Execution Copy
AGREEMENT
THIS AGREEMENT ("Agreement"), which has an effective date of April 19, 2004
(the "Effective Date"), is made by and between THE VANGUARD GROUP, INC, a
Pennsylvania Corporation ("Vanguard"), and Xxxxxxx Xxxxx & Company, L.L.C., a
Delaware limited liability company ("WBC").
W I T N E S S E T H
WHEREAS, Vanguard is registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Advisers Act");
WHEREAS, Vanguard is wholly and jointly owned by certain registered
investment companies (the "Member Funds");
WHEREAS, Vanguard provides the Member Funds with corporate management,
administrative, transfer agency, distribution, and investment advisory services
on an at-cost basis;
WHEREAS, Vanguard World Funds (the "Trust") is a Member Fund and an
open-end, diversified management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust offers a series fund known as Vanguard U.S. Growth Fund
(the "Fund");
WHEREAS, the Trust has entered an investment advisory agreement, dated
April 19, 2004, under which WBC provides investment advisory services to the
Fund; and
WHEREAS, in connection with services which WBC may render with regard to
the Fund, WBC desires to be indemnified by Vanguard, and Vanguard desires to
indemnify WBC, as described herein concerning claims which may be based on
events occurring prior to the time of WBC providing such services.
NOW THEREFORE, in consideration of the mutual promises and undertakings set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Trust and WBC
hereby agree as follows:
1. DEFENSE OF THIRD-PARTY CLAIMS. As described in this Agreement, Vanguard,
at its expense, shall handle, defend and/or settle any claim or action
threatened or brought by a third party against WBC, its Affiliates (defined
below), or its or their respective officers, directors, members, managers,
employees, agents, consultants or other representatives (each, a "WBC
Indemnified Party," and collectively, the "WBC Indemnified Parties") to the
extent such claim or action (a) is related to the Fund in any manner, and (b) is
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based on events, acts or omissions occurring prior to the Effective Date. Each
third-party claim or action described in the immediately preceding sentence is
referred to herein as a "Third-Party Claim." As used herein, the term
"Affiliate" shall mean any entity that WBC controls, is controlled by or is
under common control with. As used in the definition of "Affiliate," the term
"control" shall mean possessing, directly or indirectly, the power to vote 50%
or more of the securities having ordinary voting power for the election of
directors of such entity.
2. INDEMNIFICATION. Vanguard shall indemnify and hold each WBC Indemnified
Party harmless from and against any and all liabilities, damages and expenses
(including but not limited to reasonable attorneys' and experts' fees) that any
WBC Indemnified Party may incur, suffer, or be required to pay to the extent
arising out of any Third-Party Claim; provided, however, that (a) WBC promptly
notifies Vanguard in writing of any Third-Party Claim for which it is seeking or
may seek indemnification hereunder and specifies the nature of such Third-Party
Claim, (b) WBC reasonably cooperates with Vanguard, at Vanguard's reasonable
request and expense, in the handling, defense or settlement of such Third-Party
Claim, and (c) Vanguard shall have full authority and control over the handling,
defense and settlement of such Third-Party Claim. Notwithstanding the foregoing,
in the event that Vanguard fails to appoint an attorney or otherwise assume
authority and control of the Third-Party Claim within thirty (30) calendar days
after WBC has notified Vanguard of any such Third-Party Claim, then WBC shall
have the right to select and appoint an alternative attorney and the reasonable
cost and expense thereof shall be paid by Vanguard. Without limiting the
immediately preceding sentence, WBC shall have the right, at its own expense, to
participate and be represented, through its attorneys, in the defense or
settlement of any such Third-Party Claim.
3. LIMITATIONS. The obligations of Vanguard as set forth in Sections 1 and
2 above shall not extend to any Third-Party Claim to the extent that such
Third-Party Claim arises out of or relates to any conduct, act or omission of
any WBC Indemnified Party.
4. STATUS OF PARTIES. WBC will, in connection with this Agreement, be
deemed to be an independent contractor and will, unless otherwise expressly
provided or authorized, have no authority to act for or represent Vanguard, or
the Trust, in any way or otherwise be deemed an agent of Vanguard or the Trust.
5. LIABILITY OF WBC. No provision of this Agreement will be deemed to
protect WBC against any liability to Vanguard, the Trust, or their respective
shareholders to which it might otherwise be subject by reason of its willful
misfeasance, bad faith or gross negligence.
6. DURATION; TERMINATION; AMENDMENT. This Agreement shall become effective
on the Effective Date and will continue indefinitely. This Agreement may be
terminated by mutual consent of WBC and Vanguard without payment of any penalty.
This Agreement may be amended by mutual consent of Vanguard and WBC. As used in
this section, the term "assignment" will have the meaning set forth in section
2(a)(4) of the 1940 Act.
7. NOTICE. Any notice under this Agreement will be given in writing,
addressed and delivered, or mailed postpaid, to the other party as follows:
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If to Vanguard, at:
The Vanguard Group, Inc.
X.X. Xxx 0000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to (which shall not constitute notice):
The Vanguard Group, Inc.
X.X. Xxx 0000, X-00
Xxxxxx Xxxxx, XX 00000
Attention: General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to WBC, at:
Xxxxxxx Xxxxx & Company, LLC
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile:
With a copy to (which shall not constitute notice)
Xxxxxxx Xxxxx & Company, LLC
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
8. SEVERABILITY. If any provision of this Agreement will be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement will not be affected thereby.
9. CONFIDENTIALITY. WBC shall keep confidential any and all information
obtained in connection with the services rendered hereunder and relating
directly or indirectly to Vanguard, the Trust, or the Fund and shall not
disclose any such information to any person other than the Trust, the Board of
Directors of the Trust, Vanguard, or any director, officer, or employee of the
Trust or Vanguard, except (i) with the prior written consent of Vanguard and the
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Trust, (ii) as required by law, regulation, court order or the rules or
regulations of any self-regulatory organization, governmental body or official
having jurisdiction over WBC, or (iii) for information that is publicly
available other than due to disclosure by WBC or its affiliates or becomes known
to WBC from a source other than the Trust, the Board of Directors of the Trust,
the Fund, or Vanguard.
10. GOVERNING LAW. All questions concerning the validity, meaning, and
effect of this Agreement shall be determined in accordance with the laws
(without giving effect to the conflict-of-law principles thereof) of the State
of Delaware applicable to contracts made and to be performed in that state.
IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement.
XXXXXXX XXXXX & COMPANY, L.L.C. THE VANGUARD GROUP, INC.
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Signature Date Signature Date
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Print Name Date Print Name Date
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