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Exhibit 8
CUSTODY AGREEMENT
THIS AGREEMENT is made effective the ___ day of __________, 19__, 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 Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("IFTC"), and
___________________, a ______________________________ (CORPORATION,/TRUST,)
having its principal office and place of business at ________________ ("Fund").
(EACH REGISTERED INVESTMENT COMPANY LISTED ON SCHEDULE A HERETO, AS IT MAY BE
AMENDED FROM TIME TO TIME, INCORPORATED HEREIN BY REFERENCE, EACH HAVING ITS
PRINCIPAL OFFICE AND PLACE OF BUSINESS AT _____________ (EACH A "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:
- 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").
- REPRESENTATIONS AND WARRANTIES.
- Fund hereby represents, warrants and acknowledges to IFTC:
- That it is a (CORPORATION/TRUST) 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
- That it has the requisite power and authority under applicable law (ITS
ARTICLES OF INCORPORATION AND ITS BYLAWS/AND ITS DECLARATION OF TRUST) to
enter into this Agreement; it has taken all requisite action necessary to
appoint IFTC as custodian for the Portfolios; this Agreement has been duly
executed and delivered by Fund; and this Agreement constitutes a legal, valid
and binding obligation of Fund, enforceable in accordance with its terms.
- IFTC hereby represents, warrants and acknowledges to Fund:
- That it is a trust company duly organized and existing and in good standing
under the laws of the State of Missouri; and
- That it has the requisite power and authority under applicable law, its
charter and its bylaws to enter into and perform this Agreement; this
Agreement has been duly executed and delivered by IFTC; and this Agreement
constitutes a legal, valid and binding obligation of IFTC, enforceable in
accordance with its terms.
- DUTIES AND RESPONSIBILITIES OF THE PARTIES.
- 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
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term hereof. IFTC has no responsibility or liability whatsoever for or on
account of assets not so delivered.
- 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 perform its duties and responsibilities hereunder fully and properly .
IFTC may rely conclusively on the completeness and correctness of such
accounts and records.
- Delivery of Assets to Third Parties. IFTC will receive delivery of and keep
safely the Assets of each Portfolio segregated in a separate account. 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.
- 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.
- 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.
- 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:
- If applicable, the name of the Portfolio making such purchase;
- The name of the issuer and description of the Asset;
- The number of shares and the principal amount purchased, and accrued interest,
if any;
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- The trade date;
- The settlement date;
- The purchase price per unit and the brokerage commission, taxes and other
expenses payable in connection with the purchase;
- The total amount payable upon such purchase;
- The name of the person from whom or the broker or dealer through whom the
purchase was made; and
- 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.
- 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:
- If applicable, the name of the Portfolio making such sale;
- The name of the issuer and description of the Asset;
- The number of shares and principal amount sold, and accrued interest, if any;
- The date on which the Assets sold were purchased or other information
identifying the Assets sold and to be delivered;
- The trade date;
- The settlement date;
- The sale price per unit and the brokerage commission, taxes or other expenses
payable in connection with such sale;
- The total amount to be received by the Portfolio upon such sale; and
- The 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,
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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.
- 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:
- If applicable, the name of the Portfolio making such purchase or sale;
- In the case of security options:
- The underlying security;
- The price at which purchased or sold;
- The expiration date;
- The number of contracts;
- The exercise price;
- Whether the transaction is an opening, exercising, expiring or closing
transaction;
- Whether the transaction involves a put or call;
- Whether the option is written or purchased;
- Market on which option traded; and
- Name and address of the broker or dealer through whom the sale or
purchase was made.
- In the case of options on indices:
- The index;
- The price at which purchased or sold;
- The exercise price;
- The premium;
- The multiple;
- The expiration date;
- Whether the transaction is an opening, exercising, expiring or closing
transaction;
- Whether the transaction involves a put or call;
- Whether the option is written or purchased; and
- The name and address of the broker or dealer through whom the sale or purchase
was made, or other applicable settlement instructions.
- In the case of security index futures contracts:
- The last trading date specified in the contract and, when available, the
closing level, thereof;
- The index level on the date the contract is entered into;
- The multiple;
- Any margin requirements;
- 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 reference); and
- The name and address of the futures commission merchant through whom the sale
or purchase was made, or other applicable settlement instructions.
- In the case of options on index future contracts:
- The underlying index future contract;
- The premium;
- The expiration date;
- The number of options;
- The exercise price;
- Whether the transaction involves an opening, exercising, expiring or closing
transaction;
- Whether the transaction involves a put or call;
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- Whether the option is written or purchased; and
- The market on which the option is traded.
- 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:
- 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.
- 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.
- 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.
- 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.
- Income and Other Payments. IFTC will:
- 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;
- 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
- 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,
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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.
- 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.
- 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.
- 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.
- Appointment of Subcustodians. Notwithstanding any other provisions hereof:
- 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
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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 Foreign Custody Manager ("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
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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
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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 17f5. 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 the prior written approval of Fund, or upon
demand, any regulatory body, in any requested review of Fund's accounts and
records, provided that 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 may reasonably request for tax returns, questionnaires, periodic
reports to shareholders and such other reports and information requests as
Fund and IFTC may 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,/DECLARATION OF TRUST) 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 may impact IFTC's responsibilities or
procedures under this Agreement.
T. Advances. Fund will pay on demand any advance of cash or securities made by
IFTC or any Subcustodian, 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 to dispose of such Portfolio's Assets pursuant
to applicable law to the extent necessary to
10
obtain reimbursement of the amount advanced and any related overdraft
charges.
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.
- INSTRUCTIONS.
- 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. The term
"designated representative" may include Fund's or a Portfolio's employees and
agents, including investment managers and their employees.
- 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
11
date and the time of the beginning and ending of such oral Instruction.
- 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.
- LIMITATION OF LIABILITY OF IFTC. 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 (including, without
limitation, disbursements and the allocable cost of in-house counsel),
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 failure to act pursuant hereto; provided that IFTC has acted
in good faith and with reasonable care; and provided further, that, in no
event is IFTC liable for consequential, special, or punitive damages;
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 failure 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
Instruction, 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 failure 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 Fund, or on the Instruction, 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 to IFTC by or on behalf of
a Portfolio, or the failure of Fund to provide, or provide in a timely
manner, any accounts, records, or information needed by IFTC to perform its
duties hereunder;
12
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,
omissions, defaults or insolvency of any broker, bank, trust company,
securities system or any other person with whom IFTC may deal; and
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, tornadoes, acts of God or public enemy,
revolutions, or insurrection.
- COMPENSATION. In consideration for its services hereunder, Fund will pay to
IFTC the compensation set forth in a separate fee schedule, incorporated
herein by reference, to be agreed to by Fund and IFTC from time to time, and,
upon demand, reimbursement for IFTC's cash disbursements and reasonable
out-of-pocket costs and expenses, including attorney's fees and
disbursements, incurred by IFTC in connection with the performance of
services hereunder. 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.
- TERM AND TERMINATION. The initial term of this Agreement is for a period of
one (1) year. Thereafter, either Fund or IFTC may terminate this Agreement 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
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
13
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.
- 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.
- 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 or its affiliates ("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 and its
affiliates 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
14
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 INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, EXCEPT
THOSE WARRANTIES STATED EXPRESSLY HEREIN.
- MULTIPLE PORTFOLIOS. If Fund is comprised of more than one Portfolio, the
following provisions apply:
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 as to 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.
- 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.
15
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. The benefits of this Agreement may not be assigned by either party nor may
either party delegate all or a portion of its duties hereunder without the
prior written consent of the other party. Notwithstanding the foregoing, Fund
agrees that IFTC may delegate all or a portion of its duties to an affiliate
of IFTC, provided that such delegation will not reduce the obligations of
IFTC under this Agreement.
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.
L. Notice is hereby given that a copy of Fund's Trust Agreement and all
amendments thereto is on file with the Secretary of State of the state of its
organization; that this Agreement has been executed on behalf of Fund by the
undersigned duly authorized representative of Fund in his/her capacity as
such and not individually; and that the obligations of this Agreement are
binding only upon the assets and property of Fund and not upon any trustee,
officer of shareholder of Fund individually.
16
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY (FUND NAME)
By: By: --DRAFT--
------------------------------ --------------------------------
Title: Title:
--------------------------- -----------------------------
17
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.
----------------------------------------------------------------------------------------------------------------------------
MARKET INCOME POLICY MARKET INCOME POLICY MARKET INCOME 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 Republic Actual
----------------------------------------------------------------------------------------------------------------------------
Belgium Contractual Israel Actual South Africa Actual
----------------------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------------------
18
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 Republic Actual Mauritius Actual * Tunisia Actual
----------------------------------------------------------------------------------------------------------------------------
Denmark Contractual Mexico Actual Turkey Actual
----------------------------------------------------------------------------------------------------------------------------
Ecuador Actual Morocco Actual UnitedKingdom Contractual
----------------------------------------------------------------------------------------------------------------------------
Egypt Actual Namibia Actual United States See 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
----------------------------------------------------------------------------------------------------------------------------
19
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 Interest Contractual Contractual N/A Actual
-----------------------------------------------------------------------------------------------------------------------------
Variable Rate Interest Contractual Contractual N/A Actual
-----------------------------------------------------------------------------------------------------------------------------
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.
20
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.
21
EXHIBIT B -- FUNDS TRANSFER OPERATING GUIDELINES
- 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.
- 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.
- 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.
- 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.
- 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.
- 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
22
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.
- 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.
- 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.
- 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.
- 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.
23
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.
24
[] 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
25
--------------------------------------
Facsimile Number
--------------------------------------
SWIFT Number
(FUND NAME)
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
00
Xxxxxxxxx Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der Oesterreichischen --
Sparkassen AG
Bahrain The British Bank of the Middle East (as delegate of the --
Hongkong and Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Generale de Banque --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano S.A. --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada Canada Trustco Mortgage Company --
Chile Citibank, N.A. --
People's The Hongkong and Shanghai Banking Corporation --
Republic of Limited Shanghai and Shenzhen branches
China
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
00
Xxxxxxx Xxx Xxxxxx Xxxx --
Xxxxxxx 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, System for Monitoring Transactions
in Securities in Book-Entry Form
Hong Kong Standard Chartered Bank --
Hungary Citibank Budapest Rt- --
Iceland Icebank Ltd.
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, Ltd. --
28
Japan The Daiwa Bank, Limited; The Fuji Bank Limited
Japan Securities Depository
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 The Hongkong and Shanghai Banking --
Korea Corporation Limited
Latvia JSC Hansabank-Latvija --
Lebanon British Bank of the Middle East --
(as delegate of the Hongkong and
Shanghai Banking Corporation Limited)
Lithuania Vilniaus Bankas AB --
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. --
29
Philippines Standard Chartered Bank --
Poland Citibank Poland S.A. --
Bank Polska Kasa Opieki S.A.
Portugal Banco Comercial Portugues --
Romania ING Bank, N.V. --
Russia Credit Suisse First Boston, AO, Moscow --
(as delegate of Credit Suisse First Boston, Zurich)
Singapore The Development Bank of Singapore Ltd. --
Slovak Ceskoslovenska Obchodna Banka A.S. --
Republic
Slovenia Banka Creditanstalt d.d. --
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 UBS AS --
Taiwan - Central Trust of China --
R.O.C.
Thailand Standard Chartered Bank --
Trinidad Republic Bank Ltd. --
& Tobago
Tunisia Banque Internationale Arabe de Tunisie --
00
Xxxxxx Xxxxxxxx, X.X.; Xxxxxxx Xxxx --
Xxxxxxx ING Bank, Ukraine --
United State Street Bank and Trust Company, --
Kingdom London Branch
Uruguay Citibank, N.A. --
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
Euroclear (The Euroclear System)/State Street London Limited
Cedel, S.A. (Cedel Bank, societe anonyme)/State Street London Limited
INTERSETTLE (for EASDAQ Securities)
00
Xxxxxxxxx -Xxxx xx Xxxxxxx S.A.
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 -Companhia Brasileira de Liquidac, ao e
-Custodia (CBLC)
-Bolsa de Valores de Rio de Janeiro
-All SSB clients presently use CBLC
-Central de Custodia e de Liquidacao Financeira de Titulos
-Banco Central do Brasil, Sistema Especial de Liquidacao e Custodia
Bulgaria -Central Depository AD
-Bulgarian National Bank
Canada -The Canadian Depository for Securities Limited
People's Republic -Shanghai Securities Central Clearing and Registration Corporation;
of China -Shenzhen Securities Central Clearing Co., Ltd.
Croatia Ministry of Finance; - National Bank of Croatia
Czech Republic -Stredisko cennych papiru(degree);
-Czech National Bank
Denmark -Vaerdipapircentralen (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
(SICOVAM)
Germany -The Deutscher Borse Clearing AG
32
Greece -The Central Securities Depository (Apothetirion Titlon AE)
Hong Kong -The Central Clearing and Settlement System;
-Central Money Markets Unit
Hungary -The Central Depository and Clearing House
(Budapest) Ltd.(KELER) [Mandatory for Gov't
Bonds only; SSB does not use for other
securities]
India -The National Securities Depository Limited
Indonesia -Bank of Indonesia
Ireland -The Central Bank of Ireland, Securities Settlement Office
Israel -The Tel Aviv Stock Exchange Clearing House Ltd.;
-Bank of Israel
Italy -Monte Titoli S.p.A.;
-Banca d'Italia
Japan -Bank of Japan Net System
Jamaica -The Jamaican Central Securities Depository
Kenya -Central Bank of Kenya
Republic of Korea -Korea Securities Depository Corporation
Latvia -The Latvian Central Depository
Lebanon -The Custodian and Clearing Center of Financial Instruments for Lebanon and the
Middle East
(MIDCLEAR) X.X.X.; -The Central Bank of Lebanon
Lithuania -The Central Securities Depository of Lithuania
Malaysia -Malaysian Central Depository Sdn. Bhd.;
-Bank Negara Malaysia, Scripless Securities Trading and Safekeeping Systems
Mauritius -The Central Depository & Settlement Co. Ltd.
33
Mexico -S.D. INDEVAL, S.A. de C.V.(Instituto para el Deposito de Valores);
Morocco -Maroclear (Pending publication of enabling legislation in the Moroccan
government Gazette)
The Netherlands -Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V. (ANECIGEF@)
-De Nederlandsche Bank N.V.
New Zealand -New Zealand Central Securities Depository Limited
Norway -Verdipapirsentralen (the Norwegian Registry of Securities)
Oman -Muscat Securities Market
Pakistan -Central Depository company of Pakistan Limited
Peru -Caja de Valores y Liquidaciones S.A. (CAVALI)
Philippines -The Philippines Central Depository Inc.
-The Registry of Scripless Securities (XXXX) of the Bureau of the Treasury
Poland -The National Depository of Securities (Krajowy Depozyt Papierow
Wartosciowych);
-Central Treasury Bills Registrar
Portugal -Central de Valores Mobiliarios (Central)
Romania -National Securities Clearing, Settlement and Depository Co.;
-Bucharest Stock Exchange Registry Division;
Singapore -The Central Depository (Pte)Limited;
-Monetary Authority of Singapore
Slovak Republic -Stredisko Cennych Papierov;
-National Bank of Slovakia
Slovenia -Klirinsko Depotna Xxxxxx x.x.
South Africa -The Central Depository Limited
Spain -Servicio de Compensacion y Liquidacion de Valores, S.A.;
-Banco de Espana; Xxxxxxx xx Xxxxxxxxxxx xx Xxxxxx
00
Xxx Xxxxx -Central Depository System (Pvt) Limited
Sweden -Vardepapperscentralen AB (the Swedish Central Securities Depository)
Switzerland -Schweizerische Effekten - Giro AG;
-INTERSETTLE
Taiwan - R.O.C- -The Taiwan Securities Central Depository Company, Ltd.
Thailand -Thailand Securities Depository Company Limited
Tunisia -Societe Tunisienne Interprofessionelle de Compensation et de Depot de
Valeurs Mobilieres
-Central Bank of Tunisia;
-Tunisian Treasury
Turkey -Takas ve Saklama Bankasi A.S. (TAKASBANK)
-Central Bank of Turkey
Ukraine -The National Bank of Ukraine
United Kingdom -The Bank of England, The Central Gilts Office; The Central Moneymarkets
Office
Uruguay -Central Bank of Uruguay
Venezuela -Central Bank of Venezuela
Zambia -Lusaka Central Depository Limited
-Bank of Zambia
