EXHIBIT (d)(2)
PORTFOLIO ADVISORY AGREEMENT
Re: AHA INVESTMENT FUNDS, INC.
PORTFOLIO ADVISORY AGREEMENT
Gentlemen:
AHA Investment Funds, Inc. (the "Fund") is a Maryland corporation
registered under the Investment Company Act of 1940 as an open-end, diversified
management investment company. The Fund is comprised of a number of separate
investment portfolios (the "Portfolios"), each with different investment
objectives, policies and restrictions.
Xxxxxx Associates ("Xxxxxx") serves as the Fund's investment
consultant and in that capacity is responsible for, among other things, the
coordination of the investment activities of the Portfolios, the recommendation
of investment managers to the Board of Directors of the Fund, and the
allocation of the assets of the Portfolios among the investment managers.
Investment decisions for the Portfolios are made by the investment managers,
subject to applicable policies, restrictions and procedures.
1. APPOINTMENT OF INVESTMENT MANAGER.
The Fund, being duly authorized, hereby appoints and retains you (the
"Investment Manager") to act as a discretionary investment manager, on the terms
and conditions set forth herein, for assets of the Portfolios of the Fund
designated as specified in Schedule A to this Agreement (each a "Portfolio
Account").
2. ACCEPTANCE OF APPOINTMENT.
The Investment Manager accepts its appointment as a discretionary
investment manager and agrees to use its best professional judgment to make
timely investment decisions for the Fund with respect to the designated
Portfolio Accounts in accordance with the terms of this Agreement for the
compensation herein provided.
3. SERVICES OF INVESTMENT MANAGER.
Subject to the supervision of the Board of Directors of the Fund, the
Investment Manager is hereby authorized to purchase, hold and sell assets of the
designated Portfolio Accounts and, upon making any purchase or sale decision, to
place orders for the execution of such transaction in accordance with paragraphs
5 and 6 hereof and Schedule B hereto (as amended from time to time). In
providing such services, the Investment Manager shall continuously manage such
Portfolio Accounts in a manner consistent with the investment objectives,
policies and restrictions of the Portfolios, as described in the materials
furnished to the Investment Manager pursuant to paragraph 4 below, and in
instructions from the Fund and Xxxxxx. The Investment Manager shall manage and
maintain each Portfolio Account for purposes of applicable policies and
restrictions as if such Portfolio Account were 100% of the assets of the
Portfolio. The Investment Manager shall in addition furnish to or place at the
disposal of the Fund or Xxxxxx such of the information, evaluations, analyses
and opinions formulated or obtained by the Investment Manager in the discharge
of its duties as the Fund or Xxxxxx may, from time to time, reasonably request.
At the Fund's or Xxxxxx'x reasonable request, the Investment Manager will
consult with the Fund or Xxxxxx with respect to any decision made by it with
respect to investments of the designated Portfolio Accounts.
4. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS.
The Fund shall provide the Investment Manager with a statement of the
investment objectives, policies and restrictions of the Portfolios and with such
additional procedures and restrictions applicable thereto as established by the
Fund, including such requirements as may be necessary to maintain qualification
under Sub-Chapter M of the Internal Revenue Code. The Fund retains the right to
modify any of its objectives, policies, procedures and restrictions upon written
notice to the Investment Manager.
5. TRANSACTION PROCEDURES.
All transactions will be consummated by payment to or delivery by the
Custodian of the Fund (the "Custodian"), or such depositories, or agents, as may
be designated by the Custodian, as custodian for the Fund, of all cash and/or
securities due to or from each designated Portfolio Account, and the Investment
Manager shall not have possession or custody thereof. The Investment Manager
shall confirm in
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writing all investment orders for the Portfolio Account placed by it with
brokers and dealers in such form and manner as set forth in Schedule B hereto
(as amended from time to time). Xxxxxx or another designated agent of the Fund
shall issue to the Custodian such instructions as may be appropriate in
connection with the settlement of any transaction initiated by the Investment
Manager. The Fund shall be responsible for all custodial arrangements and the
payment of all custodial charges and fees, and the Investment Manager shall have
no responsibility or liability with respect to custodial arrangements or the
acts, omissions or other conduct of the Custodian.
6. ALLOCATION OF BROKERAGE.
The Investment Manager shall have full authority and discretion to
allocate the execution of transactions effected by it in accordance with
paragraphs 2 and 3 to brokers and dealers, with which the Fund maintains
accounts, for execution on various markets, subject to paragraph 9 below. In
doing so, the Investment Manager's primary responsibility shall be to obtain the
best net price and execution for the Fund, but this responsibility shall not be
deemed to obligate the Investment Manager to solicit competitive bids for each
transaction, and the Investment Manager shall have no obligation to seek the
lowest available commission cost to the Fund, so long as the Investment Manager
determines that the broker or dealer is able to obtain the best price on a
particular transaction and that the commission cost is reasonable in relation to
the total quality and reliability of the brokerage and research services made
available (i) to the Fund or Xxxxxx for the benefit of the Fund or (ii) to the
Investment Manager for the benefit of its clients, notwithstanding that the Fund
may not be the direct or exclusive beneficiary of any such service or that
another broker may be willing to charge the Fund a lower commission on the
particular transaction. Upon notification by the Fund, the Investment Manager
agrees to comply with such other and additional brokerage policies adopted by
the Fund and consistent with applicable laws and regulations.
The Fund shall retain the right to request that transactions giving
rise to brokerage commissions in an amount to be agreed upon by the Fund and the
Investment Manager shall be executed by brokers and dealers which provide
research or consultation services to the Fund, or as to which an on-going
relationship will be of value to the Fund, so long as the Investment Manager
determines that the broker or dealer is able to obtain the best price on a
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particular transaction and that the Fund determines that the commission cost
is reasonable in relation to the total quality and reliability of the
brokerage and research services made available to the Fund, notwithstanding
that another broker may be willing to charge the Fund a lower commission on
the particular transaction.
7. REPRESENTATIONS, WARRANTIES AND
AGREEMENTS OF THE INVESTMENT MANAGER.
The Investment Manager represents, warrants and agrees that:
(a) It has delivered to the Fund (and the Fund represents it has
received) a true and complete copy of its Form ADV most recently filed
pursuant to the Investment Advisers Act (and all Schedules thereto).
(b) It has provided on Schedule C to this Agreement a true and
complete list of: all companies which are "affiliated persons", as such term
is defined in Section 2(a)(3) of the Investment Company Act, of the
Investment Manager; all officers and directors of the Investment Manager; and
all individuals and companies which "control" or are controlled by or under
common control with the Investment Manager, as such term is defined in
Section 2(a)(9) of said Act.
(c) It is registered as an "investment adviser" under the Investment
Advisers Act of 1940 or is a bank as defined in Section 202(a)(2) of said Act;
and that neither it nor any "affiliated person" of it, as defined by Section
2(a)(3) of the Investment Company Act, is subject to any disqualification
which would make the Investment Manager unable to serve as an investment
adviser to a registered investment company under Section 9 of the Investment
Company Act.
(d) It will deliver to the Fund: true and complete copies of all
documents supplementing or amending its Form ADV promptly upon the filing
thereof; prompt notice of all additions, deletions and changes in the list of
persons and companies identified in Schedule B; and appropriate advance
notice of any event which would render the representations and warranties
contained in paragraph 7(c) above no longer true, correct and accurate.
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8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE FUND.
The Fund represents, warrants and agrees that:
(a) It will deliver to the Investment Manager a true and complete
copy of the Fund's current Prospectus and Statement and of such other
documents or instruments governing the investments and investment policies
and practices of the designated Portfolio Accounts, and promptly will deliver
to the Investment Manager true and complete copies of all documents and
instruments supplementing, amending, or otherwise becoming such documents.
(b) Prior to commencement of the Fund's operations, it will deliver to
the Investment Manager a list of all public companies and broker-dealers
which are "affiliated persons" of the Fund (including also "affiliated
persons" of such persons) and promptly will deliver to the Investment Manager
any revisions to said list of which the Fund is aware.
(c) The organization of the Fund and the conduct of the business of
the Fund and the Portfolio Account as contemplated by this Agreement, comply,
and shall at all times comply, with the requirements imposed upon the Fund by
applicable law.
(d) The Investment Manager has been duly appointed by the Board of
Directors of the Company.
9. AFFILIATED TRANSACTIONS.
The Investment Manager agrees, as part of its specific duty to invest
and manage the assets of the designated Portfolio Accounts, that:
(a) It will not cause the Fund or any Portfolio to engage in a
principal transaction or any joint arrangement or transaction with any other
Portfolio or with any individual or company known by it to be an "affiliated
person" of the Fund or to be an "affiliated person" of such a person, except
transactions with affiliated accounts in such manner as may be permitted
under procedures adopted by the Fund pursuant to Rule 17a-7 under the
Investment Company Act; however, this shall not preclude fair and reasonable
allocations of executions among client accounts of the Investment Manager
(including the Portfolios).
(b) It will not cause the Fund to purchase securities in any
underwriting where, to the knowledge of the Investment Manager, an
underwriter of such securities is an
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"affiliated person" of the Fund or an "affiliated person" of such person;
except in compliance with such procedures as may be adopted by the Fund
pursuant to Rule 10f-3 under the Investment Company Act.
(c) It will not place for execution any agency brokerage transaction
of the Fund with any broker (including the Investment Manager) that, to the
knowledge of the Investment Manager, is an "affiliated person" of the Fund
or an "affiliated person" of such person, except in compliance with such
procedures as may be adopted by the Fund pursuant to Rule 17e-1 under the
Investment Company Act.
10. REPORTS TO INVESTMENT MANAGER.
The Fund will, from time to time, furnish or otherwise make available
to the Investment Manager such periodic reports, concerning the status of
the designated Portfolio Accounts as the Investment Manager may reasonably
require in order to discharge its duties and obligations hereunder.
11. REPORTS TO THE FUND AND RECORDS.
The Investment Manager agrees that:
(a) Upon the request of the Fund, it will provide such documents,
financial information, reports and other information as may reasonably be
necessary to permit the Fund's Board of Directors to make an informed
decision as to whether to continue this Agreement in accordance with paragraph
18 hereof, and to monitor the services provided hereunder.
(b) It will maintain the records and information required to be
maintained by paragraphs (b)(5), (b)(6), (b)(10) and (b)(11) and (f) of Rule
31a-1 under the Investment Company Act respecting its activities with respect
to the Portfolio Account, and such other records with respect thereto
relating to the services the Investment Manager provides under this Agreement
as may be required in the future by applicable SEC rules, and shall retain
such records and information for such times and in such manner as required by
applicable rules, including Rule 31a-2 under said Act. The Investment Manager
agrees that such records and information are the property of the Fund shall
be made available to the Fund or its designee upon the Fund's request.
12. CODE OF CONDUCT.
The Investment Manager shall adopt a written Code of conduct
complying with the requirements of Rule 17j-1
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under the Investment Company Act, will provide the Fund with a copy of such
code together with a representation of its due adoption, and will make such
reports to the Fund as required by said rule.
13. PROXIES.
The Fund will vote all proxies solicited by or with respect to the
issuers of securities in which its assets are invested, but the Investment
Manager shall upon request provide the Fund or Xxxxxx with its
recommendations as to such voting.
14. EXPENSES.
The Investment Manager shall retain such personnel, maintain such
facilities and obtain such information as may be necessary to provide
services hereunder and shall bear all costs associated therewith except as
otherwise provided by this Agreement.
15. FEES FOR ADVISORY SERVICES.
For the services to be rendered under this Agreement, the Investment
Manager shall be entitled to receive compensation calculated and paid in
accordance with attached Schedule D which is incorporated herein.
16. LIMITATION ON LIABILITY.
The Investment Manager shall not be liable for any action taken,
omitted or suffered to be taken by it in its reasonable judgment, in good
faith and believed by it to be authorized or within the discretion or rights
or powers conferred upon it hereunder, or in accordance with specific
directions from the Fund; provided that the Investment Manager shall not be
relieved from any liability arising from its own willful misconduct, bad
faith, gross negligence or reckless disregard of its duties under this
Agreement, or arising from its breach of any of its duties or obligation
under this Agreement.
17. OTHER INVESTMENT ACTIVITIES OF INVESTMENT MANAGER.
The Fund acknowledges that the Investment Manager or one or more of
its affiliates may have investment responsibilities or render investment
advice to, or perform other investment advisory services for, other
individuals and entities. The Fund agrees that the Investment Manager or its
affiliates may give advise or exercise investment responsi-
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bility and take such other action with respect to other individuals or entities
which may differ from advice given or the timing or nature of action taken
with respect to the Portfolio Account, provided that the Investment Manager
acts in good faith, and provided, further, that it is the Investment
Manager's policy to allocate, within its reasonable discretion, investment
opportunities to the Portfolio Account over a period of time on a fair and
equitable basis relative to its other advisory clients, taking into account
the investment objectives and policies of the Portfolio Account and any
specific investment restrictions applicable thereto. The Fund acknowledges
that one or more of the other accounts managed by the Investment Manager may
at any time hold or engage in transactions in investments in which the
designated Portfolio Accounts may have an interest, including transactions
in which such Portfolio Accounts are involved. The Investment Manager shall
have no obligation to acquire for such Portfolio Accounts a position in any
investment which any other account managed by the Investment Manager may
acquire, and the Fund shall have no first refusal, coinvestment or other
rights in respect of any such investment.
18. DURATION AND TERMINATION.
This Agreement shall become effective on August 1, 1988. Unless
terminated as herein provided, this Agreement shall remain in effect until
June 30, 1990 and shall continue in effect for successive periods of one year
thereafter provided such continuance is approved at least annually by the
Board of Directors of the Fund as required by the Act. This Agreement may be
terminated by either party hereto, without the payment of any penalty,
immediately upon written notice to the other in the event of a breach on any
provision hereof by the party so notified, or otherwise upon thirty days'
written notice to the other party; provided, however, that this Agreement
shall immediately terminate in the event of its "assignment" as defined in
Section 2 (a)(4) of the Investment Company Act (to the extent required by the
Act and the rules thereunder) unless otherwise permitted by an exemptive
order or rule of the SEC. The Investment Manager shall notify the Fund in
writing sufficiently in advance of any proposed change of control, or any
proposed transaction which would constitute an "assignment", so as to enable
the Fund to consider and to take the steps as it may determine to be
necessary to enter into a new agreement with the Investment Manager or
implement alternative arrangements. Termination of this Agreement shall not
affect the obligations or rights of the parties under paragraphs 15 or 16
hereof.
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19. AMENDMENT.
This Agreement may be amended at any time upon a written agreement
between the parties; provided that any amendment, other than an amendment to
Schedule B or Schedule C, shall be required to be approved by the Board of
Directors of the Fund in the manner required by the Investment company Act.
20. APPLICABLE LAW.
This Agreement shall be construed in accordance with the laws of the
State of Illinois and the applicable provisions of the Investment Company
Act. To the extent the applicable law of the State of Illinois, or any of
the provisions herein, conflict with the applicable provisions of said Act,
the latter shall control.
21. CONFIDENTIALITY.
Subject to the right of the Investment Manager and the Fund to
comply with the applicable law, including any demand of any regulatory or
taxing authority having jurisdiction over it, the parties hereto shall treat
as confidential all information pertaining to the Fund, the Portfolio
Accounts, the rate and amount of fees paid hereunder and the actions of the
Investment Manager and the Fund in respect of the foregoing.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement.
AHA INVESTMENT FUNDS, INC.
By:
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Date:
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ATTEST:
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(Investment Manager)
By:
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Date:
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ATTEST:
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SCHEDULES: A. Assets to be managed by Investment Manager
B. Operational Procedures
C. Affiliated persons of Investment Manager
D. Fees of Investment Manager
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SCHEDULE A
The Investment Manager is hereby designated to manage _____________ of the
assets of the Fund's ____________ Portfolio (the "Portfolio"), subject to the
terms and conditions of the Agreement. It shall initially be responsible for
the management of that portion of the Portfolio's assets which is allocated
to the Investment Manager by Xxxxxx Associates (the "Portfolio Account"). It
is agreed by the parties that, from time to time, Xxxxxx may modify this
allocation by increasing or decreasing the percentage of the Portfolio's
assets allocated to the Portfolio Account. Such modifications may be
implemented in such manner designated by Xxxxxx, including: (1) the transfer
of assets of the Portfolio into or from the Portfolio Account and (2) the
sale of assets of the Portfolio Account. All such initial allocations and
modifications thereto as contemplated by this Schedule A shall become
effective upon written notice to the Investment Manager from Xxxxxx.
SCHEDULE B
AHA INVESTMENT FUNDS, INC.
OPERATIONAL PROCEDURES
July 15, 1988
The Investment Managers shall adhere to the following procedures in connection
with the operations of the Fund.
1. Daily information regarding executed trades should be provided by the
Investment Managers to Boston Safe Deposit and Trust Company, the Fund's
custodian ("Boston Safe"). This information should be transmitted so as to
be received by Boston Safe no later than 9:00 a.m. on the business day
following the trade date, and should be transmitted by facsimile machine to
(617) (TO BE SUPPLIED). Promptly upon receipt of confirmations of
transactions, any discrepancies with the original trade information sent to
Boston Safe must be reported to Boston Safe.
2. With respect to each trade the information transmitted by the Investment
Manager must include:
a. Indication of whether the transaction is a purchase or sale.
b. Name and identification of the security of investment.
c. Number of shares, principal amount or number of contracts.
d. Price per share, bond, or contract.
e. Commission rate per share or indication that the trade is on a net
basis. If the transaction is a sale of a New York Stock Exchange
security, include SEC fees.
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f. Name of executing broker or dealer.
g. Trade date.
h. Settlement date.
i. Notification, if applicable, that the security traded is not
DTC eligible. If the transaction is a sale, exact delivery
instructions must be provided.
j. Total dollar amount of the trade.
k. Any information unique to the trade.
3. The Fund maintains separate brokerage accounts for each
Portfolio. All such accounts are cash accounts. The executing
broker should be advised to use Boston Safe's ID system number
in reporting trades (No. 26586) to facilitate dissemination of
information and settlements. Brokerage accounts for the Fund can
only be opened upon the written approval of an officer of
the Fund.
4. Arrangements should be made by the Investment Manager to assure
that duplicate confirmations of all transactions are sent to:
Xxxxxx X. X'Xxxxxxx
Boston Company Advisors
00 Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxx, XX 00000
5. Delivery and receive instructions shall be in the format set
forth in Exhibit 1 to these Procedures.
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6. A daily trade authorization form reflecting all transactions
and signed by two "authorized persons" shall be submitted to
Boston Safe prior to the settlement date. The daily trade
authorization shall be in such form as will be provided to the
Investment Manager by the Fund. A list of "authorized persons"
with specimen signatures is set forth on Exhibit 2 hereto. The
Fund will provide such list and signatures to Boston Safe
together with the Fund's request that the persons name therein
be appointed as "authorized persons." It is the responsibility
of the Investment Manager to notify the Fund promptly of
persons to be added or deleted from such list, and the Fund, upon
receipt of such notices will so advise Boston Safe.
7. Settlements will be monitored by Boston Safe. In the event of a
failure to deliver or to receive, Boston Safe will notify the
Investment Manager. The Investment Manager will deal directly
with the brokers involved.
8. Boston Safe will supply the Investment Managers with daily cash
availability reports, generally by telephone. Cash not required
to be disbursed will be invested by the Investment Manager each
day. In addition, Boston Safe will provide such additional
information as may reasonably be requested by the Investment
Managers.
9. It is essential that each Investment Manager follow these
procedures in order to minimize operations problems.
10. Any questions should be directed to:
Xxxxxx X. X'Xxxxxxx (000) 000-0000
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EXHIBIT 2
AVATAR INVESTORS ASSOCIATES CORP.
AUTHORIZED PERSONS
The following persons are authorized to execute transactions for the
Portfolio Account(s) of the AHA Investment Funds, Inc. for which the
above-named Investment Manager acts as investment manager.
Name (Typed) Title Signature
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Exhibit 1
MUTUAL FUNDS ACCOUNTING DIVISION
TRADE PROCESSING AND DELIVERY STANDARDS
DTC
TRADE PROCESSING STANDARDS
I. TRADE INSTRUCTIONS - Regular settlement - 5 business days
1. Trade instructions should be received by 9:00 a.m. on T+1.
II. TURNAROUND TRADES
Time deadlines same as above and securities on the purchase
portion of the turnaround trade must be received in our account
at DTC by 10:15 a.m. to guarantee delivery of the sale portion
of the trade.
III. SWAP TRADES
Trade instructions should be received by 9:00 A.M. on T+1
Note: Trade specifics must be sent with trades.
IV. MUTUAL FUNDS ACCOUNTING DIVISION DELIVERY INSTRUCTIONS
EQUITIES, CORPORATE & MUNICIPAL BONDS, UNITS AND WARRANTS
DTC Eligible - A/C 954
Ineligible - Boston Safe Clearing Corp.
00 Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Account Name & Number
BROKERS' CONFIRMATION
ID Confirmations:
Agent Bank 26586
1
FED
TRADE PROCESSING STANDARDS
I. FED BOOK-ENTRY (GOV'T TRADES, BILLS, NOTES, XXXXX, XXXXXXX MAC,
XXXXXX XXXX)
A. Regular Settlement (Five (5) Business Days)
Buys & Sales
- Trade instructions should be received by 11:00 a.m. on T+1.
B. Next Day Settlement
Buys & Sales
- Trade instructions should be received by 12:00 p.m. on
trade date.
C. Same Day Settlement
Buys
- Trade instructions received no later than 11:00 a.m. for
sells and 11:30 a.m. for buys on Settlement Date.
Sales
- Trade instruction received no later than 10:00 a.m. on
Settlement Date.
II. TURNAROUND TRADES - Time deadlines same as above and securities on
the purchase portion of the turnaround trade must be received in our
Fed Account 45 minutes before regular cut-off time to guarantee
delivery of the sell portion of the trade.
III. MUTUAL FUNDS ACCOUNTING DIVISION DELIVERY INSTRUCTIONS
TREASURIES, ALL OTHER GOV'T AGC
REPO AGR, DETACHED COUPONS,
STRIPPED BONDS
Fed Eligible - 011001234/Bos Safe Dep/Cust
Ineligible - Boston Safe Clearing Corp.
00 Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Account Name & Number
2
NEW YORK SETTLEMENT
I. NEW YORK SETTLEMENT - BSCC
A. Regular Settlement (5 Business Days)
Buys & Sales
- Trade instructions received no later than 11:00 a.m. on T+1.
B. Next Day Settlement
Buys & Sales
- Trade instructions received no later than 11:00 a.m. on
Trade Date.
C. Same Day Settlement
Buys
- Trade instructions received no later than 11:00 a.m. on
Settlement Date.
Sales
- Trade instructions received no later than 11:00 a.m. on
Settlement Date.
II. MUTUAL FUNDS ACCOUNTING DIVISION DELIVERY INSTRUCTIONS
C.P., B.A., DOMESTIC C.D.
TIGR'S, CAT SHORT TERM MUN'S
REPRO AGR USING INELIGIBLE FED
SECURITIES AS COLLATERAL
Boston Safe Clearing Corp.
00 Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
A/C Name & Number
Mass. Issued - Boston Safe Deposit & Trust Co.
1 Boston Pl., Trust Securities
Xxxxxx, XX 00000
GNMA POOL CTR
MBS Eligible - Contra ID# "BSDEP"
Ineligible - Boston Safe Clearing Corp.
00 Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
3
III. NEW YORK SETTLEMENT - FED, XXXXXX, XXXXXX
X. Regular Settlement (5 Days)
Buys & Sales
- Trade instructions received no later than 11:00 a.m. on T+1.
B. Next Day Settlement
Buy & Sales
- Trade instructions received no later than 12:00 p.m. on
trade date.
C. Same Day Settlement
Buys
- Trade instructions received no later than 11:00 a.m. on
Settlement date.
Sales
- 10:00 a.m. Settlement date.
IV. MUTUAL FUNDS ACCOUNTING DIVISION DELIVERY INSTRUCTIONS
FEDERAL HOME LOAN MORTGAGE CORPORATION PARTICIPATION CERTIFICATES
N.Y. Fed Eligible - ABA #000000000
Xxxxxx NYC/Cust/Boston Safe Custody
A/C #39661
OFFSHORE TIME DEPOSITS
Send letters of intent via telephone
facsimile transmission to*:
Boston Safe Deposit & Tr. Co.
(000) 000-0000
or Telexed to:
Boston Safe Deposit & Tr. Co.
Telex Xx. 000 000 (Xxxxxx Xx. XXX)
Upon maturity, funds should be wired to:
Federal Reserve Bank of Boston
A/C Boston Safe Deposit & Trust Co.
Bos Saf Dep/ABA 000000000
REF Maturity *TD DESCRIPTION*
* If compatible to A Xxxxxxxxx 3600 facsimile machine.
4
OPTIONS SETTLEMENT
PROCESSING STANDARDS
I. EQUITY OPTIONS
1. Covered Puts & Calls
- Opening Sales & Closing Buys: instructions must be received
by 11:00 a.m. to insure same day processing.
NOTE: Opening sales normally settle on the day after
receipt of instructions, but settlement is dependent
upon the broker's receipt of pledge forms or
guarantee letters. In cases where the forms must be
mailed instead of hand delivered or the broker
requires an additional 24 hours for processing
settlement will be delayed accordingly.
2. Uncovered Puts & Calls and Purchased Options
- One day settlement: Instructions must be received by 9:30 a.m.
to settle on settlement date.
- Five day settlement: Instructions must be received by 11:30 a.m.
on T+3 to settle on settlement date.
3. Exercises
- Buy Exercises: Instructions must be received by 11:30 a.m.
on T+4.
- Sell Exercises: Instructions must be received by 3:00 p.m.
on Trade Date.
NOTE: Settlement is dependent upon the broker releasing the
collateralized stock from the pledge position at DTC.
II. INDEX OPTIONS
1. Covered Puts & Calls
- Opening Sales & Closing Buys: Instructions must be received
by 11:00 a.m. to insure same day processing.
NOTE: Opening sales normally settle on the day after
receipt of instructions. Settlement is dependent
upon the broker receiving an escrow receipt or
guarantee letter. In cases where the forms must be
mailed instead of hand
5
delivered or the broker requires an additional
24 hours for processing settlement will be delayed
accordingly.
III. GNMA OPTIONS
1. Written Puts & Calls
- Opening Sales & Closing Buys: Instructions must be received
by 11:30 a.m. to insure same day processing.
NOTE: Opening sales will not be credited to the account until
Custody Operations has received confirmation of
incoming funds.
2. Exercises
- Buy Exercises: Instructions must be received by 11:30 a.m.
on T+4.
- Sell Exercises: Instructions must be received by 2:00 p.m.
on T+2.
IV. TREASURY OPTIONS
1. Covered Puts & Calls
- Opening Sales & Closing Buys: Instructions must be received by
11:00 a.m. to insure same day processing.
NOTE: Opening sales and closing buys usually settle the day
after receipt of instructions. Settlement is dependent upon
the broker receiving an escrow receipt by check or write on
openings; or returning the escrow or guarantee versus
payment by check or wire on closing. In cases where
arrangements cannot be made immediately with the broker
settlement will be delayed accordingly.
2. Exercises
- Buy Exercises: Instructions must be received by 11:30 a.m. on T+4.
- Sell Exercises: Instructions must be received by 11:30 a.m. on
settlement date.
NOTE: Sell exercises cannot be settled until the broker
returns the escrow receipt. The broker is required
to notify BSD&T of the exercise on trade date. Upon
notification, Options instructs the broker to return
the escrow to Boston Safe Clearing Corp. and that the
treasuries cannot be delivered until the Escrow is
received in New York.
6
V. SALES OF OPTION COLLATERAL
Any security being used as collateral on an option cannot be sold,
tendered or exchanged until the option is bought back and
confirmation of release is received from DTC or the released Escrow
Receipts are returned to Boston Safe.
VI. MUTUAL FUNDS ACCOUNTING DIVISION DELIVERY INSTRUCTIONS
OPTIONS
DTC Eligible - DTC #954
via Premium Pay Order
Ineligible - Boston Safe Clearing Corp.
00 Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
(Specify BSDT Acct # & Name)
7
FUTURES COLLATERAL
PROCESSING STANDARDS
I. Free Receipts and Deliveries
- Instructions must be received by 11:00 a.m. to insure same
day processing.
II. Buys and Sales of Collateral
- Instructions must be received by 11:00 a.m. to insure same day
settlement.
NOTE: These standards apply only to buys or sales directly
through the futures position. In these instances the
securities are received or delivered by the broker holding
the futures position and payment is made or received via
wire through Boston Safe.
III. Maturities of Collateral
- Confirmation of maturity must be made by 11:00 a.m. to insure
same day posting.
NOTE: Boston Safe does not receive direct credit from the Federal
Reserve for maturities of treasury securities held off
premises. Verification of incoming funds must be received
before a maturity can be posted.
IV. Rollovers of Collateral
- Detail of rollover including new buy and difference amount
(when applicable) must be received by 11:00 a.m. to insure same
day processing.
NOTE: In instances where difference wires are to be received,
verification of incoming funds must be received before the
rollover can be processed.
V. Margin Calls
- Instructions must be received by 11:00 a.m. to insure same day
processing.
NOTE: Verification of incoming funds must be received before funds
can be posted to an account.
VI. Mutual Funds Accounting Division Delivery Instructions
8
FUTURES
Matured Collateral - Federal Reserve Bank of Boston
Wire Funds to 000000000/BOS SAFE DEP/CUST
a/c 108030, attn: Option Unit
(Specify BSDT's acct #)
9
PHYSICAL SETTLEMENTS, BOSTON
TIME DEADLINES FOR DELIVERY OF PHYSICAL TRADE
INSTRUCTIONS TO SECURITY OPERATIONS - OBP
I. BOSTON SETTLEMENT
A. Regular Settlement (5 Business Days)
Buys:
- Trade instructions received no later than 9:00 a.m. on T+1.
Sales:
- Trade instructions received no later than 9:00 a.m. on T+1.
B. Next Day Settlement
Buys:
- Trade instructions received no later than 11:00 a.m. on
Trade Date.
Sales:
- Trade instructions received no later than 11:00 a.m. on
Trade Date.
* If a sale is to settle out of state, than the instructions
must be received no later than 10:00 a.m., in order to
make the nightly armored car package.
C. Same Day Settlement
Buys:
- Trade instructions received no later than 11:00 a.m. on
Settlement Date.
Sales:
- Trade instructions received no later than 10:00 a.m. on
Settlement Date.
10
SCHEDULE C
I. The following companies are "affiliated persons" of the
Investment Manager as defined by Section 2(a)(3) of the Act:
COMPANY NAME NATURE OF AFFILIATION
------------ ---------------------
II. The following persons are the officers and directors of the
Investment Manager:
NAME CAPACITY
---- --------
III. The following individuals and companies control, or are
controlled by, or under common control with, the Investment Manager:
NAME DESCRIPTION OF RELATIONSHIP
---- ---------------------------
SCHEDULE D
As compensation for the services it provides under this Agreement, the
Investment Manager shall be entitled to compensation payable quarterly in
arrears, calculated at the annual rate of 0.25 of one percent (0.25%) of the
average daily net assets of the Portfolio Account during the calendar quarter.
Fees are payable thirty days after the end of each calendar quarter.
Xxxxxx hereby agrees to pay, and the Investment Manager agrees to accept from
Xxxxxx, the fees due to the Investment Manager on behalf of the Fund under
this Agreement. The Investment Manager shall have recourse solely against
Xxxxxx for the payment of all fees due hereunder, until it receives written
notification of the termination of Xxxxxx'x agreement with the Fund to pay
such fees; however, no partner of Xxxxxx shall have any personal liability
hereunder and no party hereto may resort to the personal assets of such
partners for payment or performance of any obligation hereunder to the extent
such assets exceed a partner's holdings in Xxxxxx. In the event of such
notification of termination, the Fund agrees to pay all fees accruable after
the termination date specified in the notification (whether or not then
payable) and the Investment Manager shall have recourse solely against the
Fund for the payment of such fees.
Agreed and Accepted:
XXXXXX ASSOCIATES
By:/s/ X. X. XXXXXXXX
---------------------
Dated: July 1, 1993
