connection with the Property and the
Client shall indemnify the Custodian or agent against any costs and expenses,
including without limitation any reasonable attorneys' fees and disbursements,
arising from such proceedings or other action.
(B) In the event the Custodian does not institute or defend legal proceedings,
or take any other action arising out of or in connection with the Property, the
Custodian hereby agrees that the Client shall, to the extent of any loss of the
Client's interest in the Property and to the extent permitted by applicable law
and not prohibited by contract, be subrogated to all of the rights of recovery
of the Custodian therefor against any third party person or entity; PROVIDED
THAT nothing herein shall be interpreted as granting the Client any rights to
bring any direct action under any insurance policy issued in favor of the
Custodian or as limiting the Custodian's right to bring any action against any
such third party for any damages suffered by the Custodian. Notwithstanding any
other provision hereof, in no event shall the Custodian be obliged to bring suit
in its own name or be obliged to allow suit to be brought in its name. Subject
to the terms of this Section 15(B) and to the extent permitted by law, the
Custodian shall execute and deliver any and all such instruments and documents
which the Client may reasonably request and take such other actions as
reasonably necessary or appropriate to assist the Client in the exercise of such
rights of recovery and to enable the Client to recover against any and all such
third party persons or entities. The Client shall reimburse the Custodian for
any reasonable out-of-pocket costs incurred in connection with the actions
contemplated by this Section 15(B).
(C) The Client agrees to indemnify the Custodian and to defend and hold the
Custodian harmless against all losses, liabilities, claims, expenses and Taxes,
including any reasonable legal fees and disbursements, (each referred to as a
"LOSS") arising directly or indirectly:
(i) from the fact that the Property is registered in the name of or
held by the Custodian or any nominee or agent of the Custodian or
any Clearance System;
(ii) without limiting the generality of Section 15(C)(i), from any act
which the Custodian or any nominee or agent performs or permits
(including the provision of any overdraft or other financial
accommodation which arises on the books of the Custodian, whether
on an advised or unadvised basis) in relation to the Property
pursuant to this Agreement or any Instructions;
(iii)from the Custodian or any such nominee, agent or Clearance
System carrying out any Instructions pursuant to the terms of
this Agreement, including, without limitation, Instructions
transmitted orally, by telephone, telex, facsimile transmission
or any other means agreed by the Client and the Custodian from
time to time;
(iv) from any reclaim or refund of Taxes effected by the Custodian or
any agent for the Client; and
12
(v) from the Custodian's reliance or action on any information
provided by the Client in connection with this Agreement;
PROVIDED THAT the Custodian shall not be indemnified against or held harmless
from any liability arising out of the Custodian's negligence, fraud or willful
default.
(D) The Custodian agrees to indemnify the Client and defend and hold the Client
harmless against all Loses arising out of the Custodian's negligence, fraud or
willful default; provided however, the Custodian will only be liable for Losses
to the extent it is liable for negligence, fraud or willful misconduct under
Section 14 of this Agreement.
(E) The disclosure by the Client to the Custodian that the Client has entered
into this Agreement as the agent or representative of another person shall not
prevent the Custodian from being entitled to treat the Client as incurring all
obligations as principal under this Agreement.
(F) The Custodian or the Client, as the case may be, shall give notice of any
Loss in respect of which the Client or the Custodian, respectively, is obliged
to provide indemnification pursuant to this Agreement. Such notice shall
describe the Loss in reasonable detail, and shall indicate the amount
(estimated, if necessary, and to the extent feasible) of the Loss that has been
or may be suffered by the Custodian or by the Client, as the case may be.
16. LIEN
----
In addition to any remedies available to the Custodian under applicable
law, the Custodian shall have, and the Client hereby grants, a continuing lien,
security interest and security entitlement in and to such Securities as shall
from time to time have a fair market value equal to the aggregate amount of
liabilities (whether actual or contingent) of the Client to the Custodian,
including any fees and expenses or credit exposures incurred in the performance
of services under this Agreement, such lien, security interest and security
entitlement to be effective only as long as such liability remains outstanding.
Notwithstanding anything to the contrary in this Agreement and to the extent
applicable, no liabilities or obligations the Client has arising out of or
constituting Purpose Credit shall be secured by, and the Custodian shall have no
lien upon, any Margin Stock, and any such lien or security interest being hereby
expressly disclaimed by the Custodian. "Purpose Credit" and "Margin Stock",
shall have the same meaning set forth in Regulation U and X of the Board of
Governors of the Federal Reserve System of the United States of America.
17. FEES AND EXPENSES
-----------------
Without prejudice to any of its liabilities and obligations under this
Agreement, the Client agrees to pay to the Custodian from time to time such fees
and commissions for its services pursuant to this Agreement as determined in
accordance with the terms of the Fee Agreement, together with any applicable
taxes or levies, including, without limitation, all those items referred to in
Section 8(A)(ii) hereof. The Custodian shall not be authorized to debit (after
or before the date of any termination pursuant to Section 19 hereof) any account
of the Client with the Custodian, including, without limitation, the Custody
Cash Account, for any amount owing to the Custodian from time to time under this
Agreement, without the express prior written consent of the Client.
18. TAX STATUS/WITHHOLDING TAXES
----------------------------
(A) The Client will provide the Custodian with information as to its tax status
as reasonably requested by the Custodian from time to time.
13
(B) The Client may be required from time to time to file such proof of taxpayer
status or residence, to execute such certificates and to make such
representations and warranties, or to provide any other information or documents
in respect of the Property, as the Custodian or any of its agents may deem
necessary or proper to fulfill the obligations of the Custodian or its agents
under applicable law. The Client shall provide the Custodian or its agents, as
appropriate, in a timely manner, with copies, or originals if necessary and
appropriate, of any such proofs of residence, taxpayer status or identity,
beneficial ownership of Property and any other information or documents which
the Custodian or its agents may reasonably request.
(C) If any Taxes shall become payable with respect to any payment due to the
Client, such Taxes may be withheld from such payment in accordance with
applicable law. The Custodian and any agents may withhold any interest, any
dividends or other distributions or securities receivable in respect of
Securities, proceeds from the sale or distribution of Securities ("Payments"),
or may sell for the account of the Client any part thereof or all of the
Securities, and may apply such Payment in satisfaction of such Taxes, the Client
remaining liable for any deficiency. If any Taxes shall become payable with
respect to any payment made to the Client by the Custodian or its agents in a
prior year, the Custodian or its agents may withhold Payments in satisfaction of
such prior year's Taxes.
(D) In the event the Client requests that the Custodian provide tax relief
services and the Custodian agrees to provide such services, the Custodian or any
of its agents, shall apply for appropriate tax relief (either by way of reduced
tax rates at the time of an income payment or retrospective tax reclaims in
certain markets as agreed from time to time); PROVIDED THAT the Client provides
to the Custodian such documentation and information as is necessary to secure
such tax relief. In no event shall the Custodian or any of its agents be
responsible for the difference between the statutory rate of withholding and the
treaty rate of withholding if the Custodian or any of its agents are unable to
secure tax relief.
19. TERMINATION
-----------
(A) Either of the parties hereto may terminate this Agreement by giving not less
than 60 days' prior written notice to the other party; PROVIDED THAT within 60
days of such notice, the Client shall provide the Custodian with Instructions
specifying the person to whom the Custodian shall deliver the Property in the
Custody Account and Custody Cash Accounts; PROVIDED FURTHER THAT if the
Custodian has effected any transaction on behalf of the Client the settlement of
which is likely to extend beyond the expiration of such notice, then the
Custodian shall be entitled in its reasonable discretion to close out or
complete such transaction and to retain sufficient funds from the Property for
that purpose. If within 60 days following termination, the Client fails to give
the Custodian Instructions specifying the person to whom the Custodian shall
deliver the Property in the Custody Account and Custody Cash Account, the
Custodian shall deliver the Property to the Client at its address set out above.
(B) The rights and obligations contained in Sections 15, 16, 17 and 18 of this
Agreement shall survive the termination of this Agreement.
20. ASSIGNMENT
----------
This Agreement shall bind and enure for the benefit of the parties hereto
and their respective successors and permitted assigns, and the Client shall not
assign, transfer or charge all or any rights or benefits hereunder without the
written consent of the Custodian. The Custodian may not assign, transfer or
charge all or any of its rights or benefits hereunder without the written
consent of the Client; PROVIDED HOWEVER that this Agreement may be assigned by
the Custodian to another member of the Citigroup Organization with prior written
notice to the Client, and such assignee shall, without the execution or filing
of any consents or other documents, succeed to and be substituted for the
Custodian with like effect as though such assignee had been originally named as
the Custodian hereunder. Any purported assignment, transfer or charge made in
contravention of this Section shall be null and void and of no effect
whatsoever.
14
21. JOINT AND SEVERAL LIABILITY
---------------------------
Where the Client comprises two or more persons, all obligations and
liabilities under this Agreement shall be deemed to be joint and several, and
any notice served on any one of such persons shall be deemed to have been served
on such other person or persons, as the case may be.
22. DISCLOSURE
----------
(A) The parties hereto agree that each shall treat confidentially the terms and
conditions of this Agreement and all information provided by each party to the
other regarding its business and operations. All confidential information
provided by a party hereto shall be used by the other party solely for the
purpose of rendering or obtaining services pursuant to this Agreement and,
except as specifically provided below or as may be required in carrying out this
Agreement, shall not be disclosed to any third party without the prior consent
of such providing party. Not withstanding the foregoing, the Client agrees and
understands that the Custodian or its agents may disclose information regarding
the Custody Account and/or the Custody Cash Account if required to do so (i) to
establish under the laws of any relevant jurisdiction the nominee (or similar)
status of the Custodian or its agents with respect to Property in the Custody
Account and/or Custody Cash Account for the purpose of performing or discharging
its duties and obligations under this Agreement, (ii) to enable auditors to
perform auditing services, (iii) to make the required tax certifications in the
relevant jurisdictions, (iv) by any applicable law, statute or regulation or
court order or similar process in any relevant jurisdiction, (v) by order of an
authority having power over the Custodian or its agents within the jurisdiction
of such authority, whether of a governmental nature or otherwise, or (vi) where
required by the operating rules of any relevant Clearance System.
(B) Subject to the confidentiality requirements provided in (A) above, the
Client hereby authorizes (i) the collection, storage and processing of any
information relating to the Client by the Custodian and the Branches,
subsidiaries, affiliates and agents of, or Clearance Systems used by, Citibank,
N.A.; and (ii) the transfer of any information relating to the Client to and
between the Branches, subsidiaries, affiliates and agents of, or Clearance
Systems used by, Citibank, N.A. and third parties selected by any of them,
wherever situated, for confidential use in connection with the provision of
services to the Client hereunder, and further acknowledges that any such Branch,
subsidiary, affiliate, agent, third party or Clearance System shall be entitled
to transfer any such information as required by any law, court, legal process or
as requested by any authority in accordance with which it is required to act, as
it shall reasonably determine.
(C) The Client agrees that the terms of this Agreement shall be kept strictly
confidential and no printed materials or other matter in any language (including
without limitation, prospectuses, statements of additional information, notices
to shareholders, annual reports and promotional materials) which mention
Citigroup, Citibank, N.A. or the Custodian's name, or the rights, powers or
duties of the Custodian, shall be issued by the Client or on the Client's behalf
unless Citibank, N.A. and/or the Custodian (as applicable) shall first have
given its specific written consent thereto; PROVIDED THAT no prior consent shall
be required if the only reference to the Custodian's name is in identifying the
Custodian as one of the Client's custodians.
(D) The Client agrees that the Custodian or its agents may, upon reasonable
request and during regular business hours, review the Client's premises, and
security controls and procedures, where necessary for the performance of the
Custodian's obligations regarding any relevant Clearance System.
15
23. NOTICES
-------
All notices and communications to be given by one party to the other under
this Agreement shall be in writing in the English language and (except for
notices, reports and information from the Custodian, and
Instructions given by electronic means) shall be made either by telex or
facsimile, other electronic means agreed to by the parties or by letter
addressed to the party concerned at the addresses set out above (or at such
other addresses as may be notified in writing by either party to the other from
time to time). Any such notice or communication hereunder shall be effective
upon actual receipt.
24. GOVERNING LAW AND JURISDICTION
------------------------------
(A) This Agreement shall be governed by and construed in accordance with the
internal laws (and not the laws of conflict) of the State of New York. The
Client agrees for the benefit of the Custodian and, without prejudice to the
right of the Custodian to take any proceedings in relation hereto before any
other court of competent jurisdiction, that a federal court situated in New York
City, shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in connection
with this Agreement and, for such purposes, irrevocably submits to the
non-exclusive jurisdiction of such court.
(B) Each party hereto waives any objection it may have at any time to the laying
of venue of any proceedings brought in a federal court situated in New York
City, waives any claim that such actions or proceedings have been brought in an
inconvenient forum and further waives the right to object that such court does
not have jurisdiction over such party.
(C) The Client hereby understands and agrees that the opening of, the holding of
all or any part of the Property in, and the delivery of any Securities and other
Property to or from, the Custody Account and Custody Cash Account and the
performance of any activities contemplated in this Agreement by the Custodian,
including acting on any Instructions, are subject to the relevant local laws,
regulations, decrees, orders, government acts, customs, procedures and practices
(i) to which the Custodian, or any Subcustodian or Clearance System, is subject
and (ii) as exist in the country in which the Property is held.
25. MISCELLANEOUS
-------------
(A) This Agreement shall not be amended except by a written agreement signed by
both parties and any purported amendment made in contravention of this Section
shall be null and void and of no effect whatsoever.
(B) This Agreement shall constitute the entire agreement between the Client and
the Custodian and, unless otherwise expressly agreed in writing, shall supersede
all prior agreements relating to global custodial services, written or oral,
between the parties hereto.
(C) The parties hereto agree that (i) the rights, powers, privileges and
remedies stated in this Agreement are cumulative and not exclusive of any
rights, powers, privileges and remedies provided by law, unless specifically
waived, and (ii) any failure or delay in exercising any right power, privilege
or remedy will not be deemed to constitute a waiver thereof and a single or
partial exercise of any right, power, privilege or remedy will not preclude any
subsequent or further exercise of that or any other right, power, privilege or
remedy.
(D) In the event that any provision of this Agreement, or the application
thereof to any person or circumstances, shall be determined by a court of proper
jurisdiction to be invalid or unenforceable to any extent, the remaining
provisions of this Agreement, and the application of such provisions to persons
or circumstances other than those as to which it is held invalid or
unenforceable, shall be unaffected thereby and such provisions shall be valid
and enforced to the fullest extent permitted by law in such jurisdiction.
16
(E) Titles to Sections of this Agreement are included for convenience of
reference only and shall be disregarded in construing the language contained in
this Agreement.
(F) This Agreement may be executed in several counterparts, each of which shall
be an original, but all of which together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized.
CITIBANK, N.A., New York Office EACH FUND LISTED ON SCHEDULE A
By: /S/ XXXXXXX X. XXXXX By: /S/ XXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President Title: Principal, Asst. Treasurer
SCHEDULE A
----------
FUND(S) OTHER ACCOUNTS
--------------------------------------------------------------------------------
- VANGUARD U.S. VALUE FUND, A SERIES - VANGUARD CAPITAL STOCK
OF VANGUARD MALVERN FUNDS CONCENTRATION ACCOUNT
(849355)
- VANGUARD SECURITIES LENDING
CONCENTRATION ACCOUNT
(849356)
- VANGUARD POOLED CASH
CONCENTRATION ACCOUNT
(849357)
- VANGUARD GENERAL PURPOSE
CONCENTRATION ACCOUNT
(849358)
SCHEDULE A - AMENDMENT #1
-------------------------
The following is an amendment ("Amendment") to the Global Custodial
Services Agreement dated June 1, 2000 (the "Agreement") by and between Citibank,
N.A. ("Custodian") and each open-end management investment company listed on
Schedule A thereto (each, a "Fund", collectively, the "Client"). This Amendment
serves to update the names of the Funds listed on Schedule A. Custodian and
Client hereby agree that all of the terms and conditions as set forth in the
Agreement are hereby incorporated by reference with respect to the Funds listed
below.
Schedule A is hereby amended as follows:
Funds (and the relevant series)
-------------------------------
Vanguard Explorer Fund (00-0000000)
Vanguard Fenway Funds
Vanguard Equity Income Fund (00-0000000)
Vanguard Index Funds
Vanguard Extended Market Index Fund (00-0000000)
Vanguard Institutional Index Funds
Vanguard Institutional Total Stock Market Index Fund (00-0000000)
Vanguard Malvern Funds
Vanguard Asset Allocation Fund (00-0000000)
Vanguard U.S. Value Fund (00-0000000)
Vanguard Xxxxxx Growth Fund (00-0000000)
Vanguard Preferred Stock Fund (00-0000000)
Vanguard Specialized Funds
Vanguard Energy Fund (00-0000000)
Vanguard Utilities Income Fund (00-0000000)
Vanguard Variable Insurance Funds
Equity Income Portfolio (00-0000000)
Vanguard Windsor Funds
Vanguard Windsor Fund (00-0000000)
Vanguard Windsor II Fund (00-0000000)
Vanguard World Fund
Vanguard U.S. Growth Fund (00-0000000)
Other Accounts
--------------
Vanguard Capital Stock Concentration Account (849355)
Vanguard Securities Lending Concentration Account (849356)
Vanguard Pooled Cash Concentration Account (849357)
Vanguard General Purpose Concentration Account (849358)
AGREED TO as of May 18, 2001 BY:
Citibank, N.A. Each Fund Listed on Schedule A
By: /S/ XXXXX X. XXXXXX By: /S/ XXXXXX X. XXXXXXX
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President Title: Assistant Treasurer
AMENDMENT
Reference is made to the Global Custodial Services Agreement dated as of June 1,
2000 (the "Agreement") by and between Citibank, N.A. (the "Custodian") and each
open-end management investment company listed on Schedule A to the Agreement as
amended from time to time (each such investment company, a "Fund" and all such
investment companies collectively, the "Client"). References in this Amendment
to Rule 17f-7 or to specific provisions of Rule 17f-7 refer to Rule 17f-7 under
the Investment Company Act of 1940, as adopted on or before the date hereof.
Any capitalized term used in but not defined in this Amendment shall have the
meaning defined in the Agreement.
In addition to the duties and obligations of the Custodian under the Agreement,
with respect to securities and cash in such jurisdictions as the Custodian
provides custody services under the Agreement for the Client, the Client and the
Custodian agree as follows:
1. The Custodian may deposit and/or maintain assets of the Client that consist
of Foreign Assets (as defined in Rule 17f-5 under the Investment Company
Act of 1940) only in a Clearance System located outside of the United
States of America that the Custodian has determined satisfies the
requirements of Rule 17f-7(b)(1) as an Eligible Securities Depository, as
defined therein. In such manner as the Custodian deems reasonable, the
Custodian shall give the Client prompt notice of any material change known
to the Custodian that would adversely effect the Custodian's determination
that a Clearance System is an Eligible Securities Depository.
2. The Custodian shall provide the Client (or its duly-authorized investment
manager or investment adviser) with an analysis (in form and substance as
reasonably determined by the Custodian) of the custody risks associated
with maintaining securities with each Eligible Securities Depository in
accordance with Rule 17f-7(a)(1)(i)(A). The Custodian shall monitor such
custody risks on a continuing basis and in such manner as the Custodian
deems reasonable, shall promptly notify the Client (or is duly-authorized
investment manager or investment adviser) of any adverse material changes
in such risks in accordance with Rule 17f-7(a)(1)(i)(B).
3. The Custodian agrees to exercise reasonable care, prudence and diligence in
performing the duties set forth in this Amendment as the Custodian
exercises in performing its other responsibilities under the Agreement.
4. In performing its obligations under this Amendment, the Custodian may
obtain information from sources the Custodian believes to be reliable, but
the Custodian does not warrant its completeness or accuracy and has no duty
to verify or confirm any such information. The Custodian is not obligated
to make any determination regarding whether any Eligible Securities
Depository provides reasonable care for Foreign Assets or to provide any
information or evaluation comparing any Eligible Securities Depository to
any other Clearance System or any existing or proposed standards for
securities depositories, except to the extent that such investment or
evaluation is included in the analysis provided by Custodian under
paragraph 2. of this Amendment.
5. Upon the receipt of Instructions, as specified in the Agreement, the
Custodian shall withdraw securities from any Clearance System to the extent
and as soon as
reasonably practicable; provided, however, the Custodian
shall have no obligation to obtain, safekeep or provide any services in
respect of any certificated or physical security in any jurisdiction where
the Custodian does not offer or provide such services generally to
customers within that jurisdiction.
6. In the event the Custodian breaches any provision of this Amendment, the
Custodian will be responsible for any loss or damage suffered by the Client
only to the same extent the Custodian is liable for losses resulting from
any breach of the standard of care specified in the Agreement.
The parties to the Agreement here by agree to this Amendment as of the 25th day
of June, 2001.
Citibank, N.A. Client
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President Title: Assistant Treasurer
SCHEDULE A - AMENDMENT #2
The following is an amendment ("Amendment") to the Global Custodial
Services Agreement dated June 1, 2000 and amended May 18, 2001 (the "Agreement")
by and between Citibank, N.A. ("Custodian") and each open-end management
investment company listed on Schedule A thereto (each, a "Fund", collectively,
the "Client"). This Amendment serves to update the names of the Funds listed on
Schedule A. Custodian and Client hereby agree that all of the terms and
conditions as set forth in the Agreement are hereby incorporated by reference
with respect to the Funds listed below.
Schedule A is hereby amended as follows:
Funds (and the relevant series)
Vanguard Explorer Fund (00-0000000)
Vanguard Fenway Funds
Vanguard Equity Income Fund (00-0000000)
Vanguard Institutional Index Funds
Vanguard Institutional Total Stock Market Index Fund (00-0000000)
Vanguard Malvern Funds
Vanguard Asset Allocation Fund (00-0000000)
Vanguard U.S. Value Fund (00-0000000)
Vanguard Xxxxxx Growth Fund (00-0000000)
Vanguard Preferred Stock Fund (00-0000000)
Vanguard Specialized Funds
Vanguard Energy Fund (00-0000000)
Vanguard Utilities Income Fund (00-0000000)
Vanguard Variable Insurance Funds
Equity Income Portfolio (00-0000000)
Vanguard Windsor Funds
Vanguard Windsor Fund (00-0000000)
Vanguard Windsor II Fund (00-0000000)
Vanguard World Fund
Vanguard U.S. Growth Fund (00-0000000)
Other Accounts
Vanguard Capital Stock Concentration Account -(849355)
Vanguard Securities Lending Concentration Account (849356)
Vanguard Pooled Cash Concentration Account (849357)
Vanguard General Purpose Concentration Account (849358)
AGREED TO as of July 23, 2001 BY:
Citibank, N.A. Each Fund Listed on Schedule A
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President Title: Assistant Treasurer
SCHEDULE A - AMENDMENT #3
The following is an amendment ("Amendment") to the Global Custodial
Services Agreement dated June 1, 2000 and amended May 18, 2001 and July 23, 2001
(the "Agreement") by and between Citibank, N.A. ("Custodian") and each open-end
management investment company listed on Schedule A thereto (each, a "Fund",
collectively, the "Client"). This Amendment serves to update the names of the
Funds listed on Schedule A. Custodian and Client hereby agree that all of the
terms and conditions as set forth in the Agreement are hereby incorporated by
reference with respect to the Funds listed below.
Schedule A is hereby amended as follows:
Funds (and the relevant series)
-------------------------------
Vanguard Explorer Fund (00-0000000)
Vanguard Fenway Funds
Vanguard Equity Income Fund (00-0000000)
Vanguard Institutional Index Funds
Vanguard Institutional Total Stock Market Index Fund (00-0000000)
Vanguard Malvern Funds
Vanguard Asset Allocation Fund (00-0000000)
Vanguard Capital Value Fund (00-0000000)
Vanguard U.S. Value Fund (00-0000000)
Vanguard Xxxxxx Growth Fund (00-0000000)
Vanguard Specialized Funds
Vanguard Energy Fund (00-0000000)
Vanguard Utilities Income Fund (00-0000000)
Vanguard Variable Insurance Funds
Equity Income Portfolio (00-0000000)
Vanguard Whitehall Funds
Vanguard Mid-Cap Growth Fund (00-0000000)
Vanguard Windsor Funds
Vanguard Windsor Fund (00-0000000)
Vanguard Windsor II Fund (00-0000000)
Vanguard World Fund
Vanguard U.S. Growth Fund (00-0000000)
Page 1 of 2
Other Accounts
Vanguard Capital Stock Concentration Account -(849355)
Vanguard Securities Lending Concentration Account (849356)
Vanguard Pooled Cash Concentration Account (849357)
Vanguard General Purpose Concentration Account (849358)
AGREED TO as of May 20, 2002 BY:
Citibank, N.A. Each Fund Listed on Schedule A
By: /s Xxxxx X. Xxxxxx By: /s Xxxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President Title: Treasurer
FOREIGN CUSTODY MANAGER ADDENDUM
TO
GLOBAL CUSTODIAL SERVICES AGREEMENT, dated as of June 25, 2001, by and between
each open-end management investment company listed on Schedule A of the
Agreement as amended from time to time (each such investment company, a "Fund"
and all such investment companies collectively, the "Client")) and Citibank,
N.A. (the "Custodian").
The Client desires to have the Custodian assume and discharge the responsibility
of the Client's board of directors (hereinafter the "Board") to select, contract
with and monitor certain custodians of non-U.S. assets of the Client held by the
Custodian pursuant to the Global Custodial Services Agreement (the "Agreement").
The Custodian agrees to accept the delegation and to perform the responsibility
as provided in this Addendum.
(A) Foreign Custody Manager: (i) The Board hereby delegates to the Custodian,
and the Custodian hereby accepts the delegation to it, of the obligation to
serve as the Client's "Foreign Custody Manager" (as defined in Rule
17f-5(a)(3) under the Investment Company Act of 1940, as amended from time
to time), in respect to the Client's foreign investments held from time to
time by the Custodian with any Subcustodian (as defined in the Agreement)
that is an Eligible Foreign Custodian (as defined in Rule 17f-5(a)(1)).
Foreign investments are any Property (as defined in the Agreement) for
which the primary market is outside the U.S.A.
(ii) As Foreign Custody Manager, the Custodian shall:
(1) select Eligible Foreign Custodians to serve as foreign
custodians and place and maintain the Client's foreign
investments with such foreign custodians;
(2) in selecting an Eligible Foreign Custodian, first determine
that foreign investments placed and maintained in the safekeeping
of each Eligible Foreign Custodian shall be subject to reasonable
care, based on the standards applicable to custodians in the
relevant market, after having considered all factors relevant to
the safekeeping of such investments including, without
limitation, those factors set forth in Rule 17f-5(c)(1)(i)- (iv);
(3) enter into written agreements with each Eligible Foreign
Custodian selected by the Custodian hereunder;
(4) determine that the written contract with each Eligible
Foreign Custodian (or, in the case of an Eligible Foreign
Custodian that is a Clearance System such contract (which may be
between the Custodian and the Clearance System or between an
Eligible Foreign Custodian selected by the Custodian and the
Clearance System), the rules or established practices or
procedures of the Clearance System, or any combination of the
foregoing) requires that the Eligible Foreign Custodian will
provide reasonable care for the foreign investments, based on the
standards applicable to custodians in the relevant market, and
that all such contracts, rules, practices and procedures satisfy
the requirements of Rule 17f-5(c)(2);
(5) provide written reports (x) notifying the Board of the
placement of foreign investments with each Eligible Foreign
Custodian, such reports to be provided at such time as the Board
deems reasonable and appropriate, but not less than annually, and
(y) promptly notifying the Board of the occurrence of any
material change in the arrangements with an Eligible Foreign
Custodian;
(6) monitor the continued appropriateness of (x) maintaining the
foreign investments with Eligible Foreign Custodians selected
hereunder and (y) the governing contractual arrangements; it
being understood, however, that in the event the Custodian shall
determine that any Eligible Foreign Custodian would no longer
afford the foreign investments reasonable care, the Custodian
shall promptly so advise the Client and shall then act in
accordance with Instructions (as defined in the Agreement) with
respect to the disposition of the foreign investments; and
(7) exercise such reasonable care, prudence and diligence in
serving as the Foreign Custody Manager as the Custodian exercises
in performing its responsibility under the Agreement for the
safekeeping of the Client's Property (as defined in the
Agreement).
(iii) Nothing in this paragraph shall relieve the Custodian of any
responsibility otherwise provided in the Agreement or this Addendum
for loss or damage suffered by the Client from an act of negligence or
willful misconduct on the part of the Custodian.
(iv) Nothing in this Addendum shall require the Custodian to make any
selection on behalf of the Client that would entail consideration of
any factor reasonably related to the systemic risk of holding assets
in a particular country including, but not limited to, such country's
financial infrastructure and prevailing settlement practices. The
Custodian agrees to provide to the Client such information relating to
such risk as the Client shall reasonably request from time to time and
such other information as the Custodian generally makes available to
customers with regard to such countries and risk.
(B) Termination:
(i) The Client may terminate this delegation upon written notice to
the Custodian.
(ii) The Custodian may terminate its acceptance of this delegation
upon ninety (90) days written notice to the Client.
IN WITNESS WHEREOF, the parties have caused this Addendum to be executed as of
the 25th day of June, 2001, by their respective officers thereunto duly
authorized.
CITIBANK, N.A., NEW YORK OFFICE CLIENT
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President Title: Assistant Treasurer
SCHEDULE A - AMENDMENT #4
The following is an amendment ("Amendment") to the Global Custodial
Services Agreement dated June 1, 2000 and amended May 18, 2001, July 23, 2001,
and May 20, 2002 (the "Agreement") by and between Citibank, N.A. ("Custodian")
and each open-end management investment company listed on Schedule A thereto
(each, a "Fund", collectively, the "Client"). This Amendment serves to update
the names of the Funds listed on Schedule A. Custodian and Client hereby agree
that all of the terms and conditions as set forth in the Agreement are hereby
incorporated by reference with respect to the Funds listed below.
Schedule A is hereby amended as follows:
Funds (and the relevant series)
-------------------------------
Vanguard Explorer Fund (00-0000000)
Vanguard Fenway Funds
Vanguard Equity Income Fund (00-0000000)
Vanguard Institutional Index Funds
Vanguard Institutional Total Stock Market Index Fund (00-0000000)
Vanguard Malvern Funds
Vanguard Asset Allocation Fund (00-0000000)
Vanguard Capital Value Fund (00-0000000)
Vanguard U.S. Value Fund (00-0000000)
Vanguard Xxxxxx Growth Fund (00-0000000)
Vanguard Specialized Funds
Vanguard Energy Fund (00-0000000)
Vanguard Utilities Income Fund (00-0000000)
Vanguard Variable Insurance Funds
Equity Income Portfolio (00-0000000)
Small-Cap Index Portfolio (00-0000000)
Total Stock Market Index Portfolio (00-0000000)
Vanguard Whitehall Funds
Vanguard Mid-Cap Growth Fund (00-0000000)
Vanguard Windsor Funds
Vanguard Windsor Fund (00-0000000)
Vanguard Windsor II Fund (00-0000000)
Vanguard World Fund
Vanguard U.S. Growth Fund (00-0000000)
Other Accounts
--------------
Vanguard Capital Stock Concentration Account -(849355)
Vanguard Securities Lending Concentration Account (849356)
Vanguard Pooled Cash Concentration Account (849357)
Vanguard General Purpose Concentration Account (849358)
AGREED TO as of September 30, 2002 BY:
Citibank, N.A. Each Fund Listed on Schedule A
By: /S/ Xxxxx X. Xxxxxx By: /S/ Xxxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President Title: Treasurer
SCHEDULE A - AMENDMENT #5
The following is an amendment ("Amendment") to the Global Custodial
Services Agreement dated June 1, 2000 and amended May 18, 2001, July 23, 2001,
May 20, 2002, September 30, 2002, and April ________, 2005 (the "Agreement") by
and between Citibank, N.A. ("Custodian") and each open-end management investment
company listed on Schedule A thereto (each, a "Fund", collectively, the
"Client"). This Amendment serves to update the names of the Funds listed on
Schedule A. Custodian and Client hereby agree that all of the terms and
conditions as set forth in the Agreement are hereby incorporated by reference
with respect to the Funds listed below.
Schedule A is hereby amended as follows:
Funds (and the relevant series)
-------------------------------
Vanguard Explorer Fund (00-0000000)
Vanguard Fenway Funds
Vanguard Equity Income Fund (00-0000000)
Vanguard Institutional Index Funds
Vanguard Institutional Total Stock Market Index Fund (00-0000000)
Vanguard Malvern Funds
Vanguard Asset Allocation Fund (00-0000000)
Vanguard Capital Value Fund (00-0000000)
Vanguard U.S. Value Fund (00-0000000)
Vanguard Xxxxxx Growth Fund (00-0000000)
Vanguard Specialized Funds
Vanguard Energy Fund (00-0000000)
Vanguard Dividend Growth Fund(1) (00-0000000)
Vanguard Trustees' Equity Fund
Vanguard Diversified Equity Fund (00-0000000)
Vanguard Variable Insurance Funds
Equity Income Portfolio (00-0000000)
Total Stock Market Index Portfolio (00-0000000)
Vanguard Whitehall Funds
Vanguard Mid-Cap Growth Fund (00-0000000)
------------------------------------------
(1)Formerly named Vanguard Utilities Income Fund
Vanguard Windsor Funds
Vanguard Windsor Fund (00-0000000)
Vanguard Windsor II Fund (00-0000000)
Vanguard World Fund
Vanguard U.S. Growth Fund (00-0000000)
Other Accounts
--------------
Vanguard Capital Stock Concentration Account -(849355)
Vanguard Securities Lending Concentration Account (849356)
Vanguard Pooled Cash Concentration Account (849357)
Vanguard General Purpose Concentration Account (849358)
AGREED TO as of April 8, 2005 BY:
Citibank, N.A. Each Fund Listed on Schedule A
By: /S/ XXXXXX X. XXXX By: /S/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President Title: Treasurer
