EXHIBIT 23(G)
CUSTODY AGREEMENT
CUSTODIAN AND FUND ACCOUNTING/RECORDKEEPING SERVICES AGREEMENT
AGREEMENT made as of this 1st day of July, 2002, between IDEX MUTUAL
FUNDS, a Massachusetts business trust (the "Fund"), and INVESTORS BANK & TRUST
COMPANY, a Massachusetts trust company (the "Bank").
The Fund, an open-end management investment company on behalf of the
portfolios/series listed on Appendix A hereto (as such Appendix A may be
amended from time to time) (each a "Portfolio" and collectively, the
"Portfolios"), desires to place and maintain all of its portfolio securities
and cash in the custody of the Bank and to appoint the Bank as agent to perform
fund accounting and recordkeeping services. The Bank represents and warrants it
has at least the minimum qualifications required by Section 17(f)(1) of the
Investment Company Act of 1940 (the "1940 Act") to act as custodian of the
portfolio securities and cash of the Fund, and has indicated its willingness to
so act, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian and Agent. For the Portfolios identified
in Appendix A (as such, Appendix A may be amended from time to time by
attaching a new Appendix A, executed by both parties, to this Agreement), the
Fund hereby appoints the Bank as custodian of its portfolio securities and cash
delivered to the Bank as hereinafter described and appoints the Bank as fund
accounting and recordkeeping agent which includes calculating the net asset
values of the Portfolios' classes of shares. The Bank agrees to act as such
upon the terms and conditions hereinafter set forth. For the services rendered
pursuant to this Agreement, the Fund agrees to pay to the Bank such fees as may
be agreed in writing from time to time by the parties.
2. Definitions. Whenever used herein, the terms listed below will have
the following meaning:
2.1 Authorized Person. Authorized Person will mean any of the persons
duly authorized to give Proper Instructions or otherwise act on behalf of the
Fund by appropriate resolution of its Board, and set forth in a certificate as
required by Section 4 hereof.
2.2 Board. Board will mean the Board of Directors or the Board of
Trustees of the Fund, as the case may be.
2.3 Security. The term security as used herein will have the same
meaning assigned to such term in the Securities Act of 1933, as amended,
including, without limitation, any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation
in any profit sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put, call,
straddle, option, or privilege on any security, certificate of deposit, or
group or index of securities (including any interest therein or based on the
value thereof), or any put, call, straddle, option, or privilege entered into
on a national securities exchange relating to a foreign currency, or, in
general, any interest or instrument commonly known as a "security", or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to, or option
contract to purchase or sell any of the foregoing, and futures, forward
contracts and options thereon.
2.4 Portfolio Security. Portfolio Security will mean any security
owned by the Fund.
2.5 Officers' Certificate. Officers' Certificate will mean, unless
otherwise indicated, any request, direction, instruction, or certification in
writing signed by any Authorized Person of the Fund.
2.6 Book-Entry System. Book-Entry System shall mean the Federal
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.
2.7 Depository. Depository shall mean The Depository Trust Company
("DTC"), a clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 ("Exchange
Act"), its successor or successors and its nominee or nominees. The term
"Depository" shall further mean and include any other person authorized to act
as a depository under the 1940 Act, its successor or successors and its nominee
or nominees, specifically identified in a certified copy of a resolution of the
Board.
2.8 Proper Instructions. Proper Instructions shall mean (i)
instructions regarding the purchase or sale of Portfolio Securities having
taken place, and payments and deliveries in connection therewith, given by an
Authorized Person, such instructions to be given in such form, content and
manner as the Bank and the Fund shall agree upon from time to time, and (ii)
instructions (which may be continuing instructions) regarding other matters
signed or initialed by an Authorized Person. Oral instructions will be
considered Proper Instructions if the Bank reasonably believes them to have
been given by an Authorized Person. The Fund shall cause all oral instructions
to be promptly confirmed in writing. The Bank shall act upon and comply with
any subsequent Proper Instruction which modifies a prior instruction and the
sole obligation of the Bank with respect to any follow-up or confirming
instruction shall be to make reasonable efforts to detect any discrepancy
between the original instruction and such confirmation and to report such
discrepancy to the Fund. The Fund shall be responsible, at the Fund's or
applicable Portfolio's expense, for taking any action, including any
reprocessing, necessary to correct any such discrepancy or error, and to the
extent such action requires the Bank to act, the Fund shall give the Bank
specific Proper Instructions as to the action required. Proper Instructions may
include communication effected directly between electro-mechanical or
electronic devices, including e-mail or other transmissions through the
Internet or other means. The Fund acknowledges that such electronic
transmissions may be subject to interception or interference and other risks.
Proper instructions should be delivered to the Bank at times agreed upon from
time to time by the parties.
3. Separate Accounts for each Portfolio. The Bank will segregate the
assets of each Portfolio to which this Agreement relates into a separate
account for each such Portfolio containing the assets of such Portfolio (and
all investment earnings thereon). Unless the context otherwise requires, any
reference in this Agreement to any actions to be taken by the Fund shall be
deemed to refer to the Fund acting on behalf of one or more of its Portfolios,
any reference in this Agreement to any assets of the Fund, including, without
limitation, any portfolio securities and cash and earnings thereon, shall be
deemed to refer only to assets of the applicable Portfolios, any duty or
obligation of the Bank hereunder to the Fund shall be deemed to refer to duties
and obligations with respect to such individual series and any obligation or
liability of the Fund hereunder shall be binding only with respect to such
individual series, and shall be discharged only out of the assets of such
series.
4. Certification as to Authorized Persons. The Secretary, Assistant
Secretary or Principal Accounting Officer of the Fund will at all times
maintain on file with the Bank his or her certification to the Bank, in such
form as may be acceptable to the Bank, of (i) the names and signatures of the
Authorized Persons and (ii) the names of the members of the Board, it being
understood that upon the occurrence of any change in the information set forth
in the most recent certification on file (including without limitation any
person named in the most recent certification who is no longer an Authorized
Person as designated therein), the Secretary, Assistant Secretary or Principal
Accounting Officer of the Fund will sign a new or amended certification setting
forth the change and the new, additional or omitted names or signatures. The
Bank will be entitled to rely and act upon any Officers' Certificate given to
it by the Fund, which has been signed by Authorized Persons named in the most
recent certification received by the Bank.
5. Custody of Cash/Custody Demand Deposit Accounts. As custodian for the Fund,
the Bank will open and maintain a separate account or accounts in the name of a
Portfolio or in the name of the Bank, as Custodian of the Fund's Portfolios,
and will deposit to the account of the Portfolio all of the cash of the
Portfolio, except for cash held by a subcustodian appointed pursuant to
Sections 14.2 or 14.3 hereof, including borrowed funds, delivered to the Bank,
subject only to draft or order by the Bank acting pursuant to the terms of this
Agreement.
Funds Availability. The Bank agrees: to make Fed Funds available to the
applicable Portfolio at 10:00AM ET on the second business day after deposit of
any check into an Account in the amount of the check (subject to reversal in
the event that any such check does not properly clear); to make funds available
immediately upon a deposit made by Federal Reserve wire; and to make funds
available on the next business day after a deposit by ACH credit.
Collection/receipt of Portfolio income and other payments. The Bank will
collect/receive income and other payments
pursuant to Section 9 hereof. Settlement posting by the Bank for securities
sold shall be on a contractual basis for domestic securities including ADRs and
on an actual basis for foreign (non U.S.) securities.
Upon receipt by the Bank of Proper Instructions (which may be continuing
instructions) or in the case of payments for redemptions and repurchases of
outstanding shares of beneficial interest of the Portfolio(s), notification
from the Fund's transfer agent as provided in Section 7, requesting such
payment, designating the payee or the account or accounts to which the Bank
will release funds for deposit, and stating that it is for a purpose permitted
under the terms of this Section 5, specifying the applicable subsection, the
Bank will make payments of cash held for the accounts of a Portfolio, insofar
as funds are available for that purpose, only as permitted in subsections
5.1-5.9 below. The Fund may establish standing instructions from time to time
with respect to disbursements made by the Bank on behalf of a Portfolio.
5.1 Purchase of Securities. Upon the purchase of securities for a
Portfolio, against contemporaneous receipt of such securities by the Bank or
against delivery of such securities to the Bank in accordance with generally
accepted settlement practices and customs in the jurisdiction or market in
which the transaction occurs registered in the name of a Portfolio or in the
name of, or properly endorsed and in form for transfer to, the Bank, or a
nominee of the Bank, or receipt for the account of the Bank pursuant to the
provisions of Section 6 below, each such payment to be made at the purchase
price shown on a broker's confirmation (or transaction report in the case of
Book Entry Paper (as that term is defined in Section 6.6 hereof)) of purchase
of the securities received by the Bank before such payment is made, as
confirmed in the Proper Instructions received by the Bank before such payment
is made.
5.2 Redemptions. In such amount as may be necessary for the repurchase
or redemption of shares of beneficial interest of a Portfolio offered for
repurchase or redemption in accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of Portfolios. For the payment on the
account of a Portfolio of dividends or other distributions to shareholders as
may from time to time be declared by the Board, interest, taxes, management or
advisory fees, fund administration fees, distribution fees, fees of the Bank
for its services hereunder and reimbursement of the expenses and liabilities of
the Bank, fees of any transfer agent, fees for legal, accounting, and auditing
services, or other operating expenses of a Portfolio or the Fund
5.4 Payment in Respect of Securities. For payments in connection with
the conversion, exchange or surrender of Portfolio Securities or securities
subscribed to by a Portfolio held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans of money made to a Portfolio,
but, in the case of final payment, only upon redelivery to the Bank of any
Portfolio Securities pledged or hypothecated therefor and upon surrender of
documents evidencing the loan;
5.6 Repayment of Cash. To repay the cash delivered to the Fund for the
purpose of collateralizing the obligation to return to the Fund certificates
borrowed from the Fund representing Portfolio Securities, but only upon
redelivery to the Bank of such borrowed certificates.
5.7 Foreign Exchange Transactions.
(a) For payments in connection with foreign exchange
contracts or options to purchase and sell foreign currencies for spot and
future delivery (collectively, "Foreign Exchange Agreements") which may be
entered into by the Bank on behalf of the Fund upon the receipt of Proper
Instructions, such Proper Instructions to specify the currency broker or
banking institution (which may be the Bank, or any other subcustodian or agent
hereunder, acting as principal) with which the contract or option is made, and
the Bank shall have no duty with respect to the selection of such currency
brokers or banking institutions with which the Fund deals or for their failure
to comply with the terms of any contract or option.
(b) In order to secure any payments in connection with
Foreign Exchange Agreements which may be entered into by the Bank pursuant to
Proper Instructions, the Fund agrees that the Bank shall have a continuing lien
and security interest, to the extent of any payment due under any Foreign
Exchange Agreement, in and to any property at any time held by the Bank for the
Fund's benefit or in which the Fund has an interest and which is then in the
Bank's possession or control (or in the possession or control of any third
party acting on the Bank's behalf). The Fund authorizes the Bank, in the Bank's
sole discretion, at any time to charge any such payment due under any Foreign
Exchange Agreement against any balance of account standing to the credit of the
Fund on the Bank's books.
5.8 Other Authorized Payments. For other authorized transactions of
the Fund, or other obligations of the Fund incurred for proper Fund purposes;
provided that before making any such payment the Bank will also receive a
certified copy of a resolution of the Board signed by an Authorized Person
(other than the Person certifying such resolution) and certified by its
Secretary or Assistant Secretary, naming the person or persons to whom such
payment is to be made, and either describing the transaction for which payment
is to be made and declaring it to be an authorized transaction of the Fund, or
specifying the amount of the obligation for which payment is to be made,
setting forth the purpose for which such obligation was incurred and declaring
such purpose to be a proper corporate purpose.
5.9 Termination: Upon the termination of this Agreement as hereinafter
set forth pursuant to Section 8 and Section 16 of this Agreement.
6. Securities.
6.1 Segregation and Registration. Except as otherwise provided herein,
and except for securities to be delivered to any subcustodian appointed
pursuant to Sections 14.2 or 14.3 hereof, the Bank as custodian will receive
and hold pursuant to the provisions hereof, in a separate account or accounts
and physically segregated at all times from those of other persons, any and all
Portfolio Securities which may now or hereafter be delivered to it by or for
the account of the Fund. All such Portfolio Securities will be held or disposed
of by the Bank for, and subject at all times to, the instructions of the Fund
pursuant to the terms of this Agreement. Subject to the specific provisions
herein relating to Portfolio Securities that are not physically held by the
Bank, the Bank will register all Portfolio Securities (unless otherwise
directed by Proper Instructions or an Officers' Certificate), in the name of a
registered nominee of the Bank as defined in the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, and will execute and
deliver all such certificates in connection therewith as may be required by
such laws or regulations or under the laws of any state.
The Fund will from time to time furnish to the Bank appropriate
instruments to enable it to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee, any Portfolio Securities that
may from time to time be registered in the name of a Portfolio.
6.2 Voting and Proxies. Neither the Bank nor any nominee of the Bank
will vote any of the Portfolio Securities held hereunder, except in accordance
with Proper Instructions or an Officers' Certificate. The Bank will execute and
deliver, or cause to be executed and delivered, to the Fund or its designee all
notices, proxies and proxy soliciting materials delivered to the Bank with
respect to such Securities, such proxies to be executed by the registered
holder of such Securities (if registered otherwise than in the name of the
Fund), but without indicating the manner in which such proxies are to be voted.
6.3 Corporate Action. If at any time the Bank is notified that an
issuer of any Portfolio Security has taken or intends to take a corporate
action (a "Corporate Action") that affects the rights, privileges, powers,
preferences, qualifications or ownership of a Portfolio Security, including
without limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or
stock dividend, which Corporate Action requires an affirmative response or
action on the part of the holder of such Portfolio Security (a "Response"), the
Bank shall notify the Fund or its designee promptly of the Corporate Action,
the Response required in connection with the Corporate Action and the Bank's
deadline for receipt from the Fund or its designee of Proper Instructions
regarding the Response (the "Response Deadline"). The Bank shall forward to the
Fund or its designee via facsimile, e-mail and/or overnight courier all
notices, information statements or other materials relating to the Corporate
Action promptly after receipt of such materials by the Bank.
(a) The Bank shall act upon a required Response only
after receipt by the Bank of Proper Instructions from the Fund or its designee
no later than 5:00 p.m. on the date specified as the Response Deadline and only
if the Bank (or its agent or sub-custodian hereunder) has actual possession of
all necessary Securities, consents and other materials no later than 5:00 p.m.
on the date specified as the Response Deadline.
(b) The Bank shall have no duty to act upon a required
Response if Proper Instructions relating to such Response and all necessary
Securities, consents and other materials are not received by and in the
possession of the Bank no later than 5:00 p.m. on the date specified as the
Response Deadline. Notwithstanding, the Bank may, in its sole discretion, use
its best efforts to act upon a Response for which Proper Instructions and/or
necessary Securities, consents or other materials are received by the Bank
after 5:00 p.m. on the date specified as the Response Deadline, it being
acknowledged and agreed by the parties that any undertaking by the Bank to use
its best efforts in such circumstances shall in no way create any duty upon the
Bank to complete such Response prior to its expiration.
(c) In the event that the Fund or its designee notifies
the Bank of a Corporate Action requiring a Response and the Bank has received
no other notice of such Corporate Action, the Response Deadline shall be 48
hours prior to the Response expiration time set by the depository processing
such Corporate Action.
(d) Section 14.3(e) of this Agreement shall govern any
Corporate Action involving Foreign Portfolio Securities held by a Selected
Foreign Sub-Custodian.
6.4 Book-Entry System. Provided (i) the Bank has received a certified
copy of a resolution of the Board specifically approving deposits of Fund
assets in the Book-Entry System, and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:
(a) The Bank may keep Portfolio Securities in the
Book-Entry System provided that such Portfolio Securities are represented in an
account ("Account") of the Bank (or its agent) in such System which shall not
include any assets of the Bank (or such agent) other than assets held as a
fiduciary, custodian, or otherwise for customers;
(b) The records of the Bank (and any such agent) with
respect to the Fund's participation in the Book-Entry System through the Bank
(or any such agent) will identify by book entry the Portfolio Securities which
are included with other securities deposited in the Account and shall at all
times during the regular business hours of the Bank (or such agent) be open for
inspection by duly authorized officers, employees or agents of the Fund. Where
securities are transferred to the Fund's account, the Bank shall also, by book
entry or otherwise, identify as belonging to the Fund a quantity of securities
in a fungible bulk of securities (i) registered in the name of the Bank or its
nominee, or (ii) shown on the Bank's account on the books of the Federal
Reserve Bank;
(c) The Bank (or its agent) shall pay for securities
purchased for the account of the Fund or shall pay cash collateral against the
return of Portfolio Securities loaned by the Fund upon (i) receipt of advice
from the Book-Entry System that such Securities have been transferred to the
Account, and (ii) the making of an entry on the records of the Bank (or its
agent) to reflect such payment and transfer for the account of the Fund. The
Bank (or its agent) shall transfer securities sold or loaned for the account of
the Fund upon
(i) receipt of advice from the Book-Entry
System that payment for securities sold or payment of the initial cash
collateral against the delivery of securities loaned by the Fund has been
transferred to the Account; and
(ii) the making of an entry on the records of the
Bank (or its agent) to reflect such transfer and payment for the account of the
Fund. Copies of all advices from the Book-Entry System of transfers of
securities for the account of the Fund shall identify the Fund, be maintained
for the Fund by the Bank and shall be provided to the Fund at its request. The
Bank shall send the Fund a confirmation, as defined by Rule 17f-4 of the 1940
Act, of any transfers to or from the account of the Fund;
(d) The Bank will promptly provide the Fund with any
report obtained by the Bank or its agent on the Book-Entry System's accounting
system, internal accounting control and procedures for safeguarding securities
deposited in the Book-Entry System;
6.5 Use of a Depository. Provided (i) the Bank has received a
certified copy of a resolution of the Board specifically approving deposits in
DTC or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive,
exchange, release, lend, deliver and otherwise deal with Portfolio Securities
including stock dividends, rights and other items of like nature, and to
receive and remit to the Bank on behalf of the Fund all income and other
payments thereon and to take all steps necessary and proper in connection with
the collection thereof;
(b) Registration of Portfolio Securities may be made in
the name of any nominee or nominees used by such Depository;
(c) Payment for securities purchased and sold may be made
through the clearing medium employed by such Depository for transactions of
participants acting through it. Upon any purchase of Portfolio Securities,
payment will be made only upon delivery of the securities to or for the account
of the Fund and the Fund shall pay cash collateral against the return of
Portfolio Securities loaned by the Fund only upon delivery of the Securities to
or for the account of the Fund; and upon any sale of Portfolio Securities,
delivery of the Securities will be made only against payment therefor or, in
the event Portfolio Securities are loaned, delivery of Securities will be made
only against receipt of the initial cash collateral to or for the account of
the Fund; and
(d) The Bank shall use its best efforts to provide that:
(i) The Depository obtains replacement of any
certificated Portfolio Security deposited with it in the event such Security is
lost, destroyed, wrongfully taken or otherwise not available to be returned to
the Bank upon its request;
(ii) Proxy materials received by a Depository
with respect to Portfolio Securities deposited with such Depository are
forwarded immediately to the Bank for prompt transmittal to the Fund or its
designee;
(iii) Such Depository promptly forwards to the
Bank confirmation of any purchase or sale of Portfolio Securities and of the
appropriate book entry made by such Depository to the Fund's account;
(iv) Such Depository prepares and delivers to the
Bank such records with respect to the performance of the Bank's obligations and
duties hereunder as may be necessary for the Fund to comply with the
recordkeeping requirements of Section 31(a) of the 1940 Act and Rule 31(a)
thereunder; and
(v) Such Depository delivers to the Bank all
internal accounting control reports, whether or not audited by an independent
public accountant, as well as such other reports as the Fund may reasonably
request in order to verify the Portfolio Securities held by such Depository.
6.6 Use of Book-Entry System for Commercial Paper. Provided (i) the
Bank has received a certified copy of a resolution of the Board specifically
approving participation in a system maintained by the Bank for the holding of
commercial paper in book-entry form ("Book-Entry Paper") and (ii) for each year
following such approval the Board has received and approved the arrangements,
upon receipt of Proper Instructions and upon receipt of confirmation from an
Issuer (as defined below) that the Fund has purchased such Issuer's Book-Entry
Paper, the Bank shall issue and hold in book-entry form, on behalf of the Fund,
commercial paper issued by issuers with whom the Bank has entered into a
book-entry agreement (the "Issuers"). In maintaining procedures for Book-Entry
Paper, the Bank agrees that:
(a) The Bank will maintain all Book-Entry Paper held by
the Fund in an account of the Bank that includes only assets held by it for
customers;
(b) The records of the Bank with respect to the Fund's
purchase of Book-Entry Paper through the Bank will identify, by book-entry,
commercial paper belonging to the Fund which is included in the Book-Entry
System
and shall at all times during the regular business hours of the Bank be open
for inspection by duly authorized officers, employees or agents of the Fund;
(c) The Bank shall pay for Book-Entry Paper purchased for
the account of the Fund upon contemporaneous (i) receipt of advice from the
Issuer that such sale of Book-Entry Paper has been effected, and (ii) the
making of an entry on the records of the Bank to reflect such payment and
transfer for the account of the Fund;
(d) The Bank shall cancel such Book-Entry Paper
obligation upon the maturity thereof upon contemporaneous (i) receipt of advice
that payment for such Book-Entry Paper has been transferred to the Fund, and
(ii) the making of an entry on the records of the Bank to reflect such payment
for the account of the Fund; and
(e) The Bank will send to the Fund such reports on its
system of internal accounting control with respect to the Book-Entry Paper as
the Fund may reasonably request from time to time.
6.7 Use of Immobilization Programs. Provided (i) the Bank has received
a certified copy of a resolution of the Board specifically approving the
maintenance of Portfolio Securities in an immobilization program operated by a
bank which meets the requirements of Section 26(a)(1) of the 1940 Act, and (ii)
for each year following such approval the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval, the Bank shall enter into
such immobilization program with such bank acting as a subcustodian hereunder.
6.8 Eurodollar CDs. Any Portfolio Securities which are Eurodollar CDs
may be physically held by the European branch of the U.S. banking institution
that is the issuer of such Eurodollar CD (a "European Branch"), provided that
such Portfolio Securities are identified on the books of the Bank as belonging
to the Fund and that the books of the Bank identify the European Branch holding
such Portfolio Securities. Notwithstanding any other provision of this
Agreement to the contrary, except as stated in the first sentence of this
subsection 6.8, the Bank shall be under no other duty with respect to such
Eurodollar CDs belonging to the Fund.
6.9 Options and Futures Transactions.
(a) Puts and Calls Traded on Securities Exchanges, NASDAQ
or Over-the-Counter.
(i) The Bank shall take action as to put options
("puts") and call options ("calls") purchased or sold (written) by the Fund
regarding escrow or other arrangements (i) in accordance with the provisions of
any agreement entered into upon receipt of Proper Instructions among the Bank,
any broker-dealer registered with the National Association of Securities
Dealers, Inc. (the "NASD"), and, if necessary, the Fund, relating to the
compliance with the rules of the Options Clearing Corporation and of any
registered national securities exchange, or of any similar organization or
organizations.
(ii) Unless another agreement requires it to do
so, the Bank shall be under no duty or obligation to see that the Fund has
deposited or is maintaining adequate margin, if required, with any broker in
connection with any option, nor shall the Bank be under duty or obligation to
present such option to the broker for exercise unless it receives Proper
Instructions from the Fund. The Bank shall have no responsibility for the
legality of any put or call purchased or sold on behalf of the Fund, the
propriety of any such purchase or sale, or the adequacy of any collateral
delivered to a broker in connection with an option or deposited to or withdrawn
from a Segregated Account (as defined in subsection 6.10 below). The Bank
specifically, but not by way of limitation, shall not be under any duty or
obligation to: (i) periodically check or notify the Fund that the amount of
such collateral held by a broker or held in a Segregated Account is sufficient
to protect such broker or the Fund against any loss; (ii) effect the return of
any collateral delivered to a broker; or (iii) advise the Fund that any option
it holds, has or is about to expire. Such duties or obligations shall be the
sole responsibility of the Fund.
(b) Puts, Calls and Futures Traded on Commodities
Exchanges
(i) The Bank shall take action as to puts, calls
and futures contracts ("Futures") purchased or sold by the Fund in accordance
with the provisions of any agreement entered into upon the receipt of
Proper Instructions among the Fund, the Bank and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any Contract Market,
or any similar organization or organizations, regarding account deposits in
connection with transactions by the Fund.
(ii) The responsibilities of the Bank as to
futures, puts and calls traded on commodities exchanges, any Futures Commission
Merchant account and the Segregated Account shall be limited as set forth in
subparagraph (a)(ii) of this Section 6.9 as if such subparagraph referred to
Futures Commission Merchants rather than brokers, and Futures and puts and
calls thereon instead of options.
6.10 Segregated Account. The Bank shall upon receipt of Proper
Instructions establish and maintain a Segregated Account or Accounts for and on
behalf of the Fund.
(a) Cash and/or Portfolio Securities may be transferred into
a Segregated Account upon receipt of Proper Instructions in the following
circumstances:
(i) in accordance with the provisions of any
agreement among the Fund, the Bank and a broker-dealer registered under the
Exchange Act and a member of the NASD or any Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance with the
rules of the Options Clearing Corporation and of any registered national
securities exchange or the Commodity Futures Trading Commission or any
registered Contract Market, or of any similar organizations regarding escrow or
other arrangements in connection with transactions by the Fund;
(ii) for the purpose of segregating cash or
securities in connection with options purchased or written by the Fund or
commodity futures purchased or written by the Fund;
(iii) for the deposit of liquid assets, such as
cash, U.S. Government securities or other high grade debt obligations, having a
market value (marked to market on a daily basis) at all times equal to not less
than the aggregate purchase price due on the settlement dates of all the Fund's
then outstanding forward commitment or "when-issued" agreements relating to the
purchase of Portfolio Securities and all the Fund's then outstanding
commitments under reverse repurchase agreements entered into with broker-dealer
firms;
(iv) for the purposes of compliance by the Fund
with the procedures required by Investment Company Act Release No. 10666, or
any subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of Segregated Accounts by registered investment
companies;
(v) for other proper corporate purposes, but
only, in the case of this clause (v), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board, or of the
executive committee of the Board signed by an officer of the Fund and certified
by the Secretary or an Assistant Secretary, setting forth the purpose or
purposes of such Segregated Account and declaring such purposes to be proper
corporate purposes.
(b) Cash and/or Portfolio Securities may be withdrawn
from a Segregated Account pursuant to Proper Instructions in the following
circumstances:
(i) with respect to assets deposited in
accordance with the provisions of any agreements referenced in (a)(i) or
(a)(ii) above, in accordance with the provisions of such agreements;
(ii) with respect to assets deposited pursuant to
(a)(iii) or (a)(iv) above, for sale or delivery to meet the Fund's obligations
under outstanding forward commitment or when-issued agreements for the purchase
of Portfolio Securities and under reverse repurchase agreements;
(iii) for exchange for other liquid assets of
equal or greater value deposited in the Segregated Account;
(iv) to the extent that the Fund's outstanding
forward commitment or when-issued agreements
for the purchase of portfolio securities or reverse repurchase agreements are
sold to other parties or the Fund's obligations thereunder are met from assets
of the Fund other than those in the Segregated Account;
(v) for delivery upon settlement of a forward
commitment or when-issued agreement for the sale of Portfolio Securities; or
(vi) with respect to assets deposited pursuant to
(a)(v) above, in accordance with the purposes of such account as set forth in
Proper Instructions.
6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon
receipt of Proper Instructions relating to the purchase by the Fund of
interest-bearing fixed-term and call deposits, transfer cash, by wire or
otherwise, in such amounts and to such bank or banks as shall be indicated in
such Proper Instructions. The Bank shall include in its records with respect to
the assets of the Fund appropriate notation as to the amount of each such
deposit, the banking institution with which such deposit is made (the "Deposit
Bank"), and shall retain such forms of advice or receipt evidencing the
deposit, if any, as may be forwarded to the Bank by the Deposit Bank. Such
deposits shall be deemed Portfolio Securities of the Fund and the
responsibility of the Bank therefore shall be the same as and no greater than
the Bank's responsibility in respect of other Portfolio Securities of the Fund.
6.12 Transfer of Securities. The Bank will transfer, exchange, deliver
or release Portfolio Securities held by it hereunder, insofar as such
Securities are available for such purpose, provided that the Bank will allow
any transfer, exchange, delivery or release under this Section only upon
receipt of Proper Instructions. The Proper Instructions shall state that such
transfer, exchange or delivery is for a purpose permitted under the terms of
this Section 6.12, and shall specify the applicable subsection, or describe the
purpose of the transaction with sufficient particularity to permit the Bank to
ascertain the applicable subsection. After receipt of such Proper Instructions,
the Bank will transfer, exchange, deliver or release Portfolio Securities only
in the following circumstances:
(a) Upon sales of Portfolio Securities for the account of
the Fund, against contemporaneous receipt by the Bank of payment therefor in
full, or against payment to the Bank in accordance with generally accepted
settlement practices and customs in the jurisdiction or market in which the
transaction occurs, each such payment to be in the amount of the sale price
shown in a broker's confirmation of sale received by the Bank before such
payment is made, as confirmed in the Proper Instructions received by the Bank
before such payment is made;
(b) In exchange for or upon conversion into other
securities alone or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise, upon exercise of subscription,
purchase or sale or other similar rights represented by such Portfolio
Securities, or for the purpose of tendering shares in the event of a tender
offer therefor, provided, however, that in the event of an offer of exchange,
tender offer, or other exercise of rights requiring the physical tender or
delivery of Portfolio Securities, the Bank shall have no liability for failure
to so tender in a timely manner unless such Proper Instructions are received by
the Bank at least two business days prior to the date required for tender, and
unless the Bank (or its agent or subcustodian hereunder) has actual possession
of such Security at least two business days prior to the date of tender;
(c) Upon conversion of Portfolio Securities pursuant to
their terms into other securities;
(d) For the purpose of redeeming in-kind shares of the
Fund upon authorization from the Fund;
(e) In the case of option contracts owned by the Fund,
for presentation to the endorsing broker;
(f) When such Portfolio Securities are called, redeemed
or retired or otherwise become payable;
(g) For the purpose of effectuating the pledge of
Portfolio Securities held by the Bank in order to collateralize loans made to
the Fund by any bank, including the Bank; provided, however, that such
Portfolio Securities will be released only upon payment to the Bank for the
account of the Fund of the moneys borrowed, provided further, however, that in
cases where additional collateral is required to secure a borrowing already
made, and such fact is made to appear in the Proper Instructions, Portfolio
Securities may be released for that purpose without any such payment. In
the event that any pledged Portfolio Securities are held by the Bank, they will
be so held for the account of the lender, and after notice to the Fund from the
lender in accordance with the normal procedures of the lender and any loan
agreement between the fund and the lender that an event of deficiency or
default on the loan has occurred, the Bank may deliver such pledged Portfolio
Securities to or for the account of the lender;
(h) for the purpose of releasing certificates
representing Portfolio Securities, against contemporaneous receipt by the Bank
of the fair market value of such security, as set forth in the Proper
Instructions received by the Bank before such payment is made;
(i) for the purpose of delivering securities lent by the
Fund to a bank or broker dealer, but only against receipt in accordance with
street delivery custom except as otherwise provided herein, of adequate
collateral as agreed upon from time to time by the Fund and the Bank, and upon
receipt of payment in connection with any repurchase agreement relating to such
securities entered into by the Fund;
(j) for other authorized transactions of the Fund or for
other proper corporate purposes; provided that before making such transfer, the
Bank will also receive a certified copy of resolutions of the Board, signed by
an authorized officer of the Fund (other than the officer certifying such
resolution) and certified by its Secretary or Assistant Secretary, specifying
the Portfolio Securities to be delivered, setting forth the transaction in or
purpose for which such delivery is to be made, declaring such transaction to be
an authorized transaction of the Fund or such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made; and
(k) upon termination of this Agreement as hereinafter set
forth pursuant to Section 8 and Section 16 of this Agreement.
As to any deliveries made by the Bank pursuant to this Section 6.12,
securities or cash receivable in exchange therefor shall be delivered to the
Bank.
7. Fund Shares: Shares Redeemed, Sold, and Reinvested from
Distributions. edeemed: In the case of payment of assets of the Fund/Portfolio
held by the Bank in connection with redemptions and repurchases by the
Fund/Portfolio of outstanding shares of beneficial interest, the Bank will rely
on notification by the Fund's transfer agent of receipt of a request for
redemption and certificates, if issued, in proper form for redemption before
such payment is made. Payment shall be made in accordance with the Declaration
of Trust and By-laws of the Fund (the "Articles"), from assets available for
said purpose.
Sold: Whenever shares of beneficial interest are sold by the Fund/Portfolios,
the Fund or its agent will deposit or cause to be deposited with the Bank the
amount received for such shares (generally, the net asset value of the shares
as of the trade date).
Reinvested from Distributions: On the ex-dividend date for a Portfolio
dividend, capital gain or other distribution, the Bank will record the
distribution as so instructed by the Fund and the estimated amount of the
reinvestment of such distribution in the capital and shares outstanding
accounts and records of the Portfolio(s). The Bank will reverse the estimate
and record the actual amounts of the reinvestment transactions upon notice from
the Fund's transfer agent.
From time to time, the Fund or its agent will provide to the Bank "estimates"
of fund share activity or revisions to fund share activity as originally
reported. Any such estimates or revisions so provided as contained within
Proper Instructions are to be recorded by the Bank on the date received but
shall be reversed off on the following pricing day unless otherwise instructed
or revised according to further Proper Instructions. The Bank has no
responsibility or duty to determine whether Fund share activity has been posted
to the proper shareholder accounts/records maintained by the Fund or its agent,
subject to the Bank's responsibilities under Sections 1 and 11 hereof.
8. Merger, Dissolution, etc. of Fund. In the case of the following
transactions, not in the ordinary course of business, namely, the merger of the
Fund into or the consolidation of the Fund with another investment company, the
sale by the Fund of all, or substantially all, of its assets to another
investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, upon the payment of the fees, disbursements and
expenses of the Bank through
the end of the then current term of this Agreement, the Bank will deliver the
Portfolio Securities held by it under this Agreement and disburse cash only
upon the order of the Fund set forth in an Officers' Certificate, accompanied
by a certified copy of a resolution of the Board authorizing any of the
foregoing transactions. Upon completion of such delivery and disbursement and
the payment of all such fees, disbursements and expenses of the Bank, this
Agreement will terminate and the Bank shall be released from any and all
obligations hereunder.
9. Actions of Bank Without Prior Authorization. Notwithstanding
anything herein to the contrary, unless and until the Bank receives an
Officers' Certificate to the contrary, the Bank will take the following actions
without prior authorization or instruction of the Fund or the transfer agent:
9.1 Endorse for collection and collect on behalf of and in the name of
the Fund all checks, drafts, or other negotiable or transferable instruments or
other orders for the payment of money received by it for the account of the
Fund and hold for the account of the Fund all income, dividends, interest and
other payments or distributions of cash with respect to the Portfolio
Securities held thereunder;
9.2 Present for payment all coupons and other income items held by it
for the account of the Fund, which call for payment upon presentation and hold
the cash received by it upon such payment for the account of the Fund;
9.3 Receive and hold for the account of the Fund all securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar securities
issued with respect to any Portfolio Securities held by it hereunder.
9.4 Execute as agent on behalf of the Fund all necessary ownership and
other certificates and affidavits required by the Internal Revenue Code or the
regulations of the Treasury Department issued thereunder, or by the laws of any
state, now or hereafter in effect, inserting the Fund's name on such
certificates as the owner of the securities covered thereby, to the extent it
may lawfully do so and as may be required to obtain payment in respect thereof.
The Bank will execute and deliver such certificates in connection with
Portfolio Securities delivered to it or by it under this Agreement as may be
required under the provisions of the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder, or under the laws of any State;
9.5 Present for payment all Portfolio Securities which are called,
redeemed, retired or otherwise become payable, and hold cash received by it
upon payment for the account of the Fund; and
9.6 Exchange interim receipts or temporary securities for definitive
securities.
10. Collections and Defaults. The Bank will use reasonable efforts to
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Fund notice actually received by the Bank of any call for
redemption, offer of exchange, right of subscription, reorganization or other
proceedings affecting such Securities. If Portfolio Securities upon which such
income is payable are in default or payment is refused after due demand or
presentation, the Bank will notify the Fund in writing of any default or
refusal to pay within two business days from the day on which the Bank receives
knowledge of such default or refusal;
11. Fund Accounting and Recordkeeping Services. The Bank will maintain
accounts and records with respect to transactions for which the Bank is
responsible pursuant to the terms and conditions of this Agreement in complete,
accurate and current form, and in compliance with the applicable rules and
regulations of the 1940 Act, those required to be maintained as a basis for
calculation of the net asset value of each class of a Portfolio, and other
records agreed upon by the parties. The books and records of the Bank
pertaining to its actions under this Agreement and reports by the Bank or its
independent accountants concerning its accounting system, procedures for
safeguarding securities and internal accounting controls will be open to
inspection and audit at reasonable times by officers of or auditors employed by
the Fund or any regulatory body and will be preserved by the Bank in the manner
and in accordance with the applicable rules and regulations under the 1940 Act,
or longer periods as the parties may agree. The accounts and records maintained
by the Bank pursuant hereto are the property of the Fund and are to be made
available to the Fund for inspection or reproduction within a reasonable period
of time upon demand as described above.
The Bank shall perform fund accounting and shall keep the books of
account using practices, methods, policies, etc. as set forth by the Fund's
notes to financial statements contained within the Portfolios' financial
reports and as otherwise instructed by the Fund's Principal Accounting Officer.
The Bank shall render statements or copies from time to time as reasonably
requested by the Principal Accounting Officer, Treasurer or any other executive
officer of the Fund. In preparing the daily books and records of the fund, the
Bank will perform proofs or reconciliations which include but are not limited
to: cash deposit accounts daily; verify whether transfer agent share out of
balance conditions exist and whether totals reconcile with fund accounting
records daily; Portfolio Securities details per accounting records agree with
custody administration system records and sub-custodian records at least
monthly or more frequently as may be customary or requested by the Fund.
The Bank will make available to the Fund access to its accounting and
reporting systems and reports for the Fund's purposes of inquiry and reporting,
currently referred to as the Bank's FACTS system and its browser-based tools
such as InvestView. The Fund will not have access to the system code nor shall
have any direct transaction processing capability. The Fund agrees to pay
telecommunication costs such as dedicated lines or other access methods to
FACTS or other such systems as agreed in writing by both parties.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters of
like nature.
12. Fund Valuation and Yield Calculation
12.1 Fund Valuation. The Bank shall compute and, unless otherwise
directed by the Board, determine as prescribed in the Prospectus and SAI of the
Fund, which is currently as of the close of regular trading on the New York
Stock Exchange on each day on which said Exchange is open for unrestricted
trading and as of such other days, or hours, if any, as may be authorized by
the Board, the net asset value and the public offering price of a share of
beneficial interest of each class of each Portfolio of the Fund, such
determination to be made in accordance with the provisions of the Declaration
of Trust and By-laws of the Fund and the Prospectus and Statement of Additional
Information relating to the Fund, as they may from time to time be amended, and
any applicable resolutions of the Board at the time in force and applicable;
and promptly/timely notify the Fund, its agent(s), the proper exchange(s) and
the NASD and such other persons as the Fund may request of the results of such
computation and determination. In computing the net asset value hereunder, the
Bank may rely in good faith upon information furnished to it by any Authorized
Person in respect of (i) the manner of accrual of the liabilities/expenses of
the Fund and in respect of liabilities/expenses of the Fund not appearing on
its books of account kept by the Bank, (ii) reserves, if any, authorized by the
Board or that no such reserves have been authorized, (iii) the source of the
quotations to be used in computing the net asset value, (iv) the value to be
assigned to any security for which no price quotations are available pursuant
to the valuation procedures adopted by the Portfolio(s), and (v) the method of
computation of and sales load rates used for the public offering price on the
basis of the net asset value of the shares, and the Bank shall not be
responsible for any loss occasioned by such reliance or for any good faith
reliance on any quotations received from a source pursuant to (iii) or (iv)
above. Once the information for (v) above has been specified by the Fund or its
agent to the Bank (according to the Prospectus and/or SAI), only changes to
such information will be provided to the Bank. The Bank will use only approved
pricing sources and will advise the Fund promptly when a source cannot provide
a price or where the Bank has reason to believe a source is not reliable due to
such reasons as data corruption and the like as advised by the source. The Bank
will not accept pricing overrides from any person such as a sub-adviser without
obtaining approval from the Fund or its Valuation Committee. The Fund will
provide the Bank a copy of its Valuation Procedures as well as copies of any
subsequent amendments.
12.2. Yield Calculation. The Bank will compute the yields of the Fund
(the "Yield Calculation") in accordance with the provisions of Release No.
33-6753 and Release No. IC-16245 (February 2, 1988) (the "Releases")
promulgated by the Securities and Exchange Commission, and any subsequent
amendments to, published interpretations of or general conventions accepted by
the staff of the Securities and Exchange Commission with respect to such
releases or the subject matter thereof ("Subsequent Staff Positions"), subject
to the terms set forth below:
(a) The Bank shall compute the Yield Calculation for the
Fund for the stated periods of time as shall be mutually agreed upon, and
communicate in a timely manner the result of such computation to the Fund.
Generally, the Bank will compute and transmit yields as the Fund or its agent
requests as follows: for daily dividend funds: 1 day, 7 day (current or
effective as may be specified), 30 day yield; for other funds as requested: 30
day yield.
(b) In performing the Yield Calculation, the Bank will
derive the items of data necessary for the computation from the records it
generates and maintains for the Fund pursuant Section 11 hereof. The Bank shall
have no responsibility to review, confirm, or otherwise assume any duty or
liability with respect to the accuracy or correctness of any such data supplied
to it by the Fund, any of the Fund's designated agents or any of the Fund's
designated third party providers.
13. Additional Services. The Bank shall perform the additional
services for the Fund as are set forth on Appendix B hereto. Appendix B may be
amended from time to time upon agreement of the parties to add or reduce
additional services to be provided by the Bank to the Fund.
14. Duties of the Bank.
14.1 Performance of Duties and Standard of Care. The Bank agrees to
use reasonable care in performing its obligations hereunder and with regard to
the safekeeping of Fund assets, computing the net asset values of the
Portfolios' classes, and other duties set forth herein. In performing its
duties hereunder and any other duties listed on any Schedule hereto, if any,
the Bank will reasonably be entitled to receive and act upon the advice of
independent counsel of its own selection, which may be counsel for the Fund,
and will be without liability for any action taken or thing done or omitted to
be done in accordance with this Agreement in good faith in conformity with such
advice. Should the Bank miscalculate the net asset value due to its own
negligence ("pricing error"), the Bank agrees to reimburse the affected
Portfolio(s) for direct losses incurred and as computed or approved by the Fund
or its agent in accordance with the Fund/Portfolio's pricing error policies in
effect at the time of the error. If the pricing error was the result of the
negligence of the Bank and another party(ies), the Bank will reimburse the
affected Portfolio(s) according to the degree to which the Bank contributed to
the pricing error as the Bank and Fund agree upon.
The Bank will be under no duty or obligation to inquire into and will
not be liable for:
(a) the validity of the issue of any Portfolio Securities
purchased by or for the Fund, the legality of the purchases thereof or the
propriety of the price incurred therefor;
(b) the legality of any sale of any Portfolio Securities
by or for the Fund or the propriety of the amount for which the same are sold;
(c) the legality of an issue or sale of any common shares
of the Fund or the sufficiency of the amount to be received therefor;
(d) the legality of the repurchase of any common shares
of the Fund or the propriety of the amount to be paid therefor;
(e) the legality of the declaration of any dividend by
the Fund or the legality of the distribution of any Portfolio Securities as
payment in kind of such dividend; and
(f) any property or moneys of the Fund unless and until
received by it, and any such property or moneys delivered or paid by it
pursuant to the terms hereof.
Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to or held by
it for the account of the Fund are such as may properly be held by the Fund
under the provisions of its Declaration of Trust, By-laws, any federal or state
statutes or any rule or regulation of any governmental agency.
14.2 Agents and Subcustodians with Respect to Property of the Fund
Held in the United States. The Bank may employ agents of its own selection in
the performance of its duties hereunder and shall be responsible for the acts
and omissions of such agents as if performed by the Bank hereunder. Without
limiting the foregoing, certain duties of the Bank hereunder may be performed
by one or more affiliates of the Bank.
Upon receipt of Proper Instructions, the Bank may employ subcustodians
selected by or at the direction of the Fund, provided that any such
subcustodian meets at least the minimum qualifications required by Section
17(f)(1) of the 1940 Act to act as a custodian of the Fund's assets with
respect to property of the Fund held in the United States. The Bank shall have
no liability to the Fund or any other person by reason of any act or omission
of any such subcustodian and the Fund shall indemnify the Bank and hold it
harmless from and against any and all actions, suits and claims, arising
directly or indirectly out of the performance of any subcustodian. Upon request
of the Bank, the Fund shall assume the entire defense of any action, suit, or
claim subject to the foregoing indemnity. The Fund shall pay all fees and
expenses of any subcustodian.
14.3 Duties of the Bank with Respect to Property of the Fund Held
Outside of the United States.
(a) Appointment of Foreign Custody Manager.
(i) If the Fund has appointed the Bank Foreign
Custody Manager (as that term is defined in Rule 17f-5 under the 1940 Act), the
Bank's duties and obligations with respect to the Fund's Portfolio Securities
and other assets maintained outside the United States shall be, to the extent
not set forth herein, as set forth in the Delegation Agreement between the Fund
and the Bank (the "Delegation Agreement").
(ii) If the Fund has appointed any other person
or entity Foreign Custody Manager, the Bank shall act only upon Proper
Instructions from the Fund with regard to any of the Fund's Portfolio
Securities or other assets held or to be held outside of the United States, and
the Bank shall be without liability for any Claim (as that term is defined in
Section 15 hereof) arising out of maintenance of the Fund's Portfolio
Securities or other assets outside of the United States. The Fund also agrees
that it shall enter into a written agreement with such Foreign Custody Manager
that shall obligate such Foreign Custody Manager to provide to the Bank in a
timely manner all information required by the Bank in order to complete its
obligations hereunder. The Bank shall not be liable for any Claim arising out
of the failure of such Foreign Custody Manager to provide such information to
the Bank.
(b) Segregation of Securities. The Bank shall identify on
its books as belonging to the Fund the Foreign Portfolio Securities held by
each foreign sub-custodian (each an "Eligible Foreign Custodian") selected by
the Foreign Custody Manager, subject to receipt by the Bank of the necessary
information from such Eligible Foreign Custodian if the Foreign Custody Manager
is not the Bank.
(c) Access of Independent Accountants of the Fund. If the
Bank is the Fund's Foreign Custody Manager, upon request of the Fund, the Bank
will use its best efforts to arrange for the independent accountants of the
Fund to be afforded access to the books and records of any foreign banking
institution employed as an Eligible Foreign Custodian insofar as such books and
records relate to the performance of such foreign banking institution with
regard to the Fund's Portfolio Securities and other assets.
(d) Reports by Bank. If the Bank is the Fund's Foreign
Custody Manager, the Bank will supply to the Fund the reports required under
the Delegation Agreement.
(e) Transactions in Foreign Custody Account. Transactions
with respect to the assets of the Fund held by an Eligible Foreign Custodian
shall be effected pursuant to Proper Instructions from the Fund to the Bank and
shall be effected in accordance with the applicable agreement between the
Foreign Custody Manager and such Eligible Foreign Custodian. If at any time any
Foreign Portfolio Securities shall be registered in the name of the nominee of
the Eligible Foreign Custodian, the Fund agrees to hold any such nominee
harmless from any liability by reason of the registration of such securities in
the name of such nominee.
Notwithstanding any provision of this Agreement to the
contrary, settlement and payment for Foreign Portfolio Securities received for
the account of the Fund and delivery of Foreign Portfolio Securities maintained
for the account of the Fund may be effected in accordance with the customary
established securities trading or securities processing practices and
procedures in the jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the purchaser thereof
or to a dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such securities
from such purchaser or dealer.
In connection with any action to be taken with respect to the
Foreign Portfolio Securities held hereunder, including, without limitation, the
exercise of any voting rights, subscription rights, redemption rights, exchange
rights, conversion rights or tender rights, or any other action in connection
with any other right, interest or privilege with respect to such Securities
(collectively, the "Rights"), the Bank shall promptly transmit to the Fund such
information in connection therewith as is made available to the Bank by the
Eligible Foreign Custodian, and shall promptly forward to the applicable
Eligible Foreign Custodian any instructions, forms or certifications with
respect to such Rights, and any instructions relating to the actions to be
taken in connection therewith, as the Bank shall receive from the Fund pursuant
to Proper Instructions. Notwithstanding the foregoing, the Bank shall have no
further duty or obligation with respect to such Rights, including, without
limitation, the determination of whether the Fund is entitled to participate in
such Rights under applicable U.S. and foreign laws, or the determination of
whether any action proposed to be taken with respect to such Rights by the Fund
or by the applicable Eligible Foreign Custodian will comply with all applicable
terms and conditions of any such Rights or any applicable laws or regulations,
or market practices within the market in which such action is to be taken or
omitted.
(f) Tax Law. The Bank shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund or the Bank
as custodian of the Fund by the tax laws of any jurisdiction, and it shall be
the responsibility of the Fund to notify the Bank of the obligations imposed on
the Fund or the Bank as the custodian of the Fund by the tax law of any
non-U.S. jurisdiction, including responsibility for withholding and other
taxes, assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Eligible Foreign
Custodian with regard to such tax law shall be to use reasonable efforts to
assist the Fund with respect to any claim for exemption or refund under the tax
law of jurisdictions for which the Fund has provided such information.
14.4 Insurance. The Bank shall use the same care with respect to the
safekeeping of Portfolio Securities and cash of the Fund held by it as it uses
in respect of its own similar property but it need not maintain any special
insurance for the benefit of the Fund.
14.5 Advances by the Bank. The Bank may, in its sole discretion,
advance funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this Agreement
for such payments by the Fund. Should such a payment or payments, with advanced
funds, result in an overdraft (due to insufficiencies of the Fund's account
with the Bank, or for any other reason) this Agreement deems any such overdraft
or related indebtedness a loan made by the Bank to the Fund payable on demand.
Such overdraft shall bear interest at the current rate charged by the Bank for
such loans unless the Fund shall provide the Bank with agreed upon compensating
balances. The Fund agrees that the Bank shall have a continuing lien and
security interest to the extent of any overdraft or indebtedness and to the
extent required by law, in and to any property at any time held by it for the
Fund's benefit or in which the Fund has an interest and which is then in the
Bank's possession or control (or in the possession or control of any third
party acting on the Bank's behalf). The Fund authorizes the Bank, in the Bank's
sole discretion, at any time to charge any overdraft or indebtedness, together
with interest due thereon, against any balance of account standing to the
credit of the Fund on the Bank's books.
14.6. Fees and Expenses of the Bank. For the services rendered by the
Bank hereunder, the Fund will pay to the Bank such fees at such rate as shall
be agreed upon in writing by the parties from time to time. The Fund will also
pay or reimburse the Bank from time to time for any transfer taxes payable upon
any transfers made hereunder, and for all necessary proper disbursements,
expenses and charges made or incurred by the Bank in the performance of this
Agreement (including any duties listed on any Schedule hereto, if any)
including any indemnities for any loss, liabilities or expense to the Bank as
provided herein. The Bank will also be entitled to reimbursement by the Fund
for all reasonable expenses incurred in conjunction with termination of this
Agreement and any conversion or transfer work done in connection therewith.
Fees and expenses will be calculated and billed monthly. The Bank
shall prepare and mail its fees invoice and out-of-pockets invoice for the
Portfolios to the Fund after the close of each calendar month, with the amount
being due and payable ten (10) business days after the invoice is prepared and
delivered via overnight courier. Upon receipt of the Fund approved invoice, the
Bank's fees may be charged against any cash balance held by the Fund
Portfolios. Fees charged to an account may result in an overdraft that will be
subject to normal interest charges.
15. Limitation of Liability.
15.1 The Bank shall hold harmless and indemnify the Fund/Portfolios
from and against any loss or liability arising out of the Bank's failure to
comply with the material terms of this Agreement or arising out of the Bank's
negligence, willful misconduct or bad faith. Notwithstanding anything in this
Agreement to the contrary, in no event shall the Bank or any of its officers,
directors, employees or agents (collectively, the "Indemnified Parties") be
liable to the Fund or any third party, and the Fund shall indemnify and hold
the Bank and the Indemnified Parties harmless from and against any and all
loss, damage, liability, actions, suits, claims, costs and expenses, including
reasonable legal fees, (a "Claim") arising as a result of any act or omission
of the Bank or any Indemnified Party under this Agreement, except for the
Bank's failure to comply with the material terms of this Agreement or for any
Claim resulting solely from the negligence, willful misfeasance or bad faith of
the Bank or any Indemnified Party. Without limiting the foregoing, neither the
Bank nor the Indemnified Parties shall be liable for, and the Bank and the
Indemnified Parties shall be indemnified against, any Claim arising as a result
of (provided such parties acted in good faith and with due diligence and
reasonable care):
(a) Any act or omission by the Bank or any Indemnified
Party in good faith reliance upon the terms of this Agreement, any Officer's
Certificate, Proper Instructions, resolution of the Board, telegram, facsimile,
notice, request, certificate or other instrument reasonably believed by the
Bank to genuine;
(b) Any act or omission of any subcustodian selected by
or at the direction of the Fund;
(c) Any act or omission of any Foreign Custody Manager
other than the Bank or any act or omission of any Eligible Foreign Custodian if
the Bank is not the Foreign Custody Manager;
(d) Any Corporate Action, distribution or other event
related to Portfolio Securities which, at the direction of the Fund, have not
been registered in the name of the Bank or its nominee;
(e) Any Corporate Action requiring a Response for which
the Bank has not received Proper Instructions or obtained actual possession of
all necessary Securities, consents or other materials by 5:00 p.m. on the date
specified as the Response Deadline;
(f) Any act or omission of any European Branch of a U.S.
banking institution that is the issuer of Eurodollar CDs in connection with any
Eurodollar CDs held by such European Branch;
(g) Information relied on in good faith by the Bank and
supplied by any Authorized Person in connection with the calculation of (i) the
net asset value and public offering price of the shares of beneficial interest
of the Fund or (ii) the Yield Calculation; or
(h) Any acts of God, earthquakes, fires, floods, storms
or other disturbances of nature, epidemics, strikes, riots, nationalization,
expropriation, currency restrictions, acts of war, civil war or terrorism,
insurrection, nuclear fusion, fission or radiation, the interruption, loss or
malfunction of utilities, transportation or computers (hardware or software)
and computer facilities, the unavailability of energy sources and other similar
happenings or events.
15.2 Notwithstanding anything to the contrary in this Agreement, in
no event shall the Bank or the Indemnified Parties be liable to the Fund or any
third party, nor shall the Fund be liable to the Bank, the Indemnified Parties
or any third party, for lost profits or lost revenues or any special,
consequential, punitive or incidental damages of any kind whatsoever in
connection with this Agreement or any activities hereunder.
16. Termination.
16.1 The term of this Agreement shall be five years commencing upon
the date hereof (the "Initial Term"), unless earlier terminated as provided
herein. After the expiration of the Initial Term, the term of this Agreement
shall automatically renew for successive one-year terms (each a "Renewal Term")
unless notice of non-renewal is delivered
by the non-renewing party to the other party no later than one hundred twenty
(120) days prior to the expiration of the Initial Term or any Renewal Term, as
the case may be.
With one hundred twenty (120) days' written notice of termination,
either party hereto may terminate this Agreement prior to the expiration of the
Initial Term or any Renewal Term in the event the other party violates any
material provision of this Agreement.
16.2 In the event of the termination of this Agreement, the Bank
will immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of
all cash and the delivery of all Portfolio Securities duly endorsed and all
records maintained under Section 11 to the successor custodian and fund
accounting/recordkeeping agent when appointed by the Fund. The obligation of
the Bank to deliver and transfer over the assets of the Fund held by it
directly to such successor custodian will commence as soon as such successor is
appointed and will continue until completed as aforesaid. If the Fund does not
select a successor custodian within one hundred twenty (120) days from the date
of delivery of notice of termination the Bank may, subject to the provisions of
subsection 16.3, deliver the Portfolio Securities and cash of the Fund held by
the Bank to a bank or trust company of the Bank's own selection which meets the
requirements of Section 17(f)(1) of the 1940 Act and has a reported capital,
surplus and undivided profits aggregating not less than $2,000,000, to be held
as the property of the Fund under terms similar to those on which they were
held by the Bank, whereupon such bank or trust company so selected by the Bank
will become the successor custodian of such assets of the Fund with the same
effect as though selected by the Board. The Bank will cooperate in effecting
changes in book-entries at all Depositories. Thereafter, the Bank shall be
released from any and all obligations under this Agreement.
16.3 Prior to the expiration of one hundred twenty (120) days after
notice of termination has been given, the Fund may furnish the Bank with an
order of the Fund advising that a successor custodian cannot be found willing
and able to act upon reasonable and customary terms and that there has been
submitted to the shareholders of the Fund Portfolios the question of whether
the Fund Portfolios will be liquidated or will function without a custodian for
the assets of the Fund Portfolios held by the Bank. In that event the Bank will
deliver the Portfolio Securities and cash of the Fund held by it, subject as
aforesaid, in accordance with one of such alternatives which may be approved by
the requisite vote of shareholders, upon receipt by the Bank of a copy of the
minutes of the meeting of shareholders at which action was taken, certified by
the Fund's Secretary and an opinion of counsel to the Fund in form and content
satisfactory to the Bank. Thereafter, the Bank shall be released from any and
all obligations under this Agreement.
16.4 The Fund shall reimburse the Bank for any reasonable expenses
incurred by the Bank in connection with the termination of this Agreement.
16.5 At any time after the termination of this Agreement, the Fund
may, upon written request, have reasonable access to (and copies of in physical
or electronic form) the books and records of the Fund Portfolios as maintained
by the Bank relating to its performance of its duties as custodian and fund
accounting/recordkeeping agent.
17. Confidentiality. Both parties hereto agree than any non-public
information obtained hereunder concerning the other party is confidential and
may not be disclosed without the consent of the other party, except as may be
required by applicable law or at the request of a governmental agency or
self-regulatory organization. The parties further agree that a breach of this
provision would irreparably damage the other party and accordingly agree that
each of them is entitled, in addition to all other remedies at law or in equity
to an injunction or injunctions without bond or other security to prevent
breaches of this provision. In addition, the parties further agree that any
Nonpublic Personal Information, as defined under Section 248.3(t) of Regulation
S-P ("Regulation S-P"), promulgated under the Xxxxx-Xxxxx-Xxxxxx Act (the
"Act"), disclosed by a party hereunder is for the specific purpose of
permitting the other party to perform the services set forth in this Agreement.
Each party agrees that, with respect to such information, it will comply with
Regulation S-P and the Act and that it will not disclose any Nonpublic Personal
Information received in connection with this Agreement, to any other party,
except as necessary to carry out the services set forth in this Agreement or as
otherwise permitted by Regulation S-P or the Act.
18. Notices. Any notice or other instrument in writing authorized or
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and delivered via (i) overnight
express/courier mail, (ii) United States Postal Service registered or certified
mail with return receipt, (iii) facsimile with verbal
confirmation of receipt, (iv) electronic means which may or may not contain
electronic signatures, (v) hand delivery with signature to such party at its
office at the address set forth below, namely:
(a) In the case of notices sent to the Fund to:
AEGON/Transamerica Fund Advisers, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
With a copy to: Xxxx X. Xxxxxx, General Counsel and Secretary
or at such other place as such party may from time to time
designate in writing. (b) In the case of notices sent to the
Bank to:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Director - Client Management
With a copy to: Xxxx X. Xxxxx, General Counsel
or at such other place as such party may from time to time
designate in writing.
19. Amendments. This Agreement may not be altered or amended, except
by an instrument in writing, executed by both parties.
20. Parties. This Agreement will be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank properly authorized and approved by its
Board or by the Bank without the written consent of the Fund, authorized and
approved by its Board; and provided further that termination proceedings
pursuant to Section 16 hereof will not be deemed to be an assignment within the
meaning of this provision.
21. Governing Law. This Agreement and all performance hereunder will
be governed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions.
22. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
23. Entire Agreement. This Agreement, together with its Appendices
constitute the sole and entire agreement between the parties relating to the
subject matter herein and does not operate as an acceptance of any conflicting
terms or provisions of any other instrument and terminates and supersedes any
and all prior agreements and undertakings between the parties relating to the
subject matter herein.
24. Limitation of Liability. The Bank agrees that the obligations,
including those in Section 15 of this Agreement, assumed by the Fund hereunder
shall be limited in all cases to the assets of the Fund and that the Bank shall
not seek satisfaction of any such obligation from the officers, agents,
employees, trustees, or shareholders of the Fund.
25. Several Obligations of the Portfolios. This Agreement is an
agreement entered into between the Bank and the Fund with respect to each
Portfolio. With respect to any obligation of the Fund on behalf of any
Portfolio arising out of this Agreement, the Bank shall look for payment or
satisfaction of such obligation solely to the assets of the Portfolio to which
such obligation relates as though the Bank had separately contracted with the
Fund by separate written instrument with respect to each Portfolio.
The Fund may appoint the Bank as its custodian and fund accounting and
recordkeeping agent for additional Portfolios and or classes from time to time
by written notice, provided the Bank does not object to such addition. Fees
for such additions will be at the then current fee schedule in effect at the
time of the addition unless otherwise agreed by the parties in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first written above.
IDEX MUTUAL FUNDS
By:____________________________________________
Name: ______________________________
Title: _____________________________
INVESTORS BANK & TRUST COMPANY
By:___________________________________________
Name: ______________________________
Title: _____________________________
Appendices
Appendix A............................................. Portfolios of the Fund
Appendix B............................................. Additional Services
APPENDIX A
PORTFOLIOS
FUND: IDEX Mutual Funds - July 1, 2002
CLASSES A, B, C, M (ALL FUNDS)
CLASS T (IDEX JANUS GROWTH ONLY)
38 PORTFOLIOS:
IDEX Aggressive Asset Allocation
IDEX Moderately Aggressive Asset Allocation
IDEX Moderate Asset Allocation
IDEX Conservative Asset Allocation
IDEX Xxxxx Aggressive Growth
IDEX American Century Income & Growth
IDEX American Century International
IDEX Federated Tax Exempt
IDEX Gabelli Global Growth
IDEX Xxxxxxx Sachs Growth
IDEX Great Companies - America(SM)
IDEX Great Companies - Global(2)
IDEX Great Companies - Technology
IDEX Isabelle Small Cap Value
IDEX Janus Balanced
IDEX Janus Capital Appreciation
IDEX Janus Flexible Income
IDEX Janus Global
IDEX Janus Growth & Income
IDEX Janus Growth
IDEX Xxxxxxxx Equity Opportunity
IDEX LKCM Strategic Total Return
IDEX Munder Net50
IDEX PBHG Mid Cap Growth
IDEX PBHG Technology & Communications
IDEX PIMCO Total Return
IDEX Protected Principal Stock
IDEX Salomon All Cap
IDEX Salomon Investors Value
IDEX X. Xxxx Price Health Sciences
IDEX X. Xxxx Price Small Cap
IDEX X. Xxxx Price Tax - Efficient Growth
IDEX Transamerica Conservative High - Yield Bond
IDEX Transamerica Convertible Securities
IDEX Transamerica Equity
IDEX Transamerica Growth Opportunities
IDEX Transamerica Money Market
IDEX Transamerica Value Balanced
APPENDIX B
ADDITIONAL SERVICES
In its capacity as custodian, the Bank will also perform the following services
for the Fund and its Portfolios:
- file proofs of claim and other required filings with claim agents for
class action litigation notifications as the Bank receives from time
to time as they apply to the Fund/Portfolios; provide any
documentation maintained by the Bank and requested by the claim
administration party or firm. The Bank will report from time to time
its knowledge of the status of open filed claims as well as any cash
or property received by the Bank in connection with any filed proof of
claim or similar document.
- file appropriate foreign tax reclaim documentation with non-U.S.
countries and jurisdictions for purposes of receiving rebates of
foreign taxes withheld from income by such parties as the fund may be
eligible to receive from time to time.
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