EX-99(g)(1)(i)
AMENDMENT, dated July 1, 2001 to the 1996 Global Custody Agreement
("Agreement"), between those registered investment companies listed on Schedule
A to the Agreement (each a "Customer"), having a place of business at Xxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, and The Chase Manhattan Bank ("Bank"),
having a place of business at 000 Xxxx Xxx., Xxx Xxxx, X.X. 00000-0000.
It is hereby agreed as follows:
Section 1. Except as modified hereby, the Agreement is confirmed in all
respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
Section 2. The Agreement is amended by deleting the Investment Company
Rider dated November 20, 1997 thereto and inserting, in lieu thereof, the
following Rider:
I. Add the following after the first sentence of Section 3 of the
Agreement:
At the request of Customer, Bank may, but need not, add to Schedule A
an Eligible Foreign Custodian where Bank has not acted as Foreign
Custody Manager with respect to the selection thereof. Bank shall
notify Customer in the event that it elects to add any such entity.
II. Add the following language to the end of Section 3 of the
Agreement:
(i) The term Subcustodian as used herein shall mean the following:
(a) a "U.S. Bank," which shall mean a U.S. bank as defined in rule
17f-5(a)(7); and
(b) an "Eligible Foreign Custodian," which, as defined in rule
17f-5(a)(1) and (5), shall mean (i) a banking institution or trust
company, incorporated or organized under the laws of a country other
than the United States, that is regulated as such by that country's
government or an agency thereof, and (ii) a majority-owned direct or
indirect subsidiary of a U.S. Bank or bank holding company which
subsidiary is incorporated or organized under the laws of a country
other than the United States. In addition, an Eligible Foreign
Custodian shall also mean any other entity that shall have been so
qualified by exemptive order, rule or other appropriate action of the
SEC.
(ii) The term "securities depository" as used herein shall mean the
following when referring to a securities depository located:
(a) outside the U.S., an "Eligible Securities Depository" which, in
turn, shall have the same meaning as in rule 17f-7(b)(1)(i)-(vi) as the
same may be amended from time to time, or that has otherwise been made
exempt by an SEC exemptive order, rule or other appropriate SEC action,
except that prior to the compliance date with rule 17f-7 for a
particular securities depository the term "securities depository" shall
be as defined in (a)(1)(ii)-(iii) of the 1997 amendments to rule 17f-5.
(b) in the U.S., a "securities depository" as defined in SEC rule
17f-4(a).
(iii) For purposes of clarity, it is understood and agreed that the
term Subcustodian shall not include any securities depository. For purposes of
the provisions of the Agreement imposing liability on Bank, the term
Subcustodian shall not include any Eligible Foreign Custodian as to which Bank
has not acted as Foreign Custody Manager.
III. Add new Section 16 to the Agreement as follows:
16. Compliance with Securities and Exchange Commission rule 17f-5
("rule 17f-5").
(a) Customer's board of directors (or equivalent body) (hereinafter
"Board") hereby delegates to Bank, and Bank hereby accepts the delegation to it
of, the obligation to perform as Customer's "Foreign Custody Manager" (as that
term is defined in rule 17f-5(a)(3)), including for the purposes of: (i)
selecting Eligible Foreign Custodians (as that term is defined in rule
17f-5(a)(1), as the same may be amended from time to time, or that have
otherwise been exempted by SEC exemptive order, rule or other appropriate SEC
action) to hold Customer's Foreign Assets, and (ii) evaluating the contractual
arrangements with such Eligible Foreign Custodians (as set forth in rule
17f-5(c)(2)), and (iii) monitoring such foreign custody arrangements (as set
forth in rule 17f-5(c)(3)).
(b) In connection with the foregoing, Bank shall:
(i) provide written reports notifying Customer's Board of the placement
of Foreign Assets with particular Eligible Foreign Custodians and of
any material change in the arrangements with such Eligible Foreign
Custodians, with such reports to be provided to Customer's Board at
such times as the Board deems reasonable and appropriate based on the
circumstances of Customer's foreign custody arrangements but until
further notice from Customer requesting a different schedule, such
reports shall be provided not less than quarterly in summary form, with
a more detailed report annually;
(ii) exercise such reasonable care, prudence and diligence in
performing as Customer's Foreign Custody Manager as a person having
responsibility for the safekeeping of Foreign Assets would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have determined
that Foreign Assets placed and maintained in the safekeeping of such
Eligible Foreign Custodian shall be subject to reasonable care, based
on the standards applicable to custodians in the relevant market, after
having considered all factors relevant to the safekeeping of such
Assets, including, without limitation, those factors set forth in rule
17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible Foreign
Custodian requires that the Eligible Foreign Custodian will provide
reasonable care for Foreign Assets based on the standards applicable to
custodians in the relevant market as provided in rule 17f-5(c)(2); and
(v) have established a system to monitor the continued appropriateness
of maintaining Foreign Assets with particular Eligible Foreign
Custodians and performance of the governing contractual arrangements;
it being understood, however, that in the event that Bank shall have
determined that the existing Eligible Foreign Custodian in a given
country would no longer afford Foreign Assets reasonable care and that
no other Eligible Foreign Custodian in that country would afford
reasonable care, Bank shall promptly so advise Customer and shall then
act in accordance with the Instructions of Customer with respect to the
disposition of the affected Foreign Assets.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
Foreign Assets on behalf of Customer with Eligible Foreign Custodians pursuant
to a written contract deemed appropriate by Bank.
(c) Except as expressly provided herein and in Section 17 hereof,
Customer shall be solely responsible to assure that the maintenance of Foreign
Assets hereunder complies with the rules, regulations, interpretations and
exemptive orders promulgated by or under the authority of the SEC.
2
(d) Bank represents to Customer that it is a U.S. Bank as defined in
rule 17f-5(a)(7). Customer represents to Bank that: (1) the Assets being placed
and maintained in Bank's custody are subject to the Investment Company Act of
1940, as amended (the "1940 Act") as the same may be amended from time to time;
(2) its Board (or other governing body) has determined that it is reasonable to
rely on Bank to perform as Customer's Foreign Custody Manager; and (3) its Board
(or other governing body) or its investment adviser shall have determined that
Customer may maintain Foreign Assets in each country in which Customer's Foreign
Assets shall be held hereunder and determined to accept the risks arising
therefrom (including, but not limited to, a country's financial infrastructure,
prevailing custody and settlement practices, laws applicable to the safekeeping
and recovery of Foreign Assets held in custody, and the likelihood of
nationalization, currency controls and the like) (collectively ("Country
Risk")). Nothing contained herein shall require Bank to make any selection on
behalf of Customer that would entail consideration of Country Risk and, except
as may be provided in (e) below, to engage in any monitoring of Country Risk.
(e) Bank shall provide to Customer such information relating to Country
Risk as is specified in Appendix 1-A hereto. Customer hereby acknowledges that:
(i) such information is solely designed to inform Customer of market conditions
and procedures and is not intended as a recommendation to invest or not invest
in particular markets; and (ii) Bank has gathered the information from sources
it considers reliable, but that Bank shall have no responsibility for
inaccuracies or incomplete information.
IV. Add the following language to the end of the first sentence of
Section 4(d) of the Agreement: "or, in the case of cash deposits, except for
liens or rights in favor of creditors of the Subcustodian arising under
bankruptcy, insolvency or similar laws."
V. Add a new Section 17 to the Agreement as follows:
17. Compliance with Securities and Exchange Commission rule 17f-7
("rule 17f-7").
(a) Bank shall, for consideration by Customer, provide an analysis in
accordance with rule 17f-7(a)(1)(i)(A) of the custody risks associated with
maintaining Customer's Foreign Assets with each Eligible Securities Depository
used by Bank as of the date hereof (or, in the case of an Eligible Securities
Depository not used by Bank as of the date hereof, prior to the initial
placement of Customer's Foreign Assets at such Depository) and at which any
Foreign Assets of Customer are held or are expected to be held. The foregoing
analysis will be provided to Customer at Bank's Website. In connection with the
foregoing, Customer shall notify Bank of any Eligible Securities Depositories at
which it does not choose to have its Foreign Assets held. Bank shall monitor the
custody risks associated with maintaining Customer's Foreign Assets at each such
Eligible Securities Depository on a continuing basis and shall promptly notify
Customer or its adviser of any material changes in such risks.
(b) Bank shall exercise reasonable care, prudence and diligence in
performing the requirements set forth in Section 17(a) above.
(c) Based on the information available to it in the exercise of
diligence, Bank shall determine the eligibility under rule 17f-7 of each
depository before including it on Appendix 1-B hereto and shall promptly advise
Customer if any Eligible Securities Depository ceases to be eligible. (Eligible
Securities Depositories used by Bank as of the date hereof are set forth in
Appendix 1-B hereto, and as the same may be amended on notice to Customer from
time to time.)
(d) Bank need not commence performing any of the duties set forth in
this Section 17 prior to March 31, 2001, but Bank shall advise Customer if it is
prepared to commence such duties prior to such date as to particular
depositories.
*********************
3
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
Customer THE CHASE MANHATTAN BANK
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------- ---------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxxxx X. Xxxxxxx
Title: President Title: Vice President
Date: July 1, 2001 Date: July 1, 2001
4
Appendix 1-A
Information Regarding Country Risk
Appendix 1- To aid Customer in its determinations regarding
Country Risk, Bank shall furnish annually and upon
the initial placing of Foreign Assets into a country
the following information (check items applicable):
A Opinions of local counsel concerning:
X_ i. Whether applicable foreign law would restrict the access
afforded Customer's independent public accountants to books
and records kept by an Eligible Foreign Custodian located in
that country.
X_ ii. Whether applicable foreign law would restrict the
Customer's ability to recover its assets in the event of the
bankruptcy of an Eligible Foreign Custodian located in that
country.
X_ iii. Whether applicable foreign law would restrict the
Customer's ability to recover assets that are lost while under
the control of an Eligible Foreign Custodian located in the
country.
Appendix 1- Written information concerning:
X_ i. The likelihood of expropriation, nationalization, freezes, or
confiscation of Customer's assets.
X ii. Whether difficulties in converting Customer's cash and
cash equivalents to U.S. dollars are reasonably foreseeable.
Appendix 1- A market report with respect to the following topics:
Appendix 1- securities regulatory environment, (ii) foreign
ownership restrictions, (iii) foreign exchange, (iv)
securities settlement and registration, (v) taxation,
(vi) market settlement risk, (vii) Eligible
Securities Depositories (including Depository
evaluation), if any.
2. Bank shall furnish the following additional information:
Market flashes, including with respect to changes in the
information in market reports.
Appendix 1-B
ELIGIBLE SECURITIES DEPOSITORIES
[XX XXXXXX LOGO OMMITTED]
Investor Services Network Management "At A Glance" Report
SECURITIES DEPOSITORIES
--------------------------------------------------------------------------------------------------------------------------------
COUNTRY DEPOSITORY INSTRUMENTS
--------------------------------------------------------------------------------------------------------------------------------
Argentina CVSA Equity, Corporate Debt, Government Debt
(Caja de Valores S.A.)
--------------------------------------------------------------------------------------------------------------------------------
Argentina CRYL Government Debt
(Central de Registration y Liquidacion
de Instrumentos de Endeudamiento
Publico)
--------------------------------------------------------------------------------------------------------------------------------
Australia Austraclear Limited Corporate Debt, Money Market, Semi-Government Debt
--------------------------------------------------------------------------------------------------------------------------------
Australia CHESS Equity
(Clearing House Electronic Sub
Register System)
--------------------------------------------------------------------------------------------------------------------------------
Australia RITS Government Debt
(Reserve Bank of Australia/Reserve
Bank Information and Transfer System
--------------------------------------------------------------------------------------------------------------------------------
Austria OeKB Equity, Corporate Debt, Government Debt
(Oesterreichische Kontrollbank AG)
--------------------------------------------------------------------------------------------------------------------------------
Belgium CIK Equity, Corporate Debt
(Caisse Interprofessionnelle de Dpots
et de Virements de Titres S.A.)
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx XXX Corporate Debt, Government Debt
(National Bank of Belgium)
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
2
SCHEDULE A
Delaware Group Adviser Funds
Delaware New Pacific Fund
Delaware Overseas Equity Fund
Delaware U.S. Growth Fund
Delaware Group Equity Funds I
Delaware Balanced Fund
Delaware Devon Fund
Delaware Group Equity Funds II
Delaware Decatur Equity Income Fund
Delaware Growth and Income Fund
Delaware Diversified Value Fund
Delaware Social Awareness Fund
Delaware Group Equity Funds III
Delaware American Services Fund
Delaware Focused Growth Fund
Delaware Research Fund
Delaware Small Cap Growth Fund
Delaware Technology & Innovation Fund
Delaware Trend Fund
Delaware Group Equity Funds IV
Delaware Growth Opportunities Fund
Delaware Diversified Growth Fund
Delaware Group Equity Funds V
Delaware Small Cap Value Fund
Delaware Retirement Income Fund
Delaware Small Cap Contrarian Fund
Delaware Group Foundation Funds
Delaware Income Portfolio
Delaware Balanced Portfolio
Delaware Growth Portfolio
Delaware S&P 500 Index Fund
Delaware Group Global and International Funds
Delaware Emerging Markets Fund
Delaware Global Bond Fund
Delaware Global Equity Fund
Delaware International Equity Fund
Delaware International Small Cap Fund
Delaware Group Government Fund
Delaware American Government Bond Fund
3
Delaware Group Income Funds
Delaware Corporate Bond Fund
Delaware Delchester Fund
Delaware Extended Duration Bond Fund
Delaware High-Yield Opportunities Fund
Delaware Strategic Income Fund
Delaware Group Limited-Term Government Funds
Delaware Limited-Term Government Fund
Delaware Pooled Trust
The All-Cap Growth Equity Portfolio
The Diversified Core Fixed Income Portfolio
The Emerging Markets Portfolio
The Global Equity Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio
The International Equity Portfolio
The International Fixed Income Portfolio
The International Large-Cap Equity Portfolio
The International Small-Cap Portfolio
The Labor Select International Equity Portfolio
The Large-Cap Growth Equity Portfolio
The Real Estate Investment Trust Portfolio
The Real Estate Investment Trust Portfolio II
The Small-Cap Growth Equity Portfolio
The Small-Cap Value Equity Portfolio
Delaware Group Premium Fund
Balanced Series
Convertible Securities Series
Devon Series
Emerging Markets Series
Global Bond Series
Growth and Income Series
Growth Opportunities Series
High Yield Series
International Equity Series
REIT Series
Select Growth Series
Small Cap Value Series
Social Awareness Series
Strategic Income Series
Technology and Innovation Series
Trend Series
U.S. Growth Series
4
