EXHIBIT 99.9(a)-1
CUSTODY AGREEMENT
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THIS AGREEMENT made the ___ day of _________, 199_ 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 Xxxx 00xx Xxxxxx, Xxxxxx
Xxxx, Xxxxxxxx 00000 ("Custodian"), and The Sierra Trust Funds, a Massachusetts
business trust, having its principal office and place of business at 0000 Xxxxxx
Xxxxxx, Mail Stop: Xx. 000 Xxxxxxxxxx, Xxxxxxxxxx, 00000 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian of the securities and monies of Fund's investment portfolio; and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutual covenant and
agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints Custodian
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as custodian of the securities and monies at any time owned by the Fund.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver to
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Custodian prior to the effective date of this Agreement, copies of the following
documents and all amendments or supplements thereto, properly certified or
authenticated:
A. Resolutions of the Board of Directors of the Fund appointing Custodian
as custodian hereunder and approving the form of this Agreement; and
B. Resolutions of the Board of Directors of the Fund designating certain
persons to give instructions on behalf of the Fund to Custodian and
authorizing Custodian to rely upon written instructions over their
signatures.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
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A. Delivery of Assets. Fund will deliver or cause to be delivered to
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Custodian on the effective date of this Agreement, or as soon
thereafter as practicable, and from time to time thereafter, all
portfolio securities acquired by it and monies then owned by it except
as permitted by the Investment Company Act of 1940 or from time to time
coming into its possession during the time this Agreement shall
continue in effect. Custodian shall have no responsibility or liability
whatsoever for or on account of securities or monies not so delivered.
All securities so delivered to Custodian (other than bearer securities)
shall be registered in the
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name of Fund or its nominee, or of a nominee of Custodian, or shall be
properly endorsed and in form for transfer satisfactory to Custodian.
B. Delivery of Accounts and Records. Fund shall turn over to Custodian
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all of the Fund's relevant custody accounts and records previously
maintained by it or a prior custodian in order to perform its duties
hereunder. Custodian shall be entitled to rely conclusively on the
completeness and correctness of the accounts and records turned over
to it by Fund, and Fund shall indemnify and hold Custodian harmless of
and from any and all expenses, damages and losses whatsoever arising
out of or in connection with any error, omission, inaccuracy or other
deficiency of such accounts and records or in the failure of Fund to
provide any portion of such or to provide any information needed by
the Custodian knowledgeably to perform its function hereunder.
C. Delivery of Assets to Third Parties. Custodian will receive delivery
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of and keep safely the assets of Fund delivered to it from time to
time and the assets of each Portfolio segregated in a separate
account. Custodian will not deliver, assign, pledge or hypothecate any
such assets to any person except as permitted by the provisions of
this Agreement or any agreement executed by it according to the terms
of Section 3.S. of this Agreement. Upon delivery of any such assets to
a subcustodian pursuant to Section 3.S. of this Agreement, Custodian
will create and maintain records identifying those assets which have
been delivered to the subcustodian as belonging to the applicable
Portfolio of the Fund. The Custodian is responsible for the
safekeeping of the securities and monies of Fund only until they have
been transmitted to and received by other persons as permitted under
the terms of this Agreement, except for securities and monies
transmitted to United Missouri Bank of Kansas City, N.A. (UMBKC),
United Missouri Trust Company of New York (UMBTC), and First National
Bank of Chicago (FNBC) for which Custodian remains responsible.
Custodian shall be responsible for the monies and securities of
Fund(s) held by eligible foreign subcustodians to the extent the
domestic subcustodian with which the Custodian contracts is
responsible to Custodian. Custodian may participate directly or
indirectly through a subcustodian in the Depository Trust Company,
Treasury/Federal Reserve Book Entry System, Participant Trust Company,
Treasury/Federal Reserve Book Entry System, Participant Trust Company
or other depository approved by the Fund (as such entities are defined
at 17 CFR Section 270.17f(b)).
D. Registration of Securities. Custodian will hold stocks and other
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registerable portfolio securities of Fund registered in the name of
the Fund or in the name of any nominee of Custodian for whose fidelity
and liability Custodian will be fully responsible, or in street
certificate form, so-called, with or without any indication of
fiduciary capacity. Unless otherwise instructed, Custodian will
register all such portfolio securities in the name of its authorized
nominee. All securities, and the
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ownership thereof by Fund, which are held by Custodian hereunder,
however, shall at all times be identifiable on the records of the
Custodian. The Fund agrees to hold Custodian and its nominee harmless
for any liability as a record holder of securities held in custody.
E. Exchange of Securities. Upon receipt of instructions as defined herein
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in Section 4.A, Custodian will exchange, or cause to be exchanged,
portfolio securities held by it for the account of Fund for other
securities or cash issued or paid in connection with any
reorganization, recapitalization, merger, consolidation, split-up of
shares, change of par value, conversion or otherwise, and will deposit
any such securities in accordance with the terms of any reorganization
orprotective plan. Without instructions, Custodian is authorized to
exchange securities held by it in temporary form for securities in
definitive form, to effect an exchange of shares when the par value of
the stock is changed, and upon receiving payment therefor, to
surrender bonds or other securities held by it at maturity or when
advised of earlier call for redemption, except that Custodian shall
receive instructions prior to surrendering any convertible security.
F. Purchases of Investments of the Fund. Fund will, on each business day
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on which a purchase of securities shall be made by it, deliver to
Custodian instructions which shall specify with respect to each such
purchase;
1. The name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares or 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; and
8. The name of the person from whom or the broker or dealer through
whom the purchase was made.
In accordance with such instructions, Custodian will pay for out of
monies held for the account of Fund, but only insofar as monies are available
therein for such purpose, and receive the portfolio securities so purchased by
or for the account of Fund except that Custodian may in its sole discretion
advance funds to the Fund which may result in an overdraft because the monies
held by the Custodian on behalf of the Fund are insufficient to pay the total
amount payable upon such purchase. Such payment will be made only upon receipt
by Custodian of the securities so purchased in form for transfer satisfactory to
Custodian.
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G. Sales and Deliveries of Investments of the Fund - Other than Options
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and Futures. Fund will, on each business day on which a sale of
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investment securities of Fund has been made,deliver to Custodian
instructions specifying with respect to each such sale:
1. The name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares or principal amount sold, and accrued
interest, if any;
4. The date on which the securities sold were purchased or other
information identifying the securities 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 Fund upon such sale; and
9. The name and address of the broker or dealer through whom or
person to whom the sale was made.
In accordance with such instructions, Custodian will deliver or cause to be
delivered the securities thus designated as sold for the account of Fund to the
broker or other person specified in the instructions relating to such sale, such
delivery to be made only upon receipt of payment therefor in such form as is
satisfactory to Custodian, with the understanding that Custodian may deliver or
cause to be delivered securities for payment in accordance with the customs
prevailing among dealers in securities.
H. Purchases or Sales of Security Options, Options on Indices and
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Security Index Futures Contracts. Fund will, on each business day on
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which a purchase or sale of the following options and/or futures shall
be made by it, deliver to Custodian instructions which shall specify
with respect to each such purchase or sale:
1. The name of the Portfolio making such purchase or sale;
2. 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;
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j. Name and address of the broker or dealer through whom the sale or
purchase was made.
3. 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;
j. The name and address of the broker or dealer through whom the
sale or purchase was made, or other applicable settlement
instructions.
4. 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 Custodian, Fund
shall deliver a substantially complete and executed custodial
safekeeping account and procedural agreement which shall be
incorporated by reference into this Custody Agreement); 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. Option on Index Future Contracts
a. The underlying index futures 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. Securities Pledged or Loaned
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If specifically allowed for in the prospectus of Fund:
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1. Upon receipt of instructions, Custodian will release or cause to be
released securities held in custody to the pledgee designated in such
instructions by way of pledge or hypothecation to secure any loan incurred by
Fund; provided, however, that the securities shall be released only upon payment
to Custodian of the monies borrowed, except that in cases where additional
collateral is required to secure a borrowing already made, further securities
may be released or caused to be released for that purpose upon receipt of
instructions. Upon receipt of instructions, Custodian will pay, but only from
funds available for such purpose, any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon surrender of the note or
notes evidencing such loan.
2. Upon receipt of instructions, Custodian will release securities held in
custody to the borrower designated in such instructions; provided, however, that
the securities will be released only upon deposit with Custodian of full cash
collateral as specified in such instructions, and that Fund will retain the
right to any dividends, interest or distribution on such loaned securities. Upon
receipt of instructions and the loaned securities, Custodian will release the
cash collateral to the borrower.
J. Routine Matters. Custodian will, in general, attend to all routine and
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mechanical matters in connection with the sale, exchange, substitution,
purchase, transfer, or other dealings with securities or other property of Fund
except as may be otherwise provided in this Agreement or directed from time to
time by the Board of Directors of Fund.
K. Deposit Account. Custodian will open and maintain a special purpose
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deposit accounts in the name of Custodian ("Account"), subject only to draft or
order by Custodian upon receipt of instructions. All monies received by
Custodian from or for the account of a portfolio shall be deposited in said
Account, barring events not in the control of the Custodian such as strikes,
lockouts or labor disputes, riots, war or equipment or transmission failure or
damage, fire, flood, earthquake or other natural disaster, action or inaction of
governmental authority or other causes beyond its control, at 9:00 a.m., Kansas
City time, on the second business day after deposit of any check into Fund's
Account, Custodian agrees to make Fed Funds available to the Fund in the amount
of the check. Deposits made by Federal Reserve wire will be available to the
Fund immediately and ACH wires will be available to the Fund on the next
business day. Income earned on the portfolio securities will be credited to the
applicable portfolio of the Fund based on the schedule attached as Exhibit A.
The Custodian will be entitled to reverse any credited amounts where credits
have been made and monies are not finally collected. If monies are collected
after such reversal, the Custodian will credit the applicable portfolio in that
amount. Custodian may open and maintain an Account in such other banks or trust
companies as may be designated by it or by properly authorized resolution of the
Board of Directors of Fund, such Account, however, to be in the name of
custodian and subject only to its draft or order.
L. Income and other Payments to Fund
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Custodian will:
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1. Collect, claim and receive and deposit for the Account of Fund all
income and other payments which become due and payable on or after the
effective date of this Agreement with respect to the securities
deposited under this Agreement, and credit the account of Fund in
accordance with the schedule attached hereto as Exhibit A. If for any
reason, the Fund is credited with income that is not subsequently
collected, Custodian may reverse that credited 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:
1. all coupons and other income items requiring presentation; and
2. all other securities which may mature or be called, redeemed,
retired or otherwise become payable and regarding which the
Custodian has actual knowledge, or notice of which is contained in
publications of the type to which it normally subscribes for such
purpose; and
b. the endorsement for collection, in the name of the Fund, of all
checks, drafts or other negotiable instruments.
Custodian, 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. Custodian will receive, claim and collect all
stock dividends, rights or other similar items and will deal with the same
pursuant to instructions. Unless prior instructions have been received to the
contrary, Custodian will, without further instructions, sell any rights held
for the account of Fund on the last trade date prior to the date of expiration
of such rights.
M. Payment of Dividends and other Distributions
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On the declaration of any dividend or other distribution on the shares
of Capital Stock of Fund ("Fund Shares") by the Board of Directors of
Fund, Fund shall deliver to Custodian instructions with respect thereto,
including a copy of the Resolution of said Board of Directors certified
by the Secretary or Assistant Secretary of Fund wherein there shall be
set forth the record date as of which shareholders entitled to receive
such dividend or other distribution shall be determined, the date of
payment of such dividend or distribution, and the amount payable per
share on such dividend or distribution. Except if the ex-dividend date
and the reinvestment date of any dividend are the same, in which case
funds shall remain in the Custody Account, on the date specified in such
Resolution for the payment of such dividend or other distribution,
Custodian will pay out of the monies held for the account of Fund,
insofar as the same shall be available for such purposes, and credit to
the account of the Dividend Disbursing Agent for Fund, such amount as
may be necessary to pay the amount per share payable in cash on Fund
Shares issued and outstanding on the record date established by such
Resolution.
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N. Shares of Fund Purchased by Fund
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Whenever any Fund Shares are repurchased or redeemed by Fund, Fund or
its agent shall advise Custodian of the aggregate dollar amount to be
paid for such shares and shall confirm such advice in writing. Upon
receipt of such advice, Custodian shall charge such aggregate dollar
amount to the Account of Fund 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
advice. Custodian shall not have any duty or responsibility to
determine that Fund Shares have been removed from the proper
shareholder account or accounts or that the proper number of such
shares have been cancelled and removed from the shareholder records.
O. Shares of Fund Purchased from Fund
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Whenever Fund Shares are purchased from Fund, Fund will deposit or
cause to be deposited with Custodian the amount received for such
shares. Custodian shall not have any duty or responsibility to
determine that Fund Shares purchased from Fund have been added to the
proper shareholder account or accounts or that the proper number of
such shares have been added to the shareholder records.
P. Proxies and Notices
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Custodian 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 securities held by Custodian for Fund and will, upon
receipt of instructions, execute and deliver or cause its nominee to
execute and deliver or mail or have delivered or mailed such proxies
or other authorizations as may be required. Except as provided by this
Agreement or pursuant to instructions hereafter received by Custodian,
neither it nor its nominee will exercise any power inherent in any
such securities, including any power to vote the same, or execute any
proxy, power of attorney, or other similar instrument voting any of
such securities, or give any consent, approval or waiver with respect
thereto, or take any other similar action.
Q. Disbursements
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Custodian will pay or cause to be paid insofar as funds are available
for the purpose, bills, statements and other obligations of Fund
(including but not limited to obligations in connection with the
conversion, exchange or surrender of securities owned by Fund,
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 Fund) pursuant to instructions of Fund setting forth the
name of the person to whom payment is to be made, the amount of the
payment, and the purpose of the payment.
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R. Daily Statement of Accounts
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Custodian will, within a reasonable time, render to Fund as of the
close of business on each day, a detailed statement of the amounts
received or paid and of securities received or delivered for the
account of Fund during said day. Custodian will, from time to time,
upon request by Fund, render a detailed statement of the securities
and monies held for Fund under this Agreement, and Custodian will
maintain such books and records as are necessary to enable it to do so
and will permit such persons as are authorized by Fund including
Fund's independent public accountants, access to such records or
confirmation of the contents of such records; and if demanded, will
permit federal or state regulatory agencies to examine the securities,
books and records. Upon the written instructions of Fund or as
demanded by federal or state regulatory agencies, Custodian will
instruct any subcustodian to give such persons as are authorized by
Fund including Fund's independent public accountants, access to such
records or confirmation of the contents of such records; and if
demanded, to permit federal and state regulatory agencies to examine
the books, records and securities held by subcustodian which relate to
Fund.
S.Appointment of Subcustodians
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1. Notwithstanding any other provisions of this Agreement, all or any of
the monies or securities if Fund may be held in Custodian's own
custody or in the custody of one or more other banks or trust
companies selected by Custodian. Any such subcustodian selected by the
Custodian must have the qualifications required for custodian under
the Investment Company Act of 1940, as amended. The Custodian may
participate directly or indirectly in the Depository Trust Company,
Treasury/Federal Reserve Book Entry System, Participant Trust Company
(as such entities are defined at 17 CFR Sec. 270.17f-4(b)), or other
depository approved by the Fund and with which Custodian has a
satisfactory direct or indirect contractual relationship. Custodian
will appoint UMBKC and UMBNY as subcustodians and Custodian shall be
responsible for UMBKC and UMBNY to the same extent it is responsible
to the Fund under Section 5 of this Agreement. Custodian is not
responsible for DTC, the Treasury/Federal Reserve Book Entry System,
and PTC except to the extent such entities are responsible to
Custodian. Upon instruction of the Fund, Custodian shall be willing to
contract with such entities as Bank of New York (BONY), Xxxxxx
Guaranty and Trust Company (MGTC), Chemical Bank (CB), and Bankers
Trust Company (BT) for variable rate securities and Custodian will be
responsible to the Fund to the same extent those entities are
responsible to Custodian. The Fund shall be entitled to review
Custodian's contracts with BONY, MGTC, CB, and BT.
T. Accounts and Records Property of Fund
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Custodian acknowledges that all of the accounts and records maintained by
Custodian pursuant to this Agreement are the property of Fund, and will
be made available to
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Fund for inspection or reproduction within a reasonable period of time,
upon demand. Custodian will assist Fund's independent auditors, or upon
approval of Fund, or upon demand, any regulatory body having jurisdiction
over the Fund or Custodian, in any requested review of Fund's accounts
and records but shall be reimbursed for all expenses and employee time
invested in any such review outside of routine and normal periodic
reviews.
U. Adoption of Procedures
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Custodian and Fund may from time to time adopt procedures as they agree
upon, and Custodian may conclusively assume that no procedure approved by
Fund, or directed by Fund, conflicts with or violates any requirements of
its prospectus, "Articles of Incorporation," Bylaws, or any rule or
regulation of any regulatory body or governmental agency. Fund will be
responsible to notify Custodian of any changes in statutes, regulations,
rules or policies which might necessitate changes in Custodian's
responsibilities or procedures.
V. Overdrafts
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If Custodian shall in its sole discretion advance funds to the account of
the Fund which results in an overdraft because the monies held by
Custodian on behalf of the Fund are insufficient to pay the total amount
payable upon a purchase of securities as specified in a Fund's
instructions or for some other reason, the amount of the overdraft shall
be payable by the Fund to Custodian upon demand and shall bear an
interest rate determined by Custodian from the date advanced until the
date of payment. Custodian shall have a lien on the assets of Fund in the
amount of any outstanding overdraft.
4. INSTRUCTIONS.
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A. The term "instructions," as used herein, means written or oral
instructions to Custodian from a designated representative of Fund.
Certified copies of resolutions of the Board of Directors of Fund naming
one or more designated representatives to give instructions in the name
and on behalf of Fund, may be received and accepted from time to time by
Custodian 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 (and Custodian will be fully protected in acting in reliance
thereon) until receipt by Custodian of notice to the contrary. Unless the
resolution delegating authority to any person to give instructions
specifically requires that the approval of anyone else will first have
been obtained, Custodian will be under no obligation to inquire into the
right of the person giving such instructions to do so. Notwithstanding
any of the foregoing provisions of this Section 4. no authorizations or
instructions received by Custodian from Fund, will be deemed to authorize
or permit any director, trustee, officer, employee, or agent of Fund to
withdraw any of the securities or
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similar investments of Fund upon the mere receipt of such authorization
or instructions from such director, trustee, officer, employee or agent.
B. No later than the next business day immediately following each oral
instruction, Fund will send Custodian written confirmation of such oral
instruction. At Custodian's sole discretion, Custodian may record on
tape, or otherwise, any oral instruction whether given in person or via
telephone, each such recording identifying the parties, the date and the
time of the beginning and ending of such oral instruction.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall hold harmless and indemnify Fund from and against any
loss or liability arising out of Custodian's negligence or bad faith.
Custodian shall not be liable for consequential damages, special, or
punitive damages. Custodian may request and obtain the advice and opinion
of counsel for Fund, or of its own counsel with respect to questions or
matters of law, and it shall be without liability to Fund for any action
taken or omitted by it in good faith, in conformity with such advice or
opinion. If Custodian reasonably believes that it could not prudently act
according to the instructions of the Fund or the Fund's counsel, it may
in its discretion, with notice to the Fund, not act according to such
instructions.
B. Custodian may rely upon the advice of Fund and upon statements of Fund's
accountants and other persons believed by, it in good faith, to be expert
in matters upon which they are consulted, and Custodian shall not be
liable for any actions taken, in good faith, upon such statements.
C. If Fund requires Custodian in any capacity to take, with respect to any
securities, any action which involves the payment of money by it, or
which in Custodian's opinion might make it or its nominee liable for
payment of monies or in any other way, Custodian, upon notice to Fund
given prior to such actions, shall be and be kept indemnified by Fund in
an amount and form satisfactory to Custodian against any liability on
account of such action.
D. Custodian shall be entitled to receive, and Fund agrees to pay Custodian,
on demand, reimbursement for such cash disbursements, costs and expenses
as may be agreed upon from time to time by Custodian and Fund.
E. Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or paper reasonably appearing to it to be genuine and to have
been properly executed and shall, unless otherwise specifically provided
herein, be entitled to receive as conclusive proof of any fact or matter
required to be ascertained from Fund hereunder, a certificate signed by
the Fund's President, or other officer specifically authorized for such
purpose.
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F. Without limiting the generality of the foregoing, Custodian shall be
under no duty or obligation to inquire into, and shall not be liable for:
1. The validity of the issue of any securities purchased by or for Fund,
the legality of the purchase thereof or evidence of ownership required
by Fund to be received by Custodian, or the propriety of the decision
to purchase or amount paid therefor;
2. The legality of the sale of any securities by or for Fund, or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any shares of the Capital Stock
of Fund, or the sufficiency of the amount to be received therefor;
4. The legality of the repurchase or redemption of any Fund Shares, or
the propriety of the amount to be paid therefor; or
5. 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.
G. Custodian shall not be liable for, or considered to be Custodian of, any
money represented by any check, draft, wire transfer, clearing house
funds, uncollected funds, or instrument for the payment of money received
by it on behalf of the Fund, until Custodian actually receives such
money, provided only that it shall advise Fund promptly if it fails to
receive any such money in the ordinary course of business, and use its
best efforts and cooperate with Fund toward the end that such money shall
be received.
H. Custodian shall not be responsible for loss occasioned by the acts,
neglects, defaults or insolvency of any broker, bank, trust company, or
any other person with whom Custodian may deal in the absence of
negligence, or bad faith on the part of the Custodian.
I. Notwithstanding anything herein to the contrary, Custodian may, and with
respect to any foreign subcustodian appointed under Section 3.S.2. must,
provide the Fund for its approval, agreements with banks or trust
companies which will act as subcustodians for Fund pursuant to Section
3.S of this Agreement.
6. COMPENSATION. Fund will pay Custodian such compensation as is stated in the
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Fee Schedule attached hereto as Exhibit B which may be changed from time to
time as agreed to in writing by Custodian and Fund. Custodian may charge
such compensation against monies held by it for the account of Fund.
Custodian will also be entitled, notwithstanding the provisions of Sections
5.C. or 5.D. hereof, to charge against any monies held by it for the account
of Fund the amount of any loss, damage, liability, advance, or expense for
which it shall be entitled to reimbursement under the provisions of this
Agreement including fees or expenses due to Custodian for other services
provided to the Fund by the Custodian.
-12-
7. TERMINATION. Either party to this Agreement may terminate the same by notice
------------
in writing, delivered or mailed, postage prepaid, to the other party hereto
and received not less than ninety (90) days prior to the date upon which
such termination will take effect. Upon termination of this Agreement, Fund
will pay to Custodian such compensation for its reimbursable disbursements,
costs and expenses paid or incurred to such date and Fund will use its best
efforts to obtain a successor custodian. Unless the holders of a majority of
the outstanding shares of "Capital Stock" of Fund vote to have the
securities, funds and other properties held under this Agreement delivered
and paid over to some other person, firm or corporation specified in the
vote, having not less than Two Million Dollars ($2,000,000) aggregate
capital, surplus and undivided profits, as shown by its last published
report, and meeting such other qualifications for custodian as set forth in
the Bylaws of Fund, the Board of Directors of Fund will, forthwith upon
giving or receiving notice of termination of this Agreement, appoint as
successor custodian a bank or trust company having such qualifications.
Custodian will, upon termination of this Agreement, deliver to the successor
custodian so specified or appointed, at Custodian's office, all securities
then held by Custodian hereunder, duly endorsed and in form for transfer, all
funds and other properties of Fund deposited with or held by Custodian
hereunder, or will cooperate in effecting changes in book-entries at the
Depository Trust Company or in the Treasury/Federal Reserve Book-Entry System
pursuant to 31 CFR Sec. 306.118. In the event no such vote has been adopted
by the stockholders of Fund and no written order designating a successor
custodian has been delivered to Custodian on or before the date when such
termination becomes effective, then Custodian will deliver the securities,
funds and properties of Fund to a bank or trust company at the selection of
Custodian and meeting the qualifications for custodian, if any, set forth in
the Bylaws of Fund and having not less than Two Million Dollars ($2,000,000)
aggregate capital, surplus and undivided profits, as shown by its last
published report. Upon either such delivery to a successor custodian,
Custodian will have no further obligations or liabilities under this
Agreement. Thereafter such bank or trust company will be the successor
custodian under this Agreement and will be entitled to reasonable
compensation for its services. In the event that no such successor custodian
can be found, Fund will submit to its shareholders, before permitting
delivery of the cash and securities owned by Fund to anyone other than a
successor custodian, the question of whether Fund will be liquidated or
function without a custodian. Notwithstanding the foregoing requirement as
to delivery upon termination of this Agreement, Custodian may make any other
delivery of the securities, funds and property of Fund which is permitted by
the Investment Company Act of 1940, Fund's Certificate of Incorporation and
Bylaws then in effect or apply to a court of competent jurisdiction for the
appointment of a successor custodian.
8. NOTICES. Notices, requests, instructions and other writings received by Fund
--------
at 0000 Xxxxxx Xxxxxx, Mail Stop: Xx. 000 Xxxxxxxxxx, Xxxxxxxxxx, 00000 or at
such other address as Fund may have designated to Custodian in writing, will
be deemed to have been properly given to Fund hereunder; and notices,
requests, instructions and other writings received by Custodian at its
offices at 000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, or to such
-13-
other address as it may have designated to Fund in writing, will be deemed to
have been properly given to Custodian hereunder.
9. MISCELLANEOUS.
--------------
A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective successor
and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in any manner
except by a written agreement properly authorized and executed by both
parties hereto.
D. The captions in this Agreement are included for convenience of reference
only, and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument.
F. If any part, term or provision of this Agreement is by the courts held to
be illegal, in conflict with any law or otherwise invalid, the remaining
portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
G. Custodian will not release the identity of Fund to an issuer which
requests such information pursuant to the Shareholder Communications Act
of 1985 for the specific purpose of direct communications between such
issuer and Fund unless the Fund directs the Custodian otherwise.
H. This Agreement may not be assigned by either party without prior written
consent of the other party.
I. If any provision of the Agreement, either in its present form or as
amended from time to time, limits, qualifies, or conflicts with the
Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder, such statutes, rules and regulations shall be
deemed to control and supercede such provision without nullifying or
terminating the remainder of the provisions of this Agreement.
-14-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly respective authorized officers.
INVESTORS FIDUCIARY TRUST
COMPANY
By:
---------------------
Title:
-----------
THE SIERRA TRUST FUNDS
By:
-----------------
Title:
---------
-15-
TRANSACTION DTC PHYSICAL FED
----------- --- -------- ---
TYPE CR DATE FDS TYPE CR DATE FDS TYPE CR DATE FDS TYPE
Calls Puts As Received C of F* As Received C or F*
Maturities As Received C or F* Mat. Date C or F* Mat. Date F
Tender As Received C or F* As Received C N/A
Reorgs.
Dividends Paydate C Paydate C N/A
Floating Rate Paydate C Paydate C N/A
Int.
Floating Rate N/A As Rate C N/A
Int. (No Received
Rate)
Mtg. Backed Paydate C Paydate + 1 C Paydate F
P&I Bus. Day
Fixed Rate Paydate C Paydate C Paydate F
Int.
Euroclear N/A C Paydate C
Legend
------
C = Clearinghouse Funds
F = Fed Funds
N/A = Not Applicable
* Availability based on how received.
-16-
INVESTORS FIDUCIARY TRUST COMPANY
THE SIERRA TRUST FUNDS
FEE SCHEDULE
I. SECURITY CUSTODY
A. Domestic Securities
-------------------
Asset-Based Fee on a total relationship basis:
1.0/100 of 1% (1 basis point) on the first $500 million in assets
.75/100 of 1% (.75 basis points) on the next $500 million in assets
.5/100 of 1% (.5 basis points) on all assets over $1 billion in assets
Transaction Fee, per transaction:
Physical Delivery - $20.00
Depository Eligible - $8.00
Participant Trust Company (PTC) Eligible - $12.00
PTC Asset-backed Security Paydown - $7.50
Other Asset-backed Security Paydown - $10.00
Overnight Sweeps - $5.00 (buy-side only)
Federal Funs Wire Received or Delivered - $6.00
B. Foreign Securities
------------------
See Appendix I for Global Fee Agreement.
C. Balance Credits
---------------
IFTC will offset fees with balance credits calculated at 75% of the
bank credit rate (see below) applied to average custody collected
cash balances for the month. Balance credits can be used to offset
fees. Any credits in excess of fees will be carried forward from
month to month through the end of the calendar year. For
calculation purposes, IFTC uses an actual/actual basis.
Note: The bank credit rate is the equivalent to the lesser of:
The average 91-day Treasury Xxxx discount rate for the month
or
The average Federal Funds rate for the month less 50 basis
points.
PAGE 1 OF 2
-17-
THE SIERRA TRUST FUNDS
FEE SCHEDULE (CONT.)
II. NOTES TO THE ABOVE FEE SCHEDULE
A. Asset based fees will be billed monthly at 1/12th of the annual stated
rate based on monthly average net assets. Annual maintenance fees are
payable monthly at 1/12th of the annual stated rate.
B. The above schedule does not include out-of-pocket expenses that would
be incurred by IFTC on the client's behalf. Examples of out-of-pocket
expenses include but are not limited to microfiche, disaster recovery,
pricing services, overnight mailing services, FDIC insurance, foreign
registration and script fees, etc. IFTC bills out-of-pocket expenses
separately from service fees.
C. The fees stated above are exclusive of terminal equipment required in
the client's location(s) and communication line costs.
D. Any fees or out-of-pocket expenses not paid within 30 days of the date
of the original invoice will be charged a late payment fee of 1% per
month until payment of the fees are received by IFTC.
E. The above fee schedule is applicable for selections made and
communicated within 90 days of the date of this proposal. The fees are
guaranteed for a three year period commencing on the effective date of
the service agreement between IFTC and the client. All changes to the
fee schedule will be communicated in writing at least 60 days prior to
their effective date.
F. Overdrafts will be calculated at the Prime rate (as published in the
Wall Street Journal) and charged on a daily basis.
---------------------------------- -----------------------------
Investors Fiduciary Trust Company The Sierra Trust Funds
---------------------------------- -----------------------------
Date Date
2 OF 2
-18-
APPENDIX I
GLOBAL CUSTODY FEES
I. Country Based Charges:
---------------------
Market Asset Transaction Market Asset Transaction
Charge Charge Charge Charge
Argentina 40 $120 Malaysia 15 $ 20
Australia 15 $ 20 Mauritius 40 $120
Austria 14 $ 20 Mexico 15 $ 20
Bangladesh 40 $120 Morocco 40 $120
Belgium 15 $ 20 Namibia 40 $ 20
Belize 40 $120 Netherlands 15 $ 20
Botswana 40 $120 New Zealand 15 $ 20
Brazil 40 $120 Norway 15 $ 20
Canada 15 $ 20 Pakistan 40 $120
Euroclear 5 $ 25 Peru 40 $120
Chile 40 $120 Philippines 15 $120
Colombia 40 $120 Poland 40 $120
Czech 40 $120 Portugal 15 $120
Republic
Denmark 15 $ 20 Shanghai 35 $120
(China)
Egypt 40 $120 Shenzhen 35 $120
(China)
ECU* 15 $ 20 Singapore 15 $ 20
Finland 15 $ 00 Xxxxx Xxxxxx 15 $ 20
France 15 $ 00 Xxxxx Xxxxx 40 $120
Germany 15 $ 20 Spain 15 $ 20
Ghana 40 $120 Sri Lanka 35 $120
Greece 40 $120 Swaziland 40 $120
Hong Kong 15 $ 20 Sweden 15 $ 20
Hungary 40 $120 Switzerland 15 $ 20
India 40 $120 Taiwan 35 $120
Indonesia 15 $120 Thailand 15 $ 20
Ireland 15 $ 20 Turkey 40 $120
Israel 40 $120 United 15 $ 20
Kingdom
Italy 15 $ 20 Uruguay 40 $120
Japan 10 $ 20 Venezuela 40 $120
Jordan 45 $120 Zimbabwe 40 $120
Luxembourg 15 $ 20
-19-
NOTE: Any country not listed above will be negotiated at time of investment.
Out of Pocket Expenses: As incurred (e.g. stamp taxes, registration costs,
script fees, special transportation costs, etc.). *ECU = European Currency Unit
-20-
