CUSTODY AGREEMENT
This Agreement is entered into as of ______, 1997 between Variable
Insurance Funds (the "Fund"), a Massachusetts business trust, having its
principal office and place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx
00000-0000 and AmSouth Bank (the "Bank"), an Alabama banking association with
its principal place of business at 0000 0xx Xxxxxx, Xxxxx, Xxxxxxxxxx, Xxxxxxx
00000.
In consideration of the mutual promises set forth below, the Fund and the Bank
agree as follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to this Agreement, the
words and phrases set forth below shall have the following meanings, unless the
context otherwise requires:
1.1 "Authorized Person" shall be deemed to include the President, and any
Vice President, the Secretary, the Assistant Secretary, the Treasurer and any
Assistant Treasurer of the Fund, or any other person, including persons employed
by the Investment Manager, whether or not any such person is an officer of the
Fund, duly authorized by the Board of Trustees of the Fund to give Oral
Instructions and Written Instructions on behalf of the Fund and listed in
Schedule C, Part II or such other certification as may be received by the Bank
from time to time.
1.2 "Book-Entry System" shall mean the Federal Reserve/Treasury book-entry
system for United States and federal agency securities, its successor or
successors and its nominee or nominees.
1.3 "Declaration of Trust" shall mean the Declaration of Trust of the Fund
as now in effect and as the same may be amended from time to time.
1.4 "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission under
Section 17(a) of the Securities Exchange Act of 1934, as amended, its successor
or successors and its nominee or nominees, in which the Bank is hereby
specifically authorized to make deposits. The term "Depository" shall further
mean and include any other person to be named in Written Instructions authorized
to act as a depository under the 1940 Act, its successor or successors and its
nominee or nominees.
1.5 "Money Market Security" shall be deemed to include, without limitation,
debt obligations issued or guaranteed as to interest and principal by the
Government of the United States or agencies or instrumentalities thereof, and
repurchase and reverse repurchase agreements with respect to any of the
foregoing types of securities, commercial paper, bank certificates of deposit,
bankers' acceptances and short-term corporate obligations, where the purchase or
sale of such securities normally requires settlement in federal funds on the
same day as such purchase or sale.
1.6 "Prospectus" shall mean the Series' current prospectuses and statement
of additional information relating to the registration of the Series' Shares
under the Securities Act of 1933, as amended.
1.7 "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and other
securities and investments from time to time owned by each Series.
1.8 "Shares" refers to the shares of beneficial interest of a Series of the
Trust.
1.9 "Series" refers to Funds shown on Schedule A, attached hereto and made
a part hereof by this reference, and any such other Series as may from time to
time be created and designated in accordance with the provisions of the
Declaration of Trust.
1.10 "Transfer Agent" shall mean the person which performs the transfer
agent, dividend disbursing agent and shareholder servicing agent functions for
the Fund.
1.11 "Written Instructions" shall mean a written or electronic
communication actually received by the Bank from an Authorized Person or from a
person reasonably believed by the Bank to be an Authorized Person by telex or
any other such system whereby the receiver of such communication is able to
verify through codes or otherwise with a reasonable degree of certainty the
authenticity of the sender of such communication.
1.12 The "1940 Act" refers to the Investment Company Act of 1940, and the
rules and regulations thereunder, all as amended from time to time.
2. Appointment of Custodian.
2.1 The Fund hereby constitutes and appoints the Bank as custodian of all
the securities and moneys owned by or in the possession of the Fund during the
period of this Agreement.
2.2 The Bank hereby accepts appointment as custodian for the Fund and
agrees to perform the duties thereof as hereinafter set forth.
3. Compensation.
3.1 The Fund will compensate the Bank for its services rendered under this
Agreement in accordance with the fees set forth in the Fee Schedule attached as
Schedule B and made a part of this Agreement by this reference.
3.2 The parties to this Agreement will agree upon the compensation for
acting as Custodian for any Series hereafter established and designated, and at
the time that the Bank commences serving as such for said Series, such agreement
shall be reflected in a Fee Schedule for the Fund, which shall be attached to
Schedule B of this Agreement.
3.3 Any compensation agreed to hereunder may be adjusted from time to time
by not less than 90 days advance written notice of such fee increase from Bank
to Fund. Any such increase shall take effect upon approval of the Board of
Trustees of the Fund.
3.4 The Bank will xxxx the Fund as soon as practicable after the end of the
month, and said xxxxxxxx will be detailed in accordance with the Fee Schedule.
The Fund will pay to the Bank the amount of such billing within 45 days after
receipt. In the event such xxxx is not promptly paid, the Bank may charge
against any money specifically allocated to the Fund such compensation and any
expenses incurred by the Bank in the performance of its duties pursuant to such
agreement. The Bank shall also be entitled to charge against any money held by
it and specifically allocated to the Fund the amount of any loss, damage,
liability or expense incurred with respect to such Fund, including counsel fees,
for which it shall be entitled to reimbursement under provision 10.4 of this
Agreement.
The expenses which the Bank may charge against such account include, but
are not limited to, the expenses of Sub-Custodians and foreign branches of the
Bank incurred in settling transactions outside of Birmingham or New York City
involving the purchase and sale of Securities of the Fund.
4. Custody of Cash and Securities.
4.1 Receipt and Holding of Assets. The Fund will deliver or cause to be
delivered to the Bank all securities and moneys owned by it, including cash
received from the issuances of its Shares, at any time during the period of this
Agreement and shall specify the Series to which the Securities and moneys are to
be specifically allocated. The Bank shall physically segregate and keep apart on
its books, the assets of each Series, including separate identification of
securities held in the Book-Entry System. The Bank will not be responsible for
such securities and moneys until actually received by it. The Fund shall
instruct the Bank from time to time in its sole discretion, by means of Written
Instructions as to the manner in which and in what amounts Securities and moneys
of a Series are to be deposited on behalf of such Series in the Book-Entry
System or the Depository and specifically allocated on the books of the Bank to
such Series. Securities and moneys of the Fund deposited in the Book-Entry
System or the Depository will be represented in accounts which include only
assets held by the Bank for customers, including but not limited to accounts in
which the Bank acts in a fiduciary or representative capacity.
4.2 Accounts and Disbursement. The Bank shall establish and maintain a
separate account for each Series and shall credit to the separate account of
each Series all moneys received by it for the account of such Series and shall
disburse the same only:
4.2.1 In payment for securities purchased for such Series, as provided in
Section 5 hereof;
4.2.2 In payment of dividends or distributions with respect to the Shares
of such Series;
4.2.3 In payment of original issue or other taxes with respect to the
Shares of such Series;
4.2.4 In payment for Shares which have been redeemed by such Series;
4.2.5 Pursuant to Written Instructions, setting forth the name of such
Series, the name and address of the person to whom the payment is to be made,
the amount to be paid and the purpose for which payment is to be made; or
4.2.6 In payment of fees and in reimbursement of the expenses and
liabilities of the Bank attributable to such Series.
4.3 Confirmations and Statements. Promptly after the close of business each
day, the Bank shall make available to the Fund information with respect to all
transfers to and from the account of a Series during that day. The Bank need not
send written confirmation or a summary of all such transfers to or from the
account of each Series. Provided, however, that upon the written request of
Fund, Bank shall provide within 5 business days of such written request a copy
of any confirmations which include transactions of the Fund. Where securities
purchased by a Series are in a fungible bulk of Securities registered in the
name of the Bank (or its nominee) or shown on the Bank's account on the books of
the Depository or the Book-Entry System, the Bank shall by book entry or
otherwise identify the quantity of those securities belonging to such Series. At
least monthly, the Bank shall furnish the Fund with a detailed statement of the
Securities and moneys held for each Series under this Agreement.
4.4 Registration of Securities and Physical Separation.
All Securities held for a Series which are issued or issuable only in
bearer form, except such Securities as are held in the Book-Entry System, shall
be held by the Bank in that form; all other Securities held for a Series may be
registered, in the name of any duly appointed registered nominee of the Bank as
the Bank may from time to time determine, or in the name of the Book-Entry
System or the Depository of their successor or successors, or their nominee or
nominees. When a reference is made in this Agreement to an action to be taken by
Bank it is understood by the parties that the action may be taken directly or,
in the case of book-entry securities, through the appropriate depository. The
Fund agrees to furnish to the Bank appropriate instruments to enable the Bank to
hold or deliver in proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or the Depository,
any Securities which it may hold for the account of a Series. The Bank (or its
sub-custodians) shall hold all such Securities specifically allocated to a
Series which are not held in the Book-Entry System or the Depository in a
separate account for such series in the name of such Series physically
segregated at all times from those of any other person or persons.
4.5 Collection of Income and Other Matters Affecting Securities. Unless
otherwise instructed to the contrary by Written Instructions, the Bank shall
with respect to all Securities held for a Series in accordance with this
Agreement:
4.5.1 Collect all income due or payable and credit such income promptly on
the contractual settlement date, whether or not actually received, to the
account of the appropriate Series, except for income from foreign issues. Income
which has not been collected after reasonable effort, within a time agreed upon
between the parties, shall be repaid to the Bank pending final collection at
such date as may be mutually agreed upon by the Trust and the Bank;
4.5.2 Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed or retired, or otherwise
become payable. Bank shall make a good faith effort to inform Fund of any call,
redemption or retirement date with respect to securities which are owned by a
Series and held by the Bank or its nominee. Notwithstanding the foregoing, the
Bank shall have no responsibility to the Fund or a Series for monitoring or
ascertaining of any call, redemption or retirement date with respect to
securities which are held by a Series and held by Bank or its nominee. Nor shall
the Bank have any responsibility or liability to the Fund or to a Series for any
loss by a Series for any missed payment or other default resulting therefrom
unless the Bank received timely general notification, which shall not be less
than 5 business days, from the Fund or the Series specifying the time, place and
manner for the presentment of any put bond owned by a Series and held by the
Bank or its nominee. The Bank shall not be responsible and assumes no liability
to the Fund or a Series for the accuracy or completeness of any notification the
Bank shall provide to the Fund or a series with respect to put securities;
4.5.3 Execute any necessary declarations or certificates of ownership under
the Federal income tax laws or the laws or regulations of any other taxing
authority now or hereafter in effect; and
4.5.4 Hold for the account of each Series all rights and other Securities
issued with respect to any Securities held by the Bank hereunder for such
Series.
4.6 Delivery of Securities and Evidence of Authority. Upon receipt of
Written Instructions, the Bank shall:
4.6.1 Execute and deliver or cause to be executed and delivered to such
persons as may be designated in such Written Instructions, proxies, consents,
authorization, and any other instruments whereby the authority of the Fund as
owner of any Securities may be exercised;
4.6.2 Deliver or cause to be delivered any Securities held for a Series in
exchange for other Securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any conversion
privilege;
4.6.3 Deliver or cause to be delivered any Securities held for a Series to
any protective committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation or recapitalization
or sale of assets of any corporation, and receive and hold under the terms of
this Agreement in the separate (bookkeeping) account for each Series such
certificates of deposit, interim receipts or other instruments or documents as
may be issued to it to evidence such delivery;
4.6.4 Make or cause to be made such transfers or exchanges of the assets
and take such steps as shall be stated in said Written Instructions to be for
the purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Fund;
4.6.5 Deliver Securities owned by any Series upon sale of such Securities
for the account of such Series pursuant to Section 5;
4.6.6 Deliver Securities owned by any Series upon the receipt of payment in
connection with any repurchase agreement related to such Securities entered into
by such Series;
4.6.7 Deliver Securities owned by any Series to the issuer thereof or its
agent when such Securities are called, redeemed, retired or otherwise become
payable; provided, however, that in any such case the cash or other
consideration is be delivered to the Bank.
4.6.8 Deliver Securities owned by any Series in connection with any loans
of Securities made by such Series but only against receipt of adequate
collateral as agreed upon from time to time by the Bank and the Fund which may
be in any form permitted under the 1940 Act or any interpretations thereof
issued by the Securities and Exchange Commission or its staff;
4.6.9 Deliver Securities owned by any Series for delivery as security in
connection with any borrowings by such Series requiring a pledge of Series
assets, but only against receipt of amount borrowed;
4.6.10 Deliver Securities owned by any Series upon receipt of instructions
from such Series for delivery to the Transfer Agent or to the holders of Shares
of such Series in connection with distributions in kind, as may be described
from time to time in the Series' Prospectus, in satisfaction of requests by
holders of Shares for repurchase or redemption; and
4.6.11 Deliver Securities owned by any Series for any other proper business
purpose, but only upon receipt of, in addition to Written Instructions, a
certified copy of a resolution of the Board of Trustees signed by an Authorized
Person and certified by the Secretary or Assistant Secretary of the Fund,
specifying the Securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such Purpose to be a proper business
purpose, and naming the person or persons to whom delivery of such Securities
shall be made.
4.7 Endorsement and Collection of Checks, Etc. The Bank is hereby
authorized to endorse and collect all checks, drafts or other orders for the
payment of money received by the Bank for the account of a Series.
5. Purchase and Sale of Investments of the Series.
5.1 Promptly after each purchase of Securities for a Series, the Fund shall
deliver to the Bank Written Instructions specifying with respect to each
purchase: (1) the name of the Series to which such Securities are to be
specifically allocated; (2) the name of the issuer and the title of the
Securities; (3) the number of shares or the principal amount purchased and
accrued interest, if any; (4) the date of purchase and settlement; (5) the
purchase price per unit; (6) the total amount payable upon such purchase; (7)
the name of the person from whom or the broker through whom the purchase was
made, if any; (8) whether or not such purchase is to be settled through the
Book-Entry System or the Depository; and (9) whether the Securities purchased
are to be deposited in the Book-Entry System or the Depository. The Bank shall
receive all Securities purchased by or for a Series and upon receipt of such
Securities shall pay out of the moneys held for the account of such Series the
total amount payable upon such purchase, provided that the same conforms to the
total amount payable as set forth in such Written Instructions.
5.2 Promptly after each sale of Securities of a Series, the Fund shall
deliver to the Bank Written Instructions specifying with respect to such sale:
(1) the name of the Series to which the Securities sold were specifically
allocated; (2) the name of the issuer and the title of the Securities; (3) the
number of shares or principal amount sold, and accrued interest, if any; (4) the
date of sale; (5) the sale price per unit; (6) the total amount payable to the
Series upon such sale; (7) the name of the broker through whom or the person to
whom the sale was made; and (8) whether or not such sale is to be settled
through the Book-Entry System or the Depository. The Bank shall deliver or cause
to be delivered the Securities to the broker or other person designated by the
Fund upon receipt of the total amount payable to such Series upon such sale,
provided that the same conforms to the total amount payable to such Series as
set forth in such Written Instructions. Subject to the foregoing, the Bank may
accept payment in such form as shall be reasonably satisfactory to it, and may
deliver Securities and arrange for payment in accordance with the customs
prevailing among dealers in Securities.
6. Payment of Dividends or Distributions.
6.1 The Fund shall furnish to the Bank the resolution of the Board of
Trustees of the Fund certified by the Secretary or Assistant Secretary (i)
authorizing the declaration of dividends or distribution with respect to a
Series on a specified periodic basis and authorizing the Bank to rely on Written
Instructions specifying the date of the declaration of such dividend or
distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the amount payable per
share to the shareholders of record as of the record date and the total amount
payable per share to the shareholders of record as of the record date and the
total amount payable to the Transfer Agent on the payment date, or (ii) setting
forth the date of declaration of any dividend or distribution by a Series, the
date of payment thereof, the record date as of which shareholders entitled to
payment shall be determined, the amount payable per share to the shareholders of
record as of the record date and the total amount payable to the Transfer Agent
on the payment date.
6.2 Upon the payment date specified in such resolution or Written
Instructions the Bank shall pay out the moneys specifically allocated to and
held for the account of the appropriate Series the total amount payable to the
Transfer Agent of the Fund.
7. Sale and Redemption of Shares of a Series.
7.1 Whenever the Fund shall sell or redeem any Shares of a Series, the Fund
shall deliver or cause to be delivered to the Bank Written Instructions duly
specifying:
7.1.1 The name of the Series whose Shares were sold or redeemed;
7.1.2 The number of Shares sold or redeemed, trade date, and price;
and
7.1.3 The amount of money to be received or paid by the Bank for the
sale or redemption of such Shares.
7.2 Upon receipt of such money from the Transfer Agent, the Bank shall
credit such money to the separate account of the Series.
7.3 Upon issuance of any Shares of a Series in accordance with the
foregoing provisions of this Section 7, the Bank shall pay, out of the moneys
specifically allocated and held for the account of such Series, all original
issue or other taxes required to be paid in connection with such issuance upon
the receipt of Written Instructions specifying the amount to be paid.
7.4 Upon receipt from the Transfer Agent of advice setting forth the number
of Shares of a Series received by the Transfer Agent for redemption and that
such Shares are valid and in good form for redemption, the Bank shall make
payment to the Transfer Agent out of the moneys specifically allocated to and
held for the account of the Series.
8. Indebtedness.
8.1 The Fund will cause to be delivered to the Bank by any bank (excluding
the Bank) from which the Fund borrows money for temporary administrative or
emergency purposes using Securities as collateral for such borrowings, a notice
or undertaking in the form currently employed by any such bank setting forth the
amount which such bank will loan to the Fund against delivery of a stated amount
of collateral. The Fund shall promptly deliver to the Bank Written Instructions
stating with respect to each such borrowing: (1) the name of the Series for
which the borrowing is to be made; (2) the name of the bank; (3) the amount and
terms of the borrowing, which may be set forth by incorporating by reference an
attached promissory note, duly endorsed by the Fund, or other loan agreement;
(4) the time and date, if known, on which the loan is to be entered into (the
"borrowing date"); (5) the date on which the loan becomes due and payable; (6)
the total amount payable to the Fund for the separate account of the Series on
the borrowing date; (7) the market value of Securities to be delivered as
collateral for such loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular Securities; (8)
whether the Bank is to deliver such collateral through the Book-Entry System or
the Depository; and (9) a statement that such loan is in conformance with the
1940 Act and the Series' Prospectus.
8.2 Upon receipt of the Written Instructions referred to above, the Bank
shall deliver on the borrowing date the specified collateral and the executed
promissory note, if any, against delivery by the lending bank of the total
amount of the loan payable, provided that the same conforms to the total amount
payable as set forth in the Written Instructions. The Bank may, at the option of
the lending bank keep such collateral in its possession, but such collateral
shall be subject to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Bank shall deliver as additional
collateral in the manner directed by the Fund from time to time such Securities
specifically allocated to such Series as may be specified in Written
Instructions to collateralize further any transaction described in this Section
8. The Fund shall cause all Securities released from collateral status to be
returned directly to the Bank, and the Bank shall receive from time to time such
return of collateral as may be tendered to it. In the event that the Fund fails
to specify in Written Instructions all of the information required by this
Section 8, the Bank shall not be under any obligation to deliver any Securities.
Collateral returned to the Bank shall be held hereunder as it was prior to being
used as collateral.
9. Persons Having Access to Assets of the Series.
9.1 No Trustee, officer, employee or agent of the Fund, and no officer,
director, employee or agent of the Advisor, shall have physical access to the
assets of the Fund held by the Bank or be authorized or permitted to withdraw
any investments of the Fund, nor shall the Bank deliver any assets of the Fund
to any such person. No officer, director, employee or agent of the Bank who
holds any similar position with the Fund, the Advisor shall have access to the
assets of the Fund.
9.2 The individual employees of the Bank initially duly authorized by the
Board of Directors of the Bank to have access to the assets of the Fund are
listed on Schedule C, Part I, which is attached and made a part of this
Agreement by this reference. The Bank shall advise the Fund of any change in the
individuals authorized to have access to the assets of the Fund by written
notice to the Fund.
9.3 Nothing in this Section 9 shall prohibit any officer, employee or agent
of the Fund, or any officer, director, employee or agent of the Advisor, from
giving Written Instructions to the Bank so long as it does not result in
delivery of or access to assets of the Fund prohibited by this Section 9.
10. Concerning the Bank.
10.1 Standard of Conduct. The Bank 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 Agreement and reasonably believed by it
to be valid or genuine and shall be held harmless in acting upon proper
instructions, resolutions, 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 and shall be entitled to receive as conclusive proof of
any fact or matter required to be ascertained by it hereunder, a certificate
signed by the President, a Vice President, the Treasurer, the Secretary or an
Assistant Secretary of the Fund. The Bank may receive and accept a resolution 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 Bank of
written notice from the Secretary or an Assistant Secretary to the contrary.
The Bank shall be entitled to rely on and may act upon advice of counsel
(who shall either be counsel for the Fund, or other counsel selected by the Bank
with expertise in the 1940 Act) on all matters, and shall be without liability
for any action reasonably taken or omitted pursuant to such advice. Provided,
however, that if such reliance involves a potential material loss to the Fund,
the Bank shall advise the Fund of any such actions to be taken in accordance
with such advice of counsel to the Bank.
The Bank shall be held to the exercise of reasonable care in carrying out
the provisions of this Agreement but shall be liable only for its own negligent
or bad faith acts, wilful misconduct, or negligent or wilful failures to act by
the Bank and its agents or Employees. Bank shall have no responsibility for
reviewing or questioning the acts or records of any prior custodian. The Fund
shall indemnify the Bank and hold it harmless from and against all losses,
liabilities, demands, claims, actions, expenses, attorneys' fees, and taxes with
respect to each Series which the Bank may suffer or incur on account of being
Bank hereunder except to the extent that such losses, liabilities, demands,
claims, actions, expenses, attorneys fees or taxes arise from the Bank's own
negligence or bad faith. Notwithstanding the foregoing the Bank shall be liable
to the Fund for any loss or damage resulting from the use of the Book-Entry
System or the Depository arising by reason of any negligence, misfeasance or
misconduct on the part of the Bank or any of its employees or agents.
If a Series requires the Bank to take any action with respect to
Securities, which action involves the payment of money or which action may, in
the opinion of the Bank, result in the Bank or its nominee assigned to such
Series being liable for the payment of money or incurring liability of some
other form, such Series, as a prerequisite to requiring the Bank to take such
action, shall, prior to the Bank taking such action, provide indemnity in
writing to the Bank in an amount and form reasonably satisfactory to it.
10.2 Limit of Duties. Without limiting the generality of the foregoing, the
Bank shall be under no duty or obligation to inquire into, and shall not be
liable for:
10.2.1 The validity of the issue of any Securities purchased by any Series,
the legality of the purchase thereof, the permissibility of the purchase thereof
under the Fund's governing documents, or the propriety of the amount paid
therefor;
10.2.2 The legality of the sale of any Securities by any Series, the
permissibility of such sale under the fund's governing documents, or the
propriety of the amount for which the same are sold;
10.2.3 The legality of the issue or the sale of any Shares, or the
sufficiency of the amount to be received therefor;
10.2.4 The legality of the redemption of any Shares, or the propriety of
the amount to be paid therefor;
10.2.5 The legality of the declaration or payment of any dividend or other
distribution of any Series;
10.2.6 The legality of any borrowing for temporary or emergency
administrative purposes.
10.3 No Liability until Receipt. The Bank shall not be liable for, or
considered to be the custodian of, any money, whether or not represented by any
check, draft, or other instrument for the payment of money, received by it on
behalf of any Series until the Bank actually receives and collects such money
directly or by the final crediting of the account representing the Fund's
interest in the Book-Entry System or the Depository.
10.4 Collection Where Payment Refused. The Bank shall not be under any duty
or obligation to take action to effect collection of any amount, if the
Securities upon which such amount is payable are in default, or if payment is
refused after due demand or presentation, unless and until (a) it shall be
directed to take such action by Written Instructions and (b) it shall be assured
to its satisfaction of reimbursement of its costs and expenses in connection
with any such action.
10.5 Appointment of Agents and Sub-Custodians. The Bank may appoint one or
more banking institutions, including but not limited to banking institutions
located in foreign countries, to act as Depository or Depositories or as
Sub-Custodian or as Sub-Custodians of Securities and moneys at any time owned by
any Series, upon terms and conditions specified in Written Instructions. The
Bank shall use reasonable care in selecting a Depository and/or Sub-Custodian
located in a country other than the United States ("Foreign Sub-Custodian"), and
shall oversee the maintenance of any Securities or moneys of the Trust by any
Foreign Sub-Custodian in accordance with the provisions of Rule 17f-5 of the
Act.
10.6 No Duty to Ascertain: Authority. The Bank shall not be under any duty
or obligation to ascertain whether any Securities at any time delivered to or
held by it for the Fund and specifically allocated to a Series are such as may
properly be held by the Series and specifically allocated to such Series under
the provisions of the Declaration of Trust and the Series' Prospectus.
10.7 Reliance on Certificates and Instructions. The Bank shall be entitled
to rely upon any Written Instructions or Oral Instructions actually received by
the Bank pursuant to the applicable Sections of this Agreement and reasonably
believed by the Bank to be genuine and to be given by an Authorized Person. The
Fund agrees to forward to the Bank Written Instructions from an Authorized
Person confirming such Oral Instructions in such manner so that such Written
Instructions are received by the Bank, whether by hand delivery, telex, or
otherwise, by the close of business on the same day that such Oral Instructions
are given to the Bank. The Fund agrees that the fact that such confirming
instructions are not received by the Bank shall in no way affect the validity
for the transactions or enforceability of the transactions hereby authorized by
the Fund. The Fund agrees that the Bank shall incur no liability to the Fund in
acting upon Oral Instructions given to the Bank hereunder concerning such
transactions provided such instructions reasonably appear to have been received
from a duly Authorized Person.
10.8 Inspection of Books and Records. The books and records of the Bank
regarding the Fund shall be open to inspection and audit at reasonable times by
officers and auditors employed by the Fund and by employees of the Securities
and Exchange Commission. The Bank shall provide the Fund, upon request, with any
report obtained by the Bank on the system of internal accounting control of the
Book-Entry System or the Depository and with such reports on its own systems of
internal accounting control as the Fund may reasonably request from time to
time. Provided, however, that in the event that the Fund shall require a report
of internal accounting control produced by the auditors of the Series rather
than of the Bank, then such report shall be prepared at the expense of the
Series, and the Series agrees to pay for the time expended by Bank on such audit
and report at the hourly rate set forth on the Fee agreement.
11. Term and Termination.
11.1 This Agreement shall become effective on the date first set forth
above (the "Effective Date") and shall continue in effect thereafter as the
parties may mutually agree.
11.2 The Bank may terminate this Agreement with respect to the Fund and the
Fund may terminate this Agreement with respect to any Series by giving to the
other party a notice in writing specifying the date of such termination, which
shall be not less than 90 days after the date of receipt of such notice. In the
event such notice is given by the Fund, it shall designate a successor custodian
or custodians, which shall be a person qualified to so act under the 1940 Act.
In the event such notice is given by the Bank, the Fund shall, on or before the
termination date, deliver to the Bank, Written Instructions designating a
successor Custodian or Custodians. In the absence of such designation by the
Fund, the Bank may designate a successor Custodian, which shall be a person
qualified to so act under the 0000 Xxx. If the Fund fails to designate a
successor Custodian for any Series, the Fund shall upon the date specified in
the notice of termination of this Agreement and upon the delivery by the Bank of
all Securities (other than Securities held in the Book-Entry Systems which
cannot be delivered to the Trust) and moneys then owned by such Series, be
deemed to be its own Custodian and the Bank shall thereby be relieved of all
duties and responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry system which cannot be delivered to
the Trust.
11.3 Upon the date set forth in such notice under paragraph (2) of this
Section, this Agreement shall terminate to the extent specified in such notice,
and the Bank shall upon receipt of a notice of acceptance by the successor
Custodian on that date deliver directly to the successor Custodian all
Securities and moneys then held by the Bank and specifically allocated to the
Series specified, after deducting all fees, expenses and other amounts for the
payment or reimbursement of which it shall then be entitled with respect to such
Series.
12. Additional Services by Bank.
12.1 If allowed by the prospectus, the investment adviser of each Series
may direct that the assets of that Series be invested in deposits in the Bank or
its affiliates bearing a reasonable rate of interest.
12.2 Other Bank Services. Any authorized person may direct the Bank to
utilize other services or facilities provided by the Bank or its affiliates.
Such services shall include, but not be limited to (1) the placing of orders for
the purchase, sale exchange, investment or reinvestment of securities through
any brokerage service conducted by the Bank or its affiliates, or (2) the
purchase of units of any investment company managed or advised by the Bank or
its affiliates and/or for which the Bank or its affiliates act as custodian or
provide investment advice or other services for a fee. The Fund hereby
acknowledges that the Bank or its affiliates will receive fees for such services
in addition to the fees payable under this Agreement. Fee Schedules for such
additional directed services shall be delivered to the Authorized Person before
provision of such services.
13. Miscellaneous.
13.1 Annexed hereto is Schedule C, Part II setting forth the names of the
present Authorized Persons. The Fund agrees to furnish to the Bank a new
certification in similar form in the event that any such present Authorized
Person ceases to be such an Authorized Person or in the event that other or
additional Authorized Persons are elected or appointed. Until such new
certification shall be received, the Bank shall be fully protected in acting
under the provisions of this Agreement upon Oral Instructions or signatures of
the present Authorized Persons as set forth in the last delivered certification.
13.2 Annexed hereto is Schedule C, Part III setting forth the names of the
present Trustees of the Fund. The Fund agrees to furnish to the Bank a new
certification in similar form in the event any such present Trustee ceases to be
a Trustee of the Fund or in the event that other or additional Trustees are
elected or appointed. Until such new certification shall be received, the Bank
shall be fully protected in acting under the provisions of this Agreement upon
the signature of the officers as set forth in the last delivered certification.
13.3 Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Bank, shall be sufficiently given if addressed
to the Bank and mailed or delivered to it at its offices at:
AmSouth Bank
0000 0xx Xxxxxx, Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
or such other place as the Bank may from time to time designate in writing.
13.4 Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund, shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its offices at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000-0000 or at such other place as the Fund may from time to
time designate in writing.
13.5 This Agreement may not be amended or modified in any manner except by
a written agreement executed by both parties with the same formality as this
Agreement, and as may be permitted or required by the 0000 Xxx.
13.6 This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Fund without the written consent
of the Bank, or by the Bank without the written consent of the Fund authorized
or approved by a resolution of the Board of Trustees of the Fund, and any
attempted assignment without such written consent shall be null and void.
13.7 This Agreement shall be construed in accordance with the laws of the
State of Massachusetts.
13.8 It is expressly agreed to that the obligations of the Fund hereunder
shall not be binding upon any of the Trustees, shareholders, nominees, officers,
agents, or employees of the Fund, personally, but bind only the property of the
Fund, as provided in the Declaration of Trust of the Fund. The execution and
delivery of this Agreement have been authorized by the Trustees of the Fund and
signed by an authorized officer of the Fund, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Fund as provided in its Declaration of Trust.
13.9 The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
13.10 This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunder duly authorized as of the day
and year first above written.
Variable Insurance Funds
By: _______________________________
Title: ___________________________
Date: _______, 1997
AmSouth Bank
By: _____________________________
Title: __________________________
Date: _______, 1997
Schedule A - Funds
AmSouth Regional Equity Fund
AmSouth Equity Income Fund
Variable Insurance Funds
By: _______________________________
Title: ___________________________
Date: _______, 1997
AmSouth Bank
By: _____________________________
Title: __________________________
Date: _______, 1997
Schedule B
Mutual Fund Services
Schedule of Fees
Custody
For custody services the Bank will charge for the first year of services
hereunder a fee equal to .60 b.p (.0060%) of net asset value per annum. This
charge will be reviewed thereafter, but will continue in effect until a
modification of this Schedule B is mutually agreed upon.
Variable Insurance Funds
By: ___________________________
Title: _______________________
Date: _______, 1997
AmSouth Bank
By: __________________________
Title: _______________________
Date: _______, 1997
Schedule C
Authorized Persons
Part I - Access Persons of Bank
Part II - Authorized Persons of the Fund
Refer to the current resolution of the Board of Trustees of the Fund.
Part III - Trustees
Xxxxxx X. Xxxxx
Xxxxxxx Xxx Xxxxxxx
Xxxxx X. Xxxxxxxx, Xx.
Variable Insurance Funds
By: _____________________________
Title: __________________________
Date: _______, 1997
AmSouth Bank
By: ___________________________
Title: ________________________
Date: _______, 1997
