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EXHIBIT 8
FORM OF
CUSTODY AND INVESTMENT ACCOUNTING AGREEMENT
THIS AGREEMENT made 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 x00
Xxxx 00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("Custodian"), and SENECA FUNDS,
a business trust organized and existing under the laws of the State of
Delaware, having its principal office and place of business at 000 Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, 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 as its
agent to perform certain investment accounting and recordkeeping functions; 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, mutually covenant and
agree as follows:
1. APPOINTMENT OF CUSTODIAN. Fund hereby constitutes and appoints
Custodian as:
A. Custodian of the securities and monies at any time owned by the Fund;
and
B. Agent to perform certain accounting and recordkeeping functions
relating to portfolio transactions required of a duly registered
investment company under Rule 31a of the Investment Company Act of 1940
(the "1940 Act") and to calculate the net asset value of the Fund.
2. REPRESENTATIONS AND WARRANTIES.
A. Fund hereby represents, warrants and acknowledges to Custodian:
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1. That it is a business 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
2. That it has the requisite power and authority under applicable
law, its Trust Agreement and its Bylaws to enter into this
Agreement; that it has taken all requisite action necessary to
appoint Custodian as custodian and investment accounting and
recordkeeping agent for the Fund; that this Agreement has been
duly executed and delivered by Fund; and that this Agreement
constitutes a legal, valid and binding obligation of Fund,
enforceable in accordance with its terms.
B. Custodian hereby represents, warrants and acknowledges to Fund:
1. That it is a trust company duly organized and existing and in
good standing under the laws of the State of Missouri, and that
it is and will remain throughout the term of this Agreement a
"bank" within the meaning of Section 2 (a)(5) of the 1940 Act,
and otherwise qualified to act as a custodian under the 1940 Act;
and
2. That it has the requisite power and authority under applicable
law, its Charter and its Bylaws to enter into and perform this
Agreement; that this Agreement has been duly executed and
delivered by Custodian; and that this Agreement constitutes a
legal, valid and binding obligation of Custodian, enforceable in
accordance with its terms.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
A. Delivery of Assets
Except as permitted by the 1940 Act, Fund will deliver or cause to be
delivered to 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 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.
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B. Delivery of Accounts and Records
Fund shall turn over or cause to be turned over to Custodian all of the
Fund's relevant accounts and records previously maintained. Custodian
shall be entitled to rely conclusively on the completeness and
correctness of the accounts and records turned over to it, 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, or to
provide in a timely manner, any accounts, records or information needed
by the Custodian to perform its functions hereunder.
C. Delivery of Assets to Third Parties
Custodian will receive delivery of and keep safely the assets of Fund
delivered to it from time to time segregated in a separate account, and
if Fund is comprised of more than one portfolio of investment
securities (each a "Portfolio") Custodian shall keep 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 Fund, by Portfolio if applicable. 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 subcustodians appointed under Section 3.S. of
this Agreement, for which Custodian remains responsible to the extent
provided in Section 3.S. hereof. Custodian may participate directly or
indirectly through a subcustodian in the Depository Trust Company
(DTC), Treasury/Federal
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Reserve Book Entry System (Fed System), Participant Trust Company (PTC)
or other depository approved by the Fund (as such entities are defined
at 17 CFR Section 270.17f-4(b)) (each a "Depository" and collectively,
the "Depositories").
D. Registration of Securities
The Custodian shall at all times hold registered securities of the Fund
in the name of the Custodian, the Fund, or a nominee of either of them,
unless specifically directed by instructions to hold such registered
securities in so-called "street name," provided that, in any event, all
such securities and other assets shall be held in an account of the
Custodian containing only assets of the Fund, or only assets held by
the Custodian as a fiduciary or custodian for customers, and provided
further, that the records of the Custodian at all times shall indicate
the Fund or other customer for which such securities and other assets
are held in such account and the respective interests therein. If,
however, the Fund directs the Custodian to maintain securities in
"street name", notwithstanding anything contained herein to the
contrary, the Custodian shall be obligated only to utilize its best
efforts to timely collect income due the Fund on such securities and to
notify the Fund of relevant corporate actions including, without
limitation, pendency of calls, maturities, tender or exchange offers.
All securities, and the 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 arising solely out of Custodian's or
such nominee's status as a shareholder of record of securities held in
custody.
E. Exchange of Securities
Upon receipt of instructions as defined herein 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
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otherwise, and will deposit any such securities in accordance with the
terms of any reorganization or protective 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 share 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 - Other Than Options and Futures
Fund will, on each business day on which a purchase of securities
(other than options and futures) shall be made by it, deliver to
Custodian instructions which shall specify with respect to each such
purchase:
1. If applicable, the name of the Portfolio making such purchase;
2. The name of the issuer and description of the security;
3. The number of shares and the principal amount purchased, and
accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage commission, taxes
and other expenses payable in connection with the purchase;
7. The total amount payable upon such purchase;
8. The name of the person from whom or the broker or dealer through
whom the purchase was made; and
9. Whether the security is to be received in certificated form or
via a specified Depository.
In accordance with such instructions, Custodian will pay for out of
monies held for the account of Fund, but only insofar as such monies
are available 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, provided, however, that
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Custodian agrees to notify the Fund of each such advance by no later
than the following business day. Except as otherwise instructed by
Fund, such payment shall be made by the Custodian only upon receipt of
securities: (a) by the Custodian; (b) by a clearing corporation of a
national exchange of which the Custodian is a member; or (c) by a
Depository. Notwithstanding the foregoing, (i) in the case of a
repurchase agreement, the Custodian may release funds to a Depository
prior to the receipt of advice from the Depository that the securities
underlying such repurchase agreement have been transferred by
book-entry into the account maintained with such Depository by the
Custodian, on behalf of its customers, provided that the Custodian's
instructions to the Depository require that the Depository make payment
of such funds only upon transfer by book-entry of the securities
underlying the repurchase agreement in such account; (ii) in the case
of time deposits, call account deposits, currency deposits and other
deposits, foreign exchange transactions, futures contracts or options,
the Custodian may make payment therefor before receipt of an advice or
confirmation evidencing said deposit or entry into such transaction;
and (iii) in the case of the purchase of securities, the settlement of
which occurs outside of the United States of America, the Custodian may
make, or cause a subcustodian appointed pursuant to Section 3.S.2. of
this Agreement to make, payment therefor in accordance with generally
accepted local custom and market practice.
G. Sales and Deliveries of Investments of the Fund - Other than Options
and Futures
Fund will, on each business day on which a sale of investment
securities (other than options and futures) of Fund has been made,
deliver to Custodian instructions specifying with respect to each such
sale:
1. If applicable, the name of the Portfolio making such sale;
2. The name of the issuer and description of the securities;
3. The number of shares and principal amount sold, and accrued
interest, if any;
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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. Except as otherwise instructed by Fund, such
delivery shall be made upon receipt of payment therefor: (a) in such
form as is satisfactory to the Custodian; (b) credit to the account of
the Custodian with a clearing corporation of a national securities
exchange of which the Custodian is a member; or (c) credit to the
account of the Custodian, on behalf of its customers, with a
Depository. Notwithstanding the foregoing: (i) in the case of
securities held in physical form, such securities shall be delivered in
accordance with "street delivery custom" to a broker or its clearing
agent; or (ii) in the case of the sale of securities, the settlement of
which occurs outside of the United States of America, the Custodian may
make, or cause a subcustodian appointed pursuant to Section 3.S.2. of
this Agreement to make, payment therefor in accordance with generally
accepted local custom and market practice.
H. Purchases or Sales of Options and Futures
Fund will, on each business day on 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. If applicable, the name of the Portfolio making such purchase or
sale;
2. Security Options
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a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded; and
j. Name and address of the broker or dealer through whom
the sale or purchase was made.
3. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising,
expiring or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased; and
j. The name and address of the broker or dealer through
whom the sale or purchase was made, or other applicable
settlement instructions.
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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. Options on Index Future Contracts
a. The underlying index future contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded.
I. Securities Pledged or Loaned
If specifically allowed for in the prospectus of Fund, and subject to
such additional terms and conditions as Custodian may require:
1. Upon receipt of instructions, Custodian will release or cause to
be released securities held in custody to the pledgee designated
in
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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 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 Fund in writing.
K. Deposit Accounts
Custodian will open and maintain one or more special purpose deposit
accounts in the name of Custodian ("Accounts"), subject only to draft
or order by Custodian upon receipt of instructions. All monies received
by Custodian from or for the account of Fund shall be deposited in said
Accounts. Barring events not in the control of the Custodian such as
strikes, lockouts or labor disputes, riots, war or equipment or
transmission
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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 an 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 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 Fund in that amount.
Custodian may open and maintain Accounts in its own banking department,
or in such other banks or trust companies as may be designated by it or
by Fund in writing, all such Accounts, however, to be in the name of
Custodian and subject only to its draft or order. Funds received and
held for the account of different Portfolios shall be maintained in
separate Accounts established for each Portfolio.
L. Income and other Payments to Fund
Custodian will:
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
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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 should reasonably be expected to have knowledge;
and
b. the endorsement for collection, in the name of 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 share dividends, rights and 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
On the declaration of any dividend or other distribution on the shares
of beneficial interest of Fund ("Fund Shares") by the Trustees of Fund,
Fund shall deliver to Custodian instructions with respect thereto. On
the date specified in such instructions 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 specified in such instructions.
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N. Shares of Fund Purchased by Fund
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 Fund
Shares have been cancelled and removed from the shareholder records.
O. Shares of Fund Purchased from Fund
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
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
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any consent, approval or waiver with respect thereto, or take any other
similar action.
Q. Disbursements
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.
R. Daily Statement of Accounts
Custodian will, within a reasonable time, render to Fund a detailed
statement of the amounts received or paid and of securities received or
delivered for the account of Fund during each business 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. Custodian will 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, Custodian will permit federal and 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 permit such
persons as are authorized by Fund, including Fund's independent public
accountants, reasonable access to such records or to provide reasonable
confirmation of the contents of such records, and to permit such
agencies to examine the books, records and securities held by such
subcustodian which relate to Fund.
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S. Appointment of Subcustodians
1. Notwithstanding any other provisions of this Agreement, all or
any of the monies or securities of Fund may be held in
Custodian's own custody or in the custody of one or more other
banks or trust companies acting as subcustodians as may be
selected by Custodian. Any such subcustodian selected by the
Custodian must have the qualifications required for a custodian
under the 1940 Act, as amended. Custodian shall be responsible to
the Fund for any loss, damage or expense suffered or incurred by
the Fund resulting from the actions or omissions of any
subcustodians selected and appointed by Custodian (except
subcustodians appointed at the request of Fund and as provided in
Subsection 2 below) to the same extent Custodian would be
responsible to the Fund under Section 5. of this Agreement if it
committed the act or omission itself. Upon request of the Fund,
Custodian shall be willing to contract with other subcustodians
reasonably acceptable to the Custodian for purposes of (i)
effecting third-party repurchase transactions with banks,
brokers, dealers, or other entities through the use of a common
custodian or subcustodian, or (ii) providing depository and
clearing agency services with respect to certain variable rate
demand note securities, or (iii) for other reasonable purposes
specified by Fund; provided, however, that the Custodian shall be
responsible to the Fund for any loss, damage or expense suffered
or incurred by the Fund resulting from the actions or omissions
of any such subcustodian only to the same extent such
subcustodian is responsible to the Custodian. The Fund shall be
entitled to review the Custodian's contracts with any such
subcustodians appointed at the request of Fund. Custodian shall
be responsible to the Fund for any loss, damage or expense
suffered or incurred by the Fund resulting from the actions or
omissions of any Depository only to the same extent such
Depository is responsible to Custodian.
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2. Notwithstanding any other provisions of this Agreement, Fund's
foreign securities (as defined in Rule 17f-5(c)(1) under the 0000
Xxx) and Fund's cash or cash equivalents, in amounts deemed by
the Fund to be reasonably necessary to effect Fund's foreign
securities transactions, may be held in the custody of one or
more banks or trust companies acting as subcustodians, and
thereafter, pursuant to a written contract or contracts as
approved by Fund's Trustees, may be transferred to accounts
maintained by any such subcustodian with eligible foreign
custodians, as defined in Rule 17f-5(c)(2). Custodian shall be
responsible to the Fund for any loss, damage or expense suffered
or incurred by the Fund resulting from the actions or omissions
of any foreign subcustodians only to the same extent the foreign
subcustodian is liable to the domestic subcustodian with which
the Custodian contracts for foreign subcustody purposes.
T. Accounts and Records
Custodian will prepare and maintain, with the direction and as
interpreted by the Fund, Fund's accountants and/or other advisors, in
complete, accurate and current form all accounts and records (i)
required to be maintained by Fund with respect to portfolio
transactions under Rule 31a of the 1940 Act, (ii) required to be
maintained as a basis for calculation of the Fund's net asset value,
and (iii) as otherwise agreed upon between the parties. Custodian will
preserve said records in the manner and for the periods prescribed in
the 1940 Act or for such longer period as is agreed upon by the
parties. Custodian relies upon Fund to furnish, in writing or its
electronic or digital equivalent, accurate and timely information
needed by Custodian to complete Fund's records and perform daily
calculation of the Fund's net asset value. Custodian shall incur no
liability and Fund shall indemnify and hold harmless Custodian from and
against any liability arising from any failure of Fund to furnish such
information in a timely and accurate manner, even if Fund subsequently
provides accurate but untimely information. It shall be the
responsibility of Fund to furnish
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Custodian with the declaration, record and payment dates and amounts of
any dividends or income and any other special actions required
concerning each of its securities when such information is not readily
available from generally accepted securities industry services or
publications.
U. Accounts and Records Property of Fund
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 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, in any requested review of Fund's accounts and records
but shall be reimbursed by Fund 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, Custodian will supply information from the books and
records it maintains for Fund that Fund needs for tax returns,
questionnaires, periodic reports to shareholders and such other reports
and information requests as Fund and Custodian shall agree upon from
time to time.
V. Adoption of Procedures
Custodian and Fund may from time to time adopt procedures as they agree
upon, and Custodian may conclusively assume that no procedure approved
or directed by Fund or its accountants or other advisors conflicts with
or violates any requirements of its prospectus, Trust Agreement,
Bylaws, any applicable law, rule or regulation, or any order, decree or
agreement by which Fund may be bound. Fund will be responsible to
notify Custodian of any changes in statutes, regulations, rules,
requirements or policies which might necessitate changes in Custodian's
responsibilities or procedures.
W. Calculation of Net Asset Value
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Custodian will calculate Fund's net asset value, in accordance with
Fund's prospectus. Custodian will price the securities and foreign
currency holdings of Fund for which market quotations are available by
the use of outside services designated by Fund which are normally used
and contracted with for this purpose; all other securities and foreign
currency holdings will be priced in accordance with Fund's
instructions. Custodian will have no responsibility for the accuracy of
the prices quoted by these outside services or for the information
supplied by Fund or for acting upon such instructions.
X. Advances
In the event Custodian or any subcustodian shall, in its sole
discretion, advance cash or securities 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, the advance shall be payable by the Fund on
demand. Any such cash advance shall 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 Custodian and such subcustodian a lien on and security
interest in all property at any time held for the account of the
applicable Portfolio, including without limitation all assets acquired
with the amount advanced. Should the Fund fail to promptly repay the
advance, the Custodian and such subcustodian shall be entitled to
utilize available cash and to dispose of such Portfolio's assets
pursuant to applicable law to the extent necessary to obtain
reimbursement of the amount advanced and any related overdraft charges.
Y. Exercise of Rights; Tender Offers
Upon receipt of instructions, the Custodian shall: (a) 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 securities, cash or
other assets, if any, are to be delivered to the Custodian; and (b)
deposit securities upon invitations for tenders thereof, provided that
the consideration for such securities is to be
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paid or delivered to the Custodian or the tendered securities are to be
returned to the Custodian.
Z. Custodian shall, upon receipt of instructions, establish and maintain a
segregated account or accounts for and on behalf of the Fund into which
may be transferred cash and/or securities, including securities
maintained in an account by Custodian pursuant to Section 3.C. hereof,
(i) in accordance with any agreement among the Fund, the Custodian, and
a broker-dealer that is registered under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange
Act), relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange or the
Commodity Futures Trading Commission or any registered contract market,
or of any similar organization, regarding escrow or other arrangements
in connection with transactions by the Fund, (ii) for purposes of
segregating cash or government securities in connection with options
purchased, sold or written by the Fund or commodity futures contracts
or options thereon purchased or sold by the Fund, (iii) for the
purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or
releases of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment companies,
and (iv) for other proper corporate purposes.
4. INSTRUCTIONS.
A. The term "instructions", as used herein, means written (including
telecopied or telexed) or oral instructions which Custodian reasonably
believes were given by a designated representative of Fund. Fund shall
deliver to Custodian, prior to delivery of any assets to Custodian and
thereafter from time to time as changes therein are necessary, written
instructions naming one or more designated representatives to give
-19-
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instructions in the name and on behalf of Fund, which instructions may
be received and accepted 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 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, Custodian will be under no
obligation to inquire into the right of such person, acting alone, to
give any instructions whatsoever which Custodian may receive from such
person. If Fund fails to provide Custodian any such instructions naming
designated representatives, any instructions received by Custodian from
a person reasonably believed to be an appropriate representative of
Fund shall constitute valid and proper instructions hereunder.
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.
C. If Custodian shall provide Fund direct access to any computerized
recordkeeping and reporting system used hereunder or if Custodian and
Fund shall agree to utilize any electronic system of communication,
Fund shall be fully responsible for any and all consequences of the use
or misuse of the terminal device, passwords, access instructions and
other means of access to such system(s) which are utilized by, assigned
to or otherwise made available to the Fund. Fund agrees to implement
and enforce appropriate security policies and procedures to prevent
unauthorized or improper access to or use of such system(s). Custodian
shall be fully protected in acting hereunder upon any instructions,
communications, data or other information received by Custodian by such
means as fully
-20-
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and to the same effect as if delivered to Custodian by written
instrument signed by the requisite authorized representative(s) of
Fund. Fund shall indemnify and hold Custodian harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability which may be suffered or incurred by Custodian
as a result of the use or misuse, whether authorized or unauthorized,
of any such system(s) by Fund or by any person who acquires access to
such system(s) through the terminal device, passwords, access
instructions or other means of access to such system(s) which are
utilized by, assigned to or otherwise made available to the Fund,
except to the extent attributable to any negligence or willful
misconduct by Custodian.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
A. Custodian shall at all times use reasonable care and due diligence and
act in good faith in performing its duties under this Agreement.
Custodian shall not be responsible for, and the Fund shall indemnify
and hold Custodian harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability
which may be asserted against Custodian, incurred by Custodian or for
which Custodian may be held to be liable, arising out of or
attributable to:
1. All actions taken by Custodian pursuant to this Agreement or any
instructions provided to it hereunder, provided that Custodian
has acted in good faith and with due diligence and reasonable
care; and
2. The Fund's refusal or failure to comply with the terms of this
Agreement (including without limitation the Fund's failure to pay
or reimburse Custodian under this indemnification provision), the
Fund's negligence or willful misconduct, or the failure of any
representation or warranty of the Fund hereunder to be and remain
true and correct in all respects at all times.
B. The Fund shall not be responsible for, and Custodian shall hold
harmless and indemnify Fund from and against any and all losses,
damages, costs, charges, counsel fees, payments, expenses, and
liabilities that may be
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asserted against the Fund, incurred by the Fund, or for which the Fund
may be held to be liable, arising out of or attributable to Custodian's
refusal or failure to comply with the terms of this Agreement
(including without limitation Custodian's failure to pay or reimburse
the Fund under this indemnification provision), Custodian's negligence
or willful misconduct, or the failure of any representation or warranty
of Custodian to be and remain true and correct in all respects at all
times.
C. Custodian may request and obtain at the expense of Fund 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 accountants or counsel, it may in its discretion, with notice to
the Fund, not act according to such instructions.
D. Custodian may rely upon the advice and statements of Fund, Fund's
accountants and officers or other authorized individuals, 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 advice and statements.
E. If Fund requests Custodian in any capacity to take any action which
involves the payment of money by Custodian, or which might make it or
its nominee liable for payment of monies or in any other way, Custodian
shall be indemnified and held harmless by Fund against any liability on
account of such action (except to the extent arising out of Custodian's
negligence, willful misconduct or breach of this Agreement); provided,
however, that nothing herein shall obligate Custodian to take any such
action except in its sole discretion.
F. Custodian shall be protected in acting as custodian hereunder upon any
instructions, advice, notice, request, consent, certificate or other
instrument or paper appearing to it to be genuine and to have been
-22-
23
properly executed. Custodian shall be entitled to receive upon request
as conclusive proof of any fact or matter required to be ascertained
from Fund hereunder a certificate signed by an officer or designated
representative of Fund. Fund shall also provide Custodian instructions
with respect to any matter concerning this Agreement requested by
Custodian.
G. 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 of any securities or foreign
currency positions 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 or foreign currency
positions 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 Fund Shares, 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.
H. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer, clearinghouse
funds, uncollected funds, or instrument for the payment of money to be
received by it on behalf of Fund until Custodian actually receives such
money; provided, however, that it shall advise Fund promptly if it
fails to receive any such money in the ordinary course of business and
shall cooperate with Fund toward the end that such money shall be
received.
I. Except as provided in Section 3.S., 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.
-23-
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J. Neither party shall be responsible or liable for the failure or delay
in performance of its obligations under this Agreement, or those of any
entity for which it is responsible hereunder, arising out of or caused,
directly or indirectly, by circumstances beyond the affected entity's
reasonable control, including, without limitation: any interruption,
loss or malfunction of any utility, transportation, computer (hardware
or software) or communication service; inability to obtain labor,
material, equipment or transportation, or a delay in mails;
governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes, freezes,
floods, fires, tornados, acts of God or public enemy, revolutions, or
insurrection; provided, however, that such party shall make reasonable
efforts to remove such circumstances as soon as practicable to the
extent reasonably possible for such party to do so.
K. EXCEPT FOR VIOLATIONS OF SECTION 9, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO ANYONE,
INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY, FOR CONSEQUENTIAL,
SPECIAL OR PUNITIVE DAMAGES FOR ANY ACT OR FAILURE TO ACT UNDER ANY
PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF THIS POSSIBILITY
THEREOF.
6. COMPENSATION. In consideration for its services hereunder as Custodian and
investment accounting and recordkeeping agent, Fund will pay to Custodian
such compensation as shall be set forth in a separate fee schedule to be
agreed to by Fund and Custodian from time to time. A copy of the initial
fee schedule is attached hereto and incorporated herein by reference.
Custodian shall also be entitled to receive, and Fund agrees to pay to
Custodian, on demand, reimbursement for Custodian's cash disbursements and
reasonable out-of-pocket costs and expenses, including attorney's fees,
incurred by Custodian in connection with the performance of services
hereunder. Custodian may charge such compensation against monies held by it
for the account of Fund. Custodian will also be entitled to charge against
any monies held by it for the account of
-24-
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Fund the amount of any loss, damage, liability, advance, overdraft or
expense for which it shall be entitled to reimbursement from Fund,
including but not limited to fees and expenses due to Custodian for other
services provided to the Fund by Custodian. Custodian will be entitled to
reimbursement by the Fund for the losses, damages, liabilities, advances,
overdrafts and expenses of subcustodians only to the extent that (i)
Custodian would have been entitled to reimbursement hereunder if it had
incurred the same itself directly, and (ii) Custodian is obligated to
reimburse the subcustodian therefor.
7. TERM AND TERMINATION. The initial term of this Agreement shall be for a
period of one (1) year. Thereafter, 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 Custodian its fees and
compensation due hereunder and its reimbursable disbursements, costs and
expenses paid or incurred to such date and Fund shall designate a successor
custodian by notice in writing to Custodian by the termination date. In the
event no written order designating a successor custodian has been delivered
to Custodian on or before the date when such termination becomes effective,
then Custodian may, at its option, 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 set forth in the
1940 Act and having not less that Two Million Dollars ($2,000,000)
aggregate capital, surplus and undivided profits, as shown by its last
published report, or apply to a court of competent jurisdiction for the
appointment of a successor custodian or other proper relief, or take any
other lawful action under the circumstances; provided, however, that Fund
shall reimburse Custodian for its costs and expenses, including reasonable
attorney's fees, incurred in connection therewith. Custodian will, upon
termination of this Agreement and payment of all sums due to Custodian from
Fund hereunder or otherwise, deliver to the successor custodian so
specified or appointed, or as specified by the court, at Custodian's
office, all securities then held by Custodian hereunder, duly endorsed and
in form for transfer, and all funds and other properties of Fund deposited
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26
with or held by Custodian hereunder, and Custodian will co-operate in
effecting changes in book-entries at all Depositories. Upon delivery to a
successor custodian or as specified by the court, Custodian will have no
further obligations or liabilities under this Agreement. Thereafter such
successor will be the successor custodian under this Agreement and will be
entitled to reasonable compensation for its services. In the event that
securities, funds and other properties remain in the possession of the
Custodian after the date of termination hereof owing to failure of the Fund
to appoint a successor custodian, the Custodian shall be entitled to
compensation as provided in the then-current fee schedule hereunder for its
services during such period as the Custodian retains possession of such
securities, funds and other properties, and the provisions of this
Agreement relating to the duties and obligations of the Custodian shall
remain in full force and effect.
8. NOTICES. Notices, requests, instructions and other writings addressed to
Fund at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, 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 addressed to Custodian at its
offices at 000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, 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 Custodian
hereunder.
9. CONFIDENTIALITY.
A. Fund shall preserve the confidentiality of the computerized investment
portfolio recordkeeping and accounting system used by Custodian (the
"Portfolio Accounting System") and the tapes, books, reference manuals,
instructions, records, programs, documentation and information of, and
other materials relevant to, the Portfolio Accounting System and the
business of Custodian ("Confidential Information"). Fund shall 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 to this Agreement, except as required by law
or
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regulation. Fund shall return all such Confidential Information to
Custodian upon termination or expiration of this Agreement.
B. Fund has been informed that the Portfolio Accounting System is licensed
for use by Custodian from DST Systems, Inc. ("Licensor"), and Fund
acknowledges that Custodian and Licensor have proprietary rights in and
to the Portfolio Accounting System and all other Custodian 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 Custodian and Licensor. Fund shall
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 shall so
inform employees and agents who have access to the Protected
Information or to any computer equipment capable of accessing the same.
Licensor is intended to be and shall be a third party beneficiary of
the Fund's obligations and undertakings contained in this paragraph.
10. MULTIPLE PORTFOLIOS. If Fund is comprised of more than one Portfolio:
A. Each Portfolio shall 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 by this
Agreement, every reference herein to the Fund shall be deemed to relate
solely to the particular Portfolio to which such transaction relates.
Under no circumstances shall 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
-27-
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separate agreement of each Portfolio is understood to be for clerical
convenience only and shall not constitute any basis for joining the
Portfolios for any reason.
B. Additional Portfolios may be added to this Agreement, provided that
Custodian consents to such addition. Rates or charges for each
additional Portfolio shall be as agreed upon by Custodian and Fund in
writing.
11. LIMITATION OF LIABILITY. Notice is hereby given that a copy of Fund's
Certificate of Trust 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 shall only be binding upon the
assets and property of Fund and shall not be binding upon any trustee,
officer or shareholder of Fund individually.
12. MISCELLANEOUS.
A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the
State of Missouri, without reference to the choice of laws principles
thereof.
B. All terms and provisions of this Agreement shall 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
shall continue after and survive the expiration, termination or
cancellation of this Agreement.
D. No provisions of the Agreement 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 of this Agreement or to enforce any rights resulting from
any breach of any of the terms or conditions of this Agreement,
including the payment of damages, shall not be construed as a
continuing or permanent waiver of any such terms, conditions, rights or
privileges, but the same
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29
shall 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 shall be effective unless contained in a
written instrument signed by the party sought to be charged.
F. The captions in the Agreement 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 shall be deemed an original but all of which together shall
constitute one and the same instrument.
H. If any provision of this Agreement shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement shall not be
affected thereby, and every provision of this Agreement shall remain in
full force and effect and shall remain enforceable to the fullest
extent permitted by applicable law.
I. This Agreement may not be assigned by either party hereto without the
prior written consent of the other party.
J. Neither the execution nor performance of this Agreement shall be deemed
to create a partnership or joint venture by and between Custodian and
Fund.
K. The parties hereto acknowledge that Custodian or its affiliates may
enter into one or more other agreements with the Fund pursuant to which
it or them provide services, and undertake obligations, not described
herein. Except as specifically provided herein, neither the execution
or delivery of, nor the performance or failure to perform under, nor
any provision of, this Agreement shall in any manner affect the rights,
obligations, or liabilities of either party hereto in any capacity
other than the capacity(ies) specifically contemplated by this
Agreement, including under any such other agreements.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:
------------------------------
Title:
---------------------------
SENECA FUNDS
By:
------------------------------
Title:
---------------------------
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EXHIBIT A
INVESTORS FIDUCIARY TRUST COMPANY
AVAILABILITY SCHEDULE BY TRANSACTION TYPE
=====================================================================================================
TRANSACTION DTC PHYSICAL FED
-----------------------------------------------------------------------------------------------------
TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE CREDIT DATE FUNDS TYPE
=====================================================================================================
Calls Puts As Received C or F* As Received C or F*
-----------------------------------------------------------------------------------------------------
Maturities As Received C or F* Mat. Date C or F* Mat. Date F
-----------------------------------------------------------------------------------------------------
Tender Reorgs. As Received C As Received C N/A
-----------------------------------------------------------------------------------------------------
Dividends Paydate C Paydate C N/A
-----------------------------------------------------------------------------------------------------
Floating Rate Int. Paydate C Paydate C N/A
-----------------------------------------------------------------------------------------------------
Floating Rate Int. N/A As Rate Received C N/A
(No Rate)
-----------------------------------------------------------------------------------------------------
Mtg. Backed P&I Paydate C Paydate + 1 Bus. C Paydate F
Day
-----------------------------------------------------------------------------------------------------
Fixed Rate Int. Paydate C Paydate C Paydate F
-----------------------------------------------------------------------------------------------------
Euroclear N/A C Paydate C
=====================================================================================================
Legend
C = Clearinghouse Funds
F = Fed Funds
N/A = Not Applicable
* Availability based on how received.
