CUSTODY AGREEMENT
THIS AGREEMENT is made effective the ___ day of March, 1998, by and
between INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under
the laws of the state of Missouri, having its trust office located at 000
Xxxxxxxxxxxx Xxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("IFTC"), and XXXXXXX
FUNDS, INC, a Maryland corporation, having its principal office and place
of business at 0000 Xxxxx Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxx 00000 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint IFTC as custodian of the assets of
the Fund's investment portfolio or portfolios (each a "Portfolio", and
collectively the "Portfolios"); and
WHEREAS, IFTC is willing to accept such appointment on the terms and
conditions hereinafter set forth;
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound,
mutually covenant and agree as follows:
1. APPOINTMENT OF CUSTODIAN AND AGENT. Fund hereby constitutes and
appoints IFTC as custodian of the investment securities, interests in
loans and other non-cash investment property, and monies at any time
owned by each of the Portfolios and delivered to IFTC as custodian
hereunder ("Assets").
2. REPRESENTATIONS AND WARRANTIES.
A. Fund hereby represents, warrants and acknowledges to IFTC:
1. That it is a corporation duly organized and existing and in
good standing under the laws of its state of organization,
and that it is registered under the 1940 Act; and
2. That it has the requisite power and authority under
applicable law, its articles of incorporation and its
bylaws to enter into this Agreement; that it has taken all
requisite action necessary to appoint IFTC as custodian for
the Portfolios; that this Agreement has been duly executed
and delivered by Fund; and that this Agreement constitutes
a legal, valid and binding obligation of Fund, enforceable
in accordance with its terms.
B. IFTC hereby represents, warrants and acknowledges to Fund:
1. That it is a trust company duly organized and existing and
in good standing under the laws of the State of Missouri;
and
2. That it has the requisite power and authority under
applicable law, its charter and its bylaws to enter into
and perform this Agreement; that this Agreement has been
duly executed and delivered by IFTC; and that this
Agreement constitutes a legal, valid and binding obligation
of IFTC, enforceable in accordance with its terms.
3. DUTIES AND RESPONSIBILITIES OF THE PARTIES.
A. Delivery of Assets. Except as permitted by the 1940 Act, Fund
will deliver or cause to be delivered to IFTC on the effective
date hereof, or as soon thereafter as practicable, and from time
to time thereafter, all Assets acquired by, owned by or from
time to time coming into the possession of each of the
Portfolios during the term hereof. IFTC has no responsibility
or liability whatsoever for or on account of assets not so
delivered.
B. Delivery of Accounts and Records. Fund will turn over or cause
to be turned over to IFTC all of each Portfolio's relevant
accounts and records needed by IFTC to fully and properly
perform its duties and responsibilities hereunder. IFTC may rely
conclusively on the completeness and correctness of such
accounts and records.
C. Delivery of Assets to Third Parties. IFTC will receive delivery
of and keep safely the Assets of each Portfolio segregated in a
separate account. IFTC will not deliver, assign, pledge or
hypothecate any such Assets to any person except as permitted by
the provisions hereof or any agreement executed according to the
terms of Section 3.P hereof. Upon delivery of any such Assets to
a subcustodian appointed pursuant hereto (hereinafter referred
to as "Subcustodian"), IFTC will create and maintain records
identifying such Assets as belonging to the applicable
Portfolio. IFTC is responsible for the safekeeping of the
Assets only until they have been transmitted to and received by
other persons as permitted under the terms hereof, except for
Assets transmitted to Subcustodians, for which IFTC remains
responsible to the extent provided herein. IFTC may participate
directly or indirectly through a subcustodian in the Depository
Trust Company (DTC), Treasury/Federal Reserve Book Entry System
(Fed System), Participant Trust Company (PTC) or other
depository approved by Fund (as such entities are defined at 17
CFR Section 270.17f-4(b)) (each a "Depository" and collectively
the "Depositories"). IFTC will be responsible to Fund for any
loss, damage or expense suffered or incurred by Fund resulting
from the actions or omissions of any Depository only to the same
extent such Depository is responsible to IFTC.
D. Registration. IFTC will at all times hold registered Assets in
the name of IFTC as custodian, the applicable Portfolio, or a
nominee of either of them, unless specifically directed by
Instructions, as hereinafter defined, to hold such registered
Assets in so-called "street name;" provided that, in any event,
IFTC will hold all such Assets in an account of IFTC as
custodian containing only Assets of the applicable Portfolio, or
only assets held by IFTC as a fiduciary or custodian for
customers; and provided further, that IFTC's records at all
times will indicate the Portfolio or other customer for which
such Assets are held and the respective interests therein. If,
however, Fund directs IFTC to maintain Assets in "street name",
notwithstanding anything contained herein to the contrary, IFTC
will be obligated only to utilize its best efforts to timely
collect income due the Portfolio on such Assets and to notify
the Portfolio of relevant information, such as maturities and
pendency of calls, and corporate actions including, without
limitation, calls for redemption, tender or exchange offers,
declaration, record and payment dates and amounts of any
dividends or income, reorganization, recapitalization, merger,
consolidation, split-up of shares, change of par value, or
conversion ("Corporate Actions"). All Assets and the ownership
thereof by Portfolio will at all times be identifiable on the
records of IFTC. Fund agrees to hold IFTC and its nominee
harmless for any liability as a shareholder of record of
securities held in custody.
E. Exchange. Upon receipt of Instructions, IFTC will exchange, or
cause to be exchanged, Assets held for the account of a
Portfolio for other Assets issued or paid in connection with any
Corporate Action or otherwise, and will deposit any such Assets
in accordance with the terms of any such Corporate Action.
Without Instructions, IFTC is authorized to exchange Assets in
temporary form for Assets in definitive form, to effect an
exchange of shares when the par value of stock is changed, and,
upon receiving payment therefor, to surrender bonds or other
Assets at maturity or when advised of earlier call for
redemption, except that IFTC will receive Instruction prior to
surrendering any convertible security.
F. Purchases of Investments -- Other Than Options and Futures. On
each business day on which a Portfolio makes a purchase of
Assets other than options and futures, Fund will deliver to IFTC
Instructions specifying with respect to each such purchase:
1. If applicable, the name of the Portfolio making such
purchase;
2. The name of the issuer and description of the Asset;
3. The number of shares and the principal amount purchased,
and accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission,
taxes and other expenses payable in connection with the
purchase;
7. The total amount payable upon such purchase;
8. The name of the person from whom or the broker or dealer
through whom the purchase was made; and
9. Whether the Asset is to be received in certificated form or
via a specified Depository.
In accordance with such Instructions, IFTC will pay for out of
monies held for the purchasing Portfolio, but only insofar as
such monies are available for such purpose, and receive the
Assets so purchased by or for the account of such Portfolio,
except that IFTC, or a Subcustodian, may in its sole discretion
advance funds to such Portfolio which may result in an overdraft
because the monies held on behalf of such Portfolio are
insufficient to pay the total amount payable upon such purchase.
Except as otherwise instructed by Fund, IFTC will make such
payment only upon receipt of Assets: (a) by IFTC; (b) by a
clearing corporation of a national exchange of which IFTC is a
member; or (c) by a Depository. Notwithstanding the foregoing,
(i) IFTC may release funds to a Depository prior to the receipt
of advice from the Depository that the Assets underlying a
repurchase agreement have been transferred by book-entry into
the account maintained with such Depository by IFTC on behalf of
its customers; provided that IFTC's instructions to the
Depository require that the Depository make payment of such
funds only upon transfer by book-entry of the Assets underlying
the repurchase agreement in such account; (ii) IFTC may make
payment for time deposits, call account deposits, currency
deposits and other deposits, foreign exchange transactions,
futures contracts or options, before receipt of an advice or
confirmation evidencing said deposit or entry into such
transaction; and (iii) IFTC may make, or cause a Subcustodian to
make, payment for the purchase of Assets the settlement of which
occurs outside of the United States of America in accordance
with generally accepted local custom and market practice.
G. Sales and Deliveries of Investments -- Other Than Options and
Futures. On each business day on which a Portfolio makes a sale
of Assets other than options and futures, Fund will deliver to
IFTC Instructions specifying with respect to each such sale:
1. If applicable, the name of the Portfolio making such sale;
2. The name of the issuer and description of the Asset;
3. The number of shares and principal amount sold, and accrued
interest, if any;
4. The date on which the Assets sold were purchased or other
information identifying the Assets sold and to be
delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage commission, taxes
or other expenses payable in connection with such sale;
8. The total amount to be received by the Portfolio upon such
sale; and
9. he name and address of the broker or dealer through whom or
person to whom the sale was made.
IFTC will deliver or cause to be delivered the Assets thus
designated as sold for the account of the selling Portfolio as
specified in the Instructions. Except as otherwise instructed by
Fund, IFTC will make such delivery upon receipt of: (a) payment
therefor in such form as is satisfactory to IFTC; (b) credit to
the account of IFTC with a clearing corporation of a national
securities exchange of which IFTC is a member; or (c) credit to
the account maintained by IFTC on behalf of its customers with a
Depository. Notwithstanding the foregoing: (i) IFTC will
deliver Assets held in physical form in accordance with "street
delivery custom" to a broker or its clearing agent; or (ii) IFTC
may make, or cause a Subcustodian to make, delivery of Assets
the settlement of which occurs outside of the United States of
America upon payment therefor in accordance with generally
accepted local custom and market practice.
H. Purchases or Sales of Options and Futures. On each business day
on which a Portfolio makes a purchase or sale of the options
and/or futures listed below, Fund will deliver to IFTC
Instructions specifying with respect to each such purchase or
sale:
1. If applicable, the name of the Portfolio making such
purchase or sale;
2. In the case of security options:
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded; and
j. Name and address of the broker or dealer through whom
the sale or purchase was made.
3. In the case of options on indices:
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising,
expiring or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased; and
j. The name and address of the broker or dealer through
whom the sale or purchase was made, or other
applicable settlement instructions.
4. In the case of security index futures contracts:
a. The last trading date specified in the contract and,
when available, the closing level, thereof;
b. The index level on the date the contract is entered
into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in addition
to Instructions, and if not already in the possession
of IFTC, Fund will deliver a substantially complete
and executed custodial safekeeping account and
procedural agreement, incorporated herein by this
reference); and
f. The name and address of the futures commission
merchant through whom the sale or purchase was made,
or other applicable settlement instructions.
5. In the case of options on index future contracts:
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Assets Pledged or Loaned. If specifically allowed for in the
prospectus of a Portfolio, and subject to such additional terms
and conditions as IFTC may require:
1. Upon receipt of Instructions, IFTC will release or cause to
be released Assets to the designated pledgee by way of
pledge or hypothecation to secure any loan incurred by a
Portfolio; provided, however, that IFTC will release Assets
only upon payment to IFTC of the monies borrowed, except
that in cases where additional collateral is required to
secure a borrowing already made, further Assets may be
released or caused to be released for that purpose. Upon
receipt of Instructions, IFTC will pay, but only from funds
available for such purpose, any such loan upon redelivery
to it of the Assets pledged or hypothecated therefor and
upon surrender of the note or notes evidencing such loan.
2. Upon receipt of Instructions, IFTC will release Assets to
the designated borrower; provided, however, that the Assets
will be released only upon deposit with IFTC of full cash
collateral as specified in such Instructions, and that the
lending Portfolio will retain the right to any dividends,
interest or distribution on such loaned Assets. Upon
receipt of Instructions and the loaned Assets, IFTC will
release the cash collateral to the borrower.
J. Routine Matters. IFTC will, in general, attend to all routine
and mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with the
Assets except as may be otherwise provided herein or upon
Instruction from Fund.
K. Deposit Accounts. IFTC will open and maintain one or more
special purpose deposit accounts for each Portfolio in the name
of IFTC in such banks or trust companies (including, without
limitation, affiliates of IFTC) as may be designated by it or
Fund in writing ("Accounts"), subject only to draft or order by
IFTC upon receipt of Instructions. IFTC will deposit all monies
received by IFTC from or for the account of a Portfolio in an
Account maintained for such Portfolio. Subject to Section 5.J
hereof, IFTC agrees:
1. To make Fed Funds available to the applicable Portfolio at
9:00 a.m., Kansas City time, on the second business day
after deposit of any check into an Account, in the amount
of the check;
2. To make funds available immediately upon a deposit made by
Federal Reserve wire; and
3. To make funds available on the next business day after
deposit of ACH wires.
L. Income and Other Payments. IFTC will:
1. Collect, claim and receive and deposit for the account of
the applicable Portfolio all income (including income from
the Accounts) and other payments which become due and
payable on or after the effective date hereof with respect
to the Assets, and credit the account of such Portfolio in
accordance with the schedule attached hereto as Exhibit A.
If, for any reason, a Portfolio is credited with income
that is not subsequently collected, IFTC may reverse that
credited amount. If monies are collected after such
reversal, IFTC will credit the Portfolio in that amount;
2. Execute ownership and other certificates and affidavits for
all federal, state and local tax purposes in connection
with the collection of bond and note coupons; and
3. Take such other action as may be necessary or proper in
connection with (a) the collection, receipt and deposit of
such income and other payments, including but not limited
to the presentation for payment of all coupons and other
income items requiring presentation; and all other Assets
which may mature or be called, redeemed, retired or
otherwise become payable and regarding which IFTC has
actual knowledge, or should reasonably be expected to have
knowledge; and (b) the endorsement for collection, in the
name of Fund or a Portfolio, of all checks, drafts or other
negotiable instruments.
IFTC, however, will not be required to institute suit or
take other extraordinary action to enforce collection
except upon receipt of Instructions and upon being
indemnified to its satisfaction against the costs and
expenses of such suit or other actions. IFTC will receive,
claim and collect all stock dividends, rights and other
similar items and will deal with the same pursuant to
Instructions.
M. Proxies and Notices. IFTC will promptly deliver or mail (or
have delivered or mailed) to Fund all proxies properly signed,
all notices of meetings, all proxy statements and other notices,
requests or announcements affecting or relating to Assets and
will, upon receipt of Instructions, execute and deliver or mail
(or cause its nominee to execute and deliver or mail) such
proxies or other authorizations as may be required. Except as
provided herein or pursuant to Instructions hereafter received
by IFTC, neither it nor its nominee will exercise any power
inherent in any such Assets, including any power to vote the
same, or execute any proxy, power of attorney, or other similar
instrument voting any of such Assets, or give any consent,
approval or waiver with respect thereto, or take any other
similar action.
N. Disbursements. IFTC will pay or cause to be paid, insofar as
funds are available for the purpose, bills, statements and other
obligations of each Portfolio (including but not limited to
obligations in connection with the conversion, exchange or
surrender of Assets, interest charges, dividend disbursements,
taxes, management fees, custodian fees, legal fees, auditors'
fees, transfer agents' fees, brokerage commissions, compensation
to personnel, and other operating expenses of such Portfolio)
pursuant to Instructions setting forth the name of the person to
whom payment is to be made, and the amount and purpose of the
payment.
O. Daily Statement of Accounts. IFTC will, within a reasonable
time, render to Fund a detailed statement of the amounts
received or paid and of Assets received or delivered for the
account of each Portfolio during each business day. IFTC will
maintain such books and records as are necessary to enable it to
render, from time to time upon request by Fund, a detailed
statement of the Assets. IFTC will permit, and upon Instruction
will cause any Subcustodian to permit, such persons as are
authorized by Fund, including Fund's independent public
accountants, reasonable access to such records or will provide
reasonable confirmation of the contents of such records, and if
demanded, IFTC will permit, and will cause any Subcustodian to
permit, federal and state regulatory agencies to examine the
Assets, books and records of the Portfolios.
P. Appointment of Subcustodians. Notwithstanding any other
provisions hereof:
1. All or any of the Assets may be held in IFTC's own custody
or in the custody of one or more other banks or trust
companies (including, without limitation, affiliates of
IFTC) acting as Subcustodians as may be selected by IFTC.
Any such Subcustodian selected by IFTC must have the
qualifications required for a custodian under the 1940 Act.
IFTC will be responsible to the applicable Portfolio for
any loss, damage or expense suffered or incurred by such
Portfolio resulting from the actions or omissions of any
Subcustodians selected and appointed by IFTC (except
Subcustodians appointed at the request of Fund and as
provided in Subsection 2 below) to the same extent IFTC
would be responsible to Fund hereunder if it committed the
act or omission itself.
2. Upon request of Fund, IFTC will contract with other
Subcustodians reasonably acceptable to IFTC for purposes of
(a) effecting third-party repurchase transactions with
banks, brokers, dealers, or other entities through the use
of a common custodian or subcustodian, or (b) providing
depository and clearing agency services with respect to
certain variable rate demand note securities, or (c) for
other reasonable purposes specified by Fund; provided,
however, that IFTC will be responsible to Fund for any
loss, damage or expense suffered or incurred by Fund
resulting from the actions or omissions of any such
Subcustodian only to the same extent such Subcustodian is
responsible to IFTC. Fund may review IFTC's contracts with
such Subcustodians.
Q. Foreign Custody Manager.
1. Delegation to IFTC as FCM. The Fund, pursuant to
resolution adopted by its Board of Trustees or Directors
(the "Board"), hereby delegates to IFTC, subject to Section
(b) of Rule 17f-5, the responsibilities set forth in this
Section Q with respect to Foreign Assets held outside the
United States, and IFTC hereby accepts such delegation, as
FCM of each Portfolio. It is understood and agreed that
IFTC will sub-contract the performance of its
responsibilities hereunder with State Street Bank & Trust
Company. IFTC will be responsible to the applicable
Portfolio for any loss, damage or expense suffered or
incurred by such Portfolio resulting from the actions or
omissions of State Street Bank & Trust Company to the same
extent IFTC would be responsible to Fund hereunder if it
committed the act or omission itself. References herein to
"FCM" shall include IFTC and State Street Bank & Trust
Company.
2. Definitions. Capitalized terms in this Section Q have the
following meanings:
"Country Risk" means all factors reasonably related to the
systemic risk of holding Foreign Assets in a particular
country including, but not limited to, such country's
political environment; economic and financial
infrastructure (including financial institutions such as
any Mandatory Securities Depositories operating in the
country); prevailing or developing custody and settlement
practices; and laws and regulations applicable to the
safekeeping and recovery of Foreign Assets held in custody
in that country.
"Eligible Foreign Custodian" has the meaning set forth in
section (a)(1) of Rule 17f-5, except that the term does not
include Mandatory Securities Depositories.
"Foreign Assets" means any of the Portfolios' investments
(including foreign currencies) for which the primary market
is outside the United States and such cash and cash
equivalents in amounts deemed by Fund to be reasonably
necessary to effect the Portfolios' transactions in such
investments.
"Foreign Custody Manager" or "FCM" has the meaning set
forth in section (a)(2) of Rule 17f-5.
"Mandatory Securities Depository" means a foreign
securities depository or clearing agency that, either as a
legal or practical matter, must be used if the Fund
determines to place Foreign Assets in a country outside the
United States (I) because required by law or regulation;
(ii) because securities cannot be withdrawn from such
foreign securities depository or clearing agency; or (iii)
because maintaining or effecting trades in securities
outside the foreign securities depository or clearing
agency is not consistent with prevailing or developing
custodial or market practices.
3. Countries Covered. The FCM is responsible for performing
the delegated responsibilities defined below only with
respect to the countries and custody arrangements for each
such country listed on Exhibit C hereto, which may be
amended from time to time by the FCM. The FCM will list on
Exhibit C the Eligible Foreign Custodians selected by the
FCM to maintain the assets of each Portfolio. Mandatory
Securities Depositories are listed on Exhibit D hereto,
which Exhibit D may be amended from time to time by the
FCM. The FCM will provide amended versions of Exhibits C
and D in accordance with subsection 7 of this Section Q.
Upon the receipt by the FCM of Instructions to open an
account, or to place or maintain Foreign Assets, in a
country listed on Exhibit C, and the fulfillment by the
Fund of the applicable account opening requirements for
such country, the FCM is deemed to have been delegated by
the Board responsibility as FCM with respect to that
country and to have accepted such delegation. Following
the receipt of Instructions directing the FCM to close the
account of a Portfolio with the Eligible Foreign Custodian
selected by the FCM in a designated country, the delegation
by the Board to IFTC as FCM for that country is deemed to
have been withdrawn and IFTC will immediately cease to be
the FCM of the Portfolio with respect to that country.
The FCM may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon
written notice to the Fund. Thirty days (or such longer
period as to which the parties agree in writing) after
receipt of any such notice by the Fund, IFTC will have no
further responsibility as FCM to a Portfolio with respect
to the country as to which IFTC's acceptance of delegation
is withdrawn.
4. Scope of Delegated Responsibilities.
a. Selection of Eligible Foreign Custodians. Subject
to the provisions of this Section Q, the FCM may place
and maintain the Foreign Assets in the care of the
Eligible Foreign Custodian selected by the FCM in each
country listed on Exhibit C, as amended from time to
time.
In performing its delegated responsibilities as FCM to
place or maintain Foreign Assets with an Eligible
Foreign Custodian, the FCM will determine that the
Foreign Assets will be subject to reasonable care,
based on the standards applicable to custodians in the
country in which the Foreign Assets will be held by
that Eligible Foreign Custodian, after considering all
factors relevant to the safekeeping of such assets,
including, without limitation, those set forth in Rule
17f-5(c)(1)(i) through (iv).
b. Contracts With Eligible Foreign Custodians. The FCM
will determine that the contract (or the rules or
established practices or procedures in the case of an
Eligible Foreign Custodian that is a foreign
securities depository or clearing agency) governing
the foreign custody arrangements with each Eligible
Foreign Custodian selected by the FCM will provide
reasonable care for the Foreign Assets held by that
Eligible Foreign Custodian based on the standards
applicable to custodians in the particular country.
Each such contract will include the provisions set
forth in Rule 17f-5(c)(2)(i)(A) through (F), or, in
lieu of any or all of the provisions set forth in said
(A) through (F), such other provisions that the FCM
determines will provide, in their entirety, the same
or greater level of care and protection for the
Foreign Assets as the provisions set forth in said (A)
through (F) in their entirety.
c. Monitoring. In each case in which the FCM maintains
Foreign Assets with an Eligible Foreign Custodian
selected by the FCM, the FCM will establish a system
to monitor (a) the appropriateness of maintaining the
Foreign Assets with such Eligible Foreign Custodian
and (b) the contract governing the custody
arrangements established by the FCM with the Eligible
Foreign Custodian. In the event the FCM determines
that the custody arrangements with an Eligible Foreign
Custodian it has selected are no longer appropriate,
the FCM will notify the Board in accordance with
subsection 7 of this Section Q.
5. Guidelines for the Exercise of Delegated Authority. For
purposes of this Section Q, the Board will be solely
responsible for considering and determining to accept such
Country Risk as is incurred by placing and maintaining the
Foreign Assets in each country for which IFTC is serving as
FCM of a Portfolio, and the Board will be solely
responsible for monitoring on a continuing basis such
Country Risk to the extent that the Board considers
necessary or appropriate. The Fund, on behalf of the
Portfolios, and IFTC each expressly acknowledge that the
FCM will not be delegated any responsibilities under this
Section Q with respect to Mandatory Securities
Depositories.
6. Standard of Care as FCM of a Portfolio. In performing the
responsibilities delegated to it, the FCM agrees to
exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of assets
of management investment companies registered under the
1940 Act would exercise.
7. Reporting Requirements. The FCM will report the withdrawal
of the Foreign Assets from an Eligible Foreign Custodian
and the placement of such Foreign Assets with another
Eligible Foreign Custodian by providing to the Board
amended Exhibits C and D at the end of the calendar quarter
in which an amendment to either Schedule has occurred. The
FCM will make written reports notifying the Board of any
other material change in the foreign custody arrangements
of a Portfolio described in this Section Q after the
occurrence of the material change.
8. Representations with Respect to Rule 17f-5. The FCM
represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5.
The Fund represents to IFTC that the Board has determined
that it is reasonable for the Board to rely on IFTC and
State Street Bank & Trust Company to perform the
responsibilities delegated pursuant to this Contract to
IFTC and State Street Bank & Trust Company as the FCM of
each Portfolio and that IFTC has been granted the authority
by Fund to delegate to State Street Bank & Trust Company
the FCM functions to which IFTC has been appointed by Fund.
9. Effective Date and Termination of IFTC as FCM. The Board's
delegation to IFTC as FCM of a Portfolio will be effective
as of the date hereof and will remain in effect until
terminated at any time, without penalty, by written notice
from the terminating party to the non-terminating party.
Termination will become effective thirty days after receipt
by the non-terminating party of such notice. The
provisions of subsection 3 of this Section Q govern the
delegation to and termination of IFTC as FCM of the Fund
with respect to designated countries.
R. Accounts and Records Property of Fund. IFTC acknowledges that
all of the accounts and records maintained by IFTC pursuant
hereto are the property of Fund, and will be made available to
Fund for inspection or reproduction within a reasonable period
of time, upon demand. IFTC will assist Fund's independent
auditors, or upon approval of Fund, or upon demand, any
regulatory body, in any requested review of Fund's accounts and
records but Fund will reimburse IFTC for all expenses and
employee time invested in any such review outside of routine and
normal periodic reviews. Upon receipt from Fund of the
necessary information or instructions, IFTC will supply
information from the books and records it maintains for Fund
that Fund needs for tax returns, questionnaires, periodic
reports to shareholders and such other reports and information
requests as Fund and IFTC agree upon from time to time.
S. Adoption of Procedures. IFTC and Fund hereby adopt the Funds
Transfer Operating Guidelines attached hereto as Exhibit B.
IFTC and Fund may from time to time adopt such additional
procedures as they agree upon, and IFTC may conclusively assume
that no procedure approved or directed by Fund, Fund's or
Portfolio's accountants or other advisors conflicts with or
violates any requirements of the prospectus, articles of
incorporation, bylaws, any applicable law, rule or regulation,
or any order, decree or agreement by which Fund may be bound.
Fund will be responsible for notifying IFTC of any changes in
statutes, regulations, rules, requirements or policies which
might necessitate changes in IFTC's responsibilities or
procedures.
T. Advances. Fund will pay on demand any advance of cash or
securities made by IFTC or any Subcustodian for a purpose
approved by the Fund, in its sole discretion, for any purpose
(including but not limited to securities settlements, purchase
or sale of foreign exchange or foreign exchange contracts and
assumed settlement) for the benefit of any Portfolio. Any such
cash advance will be subject to an overdraft charge at the rate
set forth in the then-current fee schedule from the date
advanced until the date repaid. As security for each such
advance, Fund hereby grants IFTC and such Subcustodian a lien on
and security interest in all Assets at any time held for the
account of the applicable Portfolio, including without
limitation all Assets acquired with the amount advanced. Should
Fund fail to promptly repay the advance, IFTC and such
Subcustodian may utilize available cash and dispose of such
Portfolio's Assets pursuant to applicable law to the extent
necessary to obtain reimbursement of the amount advanced and any
related overdraft charges. IFTC will consult with Fund before
selecting which Assets to liquidate.
U. Exercise of Rights; Tender Offers. Upon receipt of
Instructions, IFTC will: (1) deliver warrants, puts, calls,
rights or similar securities to the issuer or trustee thereof,
or to the agent of such issuer or trustee, for the purpose of
exercise or sale, provided that the new Assets, if any, are to
be delivered to IFTC; and (2) deposit securities upon
invitations for tenders thereof, provided that the consideration
for such securities is to be paid or delivered to IFTC or the
tendered securities are to be returned to IFTC.
V. Fund Shares.
1. Fund will deliver to IFTC Instructions with respect to the
declaration and payment of any dividend or other
distribution on the shares of capital stock of a Portfolio
("Fund Shares") by a Portfolio. On the date specified in
such Instruction, IFTC will pay out of the monies held for
the account of the Portfolio, insofar as it is available
for such purposes, and credit to the account of the
Dividend Disbursing Agent for the Portfolio, the amount
specified in such Instructions.
2. Whenever Fund Shares are repurchased or redeemed by a
Portfolio, Portfolio or its agent will give IFTC
Instructions regarding the aggregate dollar amount to be
paid for such shares. Upon receipt of such Instruction,
IFTC will charge such aggregate dollar amount to the
account of the Portfolio and either deposit the same in the
account maintained for the purpose of paying for the
repurchase or redemption of Fund Shares or deliver the same
in accordance with such Instruction. IFTC has no duty or
responsibility to determine that Fund Shares have been
removed from the proper shareholder accounts or that the
proper number of Fund Shares have been canceled and removed
from the shareholder records.
3. Whenever Fund Shares are purchased from Fund, Fund will
deposit or cause to be deposited with IFTC the amount
received for such shares. IFTC has no duty or
responsibility to determine that Fund Shares purchased from
Fund have been added to the proper shareholder account or
that the proper number of such shares have been added to
the shareholder records.
4. INSTRUCTIONS.
A. The term "Instructions", as used herein, means written
(including telecopied, telexed, or electronically transmitted)
or oral instructions which IFTC reasonably believes were given
by a designated representative of Fund. Fund will deliver to
IFTC, prior to delivery of any Assets to IFTC and thereafter
from time to time as changes therein are necessary, written
Instructions naming one or more designated representatives to
give Instructions in the name and on behalf of Fund, which
Instructions may be received and accepted by IFTC as conclusive
evidence of the authority of any designated representative to
act for Fund and may be considered to be in full force and
effect until receipt by IFTC of notice to the contrary. Unless
such written Instructions delegating authority to any person to
give Instructions specifically limit such authority to specific
matters or require that the approval of anyone else will first
have been obtained, IFTC will be under no obligation to inquire
into the right of such person, acting alone, to give any
Instructions whatsoever. If Fund fails to provide IFTC any such
Instructions naming designated representatives, any Instructions
received by IFTC from a person reasonably believed to be an
appropriate representative of Fund will constitute valid and
proper Instructions hereunder. "Designated representatives" may
include Fund's or a Portfolio's employees and agents, including
investment managers and their employees.
B. No later than the next business day immediately following each
oral Instruction, Fund will send IFTC written confirmation of
such oral Instruction. At IFTC's sole discretion, IFTC may
record on tape, or otherwise, any oral Instruction whether given
in person or via telephone, each such recording identifying the
date and the time of the beginning and ending of such oral
Instruction.
5. Fund will provide, upon IFTC's request a certificate signed by an
officer or designated representative of Fund, as conclusive proof of
any fact or matter required to be ascertained from Fund hereunder.
Fund will also provide IFTC Instructions with respect to any matter
concerning this Agreement requested by IFTC. If IFTC reasonably
believes that it could not prudently act according to the
Instructions, or the instruction or advice of Fund's or a Portfolio's
accountants or counsel, it may in its discretion, with notice to
Fund, not act according to such Instructions.
6. LIMITATION OF LIABILITY OF IFTC. Fund is not responsible or liable
for, and IFTC will indemnify and hold Fund harmless from and against,
any and all costs, expenses, losses, damages, charges, counsel fees,
payments and liabilities which may be asserted against or incurred by
Fund or for which Fund may be held to be liable, arising out of or
attributable to IFTC's negligence or willful misconduct, or the
failure of any representation or warranty of IFTC hereunder to be and
remain true and correct in all material respects during the terms
hereof.
IFTC is not responsible or liable for, and Fund will indemnify and
hold IFTC harmless from and against, any and all costs, expenses,
losses, damages, charges, counsel fees, payments and liabilities
which may be asserted against or incurred by IFTC or for which IFTC
may be held to be liable, arising out of or attributable to:
A. IFTC's action or omission to act pursuant hereto; provided that
IFTC has acted in good faith and with due diligence and
reasonable care.
B. IFTC's payment of money as requested by Fund, or the taking of
any action which might make it or its nominee liable for payment
of monies or in any other way; provided, however, that nothing
herein obligates IFTC to take any such action or expend its own
monies except in its sole discretion.
C. IFTC's action or omission to act hereunder upon any
Instructions, advice, notice, request, consent, certificate or
other instrument or paper appearing to it to be genuine and to
have been properly executed, including any Instructions,
communications, data or other information received by IFTC by
means of the Systems, as hereinafter defined, or any electronic
system of communication.
D. IFTC's action or omission to act in good faith reliance on the
advice or opinion of counsel for Fund or of its own counsel with
respect to questions or matters of law, which advice or opinion
may be obtained by IFTC at the expense of IFTC, or on the
Instructions, advice or statements of any officer or employee of
Fund, or Fund's accountants or other authorized individuals, and
other persons believed by it in good faith to be expert in
matters upon which they are consulted.
E. The purchase or sale of any securities or foreign currency
positions. Without limiting the generality of the foregoing,
IFTC is under no duty or obligation to inquire into:
1. The validity of the issue of any securities purchased by or
for any Portfolio, or the legality of the purchase thereof
or of foreign currency positions, or evidence of ownership
required by Fund to be received by IFTC, or the propriety
of the decision to purchase or the amount paid therefor;
2. The legality of the sale of any securities or foreign
currency positions by or for any Portfolio, or the
propriety of the amount for which the same are sold; or
3. The legality of the issue or sale of any Fund Shares, or
the sufficiency of the amount to be received therefor, the
legality of the repurchase or redemption of any Fund
Shares, or the propriety of the amount to be paid therefor,
or the legality of the declaration of any dividend by Fund,
or the legality of the issue of any Fund Shares in payment
of any stock dividend.
F. Any error, omission, inaccuracy or other deficiency in any
Portfolio's accounts and records or other information provided
by or on behalf of a Portfolio to IFTC, or the failure of Fund
to provide, or provide in a timely manner, any accounts,
records, or information needed by IFTC to perform hereunder.
G. Fund's refusal or failure to comply with the terms hereof
(including without limitation Fund's failure to pay or reimburse
IFTC under Section 5 hereof), Fund's negligence or willful
misconduct, or the failure of any representation or warranty of
Fund hereunder to be and remain true and correct in all respects
at all times.
H. The use or misuse, whether authorized or unauthorized, of the
Systems or any electronic system of communication used
hereunder, by Fund or by any person who acquires access to the
Systems or such other systems through the terminal device,
passwords, access instructions or other means of access to such
Systems or such other system which are utilized by, assigned to
or otherwise made available to Fund, except to the extent
attributable to any negligence or willful misconduct by IFTC.
I. Any money represented by any check, draft, wire transfer,
clearinghouse funds, uncollected funds, or instrument for the
payment of money to be received by IFTC on behalf of a Portfolio
until actually received; provided, however, that IFTC will
advise Fund promptly if it fails to receive any such money in
the ordinary course of business and will cooperate with Fund
toward the end that such money is received.
J. Except as provided in Section 3.P hereof, loss occasioned by the
acts, neglects, defaults or insolvency of any broker, bank,
trust company, or any other person with whom IFTC may deal.
K. The failure or delay in performance of its obligations
hereunder, or those of any entity for which it is responsible
hereunder, arising out of or caused, directly or indirectly, by
circumstances beyond the affected entity's reasonable control,
including, without limitation: any interruption, loss or
malfunction of any utility, transportation, computer (hardware
or software) or communication service; inability to obtain
labor, material, equipment or transportation, or a delay in
mails; governmental or exchange action, statute, ordinance,
rulings, regulations or direction; war, strike, riot,
emergency, civil disturbance, terrorism, vandalism, explosions,
labor disputes, freezes, floods, fires, tornados, acts of God or
public enemy, revolutions, or insurrection.
Neither party is liable for consequential, special, or punitive
damages in any event.
7. COMPENSATION. In consideration for its services hereunder, Fund will
pay to IFTC the compensation set forth in a separate fee schedule,
incorporated herein by this reference, to be agreed to by Fund and
IFTC from time to time, and reimbursement for IFTC's cash
disbursements and reasonable out-of-pocket costs and expenses,
including reasonable attorney's fees other than those incurred
pursuant to Section 6.D, incurred by IFTC in connection with the
performance of services hereunder, on demand. IFTC may charge such
compensation against monies held by it for the account of the
Portfolios. IFTC will also be entitled to charge against any monies
held by it for the account of the Portfolios the amount of any loss,
damage, liability, advance, overdraft or expense for which it is
entitled to reimbursement from Fund, including but not limited to
fees and expenses due to IFTC for other services provided to Fund by
IFTC. IFTC will be entitled to reimbursement by Fund for the losses,
damages, liabilities, advances, overdrafts and expenses of
Subcustodians only to the extent that (a) IFTC would have been
entitled to reimbursement hereunder if it had incurred the same
itself directly, and (b) IFTC is obligated to reimburse the
Subcustodian therefor.
8. TERM AND TERMINATION. The initial term of this Agreement is for a
period of one (1) year. Thereafter, Fund or IFTC may terminate the
same by notice in writing, delivered or mailed, postage prepaid, to
the other party and received not less than ninety (90) days prior to
the date upon which such termination will take effect. Upon
termination hereof:
A. Fund will pay IFTC its fees and compensation due hereunder and
its reasonable reimbursable disbursements, costs and expenses
paid or incurred to such date;
B. Fund will designate a successor custodian by Instruction to IFTC
by the termination date. In the event no such Instruction has
been delivered to IFTC on or before the date when such
termination becomes effective, then IFTC may, at its option, (i)
choose as successor custodian a bank or trust company meeting
the qualifications for custodian set forth in the 1940 Act and
having not less than Two Million Dollars ($2,000,000) aggregate
capital, surplus and undivided profits, as shown by its last
published report, or (ii) apply to a court of competent
jurisdiction for the appointment of a successor or other proper
relief, or take any other lawful action under the circumstances;
provided, however, that Fund will reimburse IFTC for its costs
and expenses, including reasonable attorney's fees, incurred in
connection therewith; and
C. IFTC will, upon payment of all sums due to IFTC from Fund
hereunder or otherwise, deliver all Assets, duly endorsed and in
form for transfer, to the successor custodian, or as specified
by the court, at IFTC's office. IFTC will co-operate in
effecting changes in book-entries at all Depositories. Upon
delivery to a successor or as specified by the court, IFTC will
have no further obligations or liabilities hereunder. Thereafter
such successor will be the successor hereunder and will be
entitled to reasonable compensation for its services.
In the event that Assets remain in the possession of IFTC after
the date of termination hereof for any reason other than IFTC's
failure to deliver the same, IFTC is entitled to compensation as
provided in the then-current fee schedule for its services
during such period, and the provisions hereof relating to the
duties and obligations of IFTC will remain in full force and
effect.
9. NOTICES. Notices, requests, instructions and other writings
addressed to Fund at the address set forth above, or at such other
address as Fund may have designated to IFTC in writing, will be
deemed to have been properly given to Fund hereunder. Notices,
requests, Instructions and other writings addressed to IFTC at the
address set forth above, Attention: Custody Department, or to such
other address as it may have designated to Fund in writing, will be
deemed to have been properly given to IFTC hereunder.
10. THE SYSTEMS; CONFIDENTIALITY.
A. If IFTC provides Fund direct access to the computerized
investment portfolio custody systems used by IFTC ("Systems") or
if IFTC and Fund agree to utilize any electronic system of
communication, Fund agrees to implement and enforce appropriate
security policies and procedures to prevent unauthorized or
improper access to or use of the Systems or such other system.
B. Fund will preserve the confidentiality of the Systems and the
tapes, books, reference manuals, instructions, records,
programs, documentation and information of, and other materials
relevant to, the Systems and the business of IFTC ("Confidential
Information"). Fund agrees that it will not voluntarily
disclose any such Confidential Information to any other person
other than its own employees who reasonably have a need to know
such information pursuant hereto. Fund will return all such
Confidential Information to IFTC upon termination or expiration
hereof.
C. Fund has been informed that the Systems are licensed for use by
IFTC from one or more third parties ("Licensors"), and Fund
acknowledges that IFTC and Licensors have proprietary rights in
and to the Systems and all other IFTC or Licensor programs,
code, techniques, know-how, data bases, supporting
documentation, data formats, and procedures, including without
limitation any changes or modifications made at the request or
expense or both of Fund (collectively, the "Protected
Information"). Fund acknowledges that the Protected Information
constitutes confidential material and trade secrets of IFTC and
Licensors. Fund will preserve the confidentiality of the
Protected Information, and Fund hereby acknowledges that any
unauthorized use, misuse, disclosure or taking of Protected
Information, residing or existing internal or external to a
computer, computer system, or computer network, or the knowing
and unauthorized accessing or causing to be accessed of any
computer, computer system, or computer network, may be subject
to civil liabilities and criminal penalties under applicable
law. Fund will so inform employees and agents who have access
to the Protected Information or to any computer equipment
capable of accessing the same. Licensors are intended to be and
are third party beneficiaries of Fund's obligations and
undertakings contained in this Section.
D. Fund hereby represents and warrants to IFTC that it has
determined to its satisfaction that the Systems are appropriate
and suitable for its use. THE SYSTEMS ARE PROVIDED ON AN AS IS,
AS AVAILABLE BASIS. IFTC EXPRESSLY DISCLAIMS ALL WARRANTIES
EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
E. IFTC will take reasonable steps to ensure that its products (and
those of its third-party suppliers) reflect the available state
of the art technology to offer products that are Year 2000
compliant, including, but not limited to, century recognition of
dates, calculations that correctly compute same century and
multi century formulas and date values, and interface values
that reflect the date issues arising between now and the next
one-hundred years, and if any changes are required, IFTC will
make the changes to its products at no cost to the Fund and in a
commercially reasonable time frame and will require third-party
suppliers to do likewise.
11. MULTIPLE PORTFOLIOS. If Fund is comprised of more than one
Portfolio:
A. Each Portfolio will be regarded for all purposes hereunder as a
separate party apart from each other Portfolio. Unless the
context otherwise requires, with respect to every transaction
covered hereby, every reference herein to Fund is deemed to
relate solely to the particular Portfolio to which such
transaction relates. Under no circumstances will the rights,
obligations or remedies with respect to a particular Portfolio
constitute a right, obligation or remedy applicable to any other
Portfolio. The use of this single document to memorialize the
separate agreement of each Portfolio is understood to be for
clerical convenience only and will not constitute any basis for
joining the Portfolios for any reason.
B. Fund may appoint IFTC as its custodian for additional Portfolios
from time to time by written notice, provided that IFTC consents
to such addition. Rates or charges for each additional
Portfolio will be as agreed upon by IFTC and Fund in writing.
12. MISCELLANEOUS.
A. This Agreement will be construed according to, and the rights
and liabilities of the parties hereto will be governed by, the
laws of the State of Missouri, without reference to the choice
of laws principles thereof.
B. All terms and provisions hereof will be binding upon, inure to
the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
C. The representations and warranties, the indemnifications
extended hereunder, and the provisions of Section 9 hereof are
intended to and will continue after and survive the expiration,
termination or cancellation hereof.
D. No provisions hereof may be amended or modified in any manner
except by a written agreement properly authorized and executed
by each party hereto.
E. The failure of either party to insist upon the performance of
any terms or conditions hereof or to enforce any rights
resulting from any breach of any of the terms or conditions
hereof, including the payment of damages, will not be construed
as a continuing or permanent waiver of any such terms,
conditions, rights or privileges, but the same will continue and
remain in full force and effect as if no such forbearance or
waiver had occurred. No waiver, release or discharge of any
party's rights hereunder will be effective unless contained in a
written instrument signed by the party sought to be charged.
F. The captions herein are included for convenience of reference
only, and in no way define or limit any of the provisions hereof
or otherwise affect their construction or effect.
G. This Agreement may be executed in two or more counterparts, each
of which is deemed an original but all of which together
constitute one and the same instrument.
H. If any provision hereof is determined to be invalid, illegal, in
conflict with any law or otherwise unenforceable, the remaining
provisions hereof will be considered severable and will not be
affected thereby, and every remaining provision hereof will
remain in full force and effect and will remain enforceable to
the fullest extent permitted by applicable law.
I. This Agreement may not be assigned by either party hereto
without the prior written consent of the other party.
J. Neither the execution nor performance hereof will be deemed to
create a partnership or joint venture by and between IFTC and
Fund or any Portfolio.
K. Except as specifically provided herein, this Agreement does not
in any way affect any other agreements entered into among the
parties hereto and any actions taken or omitted by either party
hereunder will not affect any rights or obligations of the other
party hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST XXXXXXX FUNDS, INC.
COMPANY
By: __________________________ By: _________________________
Title: _______________________ Title: ______________________
EXHIBIT A -- INCOME AVAILABILITY SCHEDULE
Foreign--Income will be credited contractually on pay day in the markets
noted with Contractual Income Policy. The markets noted with Actual
income policy will be credited income when it is received.
Income Income Income
Market Policy Market Policy Market Policy
Argentina Actual Hong Kong Contractual Poland Actual
Australia Contractual Hungary Actual Portugal Contractual
Austria Contractual India Actual Russia Actual
Bahrain Actual Indonesia Actual Singapore Contractual
Bangladesh Actual Ireland Actual Slovak Actual
Republic
Belgium Contractual Israel Actual South Actual
Africa
Bermuda Actual Italy Contractual South Korea Actual
* Bolivia Actual Ivory Coast Actual Spain Contractual
Botswana Actual * Jamaica Actual Sri Lanka Actual
Brazil Actual Japan Contractual Swaziland Actual
Canada Contractual Jordan Actual Sweden Contractual
Chile Actual Kenya Actual Switzerland Contractual
China Actual Lebanon Actual Taiwan Actual
Colombia Actual Luxembourg Actual Thailand Actual
Cyprus Actual Malaysia Actual * Trinidad Actual
& Tobago
Czech Actual Mauritius Actual * Tunisia Actual
Republic
Denmark Contractual Mexico Actual Turkey Actual
Ecuador Actual Morocco Actual United Contrac-
Kingdom tual
Egypt Actual Namibia Actual United See
States Attached
**Euroclear Contractual/ Netherlands Contractual Uruguay Actual
Actual
Euro CDs Actual New Zealand Contractual Venezuela Actual
Finland Contractual Norway Contractual Zambia Actual
France Contractual Oman Actual Zimbabwe Actual
Germany Contractual Pakistan Actual
Ghana Actual Peru Actual
Greece Actual Philippines Actual
* Market is not 17F-5 eligible
** For Euroclear, contractual income paid only in markets listed with
Income Policy of Contractual.
United States--
Income Type DTC FED PTC Physical
Dividends Contractual N/A N/A Actual
Fixed Rate Contractual Contractual N/A Actual
Interest
Variable Rate Contractual Contractual N/A Actual
Interest
GNMA I N/A N/A Contractual PD +1 N/A
GNMA II N/A N/A Contractual PD *** N/A
Mortgages Actual Contractual Contractual Actual
Maturities Actual Contractual N/A Actual
Exceptions to the above Contractual Income Policy include securities that
are:
Involved in a trade whose settlement either failed, or is pending over the
record date, (excluding the United States);
' On loan under a self directed securities lending program other than
IFTC's own vendor lending program;
' Known to be in a condition of default, or suspected to present a risk
of default or payment delay;
' In the asset categories, without limitation, of Private Placements,
Derivatives, Options, Futures, CMOs, and Zero Coupon Bonds.
' Securities whose amount of income and redemption cannot be calculated
in advance of payable date, or determined in advance of actual
collection, examples include ADRs;
' Payments received as the result of a corporate action, not limited
to, bond calls, mandatory or optional puts, and tender offers.
*** For GNMA II securities, if the 19th day of the month is a business
day, Payable/Distribution Date is the next business day. If the 19th is
not a business day, but the 20th is a business day, Payable/Distribution
date is the first business day after the 20th. If both the 19th and 20th
are not business days, Payable/Distribution will be the next business day
thereafter.
EXHIBIT B -- FUNDS TRANSFER OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER: IFTC is authorized to promptly debit Fund's
("Client's") account(s) upon the receipt of a payment order in compliance
with any of the Security Procedures chosen by the Client, from those
offered on the attached selection form (and any updated selection forms
hereafter executed by the Client), for funds transfers and in the amount
of money that IFTC has been instructed to transfer. IFTC is hereby
instructed to accept funds transfer instructions only via the delivery
methods and Security Procedures indicated on the attached selection form
(and any updated executed by the Client). The Client agrees that the
Security Procedures are reasonable and adequate for its wire transfer
transactions and agrees to be bound by any payment orders, amendments and
cancellations, whether or not authorized, issued in its name and accepted
by IFTC after being confirmed by any of the selected Security Procedures.
The Client also agrees to be bound by any other valid and authorized
payment order accepted by IFTC. IFTC shall execute payment orders in
compliance with the selected Security Procedures and with the
Client's/Investment Manager's instructions on the execution date provided
that such payment order is received by the customary deadline for
processing such a request, unless the payment order specifies a later
time. IFTC will use reasonable efforts to execute on the execution date
payment orders received after the customary deadline, but if it is unable
to execute any such payment order on the execution date, such payment
order will be deemed to have been received on the next business day.
2. SECURITY PROCEDURES: The Client acknowledges that the selected
Security Procedures were selected by the Client from Security Procedures
offered by IFTC. The Client shall restrict access to confidential
information relating to the Security Procedures to authorized persons as
communicated in writing to IFTC. The Client must notify IFTC immediately
if it has reason to believe unauthorized persons may have obtained access
to such information or of any change in the Client's authorized personnel.
IFTC shall verify the authenticity of all instructions according to the
selected Security Procedures.
3. ACCOUNT NUMBERS: IFTC shall process all payment orders on the basis
of the account number contained in the payment order. In the event of a
discrepancy between any name indicated on the payment order and the
account number, the account number shall take precedence and govern.
Financial institutions that receive payment orders initiated by IFTC at
the instruction of the Client may also process payment orders on the basis
of account numbers, regardless of any name included in the payment order.
IFTC will also rely on any financial institution identification numbers
included in any payment order, regardless of any financial institution
name included in the payment order.
4. REJECTION: IFTC reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected
balance in the account to be charged at the time of IFTC's receipt of such
payment order; (b) if initiating such payment order would cause IFTC, in
IFTC's sole judgment, to exceed any applicable volume, aggregate dollar,
network, time, credit or similar limits upon wire transfers; or (c) if
IFTC, in good faith, is unable to satisfy itself that the transaction has
been properly authorized.
5. CANCELLATION OR AMENDMENT: IFTC shall use reasonable efforts to act
on all authorized requests to cancel or amend payment orders received in
compliance with the selected Security Procedures provided that such
requests are received in sufficient time to afford IFTC a reasonable
opportunity to act prior to executing the payment order. However, IFTC
assumes no liability if the request for amendment or cancellation cannot
be satisfied by IFTC's reasonable efforts.
6. ERRORS: IFTC shall assume no responsibility for failure to detect any
erroneous payment order provided that IFTC complies with the payment order
instructions as received and IFTC complies with the selected Security
Procedures. The Security Procedures are established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
7. INTEREST AND LIABILITY LIMITS: IFTC shall assume no responsibility
for lost interest with respect to the refundable amount of any
unauthorized payment order, unless IFTC is notified of the unauthorized
payment order within thirty (30) days of notification by IFTC of the
acceptance of such payment order. In no event (including but not limited
to failure to execute a payment order) shall IFTC be liable for special,
indirect or consequential damages, even if advised of the possibility of
such damages.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS:
When the Client initiates or receives ACH credit and debit entries
pursuant to these Guidelines and the rules of the National Automated
Clearing House Association and the Mid-America Payment Exchange or other
similar body, IFTC or its agent will act as an Originating Depository
Financial Institution and/or Receiving Depository Financial Institution,
as the case may be, with respect to such entries. Credits given with
respect to an ACH credit entry are provisional until final settlement for
such entry is received from the Federal Reserve Bank. If such final
settlement is not received, the Client agrees to promptly refund the
amount credited to the Client in connection with such entry, and the party
making payment to the Client via such entry shall not be deemed to have
paid the amount of the entry.
9. CONFIRMATIONS: Confirmation of IFTC's execution of payment orders
shall ordinarily be provided within 24 hours. Notice may be delivered
through IFTC's account statements, advices, information systems, or by
facsimile or callback. The Client must report any objections to the
execution of a payment order within 30 days.
10. MISCELLANEOUS: IFTC may use the Federal Reserve System Fedwire to
execute payment orders, and any payment order carried in whole or in part
through Fedwire will be subject to applicable Federal Reserve Board rules
and regulations. IFTC and the Client agree to cooperate to attempt to
recover any funds erroneously paid to wrong parties, regardless of any
fault of IFTC or the Client, but the party responsible for the erroneous
payment shall bear all costs and expenses incurred in trying to effect
such recovery. These Guidelines may not be amended except by a written
agreement signed by the parties.
SECURITY PROCEDURES SELECTION FORM
Please select one or more of the funds transfer security procedures
indicated below.
[] SWIFT SWIFT (Society for Worldwide Interbank Financial
Telecommunication) is a cooperative society owned and operated by
member financial institutions that provides telecommunication
services for its membership. Participation is limited to securities
brokers and dealers, clearing and depository institutions, recognized
exchanges for securities, and investment management institutions.
SWIFT provides a number of security features through encryption and
authentication to protect against unauthorized access, loss or wrong
delivery of messages, transmission errors, loss of confidentiality
and fraudulent changes to messages. Selection of this security
procedure would be most appropriate for existing SWIFT members.
[] REMOTE BATCH TRANSMISSION Wire transfer instructions are
delivered via Computer-to-Computer (CPU-CPU) data communications
between the Client and/or its agent and IFTC and/or its agent.
Security procedures include encryption and/or the use of a test key
by those individuals authorized as Automated Batch Verifiers or a
callback procedure to those individuals. Clients selecting this
option should have an existing facility for completing CPU-CPU
transmissions. This delivery mechanism is typically used for high-
volume business such as shareholder redemptions and dividend
payments.
[] TELEPHONE CONFIRMATION (CALL BACK) This procedure requires Clients to
designate individuals as authorized initiators and authorized
verifiers. IFTC will verify that the instruction contains the
signature of an authorized person and prior to execution of the
payment order, will contact someone other than the originator at the
Client's location to authenticate the instruction. Selection of this
alternative is appropriate for Clients who do not have the capability
to use other security procedures.
[] TEST KEY Test Key confirmation will be used to verify all non-
repetitive funds transfer instructions received via facsimile or
phone. IFTC will provide test keys if this option is chosen. IFTC
will verify that the instruction contains the signature of an
authorized person and prior to execution of the payment order, will
authenticate the test key provided with the corresponding test key at
IFTC. Selection of this alternative is appropriate for Clients who
do not have the capability to use other security procedures.
[] REPETITIVE WIRES For situations where funds are transferred
periodically from an existing authorized account to the same payee
(destination bank and account number) and only the date and currency
amount are variable, a repetitive wire may be implemented.
Repetitive wires will be subject to a $10 million limit. If the
payment order exceeds the $10 million limit, the instruction will be
confirmed by telephone or test key prior to execution. Repetitive
wire instructions must be reconfirmed annually. Clients may
establish Repetitive Wires by following the agreed upon security
procedures as described by Telephone Confirmation (Call Back) or Test
Key. This alternative is recommended whenever funds are frequently
transferred between the same two accounts.
[] STANDING INSTRUCTIONS Funds are transferred by IFTC to a counter
party on the Client's established list of authorized counter parties.
Only the date and the dollar amount are variable. Clients may
establish Standby Instructions by following the agreed upon security
procedures as described by Telephone Confirmation (Call Back) or Test
Key. This option is used for transactions that include but are not
limited to Foreign Exchange Contracts, Time Deposits and Tri-Party
Repurchase Agreements.
[] AUTOMATED CLEARING HOUSE (ACH) IFTC or its agent receives an
automated transmission from a Client for the initiation of payment
(credit) or collection (debit) transactions through the ACH network.
The transactions contained on each transmission or tape must be
authenticated by the Client. The transmission is sent from the
Client's or its agent's system to IFTC's or its agent's system with
encryption.
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
Name Name
Address Address
City/State/Zip Code City/State/Zip Code
Telephone Number Telephone Number
Facsimile Number
SWIFT Number
XXXXXXX FUNDS, INC.
By:
Title:
Date:
EXHIBIT C
STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS AND
OPTIONAL DEPOSITORIES
Country Subcustodian Optional Depositories
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria GiroCredit Bank Aktiengesellschaft der
Sparkassen --
Bahrain The British Bank of the Middle East (as
delegate of the Hongkong and Shanghai
Banking Corporation Limited) --
Bangladesh Standard Chartered Bank --
Belgium Generale Bank --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Canada Canada Trustco Mortgage Company --
Chile Citibank, N.A. --
People's The Hongkong and Shanghai Banking --
Republic of Corporation Limited Shanghai and
China Shenzhen branches
Colombia Cititrust Colombia S.A.Sociedad
Fiduciaria --
Croatia Privredana banka Zagreb d.d --
Cyprus Barclays Bank PLC Cyprus Offshore
Banking Unit --
Czech Ceskoslovenska Obchodni Banka A.S. --
Republic
Denmark Den Danske Bank --
Ecuador Citibank, N.A. --
Egypt National Bank of Egypt --
Estonia Hansabank --
Finland Xxxxxx Bank Limited --
France Banque Paribas --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A
Bank of Greece
Hong Kong Standard Chartered Bank --
Hungary Citibank Budapest Rt. --
India Deutsche Bank AG;The Hongkong and Shanghai --
Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Banque Paribas --
Ivory Coast Societe Generale de Banques en Cote
d'Ivoire --
Jamaica Scotiabank Trust and Merchant Bank --
Japan The Daiwa Bank, Limited; The Fuji Bank Japan
Depository Limited The Sumitomo Trust & Banking Securities
Co., Ltd.
Jordan The British Bank of the Middle East (as
delegate of the Hongkong and Shanghai
Banking Corporation Limited) --
Kenya Barclays Bank of Kenya Limited --
Republic of Citibank, N.A. --
Korea
Lebanon The British Bank of the Middle East Custodian and
(as delegate of the Hongkong and Clearing Center of
Shanghai Banking Corporation Limited) Financial
Instruments for
Lebanon (MIDCLEAR)
X.X.X.;
Malaysia Standard Chartered Bank Malaysia Berhad --
Mauritius The Hongkong and Shanghai Banking --
Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa --
Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group (New Zealand) Limited --
Norway Christiania Bank og Kreditkasse --
Oman The British Bank of the Middle East (as
delegate of the Hongkong and Shanghai
Banking Corporation Limited) --
Pakistan Deutsche Bank AG --
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
Poland Citibank Poland S.A. --
Portugal Banco Comercial Portugues --
Romania ING Bank, N.V. --
Russia Credit Suisse First Boston, Zurich via
Credit Suisse First Boston Limited, Moscow --
Singapore The Development Bank of Singapore Ltd. --
Slovak Ceskoslovenska ObchodnaBanka A.S. --
Republic
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander, S.A. --
Sri Lanka The Hongkong and Shanghai Banking
Corporation Limited --
Swaziland Barclays Bank of Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland Union Bank of Switzerland --
Taiwan - Central Trust of China --
R.O.C.
Thailand Standard Chartered Bank --
Trinidad Republic Bank Ltd. --
& Tobago
Tunisia Banque Internationale Arabe de Tunisie --
Turkey Citibank, N.A. --
United State Street Bank and Trust --
Kingdom
Uruguay Citibank, N.A. --
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
Euroclear (The Euroclear System)
Cedel (Cedel Bank, societe anonyme)
INTERSETTLE (for EASDAQ Securities)
EXHIBIT D
STATE STREET GLOBAL CUSTODY NETWORK MANDATORY DEPOSITORIES
Country Mandatory Depositories (Includes entities for which use is
mandatory as a matter of law or effectively mandatory as a
matter of market practice)
Argentina -Caja de Valores S.A.;
-CRYL
Australia -Austraclear Limited;
-Reserve Bank Information and Transfer System
Austria -Oesterreichische Kontrollbank AG (Wertpapiersammelbank
Division)
Belgium -Caisse Interprofessionnelle de Depots et de Virements de
Titres S.A.;
-Banque Nationale de Belgique
Brazil -Bolsa de Valores de S o Paulo;
-Bolsa de Valores de Rio de Janeiro
-All SSB clients presently use Calispa
-Central de Custodia e de Liquidac o Financeira de Titulos
-Banco Central do Brasil, Systema Especial de Liquidac o e
Custodia
Canada -The Canadian Depository for Securities Limited; West
Canada Depository Trust Company [depositories linked]
People's
Republic -Shanghai Securities Central Clearing and Registration
of China Corporation;
-Shenzhen Securities Central Clearing Co., Ltd.
Croatia Ministry of Finance
Czech
Republic -Stredisko cenn ch papiru;
-Czech National Bank
Denmark -Vardipapircentralen - The Danish Securities Center
Egypt -Misr Company for Clearing, Settlement, and Central
Depository
Estonia -Eesti Vaartpaberite Keskdepositooruim
Finland -The Finnish Central Securities Depository
France -Societe Interprofessionnelle pour la Compensation des
Valeurs Mobilieres;
-Banque de France, Saturne System
Germany -The Deutscher Kassenverein AG
Greece -The Central Securities Depository (Apothetirion Titlon
A.E.);
Hong Kong -The Central Clearing and Settlement System;
-The Central Money Markets Unit
Hungary -The Central Depository and Clearing House (Budapest) Ltd.
[Mandatory for Gov't Bonds only; SSB does not use for
other securities]
Indonesia -Bank of Indonesia
Ireland -The Central Bank of Ireland, The Gilt Settlement Office
Israel -The Clearing House of the Tel Aviv Stock Exchange;
-Bank of Israel
Italy -Monte Titoli S.p.A.;
-Banca d'Italia
Japan -Bank of Japan Net System
Republic of -Korea Securities Depository
Korea
Lebanon -The Central Bank of Lebanon
Malaysia -Malaysian Central Depository Sdn. Bhd.;
-Bank Negara Malaysia, Scripless Securities Trading and
Safekeeping Systems
Mauritius -The Central Depository & Settlement System
Mexico -S.D. INDEVAL, S.A. de C.V.(Instituto para el Deposito de
Valores);
Netherlands -Nederlands Centraal Instituut voor Giraal Effectenverkeer
B.V. ("NECIGEF") [** It is planned that as of 1/1/98 NBNV
will no longer hold government securities, all securities
will be transferred to NECIGEF];
-De Nederlandsche Bank N.V. ("NBNV")**
New Zealand -New Zealand Central Securities Depository Limited
Norway -Verdipapirsentralen - The Norwegian Registry of Securities
Oman -Muscat Securities Market
Peru -Caja de Valores y Liquidaciones (CAVALI, S.A.)
Philippines -The Philippines Central Depository Inc.
-The Book-Entry-System of Bangko Sentral ng Pilipinas;
-The Registry of Scripless Securities of the Bureau of the
Treasury
Poland -The National Depository of Securities (Krajowy Depozyt
Papierow Wartos'ciowych);
-National Bank of Poland
Portugal -Central de Valores Mobiliarios
Romania -National Securities Clearing, Settlement and Depository
Co.;
-Bucharest Stock Exchange;
-National Bank of Romania
Singapore -The Central Depository (Pte)Limited;
-Monetary Authority of Singapore
Slovak -Stredisko Cennych Papierov;
Republic -National Bank of Slovakia
South Africa -The Central Depository Limited
Spain -Servicio de Compensacion y Liquidacion de Valores, S.A.;
-Banco de Espana, Anotaciones en Cuenta
Sri Lanka -Central Depository System (Pvt) Limited
Sweden -Vardepapperscentralen VPC AB - The Swedish Central
Securities Depository
Switzerland -Schweizerische Effekten - Giro AG;
Taiwan -The Taiwan Securities Central Depository Company, Ltd.
- R.O.C
Thailand -Thailand Securities Depository Company Limited
Tunisia -STICODEVAM;
-Central Bank of Tunisia;
-Tunisian Treasury
Turkey -Takas ve Saklama Bankasi A.S.;
-Central Bank of Turkey
United -The Bank of England, The Central Gilts Office; The Central
Kingdom Moneymarkets Office; The European Settlements Office;
-First Chicago Clearing Centre
Uruguay -Central Bank of Uruguay
Zambia -Lusaka Central Depository
