Exhibit (8)
CUSTODIAN CONTRACT
BETWEEN
CIGNA ANNUITY FUNDS GROUP
AND
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
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Page
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1. Employment of Custodian and Property to be Held By
It.....................................................................1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian......................................2
2.1 Holding Securities............................................2
2.2 Delivery of Securities........................................3
2.3 Registration of Securities....................................8
2.4 Bank Accounts.................................................8
2.5 Payments for Shares...........................................9
2.6 Availability of Federal Funds.................................9
2.7 Collection of Income.........................................10
2.8 Payment of Fund Monies.......................................11
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased..............................13
2.10 Payments for Repurchases or Redemptions
of Shares of the Fund........................................14
2.11 Appointment of Agents........................................14
2.12 Deposit of Fund Assets in Securities Systems.................15
2.12A Fund Assets Held in the Custodian's Direct
Paper System.................................................18
2.13 Segregated Account...........................................20
2.14 Ownership Certificates for Tax Purposes......................21
2.15 Proxies......................................................21
2.16 Communications Relating to Portfolio
Securities...................................................22
2.17 Proper Instructions..........................................22
2.18 Actions Permitted Without Express Authority..................23
2.19 Evidence of Authority........................................24
3. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net
Income................................................................24
4. Records...............................................................25
5. Opinion of Fund's Independent Accountants.............................26
6. Reports to Fund by Independent Public Accountants.....................26
7. Compensation of Custodian.............................................27
8. Responsibility of Custodian...........................................27
9. Effective Period, Termination and Amendment...........................28
10. Successor Custodian...................................................30
11. Interpretive and Additional Provisions................................31
12. Additional Funds......................................................32
13. Massachusetts Law to Apply............................................32
14. Prior Contracts.......................................................32
15. Trust Liability.......................................................32
CUSTODIAN CONTRACT
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This Contract between CIGNA Annuity Funds Group, a business trust
organized and existing under the laws of Massachusetts, having its principal
place of business at 0000 Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000,
hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts corporation, having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, hereinafter called the
"Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to Issue shares in separate
series, with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund presently intends to offer shares in six
series, the CIGNA Annuity Equity Fund, CIGNA Annuity Income Fund, CIGNA Annuity
Money Market Fund, CIGNA Annuity Growth and Income Fund, CIGNA Annuity
Aggressive Equity Fund, and the Companion Fund (such series together with all
other series subsequently established by the Fund and made subject to this
Contract in accordance with paragraph 12, being herein referred to as the
"Portfolio(s)");
NOW THEREFOR, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
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The Fund hereby employs the Custodian as the custodian of its
assets of the Portfolios of the Fund pursuant to the provisions of the
Declaration of Trust. The Fund agrees to deliver to the Custodian all securities
and cash owned by it, and
all payments of income, payments of principal or capital distributions received
by it with respect to all securities owned by the Portfolios from time to time,
and the cash consideration received by it for such new or treasury shares of
beneficial interest ("Shares") of the Portfolios as may be issued or sold from
time to time. The Custodian shall not be responsible for any property of a
Portfolio held or received by the Portfolio and not delivered to the Custodian.
Upon receipt of 'Proper Instructions" (within the meaning of
Section 2.17), the Custodian shall from time to time employ one or more
sub-custodians, but only in accordance with an applicable vote by the Board of
Trustees of the Fund, and provided that the Custodian shall have no more or less
responsibility or liability to the Fund on account of any actions or omissions
of any sub-custodian so employed than any such sub-custodian has to the
Custodian.
2. Duties of the Custodian with Respect to Property of the Fund Held
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By the Custodian
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2.1 Holding Securities. The Custodian shall hold and physically
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segregate for the account of each Portfolio all non-cash
property, including all securities owned by such Portfolio, other
than (a) securities which are maintained pursuant to Section 2.12
in a clearing agency which acts as a securities depository or in
a book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "Securities System"
and (b) commercial paper of an issuer for which State
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Xxxxxx Bank and Trust Company acts as issuing and paying agent
("Direct Paper") which is deposited and/or maintained in the
Direct Paper System of the Custodian pursuant to Section 2.12A.
2.2 Delivery of Securities. The Custodian shall release and
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deliver securities owned by a Portfolio held by the Custodian or
in a Securities System account of the Custodian or in the
Custodian's Direct Paper book entry system account ("Direct Paper
System Account") only upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by the
parties, and only in the following cases:
1) Upon sale of such securities for the account
of the Portfolio and receipt of payment
therefor;
2) Upon the receipt of payment in connection
with any repurchase agreement related to
such securities entered into by the
Portfolio;
3) In the case of a sale effected through a
Securities System, in accordance with the
provisions of Section 2.12 hereof;
4) To the depository agent in connection with
tender or other similar offers for
securities of the Portfolio;
5) To the issuer thereof or its agent when such
securities are called, redeemed, retired or
otherwise become payable; provided that, in
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any such case, the cash or other
consideration is to be delivered to the
Custodian;
6) To the issuer thereof, or its agent, for
transfer into the name of the Portfolio or
into the name of any nominee or nominees of
the Custodian or into the name or nominee
name of any agent appointed pursuant to
Section 2.11 or into the name or nominee
name of any sub-custodian appointed pursuant
to Article 1; or for exchange for a
different number of bonds, certificates or
other evidence representing the same
aggregate face amount or number of units;
provided that, in any such case, the new
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securities are to be delivered to the
Custodian;
7) Upon the sale of such securities for the
account of the Portfolio, to the broker or
its clearing agent, against a receipt, for
examination in accordance with "street
delivery" custom; provided that in any such
case, the Custodian shall have no
responsibility or liability for any loss
arising from the delivery of such securities
prior to receiving payment for such
securities except as may arise from the
Custodian's own negligence or willful
misconduct;
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8) For exchange or conversion pursuant to any
plan of merger, consolidation,
recapitalization, reorganization or
readjustment of the securities of the issuer
of such securities, or pursuant to
provisions for conversion contained in such
securities, or pursuant to any deposit
agreement; provided that, in any such case,
the new securities and cash, if any, are to
be delivered to the Custodian;
9) In the case of warrants, rights or similar
securities, the surrender thereof in the
exercise of such warrants, rights or similar
securities or the surrender of interim
receipts or temporary securities for
definitive securities; provided that, in any
such case, the new securities and cash, if
any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of
securities made by the Portfolio, but only
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against receipt of adequate collateral as
agreed upon from time to time by the
Custodian and the Fund on behalf of the
Portfolio, which may be in the form of cash
or obligations issued by the United States
government, its agencies or instrumental-
ities, except that in connection with any
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loans for which collateral is to be
credited to the Custodian's account in the
book-entry system authorized by the U.S.
Department of the Treasury, the Custodian
will not be held liable or responsible for
the delivery of securities owned by the
Portfolio prior to the receipt of such
collateral;
11) For delivery as security in connection with
any borrowings by the Portfolio requiring a
pledge of assets by the Portfolio, but only
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against receipt of amounts borrowed;
12) For delivery in accordance with the
provisions of any agreement among the Fund
on behalf of the Portfolio, the Custodian
and a broker-dealer registered under the
Securities Exchange Act of 1934 (the
"Exchange Act") and a member of The National
Association of Securities Dealers, Inc.
("NASD"), relating to compliance with the
rules of The Options Clearing Corporation
and of any registered national securities
exchange, or of any similar organization or
organizations, regarding escrow or other
arrangements in connection with transactions
by the Portfolio of the Fund;
13) For delivery in accordance with the
provisions of any agreement among the Fund
on
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behalf of the Portfolio, the Custodian, and
a Futures Commission Merchant registered
under the Commodity Exchange Act, relating
to compliance with the rules of the
Commodity Futures Trading Commission and/or
any Contract Market, or any similar
organization or organizations, regarding
account deposits in connection with
transactions by the Portfolio of the Fund;
14) Upon receipt of instructions from the
transfer agent ("Transfer Agent") for the
Fund, for delivery to such Transfer Agent or
to the holders of shares in connection with
distributions in kind, as may be described
from time to time in the Fund's currently
effective prospectus and statement of
additional information ("prospectus"), in
satisfaction of requests by holders of Share
for repurchase or redemption; and
15) For any other proper corporate purpose, but
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only upon receipt of, in addition to Proper
----
Instructions, a certified copy of a
resolution of the Board of Trustees or of
the Executive Committee signed by an officer
of the Fund and certified by the Secretary
or an Assistant Secretary, specifying the
securities to be delivered, setting forth
the
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purpose for which such delivery is to be
made, declaring such purpose to be a proper
corporate purpose, and naming the person or
persons to whom delivery of such securities
shall be made.
2.3 Registration of Securities. Securities held by the Custodian
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(other than bearer securities) shall be registered in the name of
the Portfolio or in the name of any nominee of the Portfolio or
of any nominee of the Custodian which nominee shall be assigned
exclusively to the Portfolio, unless the Fund has authorized in
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writing the appointment of a nominee to be used in common with
other registered investment companies having the same investment
adviser as the Portfolio, or in the name or nominee name of any
agent appointed pursuant to Section 2.11 or in the name or
nominee name of any sub-custodian appointed pursuant to Article
1. All securities accepted by the Custodian on behalf of the
Portfolio under the terms of this Contract shall be in "street
name" or other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate
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bank account or accounts in the name of each Portfolio of the
Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in such
account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Portfolio, other
than cash
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maintained by the Portfolio in a bank account established and
used in accordance with Rule 17f-3 under the Investment Company
Act of 1940. Funds held by the Custodian for a Portfolio may be
deposited by it to its credit as Custodian in the Banking
Department of the Custodian or In such other banks or trust
companies as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust
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company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust
company and the funds to be deposited with each such bank or
trust company shall be approved by vote of a majority of the
Board of Trustees of the Fund. Such funds shall be deposited by
the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 Payments for Shares. The Custodian shall receive from the
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distributor for the Fund's Shares or from the Transfer Agent of
the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that
Portfolio issued or sold from time to time by the Fund. The
Custodian will provide timely notification to the Portfolio and
the Transfer Agent of any receipt by it of payments for Shares of
such Portfolio.
2.6 Availability of Federal Funds. Upon mutual agreement between the
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Fund and the Custodian, the Custodian shall,
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upon the receipt of Proper Instructions, make federal funds
available to a Portfolio as of specified times agreed upon from
time to time by the Fund and the Custodian in the amount of
checks received in payment for Shares of such Portfolio which are
deposited into the Portfolio's account.
2.7 Collection of Income. The Custodian shall collect on a timely
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basis all income and other payments with respect to registered
securities held hereunder to which each Portfolio shall be
entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and
other payments with respect to bearer securities if, on the date
of payment by the issuer, such securities are held by the
Custodian or its agent thereof and shall credit such income, as
collected, to such Portfolio's custodian account. Without
limiting the generality of the foregoing, the Custodian shall
detach and present for payment all coupons and other income items
requiring presentation as and when they become due and shall
collect interest when due on securities held hereunder. Income
due each Portfolio on securities loaned pursuant to the
provisions of Section 2.2 (10) shall be the responsibility of the
Fund. The Custodian will have no duty or responsibility in
connection therewith, other than to provide the Fund with such
information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the
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Custodian of the income to which the Portfolio is properly
entitled.
2.8 Payment of Fund Monies. Upon receipt of Proper Instructions,
----------------------
which may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out moneys of a Portfolio in
the following cases only:
1) Upon the purchase of securities, options,
futures contracts or options on futures
contracts for the account of the Portfolio
but only (a) against the delivery of such
securities or evidence of title to such
options, futures contracts or options on
futures contracts to the Custodian (or any
bank, banking firm or trust company doing
business in the United States or abroad
which is qualified under the Investment
Company Act of 1940, as amended, to act as a
custodian and has been designated by the
Custodian as its agent for this purpose)
registered in the name of the Portfolio or
in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in
proper form for transfer; (b) in the case of
a purchase effected through a Securities
System, in accordance with the conditions
set forth in Section 2.12 hereof; or (c) in
the case of a purchase involving the Direct
Paper System,
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in accordance with the conditions set forth
in Section 2.12A; or (d) in the case of
repurchase agreements entered into between
the Fund on behalf of the Portfolio and the
Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i)
against delivery of the securities either in
certificate form or through an entry
crediting the Custodian's account at the
Federal Reserve Bank with such securities or
(ii) against delivery of the receipt
evidencing purchase by the Portfolio of
securities owned by the Custodian along with
written evidence of the agreement by the
Custodian to repurchase such securities from
the Portfolio;
2) In connection with conversion, exchange or
surrender of securities owned by the
Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares
issued by the Portfolio as set forth in
Section 2.10 hereof;
4) For the payment of any expense or liability
incurred by the Portfolio, including but not
limited to the following payments for the
account of the Portfolio: interest, taxes,
management, accounting, transfer agent and
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legal fees, and operating expenses of the
Fund whether or not such expenses are to be
in whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends declared
pursuant to the governing documents of the
Fund;
6) For payment of the amount of dividends
received in respect of securities sold
short;
7) For any other proper purpose, but only upon
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receipt of, in addition to Proper
Instructions, a certified copy of a
resolution of the Board of Trustees or of
the Executive Committee of the Fund signed
by an officer of the Fund and certified by
its Secretary or an Assistant Secretary,
specifying the amount of such payment,
setting forth the purpose for which such
payment is to be made, declaring such
purpose to be a proper purpose, and naming
the person or persons to whom such payment
is to be made.
2.9 Liability for Payment in Advance of Receipt of Securities
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Purchased. In any and every case where payment for purchase of
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securities for the account of a Portfolio is made by the
Custodian in advance of receipt of the securities purchased in
the absence of specific written instructions from such Portfolio
to so pay in advance,
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the Custodian shall be absolutely liable to the Portfolio for
such securities to the same extent as if the securities had been
received by the Custodian.
2.10 Payments for Repurchases or Redemptions of Shares of the
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Fund. From such funds as may be available for the purpose but
----
subject to the limitations of the Declaration of Trust and any
applicable votes of the Board of Trustees of the Fund pursuant
thereto, the Custodian shall, upon receipt of instructions from
the Transfer Agent, make funds available for payment to holders
of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the
redemption or repurchase of Shares of a Portfolio, the Custodian
is authorized upon receipt of instructions from the Transfer
Agent to wire funds to or through a commercial bank designated by
the redeeming shareholders. In connection with the redemption or
repurchase of Shares of the Fund, the Custodian shall honor
checks drawn on the Custodian by a holder of Shares, which checks
have been furnished by the Fund to the holder of Shares, when
presented to the Custodian in accordance with such procedures and
controls as are mutually agreed upon from time to time between
the Fund and the Custodian.
2.11 Appointment of Agents. The Custodian may at any time or times in
---------------------
its discretion appoint (and may at any time remove) any other
bank or trust company which is itself
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qualified under the Investment Company Act of 1940, as amended,
to act as a custodian, as its agent to carry out such of the
provisions of this Article 2 as the Custodian may from time to
time direct; provided, however, that the appointment of any agent
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shall not relieve the Custodian of its responsibilities or
liabilities hereunder.
2.12 Deposit of Fund Assets in Securities Systems. The Custodian may
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deposit and/or maintain securities owned by a Portfolio in a
clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of
1934, which acts as a securities depository, or in the book-entry
system authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to herein as
"Securities System" in accordance with applicable Federal Reserve
Board and Securities and Exchange Commission rules and
regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the
Portfolio in a Securities System provided
that such securities are represented in an
account ("Account") of the Custodian in the
Securities System which shall not include
any assets of the Custodian other than
assets held as a fiduciary, custodian or
otherwise for customers;
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2) The records of the Custodian with respect to
securities of the Portfolio which are
maintained in a Securities System shall
identify by book-entry those securities
belonging to the Portfolio;
3) The Custodian shall pay for securities
purchased for the account of the Portfolio
upon (i) receipt of advice from the
Securities System that such securities have
been transferred to the Account, and (ii)
the making of an entry on the records of the
Custodian to reflect such payment and
transfer for the account of the Portfolio.
The Custodian shall transfer securities sold
for the account of the Portfolio upon (i)
receipt of advice from the Securities System
that payment for such securities has been
transferred to the Account, and (ii) the
making of an entry on the records of the
Custodian to reflect such transfer and
payment for the account of the Portfolio.
Copies of all advices from the Securities
System of transfers of securities for the
account of the Portfolio shall identify the
Portfolio, be maintained for the Portfolio
by the Custodian and be provided to the Fund
at its request. Upon request, the Custodian
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shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to
or from the account of the Portfolio in the
form of a written advice or notice and shall
furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets
reflecting each day's transactions in the
Securities System for the account of the
Portfolio.
4) The Custodian shall provide the Fund for the
Portfolio with any report obtained by the
Custodian on the Securities System's
accounting system, internal accounting
control and procedures for safeguarding
securities deposited in the Securities
System;
5) The Custodian shall have received the
initial or annual certificate, as the case
may be, required by Article 9 hereof;
6) Anything to the contrary in this Contract
notwithstanding, the Custodian shall be
liable to the Fund for the benefit of the
Portfolio for any loss or damage to the
Portfolio resulting from use of the
Securities System by reason of any
negligence, misfeasance or misconduct of the
Custodian or any of its agents or of any of
its or their employees or from failure of
the
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Custodian or any such agent to enforce
effectively such rights as it may have
against the Securities System; at the
election of the Fund, it shall be entitled
to be subrogated to the rights of the
Custodian with respect to any claim against
the Securities System or any other person
which the Custodian may have as a
consequence of any such loss or damage if
and to the extent that the Portfolio has not
been made whole for any such loss or damage.
2.12A Fund Assets Held in the Custodian's Direct Paper System.
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The Custodian may deposit and/or maintain securities owned by a
Portfolio in the Direct Paper System of the Custodian subject to
the following provisions:
1) No transaction relating to securities in the
Direct Paper System will be effected in the
absence of Proper Instructions;
2) The Custodian may keep securities of the
Portfolio in the Direct Paper System only if
such securities are represented in an
account ("Account") of the Custodian in the
Direct Paper System which shall not include
any assets of the Custodian other than
assets held as a fiduciary, custodian or
otherwise for customers;
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3) The records of the Custodian with respect to
securities of the Portfolio which are
maintained in the Direct Paper System shall
identify by book-entry those securities
belonging to the Portfolio;
4) The Custodian shall pay for securities
purchased for the account of the Portfolio
upon the making of an entry on the records
of the Custodian to reflect such payment and
transfer of securities to the account of the
Portfolio. The Custodian shall transfer
securities sold for the account of the
Portfolio upon the making of an entry on the
records of the Custodian to reflect such
transfer and receipt of payment for the
account of the Portfolio;
5) The Custodian shall furnish the Fund on
behalf of the Portfolio confirmation of each
transfer to or from the account of the
Portfolio, in the form of a written advice
or notice, of Direct Paper on the next
business day following such transfer and
shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets
reflecting each day's transaction in the
Securities System for the account of the
Portfolio;
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6) The Custodian shall provide the Fund on
behalf of the Portfolio with any report on
its system of internal accounting control as
the Fund may reasonably request from time to
time.
2.13 Segregated Account. The Custodian shall upon receipt of Proper
------------------
Instructions establish and maintain a segregated account or
accounts for and on behalf of each Portfolio, into which account
or accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to
Section 2.12 hereof, (i) in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under 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 or organizations, regarding escrow
or other arrangements in connection with transactions by the
Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written
by the Portfolio or commodity futures contracts or options
thereon purchased or sold by the Portfolio, (iii) for the
purposes of compliance by
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the Portfolio 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, but only,
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in the case of clause (iv), upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the
Board of Trustees or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an
Assistant Secretary, setting forth the purpose or purposes of
such segregated account and declaring such purposes to be proper
corporate purposes.
2.14 Ownership Certificates for Tax Purposes. The Custodian shall
---------------------------------------
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of
income or other payments with respect to securities of each
Portfolio held by it and in connection with transfers of
securities.
2.15 Proxies. The Custodian shall, with respect to the securities
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held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered
otherwise than in the name of the Portfolio or a nominee of the
Portfolio, all proxies, without indication of the manner in which
such proxies are to be voted, and shall promptly deliver to the
Portfolio such proxies, all proxy soliciting materials and all
notices relating to such securities.
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2.16 Communications Relating to Portfolio Securities. The Custodian
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shall transmit promptly to the Fund for each Portfolio all
written information (including, without limitation, pendency of
calls and maturities of securities and expirations of rights in
connection therewith and notices of exercise of call and put
options written by the Fund on behalf of the Portfolio and the
maturity of futures contracts purchased or sold by the Portfolio)
received by the Custodian from issuers of the securities being
held for the Portfolio. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Portfolio
all written information received by the Custodian from Issuers of
the securities whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer. If
the Portfolio desires to take action with respect to any tender
offer, exchange offer or any other similar transaction, the
Portfolio shall notify the Custodian at least three business days
prior to the date on which the Custodian is to take such action.
2.17 Proper Instructions. Proper Instructions as used throughout this
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Article 2 means a writing signed or initialed by one or more
person or persons as the Board of Trustees shall have from time
to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action
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is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with
respect to the transaction involved. The Fund shall cause all
oral instructions to be confirmed in writing. Upon receipt of a
certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Trustees of the Fund accompanied by
a detailed description of procedures approved by the Board of
Trustees, Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices
provided that the Board of Trustees and the Custodian are
satisfied that such procedures afford adequate safeguards for the
Portfolio's assets.
2.18 Actions Permitted without Express Authority. The Custodian may
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in its discretion, without express authority from the Fund on
behalf of the Portfolio:
1) make payments to itself or others
for minor expenses of handling
securities or other similar items
relating to its duties under this
Contract, provided that all such
--------
payments shall be accounted for to
the Fund on behalf of the Portfolio;
2) surrender securities in temporary
form for securities in definitive
form;
-23-
3) endorse for collection, in the name
of the Portfolio, checks, drafts and
other negotiable instruments; and
4) in general, attend to all non-
discretionary details in connection
with the sale, exchange,
substitution, purchase, transfer and
other dealings with the securities
and property of the Portfolio except
as otherwise directed by the Board
of Trustees of the Fund.
2.19 Evidence of Authority. The Custodian shall be protected in
---------------------
acting upon any instructions, notice, request, consent,
certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the
Fund. The Custodian may receive and accept a certified copy of a
vote of the Board of Trustees of the Fund as conclusive evidence
(a) of the authority of any person to act in accordance with such
vote or (b) of any determination or of any action by the Board of
Trustees pursuant to the Declaration of Trust as described in
such vote, and such vote may be considered as in full force and
effect until receipt by the Custodian of written notice to the
contrary.
3. Duties of Custodian with Respect to the Books of Account
--------------------------------------------------------
and Calculation of Net Asset Value and Net Income.
-------------------------------------------------
The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Board of
-24-
Trustees of the Fund to keep the books of account of each Portfolio and/or
compute the net asset value per share of the outstanding shares of each
Portfolio or, if directed in writing to do so by the Portfolio, shall itself
keep such books of account and/or compute such net asset value per share. If so
directed, the Custodian shall also calculate daily the net income of the
Portfolio as described in the Fund's currently effective prospectus and shall
advise the Fund and the Transfer Agent daily of the total amounts of such net
income and, if instructed in writing by an officer of the Fund to do so, shall
advise the Transfer Agent periodically of the division of such net income among
its various components. The calculations of the net asset value per share and
the daily income of each Portfolio shall be made at the time or times described
from time to time in the Fund's currently effective prospectus.
4. Records
-------
The Custodian shall create and maintain all records relating to
its activities and obligations under this Contract in such manner as will meet
the obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 3la-1 and 3la-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All such records shall be the
property of the Fund and shall at all times during the regular business hours of
the Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the
-25-
Securities and Exchange Commission. The Custodian shall, at the Fund's request,
supply the Fund with a tabulation of securities owned by each Portfolio and held
by the Custodian and shall, when requested to do so by the Fund and for such
compensation as shall be agreed upon between the Fund and the Custodian, include
certificate numbers in such tabulations.
5. Opinion of Fund's Independent Accountant
----------------------------------------
The Custodian shall take all reasonable action, as the Fund may
from time to time request, to obtain from year to year favorable opinions from
the Fund's independent accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N-lA, and Form N-SAR or other
annual reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
6. Reports to Fund by Independent Public Accountants
-------------------------------------------------
The Custodian shall provide the Fund, at such times as the Fund
may reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
securities deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian under this Contract; such reports, shall be
of sufficient scope and in sufficient detail, as may reasonably be required by
the Fund to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
-26-
7. Compensation of Custodian
-------------------------
The Custodian shall be entitled to reasonable compensation for
its services and expenses as Custodian, as agreed upon from time to time between
the Fund and the Custodian.
8. Responsibility of Custodian
---------------------------
So long as and to the extent that it is in the exercise of
reasonable care, the Custodian shall not be responsible for the title, validity
or genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties.
The Custodian shall be held to the exercise of reasonable care in carrying out
the provisions of this Contract, but shall be kept indemnified by and shall be
without liability to the Fund for any action taken or omitted by it in good
faith without negligence. It shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Fund) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant to such
advice. Notwithstanding the foregoing, the responsibility of the Custodian with
respect to redemptions effected by check shall be in accordance with a separate
Agreement entered into between the Custodian and the Fund.
If the Fund requires the Custodian to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Custodian,
-27-
result in the Custodian or its nominee assigned to the Fund or the Portfolio
being liable for the payment of money or incurring liability of some other form,
the Fund, as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
If the Fund requires the Custodian to advance cash or securities
for any purpose for the benefit of a Portfolio or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Portfolio shall be security therefor and
should the Fund fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of the Portfolio's assets to
the extent necessary to obtain reimbursement.
9. Effective Period, Termination and Amendment
-------------------------------------------
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
--------
however that the Custodian shall not act under
-28-
Section 2.12 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the Fund has
approved the initial use of a particular Securities System and the receipt of an
annual certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has reviewed the use by the Fund of such Securities System, as required
in each case by Rule 17f-4 under the Investment Company Act of 1940, as amended
and that the Custodian shall not act under Section 2.12A hereof in the absence
of receipt of an initial certificate of the Secretary or an Assistant Secretary
that the Board of Trustees has approved the initial use of the Direct Paper
System and the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Trustees has reviewed the use by the Fund of the
Direct Paper System; provided further, however, that the Fund shall not amend or
-------- -------
terminate this Contract in contravention of any applicable federal or state
regulations, or any provision of the Declaration of Trust, and further provided,
that the Fund may at any time by action of its Board of Trustees (i) substitute
another bank or trust company for the Custodian by giving notice as described
above to the Custodian, or (ii) immediately terminate this Contract in the event
of the appointment of a conservator or receiver for the Custodian by the
Comptroller of the Currency or upon the happening of a like event at the
direction of an appropriate regulatory agency or court of competent
jurisdiction.
-29-
Upon termination of the Contract, the Fund shall pay to the
Custodian such compensation as may be due as of the date of such termination and
shall likewise reimburse the Custodian for its costs, expenses and
disbursements.
10. Successor Custodian
-------------------
If a successor custodian shall be appointed by the Board of
Trustees of the Fund, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed and in the
form for transfer, all securities then held by it hereunder and shall transfer
to an account of the successor custodian all of the Portfolio's securities held
in a Securities System.
If no such successor custodian shall be appointed, the Custodian
shall, in like manner, upon receipt of a certified copy of a vote of the Board
of Trustees of the Fund, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor
custodian or certified copy of a vote of the Board of Trustees shall have been
delivered to the Custodian on or before the date when such termination shall
become effective, then the Custodian shall have the right to deliver to a bank
or trust company, which is a "bank" as defined in the Investment Company Act of
1940, doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by
-30-
the Custodian and all instruments held by the Custodian relative thereto and all
other property held by it under this Contract and to transfer to an account of
such successor custodian all of the Portfolio's securities held in any
Securities System. Thereafter, such bank or trust company shall be the successor
of the Custodian under this Contract.
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 procure the certified copy of the vote referred to or
of the Board of Trustees to appoint a successor custodian, the Custodian shall
be entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions
--------------------------------------
In connection with the operation of this Contract, the Custodian
and the Fund may from time to time agree on such provisions interpretive of or
in addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
--------
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust of the Fund. No interpretive or additional
-31-
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Contract.
12. Additional Funds
----------------
In the event that the Fund establishes one or more series of
Shares in addition to the CIGNA Annuity Equity Fund, CIGNA Annuity Income Fund,
CIGNA Annuity Money Market Fund, CIGNA Annuity Growth and Income Fund, CIGNA
Annuity Aggressive Equity Fund, and the Companion Fund with respect to which it
desires to have the Custodian render services as custodian under the terms
hereof, it shall so notify the Custodian in writing, and if the Custodian agrees
in writing to provide such services, such series of Shares shall become a
Portfolio hereunder.
13. Massachusetts Law to Apply
--------------------------
This Contract shall be construed and the provisions thereof
interpreted under and in accordance with laws of The Commonwealth of
Massachusetts.
14. Prior Contracts
---------------
This Contract supersedes and terminates, as of the date hereof,
all prior contracts between the Fund and the Custodian relating to the custody
of the Fund's assets.
15. Trust Liability
---------------
Copies of the Master Trust Agreement, as amended, establishing
CIGNA Annuity Funds Group (the "Trust") are on file with the Secretary of the
Commonwealth of Massachusetts, and notice is hereby given that this Custodian
Contract is executed on behalf of the Trust by officers of the Trust as officers
and not Individually and that the obligations of or arising out of
-32-
this Custodian Contract are not binding upon any of the Trustees, officers,
shareholders, employees or agents of the Trust individually but are binding only
upon the assets and property of the Trust.
IN WITNESS WHEREOF, each of the parties has caused this
instrument to be executed in its name and behalf by its duly authorized
representative and its seal to be hereunder affixed as of the 15 day of October,
1987.
ATTEST CIGNA ANNUITY FUNDS GROUP
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx III
----------------------------------- ------------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ X. Xxxxxx By: /s/ X. Xxxxxxxx
----------------------------------- ------------------------------------
Assistant Secretary Vice President
-33-
DATA ACCESS ADDENDUM TO CUSTODIAN AGREEMENT
-------------------------------------------
AGREEMENT between each fund listed on Appendix A, (individually a
"Fund" and collectively, the "Funds") as amended from time to time, and State
Street Bank and Trust Company ("State Street").
PREAMBLE
WHEREAS, State Street has been appointed as custodian of certain assets
of each Fund pursuant to a certain Custodian Agreement (the "Custodian
Agreement") for each of the respective Funds;
WHEREAS, State Street has developed and utilizes proprietary accounting
and other systems, including State Street's proprietary Multicurrency HORIZON/R/
Accounting System, in its role as custodian of each Fund, and maintains certain
Fund-related data ("Fund Data") in databases under the control and ownership of
State Street (the "Data Access Services"); and
WHEREAS, State Street makes available to each Fund certain Data Access
Services solely for the benefit of the Fund, and intends to provide additional
services, consistent with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the parties
agree as follows:
1. SYSTEM AND DATA ACCESS SERVICES
a. System. Subject to the terms and conditions of this Agreement, State
------
Street hereby agrees to provide each Fund with access to State Street's
Multicurrency HORIZON/R/ Accounting System and the other information systems
(collectively, the "System") as described in Attachment A, on a remote basis for
the purpose of obtaining reports, solely on computer hardware, system software
and telecommunication links, as listed in Attachment B (the "Designated
Configuration") of the Fund, or certain third parties approved by State Street
that serve as investment advisors or investment managers (the "Investment
Advisor") or independent auditors (the "Independent Auditors") of a Fund and
solely with respect to the Fund or on any designated substitute or back-up
equipment configuration with State Street's written consent, such consent not to
be unreasonably withheld.
b. Data Access Services. State Street agrees to make available to each
--------------------
Fund the Data Access Services subject to the terms and conditions of this
Agreement and data access operating standards and procedures as may be issued by
State Street from time to time. The ability of each Fund to originate electronic
instructions to State Street on behalf of each Fund in order to (i) effect the
transfer or movement of cash or securities held under custody by State
Street or (ii) transmit accounting or other information (such transactions are
referred to herein as "Client Originated Electronic Financial Instructions"),
and (iii) access data for the purpose of reporting and analysis, shall be deemed
to be Data Access Services for purposes of this Agreement.
c. Additional Services. State Street may from time to time agree to
-------------------
make available to a Fund additional Systems that are not described in the
attachments to this Agreement. In the absence of any other written agreement
concerning such additional systems, the term "System" shall include, and this
Agreement shall govern, a Fund's access to and use of any additional System made
available by State Street and/or accessed by the Fund.
2. NO USE OF THIRD PARTY SOFTWARE
State Street and each Fund acknowledge that in connection with the Data
Access Services provided under this Agreement, each Fund will have access,
through the Data Access Services, to Fund Data and to functions of State
Street's proprietary systems; provided, however that in no event will the Fund
have direct access to any third party systems-level software that retrieves data
for, stores data from, or otherwise supports the System.
3. LIMITATION ON SCOPE OF USE
a. Designated Equipment: Designated Location. The System and the
-----------------------------------------
Data Access Services shall be used and accessed solely on and through the
Designated Configuration at the offices of a Fund or the Investment Advisor or
Independent Auditor located in Hartford/Bloomfield Connecticut ("Designated
Location").
b. Designated Configuration Trained Personnel. State Street shall be
------------------------------------------
responsible for supplying, installing and maintaining the Designated
Configuration at the Designated Location. State Street and each Fund agree that
each will engage or retain the services of trained personnel to enable both
State Street and the Fund to perform their respective obligations under this
Agreement. State Street agrees to use commercially reasonable efforts to
maintain the System so that it remains serviceable, provided, however, that
State Street does not guarantee or assure uninterrupted remote access use of the
System.
c. Scope of Use. Each Fund will use the System and the Data Access
------------
Services only for the processing of securities transactions, the keeping of
books of account for the Fund and accessing data for purposes of reporting and
analysis. Each Fund shall not, and shall cause its employees and agents not to
(i) permit any third party* to use the System or the Data Access Services, (ii)
sell, rent, license or otherwise use the System or the Data Access Services in
the operation of a service bureau or for any purpose other than as expressly
authorized under this Agreement, (iii) use the System or the Data Access
Services for any fund, trust or other investment vehicle without the prior
written consent of State Street, (iv) allow access to the System or the Data
Access Services through terminals or any other computer or telecommunications
facilities located outside the Designated Locations, (v) allow
*except its Investment Adviser
2
or cause any information (other than portfolio holdings, valuations of portfolio
holdings, and other information reasonably necessary for the management or
distribution of the assets of the Fund) transmitted from State Street's
databases, including data from third party sources, available through use of the
System or the Data Access Services to be redistributed or retransmitted to
another computer, terminal or other device for other than use for or on behalf
of the Fund or (vi) modify the System in any way, including without limitation,
developing any software for or attaching any devices or computer programs to any
equipment, system, software or database which forms a part of or is resident on
the Designated Configuration.
d. Other Locations. Except in the event of an emergency or of a planned
---------------
System shutdown, each Fund's access to services performed by the System or to
Data Access Services at the Designated Location may be transferred to a
different location only upon the prior written consent of State Street. In the
event of an emergency or System shutdown, each Fund may use any back-up site
included in the Designated Configuration or any other back-up site agreed to by
State Street, which agreement will not be unreasonably withheld. Each Fund may
secure from State Street the right to access the System or the Data Access
Services through computer and telecommunications facilities or devices complying
with the Designated Configuration at additional locations only upon the prior
written consent of State Street and on terms to be mutually agreed upon by the
parties.
e. Title. Title and all ownership and proprietary rights to the System,
-----
including any enhancements or modifications thereto, whether or not made by
State Street, are and shall remain with State Street.
f. No Modification. Without the prior written consent of State Street,
---------------
a Fund shall not modify, enhance or otherwise create derivative works based upon
the System, nor shall the Fund reverse engineer, decompile or otherwise attempt
to secure the source code for all or any part of the System.
g. Security Procedures. Each Fund shall comply with data access
-------------------
operating standards and procedures and with user identification or other
password control requirements and other security procedures as may be issued
from time to time by State Street for use of the System on a remote basis and to
access the Data Access Services. Each Fund shall have access only to the Fund
Data and authorized transactions agreed upon from time to time by State Street
and, upon notice from State Street, the Fund shall discontinue remote use of the
System and access to Data Access Services for any security reasons cited by
State Street; provided, that, in such event, State Street shall, for a period
not less than 180 days (or such other shorter period specified by the Fund)
after such discontinuance, assume responsibility to provide accounting services
under the terms of the Custodian Agreement.
h. Inspections. State Street shall have the right to inspect the use of
-----------
the System and the Data Access Services by the Fund and the Investment Advisor
to ensure compliance with this Agreement. The on-site inspections shall be upon
prior written notice to Fund and the Investment Advisor and at reasonably
convenient times and frequencies so as not to result in an unreasonable
disruption of the Fund's or the Investment Advisor's business.
3
4. PROPRIETARY INFORMATION
a. Proprietary Information. Each Fund acknowledges and State Street
-----------------------
represents that the System and the databases, computer programs, screen formats,
report formats, interactive design techniques, documentation and other
information made available to the Fund by State Street as part of the Data
Access Services and through the use of the System constitute copyrighted, trade
secret, or other proprietary information of substantial value to State Street,
Any and all such information provided by State Street to each Fund shall be
deemed proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). Each Fund agrees that it will hold such Proprietary
Information in confidence and secure and protect it in a manner consistent with
its own procedures for the protection of its own confidential information and to
take appropriate action by instruction or agreement with its employees who are
permitted access to the Proprietary Information to satisfy its obligations
hereunder. Each Fund further acknowledges that State Street shall not be
required to provide the Investment Advisor or the Investment Auditor with access
to the System unless it has first received from the Investment Advisor of the
Investment Auditor an undertaking with respect to State Street's Proprietary
Information in the form of Attachment C and/or Attachment C-1 to this Agreement.
Each Fund shall use all commercially reasonable efforts to assist State Street
in identifying and preventing any unauthorized use, copying or disclosure of the
Proprietary Information or any portions thereof or any of the logic, formats or
designs contained therein.
b. Cooperation. Without limitation of the foregoing, each Fund shall
-----------
advise State Street immediately in the event the Fund learns or has reason to
believe that any person to whom the Fund has given access to the Proprietary
Information, or any portion thereof, has violated or intends to violate the
terms of this Agreement, and each Fund will, at its expense, co-operate with
State Street in seeking injunctive or other equitable relief in the name of the
Fund or State Street against any such person.
c. Injunctive Relief. Each Fund acknowledges that the disclosure of any
-----------------
Proprietary Information, or of any information which at law or equity ought to
remain confidential, will immediately give rise to continuing irreparable injury
to State Street inadequately compensable in damages at law. In addition, State
Street shall be entitled to obtain immediate injunctive relief against the
breach or threatened breach of any of the foregoing undertakings, in addition to
any other legal remedies which may be available.
d. Survival. The provisions of this Section 4 shall survive the
--------
termination of this Agreement.
5. LIMITATION ON LIABILITY
4
a. Limitation on Amount and Time for Bringing Action. Each Fund agrees
-------------------------------------------------
any liability of State Street to the Fund or any third party arising out of
State Street's provision of Data Access Services or the System under this
Agreement shall be limited to the amount paid by the Fund for the preceding 24
months for such services. In no event shall State Street be liable to the Fund
or any other party for any special, indirect, punitive or consequential damages
even if advised of the possibility of such damages. No action, regardless of
form, arising out of this Agreement may be brought by the Fund more than two
years after the Fund has knowledge that the cause of action has arisen.
b. NO OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE MADE BY STATE STREET. IN NO EVENT WILL STATE STREET BE
LIABLE TO THE FUND OR ANY OTHER PARTY FOR ANY CONSEQUENTIAL OR INCIDENTAL
DAMAGES WHICH MAY ARISE FROM THE FUND'S ACCESS TO THE SYSTEM OR USE OF
INFORMATION OBTAINED THEREBY.
c. Third-Party Data. Organizations from which State Street may obtain
----------------
certain data included in the System or the Data Access Services are solely
responsible for the contents of such data, and State Street shall have no
liability for claims arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
d. Regulatory Requirements. As between State Street and each Fund, the
-----------------------
Fund shall be solely responsible for the accuracy of any accounting statements
or reports produced using the Data Access Services and the System and the
conformity thereof with any requirements of law.
e. Force Majeure. Neither State Street or a Fund shall be liable for
-------------
any costs or damages due to delay or nonperformance under this Agreement arising
out of any cause or event beyond such party's control, including without
limitation, cessation of services hereunder or any damages resulting therefrom
to the other party, or the Fund as a result of work stoppage, power or other
mechanical failure, computer virus, natural disaster, governmental action, or
communication disruption.
6. INDEMNIFICATION
Each Fund agrees to indemnify and hold State Street harmless from any
loss, damage or expense including reasonable attorney's fees, (a "loss")
suffered by State Street arising from (i) the negligence or willful misconduct
in the use by the Fund of the Data Access Services or the System, including any
loss incurred by State Street resulting from a security breach at the Designated
Location or committed by the Fund's employees or agents or the Investment
Advisor or the Independent Auditor of the Fund and (ii) any loss resulting from
incorrect Client Originated Electronic Financial Instructions. State Street
shall be entitled to rely on the validity and authenticity of Client Originated
Electronic Financial Instructions without
5
undertaking any further inquiry as long as such instruction is undertaken in
conformity with security procedures established by State Street from time to
time.
7. FEES
Fees and charges for the use of the System and the Data Access Services
and related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). Any tariffs,
duties or taxes imposed or levied by any government or governmental agency by
reason of the transactions contemplated by this Agreement, including, without
limitation, federal, state and local taxes, use, value added and personal
property taxes (other than income, franchise or similar taxes which may be
imposed or assessed against State Street) shall be borne by each Fund. Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.
8. TRAINING, IMPLEMENTATION AND CONVERSION
a. Training. State Street agrees to provide training, at a designated
--------
State Street training facility or at the Designated Location, to the Fund's
personnel in connection with the use of the System on the Designated
Configuration. Each Fund agrees that it will set aside, during regular business
hours or at other times agreed upon by both parties, sufficient time to enable
all operators of the System and the Data Access Services, designated by the
Fund, to receive the training offered by State Street pursuant to this
Agreement.
b. Installation and Conversion. State Street shall be responsible for
---------------------------
the technical installation and conversion ("Installation and Conversion") of the
Designated Configuration. Each Fund shall have the following responsibilities in
connection with Installation and Conversion of the System:
(i) The Fund shall be solely responsible for the timely
acquisition and maintenance of the hardware and software that
attach to the Designated Configuration in order to use the
Data Access Services at the Designated Location.
(ii) State Street and the Fund each agree that they will assign
qualified personnel to actively participate during the
Installation and Conversion phase of the System implementation
to enable both parties to perform their respective obligations
under this Agreement.
9. SUPPORT
During the term of this Agreement, State Street agrees to provide the
support services set out in Attachment D to this Agreement.
10. TERM OF AGREEMENT
6
a. Term of Agreement. This Agreement shall become effective on the date
-----------------
of its execution by State Street and shall remain in full force and effect until
terminated as herein provided.
b. Termination of Agreement. Any party may terminate this Agreement (i)
------------------------
for any reason by giving the other parties at least one-hundred and eighty days'
prior written notice in the case of notice of termination by State Street to the
Fund or thirty days' notice in the case of notice from the Fund to State Street
of termination; or (ii) immediately for failure of the other party to comply
with any material term and condition of the Agreement by giving the other party
written notice of termination. In the event the Fund shall cease doing business,
shall become subject to proceedings under the bankruptcy laws (other than a
petition for reorganization or similar proceeding) or shall be adjudicated
bankrupt, this Agreement and the rights granted hereunder shall, at the option
of State Street, immediately terminate with notice to the Fund. Termination of
this Agreement with respect to any given Fund shall in no way affect the
continued validity of this Agreement with respect to any other Fund. This
Agreement shall in any event terminate as to any Fund within 90 days after the
termination of the Custodian Agreement applicable to such Fund.
c. Termination of the Right to Use. Upon termination of this Agreement
-------------------------------
for any reason, any right to use the System and access to the Data Access
Services shall terminate and the Fund shall immediately cease use of the System
and the Data Access Services. Immediately upon termination of this Agreement for
any reason, the Fund shall return to State Street all copies of documentation
and other Proprietary Information in its possession; provided, however, that in
the event that either State Street or the Fund terminates this Agreement or the
Custodian Agreement for any reason other than the Fund's breach, State Street
shall provide the Data Access Services for a period of time and at a price to be
agreed upon by State Street and the Fund.
11. MISCELLANEOUS
a. Assignment: Successors. This Agreement and the rights and
----------------------
obligations of each Fund and State Street hereunder shall not be assigned by any
party without the prior written consent of the other parties, except that State
Street may assign this Agreement to a successor of all or a substantial portion
of its business, or to a party controlling, controlled by, or under common
control with State Street.
b. Survival. All provisions regarding indemnification, warranty,
--------
liability and limits thereon, and confidentiality and/or protection of
proprietary rights and trade secrets shall survive the termination of this
Agreement.
c. Entire Agreement. This Agreement and the attachments hereto
----------------
constitute the entire understanding of the parties hereto with respect to the
Data Access Services and the use of the System and supersedes any and all prior
or contemporaneous representations or
7
agreements, whether oral or written, between the parties as such may relate to
the Data Access Services or the System, and cannot be modified or altered except
in a writing duly executed by the parties. This Agreement is not intended to
supersede or modify the duties and liabilities of the parties hereto under the
Custodian Agreement or any other agreement between the parties hereto except to
the extent that any such agreement specifically refers to the Data Access
Services or the System. No single waiver or any right hereunder shall be deemed
to be a continuing waiver.
d. Severability. If any provision or provisions of this Agreement shall
------------
be held to be invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
e. Governing Law. This Agreement shall be interpreted and construed in
-------------
accordance with the internal laws of The Commonwealth of Massachusetts without
regard to the conflict of laws provisions thereof.
8
IN WITNESS WHEREOF, each of the undersigned Funds severally
has caused this Agreement to be duly executed in its name and through its duly
authorized officer as of the date hereof.
STATE STREET BANK AND TRUST
COMPANY
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Title: Executive Vice President
---------------------------------
Date:
----------------------------------
EACH FUND LISTED, ON APPENDIX A
By: /s/ Xxxxxx X. Xxxxxxx III
------------------------------------
Title: Vice President and Treasurer
---------------------------------
Date: 8/18/97
----------------------------------
COPIES OF THE MASTER TRUST AGREEMENT ESTABLISHING
THE TRUST ARE ON FILE WITH THE SECRETARY OF THE
COMMONWEALTH OF MASSACHUSETTS, AND NOTICE IS HEREBY
GIVEN THAT THIS DOCUMENT IS EXECUTED ON BEHALF OF
THE TRUST BY AN OFFICER OF THE TRUST AS AN OFFICER
OF THE TRUST AND NOT INDIVIDUALLY AND THAT ANY
OBLIGATIONS OF OR ARISING OUT OF THIS DOCUMENT ARE
NOT BINDING UPON ANY OF THE TRUSTEES, OFFICERS,
SHAREHOLDERS, EMPLOYEES OR AGENT OF THE TRUST
INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE ASSETS
AND PROPERTY OF THE TRUST.
APPENDIX A
CIGNA Funds Group
CIGNA High Income Shares
CIGNA Institutional Funds Group
CIGNA Variable Products Group
INA Investment Securities, Inc.
ATTACHMENT A
Multicurrency HORIZON/R/ Accounting System
System Product Description
--------------------------
1. The Multicurrency HORIZON/R/ Accounting System is designed to provide lot
level portfolio and general ledger accounting for SEC and ERISA type
requirements and includes the following services: 1) recording of general ledger
entries; 2) calculation of daily income and expense; 3) reconciliation of daily
activity with the trial balance, and 4) appropriate automated feeding mechanisms
to (i) domestic and international settlement systems, (ii) daily, weekly and
monthly evaluation services, (iii) portfolio performance and analytic services,
(iv) Fund's internal computing systems and (v) various State Street provided
information services products.
II. GlobalQuest/R/ GlobalQuest/R/ is designed to provide Fund access to the
following information maintained on The Multicurrency HORIZON/R/ Accounting
System: 1) cash transactions and balances; 2) purchases and sales; 3) income
receivables; 4) tax refund receivables; 5) daily priced positions; 6) open
trades; 7) settlement status; 8) foreign exchange transactions; 9) trade
history; and 10) daily, weekly and monthly evaluation services.
ATTACHMENT B ADVISOR
CIGNA INVESTMENT
MANAGEMENT, INC.
-------------------
STATE STREET [PC GRAPHIC APPEARS HERE]
BANK AND
TRUST
COMPANY
MULTICURRENCY Software is installed for access.
HORIZON/R/ AND Click on icon for access.
GLOBALQUEST/R/
-------------------
CIGNA FUNDS
DIAL UP ACCESS
CONFIGURATION
ATTACHMENT C
Undertaking
The undersigned understands that in the course of employment as
Investment Advisor to each fund listed on Appendix A (individually a, "Fund",
collectively, the "Funds"), as amended from time to time, it will have access to
State Street Bank and Trust Company's ("State Street") Multicurrency /R/
Accounting System and other information systems (collectively, the "System").
The undersigned acknowledges that the System and the databases,
computer programs, screen formats, report formats, interactive design
techniques, documentation, and other information made available to the
Undersigned by State Street as part of the Data Access Services provided to the
Fund and through the use of the System constitute copyrighted, trade secret, or
other proprietary information of substantial value to State Street. Any and all
such information provided by State Street to the Undersigned shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Undersigned agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder.
The Undersigned will not attempt to intercept data, gain access to data
in transmission, or attempt entry into any system or files for which it is not
authorized. It will not intentionally adversely affect the integrity of the
System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the System
and access to the Data Access Services shall terminate and the Undersigned shall
immediately cease use of the System and the Data Access Services. Immediately
upon notice by State Street for any reason, the Undersigned shall return to
State Street all copies of documentation and other Proprietary Information in
its possession.
CIGNA INVESTMENTS, INC
By: /s/ Xxxxxx X. Xxxxxxx III
----------------------------------
Title: Assistant vice President
-------------------------------
Date: 10/31/97
--------------------------------
ATTACHMENT C- I
Undertaking
The undersigned understands that in the course of its employment
as Independent Auditor to each fund listed on Appendix A (individually a,
"Fund", collectively, the "Funds"), as amended from time to time, it will have
access to State Street Bank and Trust Company's ("State Street") Multicurrency
HORIZON/R/ Accounting System and other information systems (collectively, the
"System").
The undersigned acknowledges that the System and the databases,
computer programs, screen formats, report formats, interactive design
techniques, documentation, and other information made available to the
Undersigned by State Street as part of the Data Access Services provided to the
Fund and through the use of the System constitute copyrighted, trade secret, or
other proprietary information of substantial value to State Street. Any and all
such information provided by State Street to the Undersigned shall be deemed
proprietary and confidential information of State Street (hereinafter
"Proprietary Information"). The Undersigned agrees that it will hold such
Proprietary Information in confidence and secure and protect it in a manner
consistent with its own procedures for the protection of its own confidential
information and to take appropriate action by instruction or agreement with its
employees who are permitted access to the Proprietary Information to satisfy its
obligations hereunder.
The Undersigned will not attempt to intercept data, gain access
to data in transmission, or attempt entry into any system or files for which it
is not authorized. It will not intentionally adversely affect the integrity of
the System through the introduction of unauthorized code or data, or through
unauthorized deletion.
Upon notice by State Street for any reason, any right to use the
System and access to the Data Access Services shall terminate and the
Undersigned shall immediately cease use of the System and the Data Access
Services. Immediately upon notice by State Street for any reason, the
Undersigned shall return to State Street all copies of documentation and other
Proprietary Information in its possession.
[Independent Auditor]
By: /s/ Price Waterhouse LLP
-------------------------------------
Title:
----------------------------------
Date: 11/5/97
-----------------------------------
ATTACHMENT D
Support
During the term of this Agreement, State Street agrees to provide the
following on-going support services:
a. Telephone Support. The Fund Designated Persons may contact State
-----------------
Street's HORIZON/R/ Help Desk and Fund Assistance Center between the hours of 8
a.m. and 6 p.m. (Eastern time) on all business days for the purpose of obtaining
answers to questions about the use of the System, or to report apparent problems
with the System. From time to time, the Fund shall provide to State Street a
list of persons, not to exceed five in number, who shall be permitted to contact
State Street for assistance (such persons being referred to as "the Fund
Designated Persons").
b. Technical Support. State Street will provide technical support to
-----------------
assist the Fund in using the System and the Data Access Services. The total
amount of technical support provided by State Street shall not exceed 10
resource days per year. State Street shall provide such additional technical
support as is expressly set forth in the fee schedule in effect from time to
time between the parties (the "Fee Schedule"). Technical support, including
during installation and testing, is subject to the fees and other terms set
forth in the Fee Schedule.
c. Maintenance Support. State Street shall use commercially
-------------------
reasonable efforts to correct system functions that do not work according to the
System Product Description as set forth on Attachment A in priority order in the
next scheduled delivery release or otherwise as soon as is practicable.
d. System Enhancements. State Street will provide to the Fund any
-------------------
enhancements to the System developed by State Street and made a part of the
System; provided that, sixty (60) days prior to installing any such enhancement,
State Street shall notify the Fund and shall offer the Fund reasonable training
on the enhancement. Charges for system enhancements shall be as provided in the
Fee Schedule. State Street retains the right to charge for related systems or
products that may be developed and separately made available for use other than
through the System.
e. Custom Modifications. In the event the Fund desires custom
--------------------
modifications in connection with its use of the System, the Fund shall make a
written request to State Street providing specifications for the desired
modification. Any custom modifications may be undertaken by State Street in its
sole discretion in accordance with the Fee Schedule.
f. Limitation on Support. State Street shall have no obligation to
---------------------
support the Fund's use of the System: (1) for use on any computer equipment or
telecommunication facilities which does not conform to the Designated
Configuration or (ii) in the event the Fund has modified the System in breach of
this Agreement.
[STATE STREET LOGO APPEARS HERE]
STATE STREET BANK AND TRUST COMPANY
Custodian Fee Schedule
CIGNA FUNDS
EFFECTIVE JULY 1, 1992
--------------------------------------------------------------------------------
I. ADMINISTRATION
--------------
Custody, Portfolio and Fund Accounting Service - Maintain custody of
------------------------------------------------
fund assets. Settle portfolio purchases and sales. Report buy and sell
fails. Determine and collect portfolio income. Make cash disbursements
and report cash transactions. Maintain investment ledgers, provide
selected portfolio transactions, position and income reports. Maintain
general ledger and capital stock accounts. Prepare daily trial
balance. Calculate net asset value daily. Provide selected general
ledger reports.
The administration fee shown below is an annual charge, billed and
payable monthly, based on average monthly net assets.
Custody, Portfolio
Fund Net Assets and Fund Accounting
--------------- -------------------
First $20 Million 1/10 of 1%
Next $80 Million 1/30 of 1%
Excess 1/100 of 1%
Minimum Monthly Charges - Domestic Portfolio $1,000
- International Portfolio $2,000**
* New Fund Phase In - No Base Fee on new domestic funds for months 1-3.
* The administration fee for international funds reflects portfolio and
fund accounting services only. Custody fees are listed separately in
Section II.
II. Global Custody
--------------
Includes: Maintaining custody of fund assets. Settling portfolio
purchases and sales. Reporting buy and sell fails. Determining and
collecting portfolio income. Making cash disbursements and reporting
cash transactions. Monitoring corporate actions. Withholding foreign
taxes. Filing foreign tax reclaims.
A. Holding Fees (basis points per portfolio per annum):
------------
Group I Group II Group III Group IV Group V Group VI
------- -------- --------- -------- ------- --------
Denmark Australia Austria Belgium Hong Kong Argentina
Euroclear Canada Ireland Finland Italy Brazil
Germany France Netherlands Indonesia Spain Chile
Japan Norway Singapore Malaysia Thailand Greece
New Zealand U. Kingdom Switzerland Sweden Mexico
Philippines
Turkey
GROUP GROUP GROUP GROUP GROUP GROUP
USA I II III IV V VI
--- - -- --- -- - --
First $ 50 Million 3.0 7.0 9.0 11.0 14.0 20.0 30.0
Next $50 Million 2.0 6.0 8.0 10.0 13.0 18.0 30.0
Over $100 Million 1.0 5.0 7.0 8.0 11.0 15.0 30.0
B. TRANSACTION CHARGES (US dollars):
USA- See Group I Group II Group III Group IV Group V GROUP VI
--- ------- -------- --------- -------- ------- --------
itemized
fee schedule $30 $60 $75 $100 $125 Greece*-
Canada Austria Australia Argentina Indonesia 20 basis
Euroclear Chile Brazil Belgium Philippines pts per
Germany Hong Kong Ireland Denmark settlement
Japan Italy Mexico Finland min $10.00
Netherlands Spain France Portugal-
Switzerland Sweden New Zealand Turkey*-
United Kingdom Sweden Norway .50 per
Thailand Singapore security
settled
max $7,500
min $250
*Transaction charge waived if brokerage provided by National Securities Company.
III. Portfolio Trades
----------------
For each line item processed:
State Street Bank Repos $ 7.00
DTC or Fed Book Entry $15.00
New York Physical Settlements $30.00
All other trades $16.00
Boston Book Entry $20.00
Maturity Collections $ 8.00
IV. Options
-------
Option charge for each option written or
closing contract, per issue, per broker $25.00
Option expiration charge, per issue, per broker $15.00
Option exercised charge, per issue, per broker $15.00
V. Lending-of Securities
---------------------
Deliver loaned securities versus cash
collateral $20.00
Deliver loaned securities versus securities
collateral $30.00
Receive/deliver additional cash collateral $ 6.00
Substitutions of securities collateral $30.00
Deliver cash collateral versus receipt of
loaned securities $15.00
Deliver securities collateral versus receipt
of loaned securities $25.00
Loan administration -- xxxx-to-market per
day, per loan $ 3.00
VI. Interest Rate Futures
---------------------
Transactions -- no security movement $ 8.00
VII. Coupon Bonds
------------
Monitoring for calls and processing coupons --
for each coupon issue held -- monthly charge $ 5.00
VIII. Holdings Charge
---------------
For each issue maintained -- monthly charge $ 5.00
IX. Principal Reduction Payments
----------------------------
Per Paydown $10.00
X. Dividend Charges (For items held at the Request
----------------
of Traders over record date in street form) $75.00
XI. Special Services
----------------
Fees for activities of a non-recurring nature such as fund
consolidations or reorganizations, extraordinary security shipments
and the preparation of special reports will be subject to negotiation.
Fees for tax accounting/recordkeeping for options, financial futures,
and other special items will be negotiated separately.
XII. Out-of-Pocket Expenses
----------------------
A billing for the recovery of applicable out-of-pocket expenses will
be made as of the end of each month. Out-of-pocket expenses include,
but are not limited to the following:
Telephone
Wire Charges ($4.75 per wire in and $4.55 out)
Postage and Insurance
Courier Service
Duplicating
Legal Fees
Supplies Related to Fund Records
Rush Transfer -- $8.00 Each
Transfer Fees
Sub-custodian Charges
Price Waterhouse Audit Letter
Federal Reserve Fee for Return Check items over $2,500 - $4.25
GNMA Transfer - $15 each
Rapicom lease and supplies
XIII. Payment
-------
The above fees are expected to be paid within 30 days of receipt of
invoice.
CIGNA INSTITUTIONAL FUNDS GROUP
-------------------------------
CIGNA International Stock Fund
CIGNA Annuity Funds Group
-------------------------
CIGNA Annuity Money Market Fund
CIGNA Annuity Income Fund
CIGNA Annuity Equity Fund
CIGNA Annuity Growth & Income Fund
CIGNA Annuity Aggressive Equity Fund
CIGNA Variable Products Group
-----------------------------
CIGNA Companion Fund
INA Investment Securities, Inc.
CIGNA High Income Shares
Copies of the Master Trust Agreements establishing CIGNA Institutional Funds
Group, CIGNA Annuity Funds Group, CIGNA Variable Products Group and CIGNA High
Income Shares (the "Trusts"), are on file with the Secretary of the Commonwealth
of Massachusetts, and notice is hereby given that this agreement is executed on
behalf of Trusts by an officer of the Trusts, as an officer and not
individually, and that the obligations of or arising out of this agreement are
not binding upon any of the trustees, officers, shareholders, employees, agents
or any subsequent series of the Trusts, either individually or collectively, but
are binding only upon the assets or property of the series of the Trusts listed
above.
For each of the above:
CIGNA FUNDS STATE STREET BANK AND TRUST CO
By: /s/ Xxxxxx X. Xxxxxxx III By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------- -------------------------------
Title: Vice President Title: Vice President
------------------------------- ----------------------------
Date: 11/19/90 Date: 11/19/90
-------------------------------- -----------------------------
