CUSTODIAN AGREEMENT
AGREEMENT dated as of December 14, 2000, between BANKERS TRUST COMPANY
(the "Custodian") and VARIABLE INSURANCE FUNDS (the "Customer").
WHEREAS, the Customer may be organized with one or more series of
shares, each of which shall represent an interest in a separate portfolio of
Securities and Cash (each as hereinafter defined) (all such existing and
additional series now or hereafter listed on Exhibit A being hereafter referred
to individually as a "Portfolio" and collectively, as the "Portfolios"); and
WHEREAS, the Customer desires to appoint the Custodian as custodian on
behalf of the Portfolios under the terms and conditions set forth in this
Agreement, and the Custodian has agreed to so act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. Employment of Custodian. The Customer hereby employs the Custodian
as custodian of all assets of each Portfolio which are delivered to and accepted
by the Custodian or any Subcustodian (as that term is defined in Section 4) (the
"Property") pursuant to the terms and conditions set forth herein. For purposes
of this Agreement, "delivery" of Property shall include the acquisition of a
security entitlement (as that term is defined in the New York Uniform Commercial
Code ("UCC")) with respect thereto. Without limitation, such Property shall
include stocks and other equity interests of every type, evidences of
indebtedness, other instruments representing same or rights or obligations to
receive, purchase, deliver or sell same and other non-cash investment property
of a Portfolio ("Securities") and cash from any source and in any currency
("Cash"), provided that the Custodian shall have the right, in its sole
discretion, to refuse to accept as Property any property of a Portfolio that the
Custodian considers not to be appropriate or in proper form for deposit for any
reason. The Custodian shall not be responsible for any property of a Portfolio
held or received by the Customer or others and not delivered to the Custodian or
any Subcustodian.
2. Maintenance of Securities and Cash at Custodian and Subcustodian
Locations. Pursuant to Instructions, the Customer shall direct the Custodian to
(a) settle Securities transactions and maintain cash in the country or other
jurisdiction in which the principal trading market for such Securities is
located, where such Securities are to be presented for payment or where such
Securities are acquired and (b) maintain cash and cash equivalents in such
countries in amounts reasonably necessary to effect the Customer's transactions
in such Securities. Instructions to settle Securities transactions in any
country shall be deemed to authorize the holding of such Securities and Cash in
that country.
3. Custody Account. The Custodian agrees to establish and maintain one
or more custody accounts on its books each in the name of a Portfolio (each, an
"Account") for any and all Property from time to time received and accepted by
the Custodian or any Subcustodian for the account of such Portfolio. Upon
delivery by the Customer to the Custodian of any acceptable Property belonging
to a Portfolio, the Customer shall, by Instructions (as hereinafter defined in
Section 15), specifically indicate which Portfolio such Property belongs or if
such Property belongs to more than one Portfolio shall allocate such Property to
the appropriate Portfolio, and the Custodian shall allocate such Property to the
Accounts in accordance with the Instructions. The Customer on behalf of each
Portfolio, acknowledges its responsibility as a principal for all of its
obligations to the Custodian arising under or in connection with this Agreement,
warrants its authority to deposit in the appropriate Account any Property
received therefor by the Custodian or a Subcustodian and to give, and authorize
others to give, instructions relative thereto. The Custodian may deliver
securities of the same class in place of those deposited in the Account.
The Custodian shall hold, keep safe and protect as custodian for each
Account, on behalf of the Customer, all Property in such Account and, to the
extent such Property constitutes financial assets for purposes of the New York
UCC, shall maintain those financial assets in such Account as security
entitlements in favor of the Portfolio in whose name the Account is maintained.
All transactions, including, but not limited to, foreign exchange transactions,
involving the Property shall be executed or settled solely in accordance with
Instructions (which shall specifically reference the Account for which such
transaction is being settled), except that until the Custodian receives
Instructions to the contrary, the Custodian will:
(a) collect all interest and dividends and all other income and
payments, whether paid in cash or in kind, on the Property, as
the same become payable and credit the same to the appropriate
Account;
(b) present for payment all Securities held in an Account which
are called, redeemed or retired or otherwise become payable
and all coupons and other income items which call for payment
upon presentation to the extent that the Custodian or
Subcustodian is actually aware of such opportunities and hold
the cash received in such Account pursuant to this Agreement;
(c) (i) exchange Securities where the exchange is purely
ministerial (including, without limitation, the exchange of
temporary securities for those in definitive form and the
exchange of warrants, or other documents of entitlement to
securities, for the Securities themselves), provided that
Custodian will take delivery and hold in the Account any such
replacement securities prior to withdrawing the securities
being replaced and (ii) when notification of a tender or
exchange offer (other than ministerial exchanges described in
(i) above) is received for an Account, endeavor to receive
Instructions, provided that if such Instructions are not
received in time for the Custodian to take timely action, no
action shall be taken with respect thereto;
(d) whenever notification of a rights entitlement or a fractional
interest resulting from a rights issue, stock dividend or
stock split is received for an Account and such rights
entitlement or fractional interest bears an expiration date,
if after endeavoring to obtain Instructions such Instructions
are not received in time for the Custodian to take timely
action or if actual notice of such actions was received too
late to seek Instructions, sell in the discretion of the
Custodian (which sale the Customer hereby authorizes the
Custodian to make) such rights entitlement or fractional
interest and credit the Account with the net proceeds of such
sale;
(e) execute in the Customer's name for an Account, whenever the
Custodian deems it appropriate, such ownership and other
certificates as may be required to obtain the payment of
income from the Property in such Account;
(f) pay for each Account, any and all taxes and levies in the
nature of taxes imposed on interest, dividends or other
similar income on the Property in such Account by any
governmental authority. In the event there is insufficient
Cash available in such Account to pay such taxes and levies,
the Custodian shall notify the Customer of the amount of the
shortfall and the Customer, at its option, may deposit
additional Cash in such Account or take steps to have
sufficient Cash available. The Customer agrees, when and if
requested by the Custodian and required in connection with the
payment of any such taxes to cooperate with the Custodian in
furnishing information, executing documents or otherwise; and
(g) appoint brokers and agents for any of the ministerial
transactions involving the Securities described in (a) - (f),
including, without limitation, affiliates of the Custodian or
any Subcustodian.
4. Subcustodians and Securities Systems. The Customer authorizes and
instructs the Custodian to maintain the Property in each Account directly in one
of its U.S. branches or indirectly through custody accounts which have been
established by the Custodian with the following other securities intermediaries:
(a) another U.S. bank or trust company or branch thereof located in the U.S.
which is itself qualified under the Investment Company Act of 1940, as amended
("1940 Act"), to act as custodian (individually, a "U.S. Subcustodian"), or a
U.S. securities depository or clearing agency or system in which the Custodian
or a U.S. Subcustodian participates (individually, a "U.S. Securities System")
or (b) one of its non-U.S. branches or majority-owned non-U.S. subsidiaries, a
non-U.S. branch or majority-owned subsidiary of a U.S. bank or a non-U.S. bank
or trust company, acting as custodian (individually, a "non-U.S. Subcustodian";
U.S. Subcustodians and non-U.S. Subcustodians, collectively, "Subcustodians"),
or a non-U.S. depository or clearing agency or system in which the Custodian or
any Subcustodian participates (individually, a "non-U.S. Securities System";
U.S. Securities System and non-U.S. Securities System, collectively, Securities
System"), provided that in each case in which a U.S. Subcustodian or U.S.
Securities System is employed, each such Subcustodian or Securities System shall
have been approved by Instructions; provided further that in each case in which
a non-U.S. Subcustodian or non-U.S. Securities System is employed, (a) such
Subcustodian or Securities System either is (i) a "qualified U.S. bank" as
defined by Rule 17f-5 under the 1940 Act ("Rule 17f-5") or (ii) an "eligible
foreign custodian" within the meaning of Rule 17f-5 or such Subcustodian or
Securities System is the subject of an order granted by the U.S. Securities and
Exchange Commission ("SEC") exempting such agent or the subcustody arrangements
thereto from all or part of the provisions of Rule 17f-5 and (b) the agreement
between the Custodian and such non-U.S. Subcustodian has been approved by
Instructions; it being understood that the Custodian shall have no liability or
responsibility for determining whether the approval of any Subcustodian or
Securities System has been proper under the 1940 Act or any rule or regulation
thereunder.
Upon receipt of Instructions, the Custodian agrees to cease the
employment of any Subcustodian or Securities System with respect to the
Customer, and if desirable and practicable, appoint a replacement Subcustodian
or securities system in accordance with the provisions of this Section. In
addition, the Custodian may, at any time in its discretion, upon written
notification to the Customer, terminate the employment of any Subcustodian or
Securities System.
Upon request of the Customer, the Custodian shall deliver to the
Customer annually a certificate stating: (a) the identity of each non-U.S.
Subcustodian and non-U.S. Securities System then acting on behalf of the
Custodian and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such non-U.S Subcustodian and
non-U.S. Securities System; (b) the countries in which each non-U.S.
Subcustodian or non-U.S. Securities System is located; and (c) so long as Rule
17f-5 requires the Customer's Board of Trustees to directly approve its foreign
custody arrangements, such other information relating to such non-U.S.
Subcustodians and non-U.S. Securities Systems as may reasonably be requested by
the Customer to ensure compliance with Rule 17f-5. So long as Rule 17f-5
requires the Customer's Board of Trustees to directly approve its foreign
custody arrangements, the Custodian also shall furnish annually to the Customer
information concerning such non-U.S. Subcustodians and non-U.S. Securities
Systems similar in kind and scope as that furnished to the Customer in
connection with the initial approval of this Agreement. Custodian agrees to
promptly notify the Customer if, in the normal course of its custodial
activities, the Custodian has reason to believe that any non-U.S. Subcustodian
or non-U.S. Securities System has ceased to be a qualified U.S. bank or an
eligible foreign custodian each within the meaning of Rule 17f-5 or has ceased
to be subject to an exemptive order from the SEC.
5. Use of Subcustodian. With respect to Property in an Account which
is maintained by the
Custodian through a Subcustodian employed pursuant to Section 4:
(a) The Custodian will identify on its books as belonging to the
Customer on behalf of a Portfolio, any Property maintained
through such Subcustodian.
(b) Any Property in the Account held by a Subcustodian will be
subject only to the instructions of the Custodian or its
agents.
(c) Property deposited with a Subcustodian will be maintained in
an account holding only assets for customers of the Custodian.
(d) Any agreement the Custodian shall enter into with a non-U.S.
Subcustodian with respect to maintaining Property shall
require that (i) the Account will be adequately indemnified or
its losses adequately insured; (ii) the Securities so
maintained are not subject to any right, charge, security
interest, lien or claim of any kind in favor of such
Subcustodian or its creditors except a claim for payment in
accordance with such agreement for their safe custody or
administration and expenses related thereto, (iii) beneficial
ownership of such Securities be freely transferable without
the payment of money or value other than for safe custody or
administration and expenses related thereto, (iv) adequate
records will be maintained identifying the Property maintained
pursuant to such Agreement as belonging to the Custodian, on
behalf of its customers and (v) to the extent permitted by
applicable law, officers of or auditors employed by, or other
representatives of or designated by, the Custodian, including
the independent public accountants of or designated by, the
Customer be given access to the books and records of such
Subcustodian relating to its actions under its agreement
pertaining to any Property maintained by it thereunder or
confirmation of or pertinent information contained in such
books and records be furnished to such persons designated by
the Custodian.
6. Use of Securities System. With respect to Property in the
Account(s) which is maintained by the Custodian or any Subcustodian through a
Securities System employed pursuant to Section 4:
(a) The Custodian shall, and the Subcustodian will be required by
its agreement with the Custodian to, identify on its books
such Property as being maintained for the account of the
Custodian or Subcustodian for its customers.
(b) Any Property maintained through a Securities System for the
account of the Custodian or a Subcustodian will be subject
only to the instructions of the Custodian or such
Subcustodian, as the case may be.
(c) Property deposited with a Securities System will be maintained
in an account holding only assets for customers of the
Custodian or Subcustodian, as the case may be, unless
precluded by applicable law, rule, or regulation, in which
case the Custodian will notify the Customer.
(d) The Custodian shall provide the Customer 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.
7. Agents. The Custodian may at any time or times in its sole
discretion appoint (or remove) any other U.S. bank or trust company which is
itself qualified under the 1940 Act to act as custodian, as its agent to carry
out such of the provisions of this Agreement as the Custodian may from time to
time direct; provided, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities hereunder.
8. Records, Ownership of Property, Statements, Opinions of Independent
Certified Public Accountants.
(a) The ownership of the Property whether Securities, Cash and/or other
property, and whether maintained directly by the Custodian or indirectly through
a Subcustodian or a Securities System as authorized herein, shall be clearly
recorded on the Custodian's books as belonging to the appropriate Account and
not for the Custodian's own interest. The Custodian shall keep accurate and
detailed accounts of all investments, receipts, disbursements and other
transactions for each Account. All accounts, books and records of the Custodian
relating thereto shall be open to inspection and audit at all reasonable times
during normal business hours by any person designated by the Customer. All such
accounts shall be maintained and preserved in the form reasonably requested by
the Customer. The Custodian will supply to the Customer from time to time, as
mutually agreed upon, a statement in respect to any Property in an Account
maintained by the Custodian or by a Subcustodian. In the absence of the filing
in writing with the Custodian by the Customer of exceptions or objections to any
such statement, absent manifest error, within one hundred eighty (180) days of
the mailing thereof, the Customer shall be deemed to have approved such
statement and in such case or upon written approval of the Customer of any such
statement, such statement shall be presumed to be for all purposes correct with
respect to all information set forth therein.
(b) The Custodian shall take all reasonable action as the Customer may
request to obtain from year to year favorable opinions from the Customer's
independent certified public accountants with respect to the Custodian's
activities hereunder in connection with the preparation of the Customer's Form
N-1A and the Customer's Form N-SAR or other periodic reports to the SEC and with
respect to any other requirements of the SEC. Custodian shall provide written
notice to Customer of any adverse rating or regulatory enforcement action
relating to Custodian's custody services, to the extent permitted to do so.
(c) At the request of the Customer, the Custodian shall deliver to the
Customer a written report prepared by the Custodian's independent certified
public accountants with respect to the services provided by the Custodian under
this Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding Cash and
Securities, including Cash and Securities deposited and/or maintained in a
securities system or with a Subcustodian. Such report shall be of sufficient
scope and in sufficient detail as may reasonably be required by the Customer and
as may reasonably be obtained by the Custodian.
(d) The Customer may elect to participate in any of the electronic
on-line service and communications systems offered by the Custodian which can
provide the Customer, on a daily basis, with the ability to view on-line or to
print on hard copy various reports of Account activity and of Securities and/or
Cash being held in any Account. To the extent that such service shall include
market values of Securities in an Account, the Customer hereby acknowledges that
the Custodian now obtains and may in the future obtain information on such
values from outside sources that the Custodian considers to be reliable and the
Customer agrees that the Custodian (i) does not verify or represent or warrant
either the reliability of such service nor the accuracy or completeness of any
such information furnished or obtained by or through such service and (ii) shall
be without liability in selecting and utilizing such service or furnishing any
information derived therefrom.
9. Holding of Securities, Nominees, etc. Securities in an Account which
are maintained by the Custodian or any Subcustodian may be held directly by such
entity in the name of the Customer or in bearer form or maintained, on behalf of
a Portfolio, in the Custodian's or Subcustodian's name or in the name of the
Custodian's or Subcustodian's nominee. Securities that are maintained through a
Subcustodian or which are eligible for deposit in a Securities System as
provided above may be maintained with the Subcustodian or the Securities System
in an account for the Custodian's or Subcustodian's customers, unless prohibited
by law, rule, or regulation. The Custodian or Subcustodian, as the case may be,
may combine certificates representing Securities held in an Account with
certificates of the same issue held by it as fiduciary or as a custodian,
provided that such certificates shall at all times be segregated from the assets
of the Custodian.. In the event that any Securities in the name of the Custodian
or its nominee or held by a Subcustodian and registered in the name of such
Subcustodian or its nominee are called for partial redemption by the issuer of
such Security, the Custodian may, subject to the rules or regulations pertaining
to allocation of any Securities System in which such Securities have been
deposited, allot, or cause to be allotted, the called portion of the respective
beneficial holders of such class of security in any manner the Custodian deems
to be fair and equitable. Securities maintained with a Securities System shall
be maintained subject to the rules of that Securities System governing the
rights and obligations among the Securities System and its participants.
10. Proxies, etc. With respect to any proxies, notices, reports or
other communications relative to any of the Securities in the Account, the
Custodian shall perform such services and only such services relative thereto as
are (i) set forth in Section 3 of this Agreement, (ii) described in Exhibit B
attached hereto (the "Proxy Service") or (iii) as may otherwise be agreed upon
between the Custodian and the Customer. The liability and responsibility of the
Custodian in connection with the Proxy Service referred to in (ii) of the
immediately preceding sentence and in connection with any additional services
which the Custodian and the Customer may agree upon as provided in (iii) of the
immediately preceding sentence shall be as set forth in the description of the
Proxy Service and as may be agreed upon by the Custodian and the Customer in
connection with the furnishing of any such additional service and shall not be
affected by any other term of this Agreement. Neither the Custodian nor its
nominees or agents shall vote upon or in respect of any of the Securities in the
Account, execute any form of proxy to vote thereon, or give any consent or take
any action (except as provided in Section 3) with respect thereto except upon
the receipt of Instructions relative thereto.
11. Segregated Account. To assist the Customer in complying with the
requirements of the 1940 Act and the rules and regulations thereunder, the
Custodian shall, upon receipt of Instructions, establish and maintain a
segregated account or accounts on its books for and on behalf of a Portfolio.
12. Settlement Procedures. Securities will be transferred, exchanged or
delivered by the Custodian or a Subcustodian upon receipt by the Custodian of
Instructions which include all information required by the Custodian. Settlement
and payment for Securities received for an Account and delivery of Securities
out of such Account may be effected in accordance with the customary or
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivering Securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a receipt
with the expectation of receiving later payment for such Securities from such
purchaser or dealer, as such practices and procedures may be modified or
supplemented in accordance with the standard operating procedures of the
Custodian in effect from time to time for that jurisdiction or market. The
Custodian shall not be liable for any loss which results from effecting
transactions in accordance with the customary or established securities trading
or securities processing practices and procedures in the applicable jurisdiction
or market.
Notwithstanding that the Custodian may settle purchases and sales
against, or credit income to, an Account, on a contractual basis, as outlined in
the applicable Service Standards as defined below and provided to the Customer
by the Custodian, the Custodian may, at its sole option, reverse such credits or
debits to the appropriate Account in the event that the transaction does not
settle, or the income is not received in a timely manner, and the Customer
agrees to hold the Custodian harmless from any losses which may result
therefrom.
13. Conditional Credits.
(a) Notwithstanding any other provision of this Agreement, the
Custodian shall not be required to comply with any Instructions to settle the
purchase of any securities for the Account, unless there are sufficient
immediately available funds in the relevant currency in the Account, provided
that, if, after all expenses, debits and withdrawals of Cash in the relevant
currency ("Debits") applicable to the Account have been made and if after all
Conditional Credits, as defined below, applicable to the Account have been made
final entries as set forth in (c) below, the amount of immediately available
funds of the relevant currency in such Account is at least equal to the
aggregate purchase price of all securities for which the Custodian has received
Instructions to settle on that date ("Settlement Date"), the Custodian, upon
settlement, shall credit the Securities to the Account by making a final entry
on its books and records.
(b) Notwithstanding the foregoing, if after all Debits applicable to
the Account have been made, there remains outstanding any Conditional Credit (as
defined below) applicable to the Account or the amount of immediately available
funds in a given currency in such Account are less than the aggregate purchase
price in such currency of all securities for which the Custodian has received
Instructions to settle on the Settlement Date, the Custodian, upon settlement,
may credit the securities to the Account by making a conditional entry on its
books and records ("Conditional Credit"), pending receipt of sufficient
immediately available funds in the relevant currency in the Account.
(c) If, within a reasonable time from the posting of a Conditional
Credit and after all Debits applicable to the Account have been made,
immediately available funds in the relevant currency at least equal to the
aggregate purchase price in such currency of all securities subject to a
Conditional Credit on a Settlement Date are deposited into the Account, the
Custodian shall make the Conditional Credit a final entry on its books and
records. In such case, the Customer shall be liable to the Custodian only for
late charges at a rate which the Custodian customarily charges for similar
extensions of credit.
(d) If (i) within a reasonable time from the posting of a Conditional
Credit, immediately available funds at least equal to the resultant Debit on a
Settlement Date are not on deposit in the Account, or (ii) any Proceeding shall
occur, the Custodian may sell such of the Securities subject to the Conditional
Credit as it selects in its sole discretion and shall apply the net proceeds of
such sale to cover such Debit, including related late charges, and any remaining
proceeds shall be credited to the Account. If such proceeds are insufficient to
satisfy such debt in full, the Customer shall continue to be liable to the
Custodian for any shortfall. The Custodian shall make the Conditional Credit a
final entry on its books as to the Securities not required to be sold to satisfy
such Debit. Pending payment in full by the Customer of the purchase price for
Securities subject to a Conditional Credit, and the Custodian's making a
Conditional Credit a final entry on its books, and, unless consented to by the
Custodian, the Customer shall have no right to give further Instructions in
respect of Securities subject to a Conditional Credit. The Custodian shall have
the sole discretion to determine which Securities shall be deemed to have been
paid for by the Customer out of funds available in the Account. Any such
Conditional Credit may be reversed (and any corresponding Debit shall be
canceled) by the Custodian unless and until the Custodian makes a final entry on
its books crediting such Securities to the Account. The term "Proceeding" shall
mean any insolvency, bankruptcy, receivership, reorganization or similar
proceeding relating to the Customer, whether voluntary or involuntary.
(e) The Customer agrees that it will not use the Account to facilitate
the purchase of securities without sufficient funds in the Account (which funds
shall not include the expected proceeds of the sale of the purchased
securities).
14. Permitted Transactions. The Customer agrees that it will cause
transactions to be made pursuant to this Agreement only upon Instructions in
accordance with Section 15 and only for the purposes listed below.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions.
(b) When Securities are called, redeemed or retired, or otherwise
become payable.
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment.
(d) Upon conversion of Securities pursuant to their terms into other
securities.
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities.
(f) For the payment of interest, taxes, management or supervisory
fees, distributions or operating expenses.
(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed or in order
to satisfy requirements for additional or substitute collateral.
(h) In connection with any loans, but only against receipt of
collateral as specified in Instructions which shall reflect any restrictions
applicable to the Customer.
(i) For the purpose of redeeming shares of the capital stock of the
Customer against delivery of the shares to be redeemed to the Custodian, a
Subcustodian or the Customer's transfer agent.
(j) For the purpose of redeeming in kind shares of the Customer
against delivery of the shares to be redeemed to the Custodian, a Subcustodian
or the Customer's transfer agent.
(k) For delivery in accordance with the provisions of any agreement
among the Customer, on behalf of a Portfolio, the Portfolio's investment adviser
and a broker-dealer registered under the Securities Exchange Act of 1934 and a
member of the National Association of Securities Dealers, Inc., relating to
compliance with the rules of The Options Clearing Corporation, the Commodities
Futures Trading Commission or of any registered national securities exchange, or
of any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Customer.
(l) For release of Securities to designated brokers under covered call
options, provided, however, that such Securities shall be released only upon
payment to the Custodian of monies for the premium due and a receipt for the
Securities which are to be held in escrow. Upon exercise of the option, or at
expiration, the Custodian will receive the Securities previously deposited from
broker. The Custodian will act strictly in accordance with Instructions in the
delivery of Securities to be held in escrow and will have no responsibility or
liability for any such Securities which are not returned promptly when due other
than to make proper request for such return.
(m) For spot or forward foreign exchange transactions to facilitate
security trading or receipt of income from Securities related transactions.
(n) Upon the termination of this Agreement as set forth in Section 20.
(o) For other proper purposes.
The Customer agrees that the Custodian shall have no obligation to
verify the purpose for which a transaction is being effected.
15. Instructions. The term "Instructions" means instructions from the
Customer in respect of any of the Custodian's duties hereunder which have been
received by the Custodian at its address set forth in Section 22 below (i) in
writing (including, without limitation, facsimile transmission) or by tested
telex signed or given by such one or more person or persons as the Customer
shall have from time to time authorized in writing to give the particular class
of Instructions in question and whose name and (if applicable) signature and
office address have been filed with the Custodian, or (ii) which have been
transmitted electronically through an electronic on-line service and
communications system offered by the Custodian or other electronic instruction
system acceptable to the Custodian, or (iii) a telephonic or oral communication
by one or more persons as the Customer shall have from time to time authorized
to give the particular class of Instructions in question and whose name has been
filed with the Custodian; or (iv) upon receipt of such other form of
instructions as the Customer may from time to time authorize in writing and
which the Custodian has agreed in writing to accept. Instructions in the form of
oral communications shall be confirmed by the Customer by tested telex or
writing in the manner set forth in clause (i) above, but the lack of such
confirmation shall in no way affect any action taken by the Custodian in
reliance upon such oral instructions prior to the Custodian's receipt of such
confirmation. Instructions may relate to specific transactions or to types or
classes of transactions, and may be in the form of standing instructions.
The Custodian shall have the right to assume in the absence of notice
to the contrary from the Customer that any person whose name is on file with the
Custodian pursuant to this Section has been authorized by the Customer to give
the Instructions in question and that such authorization has not been revoked.
The Custodian may act upon and conclusively rely on, without any liability to
the Customer or any other person or entity for any losses resulting therefrom,
any Instructions reasonably believed by it to be furnished by the proper person
or persons as provided above.
16. Standard of Care. The Custodian shall be responsible for the
performance of only such duties as are set forth herein or contained in
Instructions given to the Custodian which are not contrary to the provisions of
this Agreement. The Custodian will use reasonable care with respect to the
safekeeping of Property in each Account and, except as otherwise expressly
provided herein, in carrying out its obligations under this Agreement. So long
as and to the extent that it has exercised reasonable care, the Custodian shall
not be responsible for the title, validity or genuineness of any Property or
other property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement and shall be held harmless in acting upon, and may
conclusively rely on, without liability for any loss resulting therefrom, any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed or furnished by the proper party or parties,
including, without limitation, Instructions, and shall be indemnified by the
Customer for any losses, damages, costs and expenses (including, without
limitation, the fees and expenses of counsel) incurred by the Custodian and
arising out of action taken or omitted with reasonable care by the Custodian
hereunder or under any Instructions. The Custodian shall be liable to the
Customer for any act or omission to act of any Subcustodian to the same extent
as if the Custodian committed such act itself. With respect to a Securities
System, the Custodian shall only be responsible or liable for losses arising
from employment of such Securities System caused by the Custodian's own failure
to exercise reasonable care. In the event of any loss to the Customer by reason
of the failure of the Custodian or a Subcustodian to utilize reasonable care,
the Custodian shall be liable to the Customer to the extent of the Customer's
actual damages at the time such loss was discovered without reference to any
special conditions or circumstances. In no event shall the Custodian be liable
for any consequential or special damages. The Custodian shall be entitled to
rely, and may act, on advice of counsel (who may be counsel for the Customer) on
all matters and shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
In the event the Customer subscribes to an electronic on-line service
and communications system offered by the Custodian, the Customer shall be fully
responsible for the security of the Customer's connecting terminal, access
thereto and the proper and authorized use thereof and the initiation and
application of continuing effective safeguards with respect thereto and agree to
defend and indemnify the Custodian and hold the Custodian harmless from and
against any and all losses, damages, costs and expenses (including the fees and
expenses of counsel) incurred by the Custodian as a result of any improper or
unauthorized use of such terminal by the Customer or by any others.
All collections of funds or other property paid or distributed in
respect of Securities in an Account, including funds involved in third-party
foreign exchange transactions, shall be made at the risk of the Customer.
Subject to the exercise of reasonable care, the Custodian shall have no
liability for any loss occasioned by delay in the actual receipt of notice by
the Custodian or by a Subcustodian of any payment, redemption or other
transaction regarding Securities in each Account in respect of which the
Custodian has agreed to take action as provided in Section 3 hereof. The
Custodian shall not be liable for any loss resulting from, or caused by, or
resulting from acts of governmental authorities (whether de jure or de facto),
including, without limitation, nationalization, expropriation, and the
imposition of currency restrictions; devaluations of or fluctuations in the
value of currencies; changes in laws and regulations applicable to the banking
or securities industry; market conditions that prevent the orderly execution of
securities transactions or affect the value of Property; acts of war, terrorism,
insurrection or revolution; strikes or work stoppages; the inability of a local
clearing and settlement system to settle transactions for reasons beyond the
control of the Custodian; hurricane, cyclone, earthquake, volcanic eruption,
nuclear fusion, fission or radioactivity, or other acts of God.
The Custodian shall have no liability in respect of any loss, damage or
expense suffered by the Customer, insofar as such loss, damage or expense arises
from the performance of the Custodian's duties hereunder by reason of the
Custodian's reliance upon records that were maintained for the Customer by
entities other than the Custodian prior to the Custodian's employment under this
Agreement.
The provisions of this Section shall survive termination of this
Agreement.
17. Investment Limitations and Legal or Contractual Restrictions or
Regulations. The Custodian shall not be liable to the Customer and the Customer
agrees to indemnify the Custodian and its nominees, for any loss, damage or
expense suffered or incurred by the Custodian or its nominees arising out of any
violation of any investment restriction or other restriction or limitation
applicable to the Customer or any Portfolio pursuant to any contract or any law
or regulation. The provisions of this Section shall survive termination of this
Agreement.
18. Fees and Expenses. The Customer agrees to pay to the Custodian such
compensation for its services pursuant to this Agreement as may be mutually
agreed upon in writing from time to time and the Custodian's reasonable
out-of-pocket or incidental expenses in connection with the performance of this
Agreement, including (but without limitation) legal fees as described herein
and/or deemed necessary in the judgment of the Custodian to keep safe or protect
the Property in the Account. The initial fee schedule is attached hereto as
Exhibit D. Such fees will not be abated by, nor shall the Custodian be required
to account for, any profits or commissions received by the Custodian in
connection with its provision of custody services under this agreement. The
Customer hereby agrees to hold the Custodian harmless from any liability or loss
resulting from any taxes or other governmental charges, and any expense related
thereto, which may be imposed, or assessed with respect to any Property in an
Account and also agrees to hold the Custodian, its Subcustodians, and their
respective nominees harmless from any liability as a record holder of Property
in such Account. The Custodian is authorized to charge the applicable Account
for such items and the Custodian shall have a lien on the Property in the
applicable Account for any amount payable to the Custodian under this Agreement,
including but not limited to amounts payable pursuant to Section 13 and pursuant
to indemnities granted by the Customer under this Agreement. The provisions of
this Section shall survive the termination of this Agreement.
19. Tax Reclaims. With respect to withholding taxes deducted and which
may be deducted from any income received from any Property in the Account, the
Custodian shall perform such services with respect thereto as are described in
Exhibit C attached hereto and shall in connection therewith be subject to the
standard of care set forth in such Exhibit. Such standard of care shall not be
affected by any other term of this Agreement.
20. Amendment, Modifications, etc. No provision of this Agreement may
be amended, modified or waived except in a writing signed by the parties hereto.
No waiver of any provision hereto shall be deemed a continuing waiver unless it
is so designated. No failure or delay on the part of either party in exercising
any power or right under this Agreement operates as a waiver, nor does any
single or partial exercise of any power or right preclude any other or further
exercise thereof or the exercise of any other power or right.
21. Termination. (a) Termination of Entire Agreement. This Agreement
may be terminated by the Customer or the Custodian by ninety (90) days' written
notice to the other; provided that notice by the Customer shall specify the
names of the persons to whom the Custodian shall deliver the Securities in each
Account and to whom the Cash in such Account shall be paid. If notice of
termination is given by the Custodian, the Customer shall, within ninety (90)
days following the giving of such notice, deliver to the Custodian a written
notice specifying the names of the persons to whom the Custodian shall deliver
the Securities in each Account and to whom the Cash in such Account shall be
paid. In either case, the Custodian will deliver such Property to the persons so
specified, after deducting therefrom any amounts which the Custodian determines
to be owed to it hereunder. In addition, the Custodian may in its discretion
withhold from such delivery such Property as may be necessary to settle
transactions pending at the time of such delivery. The Customer grants to the
Custodian a lien and right of setoff against the Account and all Property held
therein from time to time in the full amount of the foregoing obligations. If
within ninety (90) days following the giving of a notice of termination by the
Custodian, the Custodian does not receive from the Customer a written notice
specifying the names of the persons to whom the Custodian shall deliver the
Securities in each Account and to whom the Cash in such Account shall be paid,
the Custodian, at its election, may deliver such Securities and pay such Cash to
a bank or trust company doing business in the State of New York to be held and
disposed of pursuant to the provisions of this Agreement, or may continue to
hold such Securities and Cash until a written notice as aforesaid is delivered
to the Custodian, provided that the Custodian's obligations shall be limited to
safekeeping.
(b) Termination as to One or More Portfolios. This Agreement may be
terminated by the Customer or the Custodian as to one or more Portfolios (but
less than all of the Portfolios) by delivery of an amended Exhibit A deleting
such Portfolios, in which case termination as to such deleted Portfolios shall
take effect ninety (90) days after the date of such delivery, or such earlier
time as mutually agreed. The execution and delivery of an amended Exhibit A
which deletes one or more Portfolios shall constitute a termination of this
Agreement only with respect to such deleted Portfolio(s), shall be governed by
the preceding provisions of Section 21 as to the identification of a successor
custodian and the delivery of Cash and Securities of the Portfolio(s) so deleted
to such successor custodian, and shall not affect the obligations of the
Custodian and the Customer hereunder with respect to the other Portfolios set
forth in Exhibit A, as amended from time to time.
22. Notices. Except as otherwise provided in this Agreement, all
requests, demands or other communications between the parties or notices in
connection herewith (a) shall be in writing, hand delivered or sent by
registered mail, telex or facsimile addressed to such other address as shall
have been furnished by the receiving party pursuant to the provisions hereof and
(b) shall be deemed effective when received, or, in the case of a telex, when
sent to the proper number and acknowledged by a proper answerback.
23. Financial Information. The Customer will deliver to the Custodian:
(i) as soon as available, and in any event no later than 120
days after the end of each fiscal year, the Annual Report of the Customer with
all attached footnotes, audited by an independent certified public accountant;
(ii) promptly after request, such additional financial
information as the Custodian may request from time to time.
24. Several Obligations of the Portfolios. With respect to any
obligations of the Customer on behalf of each Portfolio and each of its related
Accounts arising out of this Agreement, the Custodian shall look for payment or
satisfaction of any obligation solely to the assets and property of the
Portfolio and such Accounts to which such obligation relates as though the
Customer had separately contracted with the Custodian by separate written
instrument with respect to each Portfolio and its related Accounts.
25. Security for Payment. To secure payment of all obligations due
hereunder, the Customer hereby grants to the Custodian a continuing security
interest in and right of setoff against each Account and all Property held
therein from time to time in the full amount of such obligations; provided that,
if there is more than one Account and the obligations secured pursuant to this
Section can be allocated to a specific Account or the Portfolio related to such
Account, such security interest and right of setoff will be limited to Property
held for that Account only and its related Portfolio. Should the Customer fail
to pay promptly any amounts owed hereunder, the Custodian shall be entitled to
use available Cash in the Account or applicable Account, as the case may be, and
to dispose of Securities in the Account or such applicable Account as is
necessary. In any such case and without limiting the foregoing, the Custodian
shall be entitled to take such other actions or exercise such other options,
powers and rights as the Custodian now or hereafter has as a secured creditor
under the New York Uniform Commercial Code or any other applicable law.
26. Representations and Warranties.
(a) The Customer hereby represents and warrants to the Custodian that:
(i) the employment of the Custodian and the allocation of
fees, expenses and other charges to any Account as herein provided, is not
prohibited by law or any governing documents or contracts to which it is
subject;
(ii) the terms of this Agreement do not violate any obligation
by which it is bound, whether arising by contract, operation of law or
otherwise;
(iii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon it and each
Portfolio in accordance with its terms; and
(iv) it will deliver to the Custodian a duly executed
Secretary's Certificate in the form of Exhibit E hereto or such other evidence
of such authorization as the Custodian may reasonably require, whether by way of
a certified resolution or otherwise.
(b) The Custodian hereby represents and warrants to the Customer
that:
(i) the terms of this Agreement do not violate any obligation
by which it is bound, whether arising by contract, operation of law or
otherwise;
(ii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon it in accordance
with its terms;
(iii) it will deliver to the Customer such evidence of such
authorization as the Customer may reasonably require, whether by way of a
certified resolution or otherwise; and
(iv) Custodian is qualified as a custodian under Section 26(a)
of the 1940 Act and warrants that it will remain so qualified or upon ceasing to
be so qualified shall promptly notify the Customer in writing.
27. Governing Law and Successors and Assigns. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Custodian.
28. Publicity. Customer shall furnish to Custodian at its office
referred to in Section 22 above, prior to any distribution thereof, copies of
any material prepared for distribution to any persons who are not parties hereto
that refer in any way to the Custodian. Customer shall not distribute or permit
the distribution of such materials if Custodian reasonably objects in writing
within ten (10) business days of receipt thereof (or such other time as may be
mutually agreed) after receipt thereof. The provisions of this Section shall
survive the termination of this Agreement.
29. Representative Capacity and Binding Obligation. A copy of the
Declaration of Trust of the Customer is on file with The Secretary of the
Commonwealth of Massachusetts, and notice is hereby given that this Agreement is
not executed on behalf of the Trustees of the Customer as individuals, and the
obligations of this Agreement are not binding upon any of the Trustees, officers
or shareholders of the Customer individually but are binding only upon the
assets and property of the Portfolios.
The Custodian agrees that no shareholder, trustee or officer of the
Customer may be held personally liable or responsible for any obligations of the
Customer arising out of this Agreement.
30. Submission to Jurisdiction. Any suit, action or proceeding arising
out of this Agreement may be instituted in any State or Federal court sitting in
the City of Xxx Xxxx, Xxxxx xx Xxx Xxxx, Xxxxxx Xxxxxx of America, and the
Customer irrevocably submits to the non-exclusive jurisdiction of any such court
in any such suit, action or proceeding and waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding brought in such a court and any
claim that such suit, action or proceeding was brought in an inconvenient forum.
31. Confidentiality. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall
not be disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other than
through a breach of this Agreement, or that is required or requested to be
disclosed by any bank or other regulatory examiner of the Custodian, Customer,
or any Subcustodian, any auditor of the parties hereto, by judicial or
administrative process or otherwise by applicable law or regulation. The
provisions of this Section shall survive the termination of this Agreement.
32. Severability. If any provision of this Agreement is determined to be
invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other provision of this Agreement.
33. Entire Agreement. This Agreement together with any Exhibits attached
hereto, contains the entire agreement between the parties relating to the
subject matter hereof and supersedes any oral statements and prior writings with
respect thereto.
34. Headings. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.
35. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties hereto.
IN WITNESS WHEREOF, each of the parties has caused its duly authorized
signatories to execute this Agreement as of the date first written above.
VARIABLE INSURANCE FUNDS
By: _____________________________
Name: ___________________________
Title: __________________________
By: _____________________________
Name: ___________________________
Title: __________________________
BANKERS TRUST COMPANY
By: _____________________________
Name: ___________________________
Title: __________________________
EXHIBIT A
To Custodian Agreement dated as of December 14, 2000 between Bankers
Trust Company and Variable Insurance Funds.
LIST OF PORTFOLIOS
The following is a list of Portfolios referred to in the first WHEREAS
clause of the above-referred to Custodian Agreement. Terms used herein as
defined terms unless otherwise defined shall have the meanings ascribed to them
in the above-referred to Custodian Agreement.
AmSouth International Equity Fund
VARIABLE INSURANCE FUNDS
By: _______________________
Name: _____________________
Title: ____________________
By: _______________________
Name: _____________________
Title: ____________________
BANKERS TRUST COMPANY
By: _______________________
Name: _____________________
Title: ____________________
EXHIBIT B
To Custodian Agreement dated as of December 14, 2000 between Bankers Trust
Company and Variable Insurance Funds.
PROXY SERVICE
The following is a description of the Proxy Service referred to in
Section 10 of the above referred to Custodian Agreement. Terms used herein as
defined terms shall have the meanings ascribed to them therein unless otherwise
defined below.
The Custodian provides a service, described below, for the transmission
of corporate communications in connection with shareholder meetings relating to
Securities held in Argentina, Australia, Austria, Canada, Cedel, Finland,
France, Germany, Greece, Hong Kong, Indonesia, Ireland, Italy, Japan, Korea,
Malaysia, Mexico, Netherlands New Zealand, Pakistan, Singapore, South Africa,
Spain, Sri Lanka, Sweden, Switzerland (only bearer shares), United Kingdom,
United States and Venezuela. For the United States and Canada, the term
"corporate communications" means the proxy statements or meeting agenda, proxy
cards, annual reports and any other meeting materials received by the Custodian.
For countries other than the United States and Canada, the term "corporate
communications" means the meeting agenda only and does not include any meeting
circulars, proxy statements or any other corporate communications furnished by
the issuer in connection with such meeting. Non-meeting related corporate
communications are not included in the transmission service to be provided by
the Custodian except upon request as provided below.
The Custodian's process for transmitting and translating meeting
agendas will be as follows:
1) If the meeting agenda is not provided by the issuer in the
English language, and if the language of such agenda is in the
official language of the country in which the related security
is held, the Custodian will as soon as practicable after
receipt of the original meeting agenda by a Subcustodian
provide an English translation prepared by that Subcustodian.
2) If an English translation of the meeting agenda is furnished,
the local language agenda will not be furnished unless
requested.
Translations will be free translations and neither the Custodian nor
any Subcustodian will be liable or held responsible for the accuracy thereof or
any direct or indirect consequences arising therefrom, including without
limitation arising out of any action taken or omitted to be taken based thereon.
If requested, the Custodian will, on a reasonable efforts basis,
endeavor to obtain any additional corporate communication such as annual or
interim reports, proxy statements, meeting circulars or local language agendas,
and provide them in the form obtained.
Timing in the voting process is important and, in that regard, upon
receipt by the Custodian of notice from a Subcustodian, the Custodian will
provide a notice to the Customer indicating the deadline for receipt of its
instructions to enable the voting process to take place effectively and
efficiently. As voting procedures will vary from market to market, attention to
any required procedures will be very important. Upon timely receipt of voting
instructions, the Custodian will promptly forward such instructions to the
applicable Subcustodian. If voting instructions are not timely received, the
Custodian shall have no liability or obligation to take any action.
For Securities held in markets other than those set forth above, the
Custodian will not furnish the material described above or seek voting
instructions. However, if requested to exercise voting rights at a specific
meeting, the Custodian will endeavor to do so on a reasonable efforts basis
without any assurance that such rights will be so exercised at such meeting.
If the Custodian or any Subcustodian incurs extraordinary expenses in
exercising voting rights related to any Securities pursuant to appropriate
instructions or directions (e.g., by way of illustration only and not by way of
limitation, physical presence is required at a meeting and/or travel expenses
are incurred), such expenses will be reimbursed out of the Account unless other
arrangements have been made for such reimbursement.
It is the intent of the Custodian to expand the Proxy Service to
include jurisdictions which are not currently included as set forth above. The
Custodian will notify the Customer as to the inclusion of additional countries
or the deletion of existing countries after their inclusion or deletion and this
Exhibit B will be deemed to be automatically amended to include or delete such
countries as the case may be. Such notification may be by Global Custody Flash
Notice.
Notwithstanding anything in this Exhibit B to the contrary, the Custodian may
utilize third-party non-affiliated agents to perform any of the services
described herein.
EXHIBIT C
To Custodian Agreement dated as of December 14, 2000 between Bankers Trust
Company and Variable Insurance Funds.
TAX RECLAIMS
Pursuant to Section 19 of the above referred to Custodian Agreement,
the Custodian shall perform the following services with respect to withholding
taxes imposed or which may be imposed on income from Property in the Account in
certain countries. Terms used herein as defined terms shall unless otherwise
defined have the meanings ascribed to them in the above referred to Custodian
Agreement.
When withholding tax has been deducted with respect to income from any
Property in an Account, the Custodian will actively pursue on a reasonable
efforts basis the reclaim process, provided that the Custodian shall not be
required to institute any legal or administrative proceeding against any
Subcustodian or other person. The Custodian will provide fully detailed
advices/vouchers to support reclaims submitted to the local authorities by the
Custodian or its designee. In all cases of withholding, the Custodian will
provide full details to the Customer. When the Custodian becomes aware of an
opportunity to obtain exemption, the Custodian will notify and advise the
Customer of the required documentation, if any, to obtain such exemption.
Provided that the Custodian can file the exemption on behalf of the Customer,
the Custodian will do so upon receipt of the completed appropriate
documentation. The Custodian will notify the Customer when such exemption has
been obtained.
In connection with providing the foregoing services, the Custodian
shall be entitled to apply categorical treatment of the Customer according to
the Customer's nationality, the particulars of its organization and other
relevant details that shall be supplied by the Customer. It shall be the duty of
the Customer to inform the Custodian of any change in the organization, domicile
or other relevant fact concerning tax treatment of the Customer and further to
inform the Custodian if the Customer is or becomes the beneficiary of any
special ruling or treatment not applicable to the general nationality and
category or entity of which the Customer is a party under general laws and
treaty provisions. The Custodian may rely on any such information provided by
the Customer.
In connection with providing the foregoing services, the Custodian may
also rely on professional tax services published by a major international
accounting firm and/or advice received from a Subcustodian in the jurisdictions
in question. In addition, the Custodian may seek the advice of counsel or other
professional tax advisers in such jurisdictions. The Custodian is entitled to
rely, and may act, on information set forth in such services and on advice
received from a Subcustodian, counsel or other professional tax advisers and
shall be without liability to the Customer for any action reasonably taken or
omitted pursuant to information contained in such services or such advice.
EXHIBIT D
To Custodian Agreement dated as of December 14, 2000 between Bankers
Trust Company and Variable Insurance Funds.
I. Transaction and Safekeeping fees:
--------------------------------------- ---------------------------------- ----------------------------------
Country Transaction Fees Safekeeping BP's Yearly
--------------------------------------- ---------------------------------- ----------------------------------
Argentina $100 35.0
--------------------------------------- ---------------------------------- ----------------------------------
Australia $50 3.0
--------------------------------------- ---------------------------------- ----------------------------------
Austria $75 5.0
--------------------------------------- ---------------------------------- ----------------------------------
Bangladesh $150 40.0
--------------------------------------- ---------------------------------- ----------------------------------
Belgium/Lux $60 4.0
--------------------------------------- ---------------------------------- ----------------------------------
Botswana $150 50.0
--------------------------------------- ---------------------------------- ----------------------------------
Brazil $70 25.0
--------------------------------------- ---------------------------------- ----------------------------------
Canada $20 1.5
--------------------------------------- ---------------------------------- ----------------------------------
Cedel $20 2.5
--------------------------------------- ---------------------------------- ----------------------------------
Chile $80 30.0
--------------------------------------- ---------------------------------- ----------------------------------
China $75 30.0
--------------------------------------- ---------------------------------- ----------------------------------
Colombia $100 35.0
--------------------------------------- ---------------------------------- ----------------------------------
Czech Rep $70 20.0
--------------------------------------- ---------------------------------- ----------------------------------
Denmark $50 4.0
--------------------------------------- ---------------------------------- ----------------------------------
Ecuador $100 45.0
--------------------------------------- ---------------------------------- ----------------------------------
Egypt $80 45.0
--------------------------------------- ---------------------------------- ----------------------------------
Euroclear $20 2.5
--------------------------------------- ---------------------------------- ----------------------------------
Finland $75 10.0
--------------------------------------- ---------------------------------- ----------------------------------
France $50 4.0
--------------------------------------- ---------------------------------- ----------------------------------
Germany $30 2.0
--------------------------------------- ---------------------------------- ----------------------------------
Ghana $150 50.0
--------------------------------------- ---------------------------------- ----------------------------------
Greece $120 35.0
--------------------------------------- ---------------------------------- ----------------------------------
Hong Kong $30 5.0
--------------------------------------- ---------------------------------- ----------------------------------
Hungary $150 45.0
--------------------------------------- ---------------------------------- ----------------------------------
India (Physical) $200 60.0
--------------------------------------- ---------------------------------- ----------------------------------
India (Dematerialized) $140 25.0
--------------------------------------- ---------------------------------- ----------------------------------
Indonesia $35 8.0
--------------------------------------- ---------------------------------- ----------------------------------
Ireland $50 5.0
--------------------------------------- ---------------------------------- ----------------------------------
Israel $50 40.0
--------------------------------------- ---------------------------------- ----------------------------------
Italy $50 3.0
--------------------------------------- ---------------------------------- ----------------------------------
Japan $35 2.5
--------------------------------------- ---------------------------------- ----------------------------------
Jordan $100 30.0
--------------------------------------- ---------------------------------- ----------------------------------
Kenya $150 50.0
--------------------------------------- ---------------------------------- ----------------------------------
Korea $50 15.0
--------------------------------------- ---------------------------------- ----------------------------------
Malaysia $50 7.0
--------------------------------------- ---------------------------------- ----------------------------------
Mauritius $140 50.0
--------------------------------------- ---------------------------------- ----------------------------------
Mexico $30 5.0
--------------------------------------- ---------------------------------- ----------------------------------
Morocco $130 30.0
--------------------------------------- ---------------------------------- ----------------------------------
Netherlands $45 4.0
--------------------------------------- ---------------------------------- ----------------------------------
New Zealand $50 4.0
--------------------------------------- ---------------------------------- ----------------------------------
Norway $50 5.0
--------------------------------------- ---------------------------------- ----------------------------------
Pakistan $150 30.0
--------------------------------------- ---------------------------------- ----------------------------------
Peru $100 50.0
--------------------------------------- ---------------------------------- ----------------------------------
Philippines $30 8.0
--------------------------------------- ---------------------------------- ----------------------------------
Poland $100 45.0
--------------------------------------- ---------------------------------- ----------------------------------
Portugal $75 4.0
--------------------------------------- ---------------------------------- ----------------------------------
Russia $300 50.0
--------------------------------------- ---------------------------------- ----------------------------------
Singapore $50 7.0
--------------------------------------- ---------------------------------- ----------------------------------
Slovakia $100 25.0
--------------------------------------- ---------------------------------- ----------------------------------
South Africa $30 3.0
--------------------------------------- ---------------------------------- ----------------------------------
Spain $50 6.0
--------------------------------------- ---------------------------------- ----------------------------------
Sri Lanka $60 12.0
--------------------------------------- ---------------------------------- ----------------------------------
Sweden $50 4.0
--------------------------------------- ---------------------------------- ----------------------------------
Switzerland $60 2.0
--------------------------------------- ---------------------------------- ----------------------------------
Taiwan $100 15.0
--------------------------------------- ---------------------------------- ----------------------------------
Thailand $100 7.0
--------------------------------------- ---------------------------------- ----------------------------------
Tunisia $50 45.0
--------------------------------------- ---------------------------------- ----------------------------------
Turkey $50 15.0
--------------------------------------- ---------------------------------- ----------------------------------
United States $15 1.0
--------------------------------------- ---------------------------------- ----------------------------------
UK $15 1.5
--------------------------------------- ---------------------------------- ----------------------------------
Venezuela $100 35.0
--------------------------------------- ---------------------------------- ----------------------------------
Zambia $150 50.0
--------------------------------------- ---------------------------------- ----------------------------------
Zimbabwe $150 50.0
--------------------------------------- ---------------------------------- ----------------------------------
Foreign Exchange (round trip) $50 N/A
--------------------------------------- ---------------------------------- ----------------------------------
Any Non-U.S. Wire $25 N/A
--------------------------------------- ---------------------------------- ----------------------------------
U.S. Wire $10 N/A
--------------------------------------- ---------------------------------- ----------------------------------
II. Portfolio/Maintenance fees:
Type of Portfolio Price
1 Global Account $2,400.00 annually
This Exhibit D shall be amended upon delivery by the Custodian of a new Exhibit
D to the Customer and acceptance thereof by the Customer and shall be effective
as of the date of acceptance by the Customer or a date agreed upon between the
Custodian and the Customer.
Dated as of: VARIABLE INSURANCE FUNDS
By: _______________________
Name: _____________________
Title: ____________________
By: _______________________
Name: _____________________
Title: ____________________
BANKERS TRUST COMPANY
By: _______________________
Name: _____________________
Title: ____________________
EXHIBIT E
VARIABLE INSURANCE FUNDS
Certificate of the Secretary
I, [Name of Secretary], hereby certify that I am the Secretary
of [Name of Entity], a [type of entity] organized under the laws of
[jurisdiction] (the "Company"), and as such I am duly authorized to, and do
hereby, certify that:
1. Organizational Documents. The Company's organizational
documents, and all amendments thereto, have been filed with the appropriate
governmental officials of [jurisdiction], the Company continues to be in
existence and is in good standing, and no action has been taken to repeal such
organizational documents, the same being in full force and effect on the date
hereof.
2. Bylaws. The Company's Bylaws have been duly adopted and no
action has been taken to repeal such Bylaws, the same being in full force and
effect.
3. Resolutions. Resolutions have been duly adopted on behalf
of the Company, which resolutions (i) have not in any way been revoked or
rescinded, (ii) have been in full force and effect since their adoption, to and
including the date hereof, and are now in full force and effect, and (iii) are
the only corporate proceedings of the Company now in force relating to or
affecting the matters referred to therein, including, without limitation,
confirming that the Company is duly authorized to enter into a certain custody
agreement with Bankers Trust Company (the "Agreement"), and that certain
designated officers, including those identified in paragraph 4 of this
Certificate, are authorized to execute said Agreement on behalf of the Company,
in conformity with the requirements of the Company's organizational documents,
Bylaws, and other pertinent documents to which the Company may be bound.
4. Incumbency. The following named individuals are duly
elected (or appointed), qualified, and acting officers of the Company holding
those offices set forth opposite their respective names as of the date hereof,
each having full authority, acting individually, to bind the Company, as a legal
matter, with respect to all matters pertaining to the Agreement, and to execute
and deliver said Agreement on behalf of the Company, and the signatures set
forth opposite the respective names and titles of said officers are their true,
authentic signatures:
Name Title Signature
[Name] [Position] ____________________
[Name] [Position] ____________________
[Name] [Position] ____________________
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day
of [Date], 200__.
By: ___________________________
Name: ___________________________
Title: Secretary
I, [Name of Confirming Officer], [Title] of the Company,
hereby certify that on this ___ day of [Date], 200__, [Name of Secretary] is the
duly elected Secretary of the Company and that the signature above is his
genuine signature.
By:_________________________________
Name:_______________________________
Title:______________________________
EXHIBIT F
CASH MANAGEMENT ADDENDUM (this "Addendum") to the CUSTODIAN
AGREEMENT (the "Agreement") between BANKERS TRUST COMPANY (the "Custodian") and
VARIABLE INSURANCE FUNDS (the "Customer").
WHEREAS, the Custodian will provide cash management services
to the Customer, and the Custodian and the Customer desire to confirm their
understanding with respect to such services;
NOW, THEREFORE, the Custodian and the Customer agree as
follows:
1. Until the Custodian receives Instructions to the contrary,
the Custodian will (a) hold with Subcustodians, in deposit accounts maintained
for the benefit of the Custodian's clients, all Cash received for the Account,
(b) credit such interest, if any, on Cash in the Account as the Custodian shall
from time to time determine and (c) receive compensation out of any amounts paid
by Subcustodians in respect of Cash in the Account.
2. The Custodian may (on an overnight or other short-term
basis) move certain, or all, currencies of Cash in the Account from any
Subcustodian and place it, as deposits or otherwise, with one or more other
Subcustodians (including branches and affiliates of the Custodian). The
Custodian will notify the Customer of any placement procedures it implements and
will move Cash in accordance with such procedures until it notifies the Customer
otherwise or receives Instructions to the contrary. The Custodian may credit
interest and receive compensation as described in 1 above with respect to any
Cash moved. If any Cash is held in an investment fund managed by Bankers Trust,
it will notify the fund (as opposed to the Customer) as provided herein with
respect to such Cash.
3. The Customer acknowledges that it has received and reviewed
the current policies of the Custodian regarding cash management services, which
are attached to this Addendum.
4. To the extent any of the Property or Cash in the Account is
subject to the Employee Retirement Income Security Act of 1974, the Customer (a)
represents and warrants that it, at all times during the duration of the
Agreement, will be a qualified professional asset manager as defined in the
prohibited transaction exemption 84-14 and that the provisions of the exemption
apply to the Agreement (and transactions thereunder) and (b) agrees to maintain
such records as are necessary to comply with the exemption or to enable
interested persons to determine that the conditions of the exemption are met.
5. Capitalized terms used but not defined in this Addendum are
used with the respective meanings assigned to them in the Agreement.
IN WITNESS WHEREOF, this Addendum has been executed as of the
date of the Agreement.
BANKERS TRUST COMPANY
By:____________________________
VARIABLE INSURANCE FUNDS
By:____________________________
Global Custody Cash Management Program
In the Global Custody cash management program, currencies on
which Bankers Trust pays interest are divided into two categories: (1)
currencies on which we pay interest based on a market benchmark rate for
overnight deposits, and (2) currencies on which we pay interest based on a rate
paid by the London branch of Deutsche Bank AG or the local subcustodian.
Currencies on which we pay interest based on a market
benchmark rate for overnight deposits (which we call "Benchmark Rate
Currencies"):
. For each of these currencies, the interest rate we pay is based on a
specific market benchmark (such as Effective Fed Funds) and is
calculated by taking an average of the benchmark rate and subtracting
a spread. (See Schedule A)
. Currently, the only Benchmark Rate Currency is the U.S. Dollar. Over
time we will be considering additional currencies to include in this
category.
. Operationally, most balances in U.S. Dollars are swept overnight into
deposits at the Nassau branch of Bankers Trust Company. Where you have
selected a short-term investment fund, your U.S. Dollar balances in
the U.S. will be swept overnight in accordance with your instructions.
Currencies on which we pay interest based on a rate paid by
the London branch of Deutsche Bank AG or the local subcustodian (which we call
"Base Rate Currencies"):
. For each of these currencies, the interest rate we pay is basedon the
rate paid by the London branch of Deutsche Bank AG or the local
subcustodian on overnight deposits in the currency. In either case,
interest is calculated by using the overnight rate (which will be the
actual overnight, a weekly average, monthly average rate, depending on
the month and currency) and subtracting a spread. (See Schedule A)
. Currencies that are part of the sweep program will earn interest based
on the base rate, which will be the higher of the rate offered by the
London branch of Deutsche Bank AG or the local subcustodian.
. Currencies that are not part of the sweep program will generally earn
interest based on the rate paid by the local subcustodian. We may at
times be able to sweep certain currency balances into deposits of
Deutsche Bank AG's London branch in order to be able to earn a higher
rate for you. On those days, any such currency will be treated as part
of the sweep program, and you will earn interest on all of your
balances in that currency at the higher rate for that day.
. Currently, there are 30 Base Rate Currencies, 7 of which are included
in our sweep program to the London branch of Deutsche Bank AG.
. Operationally, most balances in Base Rate Currencies that are part of
our sweep program are swept overnight into deposits at the London
branch of Deutsche Bank AG, while balances in Base Rate Currencies
that are not part of our sweep program remain with the local
subcustodian.
For each currency on which we pay interest:
. We will notify you periodically in writing of changes in spreads and
updates to the cash management program. These program updates also
will be available through Global Custody Flash Notices.
. For markets where we maintain one or more omnibus cash accounts, you
earn interest at the calculated rate on your entire contractual
balance without any action on your part and without any minimum
balance requirements. This is the case regardless of whether we are
able to invest your balances at or near the applicable benchmark or
base rate and regardless of whether your contractual balance may
exceed your actual balance.
. For markets where we maintain one or more omnibus cash accounts, the
minimum rate paid is 0.50%, except for the Japanese Yen (for which the
minimum rate of 0.05% has been suspended for the time being due to
market conditions) and the Singapore Dollar (for which the minimum
rate is 0.25%). Please note that this is also subject to change as
appropriate for any currency. Notwithstanding the foregoing, in no
event will interest be negative.
. For the currencies of "client specific markets," those markets where
for regulatory or other reasons we do not maintain omnibus accounts
for client cash, on which we pay credit interest (which at this time
are the Hungarian Forint, Israeli Shekel, Polish Zloty, Korean Won and
Taiwanese Dollar), we will no longer be taking a spread for providing
interest on cash balances. The credit interest you earn on overnight
balances will be based on actual balances, as opposed to contractual
balances, and the minimum credit interest rate will no longer be
applied.
. You will have continuous access through Globe*View, BTWorld, or
Globe*Link or other agreed electronic on-line system to the interest
rate earned during the previous "rate averaging period". Because we
may use weekly or monthly average rates to calculate the interest you
earn, we do not know the actual interest rate until the weekly or
monthly period is completed.
. Our program generally requires that overnight balances in each
currency remain with (or are swept to) a subcustodian we designate for
that currency. Nevertheless, we pay our stated rate of interest on any
balances that, because of transactions in your account, are held
overnight with an alternate subcustodian if we receive interest on
that currency from that subcustodian. If the alternate subcustodian
does not pay interest, however, these balances are excluded from our
program.
. For swept currencies, from time to time we may not be able to sweep
the full amount of your balances to the London branch of Deutsche Bank
AG because of operational constraints or because your balance on a
contractual basis temporarily exceeds your actual balance. You will,
however, always receive credit for interest based on your entire
contractual balance. To the extent you would have earned a lower rate
on balances not swept, we will make up the difference. To the extent
that actual balances are higher than contractually posted balances due
to purchase fails or otherwise, we will retain the interest earned as
compensation.
. The effective rate we pay on overnight balances will generally differ
from the effective rate we receive (whether from the London branch of
Deutsche Bank AG or the local subcustodian). Any difference between
the effective rate we receive and the effective rate we pay (which may
be positive or negative, but is generally positive) is kept by us and
covers our fee for running the cash management program and the related
costs we absorb.
Obviously, there will be currencies on which we will not pay
interest because of local regulations, insufficient scale, or other reasons.
However, we hope to identify additional currencies where we can begin paying
interest and we will announce those to you as soon as practical.
Currently most cash balances in our overnight sweep program are swept
into deposits at the London branch of Deutsche Bank AG. We reserve the right to
utilize other branches or affiliates for the overnight sweep program. In the
event of such change, we will notify you in writing, which may be through Global
Custody Flash Notice.
As you know, overdrafts are not permitted in the normal course
of business in any currency. Should they occur in any currency, your account
will be charged a fee to settle transactions in advance of receipt of funds. If
the overdraft is not promptly cured (and in any event upon the expiration of 30
days) after the investment manager has been notified of the outstanding
overdraft, the account's home currency will be used to cure the overdraft and
the associated foreign exchange will be done by Bankers Trust at market rates.
(Other currencies may be utilized to the extent the home currency is
insufficient.) Investment managers that have not cured overdrafts within such
period will be deemed to have directed such foreign exchange transaction.
Accounts subject to ERISA will be deemed to have engaged in the transaction
under the authority of the class exemptions available to qualified professional
asset managers and in-house investment managers. To the extent that the
overdraft is less than the U.S. dollar equivalent of $50,000, Bankers Trust's
foreign exchange desk will bundle the transaction with other small amounts for
other clients.
Schedule A
Cash Management Program - Global Custody
Overnight Uninvested Cash Balances
(* - Denotes currencies in sweep program)
Currencies Rates
---------- -----
Argentine Peso Base Rate less 150
Australian Dollar* Base Rate less 130
British Pound Sterling* Base Rate less 215
Canadian Dollar* Base Rate less 175
Czech Koruna Base Rate less 75
Danish Krone* Base Rate less 250
EMU Euro* Base Rate less 175
Greek Drachma Base Rate less 150
Hong Kong Dollar* Base Rate less 250
Hungarian Forint Base Rate less 0
Indonesian Rupiah Base Rate less 200
Israeli Shekel Base Rate less 0
Japanese Yen Base Rate less 75
Jordanian Dinar Base Rate less 200
Korean Won Base Rate less 0
Malaysian Ringgit1 Base Rate less 200
Mexican Peso Base Rate less 200
Moroccan Dirham Base Rate Less 150
New Taiwan Dollar Base Rate less 0
New Zealand Dollar Base Rate less 100
Norwegian Krone* Base Rate less 175
Philippine Peso Base Rate less 150
Polish Zloty Base Rate less 0
Singapore Dollar Base Rate less 000
Xxxxxx Koruna Base Rate less 150
South African Rand* Base Rate less 250
Swedish Krona* Base Rate less 250
Swiss Franc* Base Rate less 100
Thai Baht Base Rate less 200
Turkish Lira Base Rate less 200
U.S. Dollar* Effective Fed Funds less 100 2
We reserve the right, in our sole discretion, to adjust the base rates and
benchmark rates used and the spreads charged at any time and for any reason. We
will notify you periodically in writing of changes in spreads and updates to the
cash management program. These program updates also will be available through
Global Custody Flash Notices.
1 As a result of the rules introduced by local Malaysia regulators, we have
suspended paying interest on Ringgit balances. Should the situation change, we
will notify you via Flash Notice.
2 Not applicable if U.S. Dollars are swept to a short-term investment fund.
ILAF SWEEP LETTER OF DIRECTION
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies & Gentlemen:
Bankers Trust Company ("BTCo") is hereby appointed as agent and
attorney-in-fact with specific authority limited to buying and selling shares of
the BT Institutional Liquid Assets Fund (the "Fund") managed and administered by
BTCo and distributed by Signature Broker-Dealer Services, Inc. BTCo shall
exercise its authority in accordance with the terms of this letter, which shall
supersede any trust, custody or other agreement which we may have with BTCo with
respect to investment of cash balances.
We hereby give to BTCo standing instructions to "sweep" and invest
excess cash balances in our account(s) designated below (individually or
collectively, the "Account") as of 4pm (Eastern Time) each Business Day (as
hereinafter defined) automatically in shares of the Fund. The purchase price of
the shares of the Fund will be the net asset value per share next determined
after an automatic purchase order is entered with the Fund. We agree to notify
BTCo by 2pm (Eastern Time) on a Business Day of any new contributions or
distributions or other unusual cash movements (deposits or withdrawals) expected
to occur within our Account. A Business Day is a day on which both BTCo and the
Fund are open for business.
All funds swept by BTCo pursuant to these directions will be
transferred from our Account to an omnibus custody account (the "Omnibus
Account") maintained by BTCo which maintains records of purchases and
redemptions of Fund shares made with funds from our Account and holds funds
pending investment or return to our Account. We hereby authorize BTCo to record
and hold Fund shares in the name of BTCo or its nominee as our agent. If, on any
Business Day, our Account has a net excess of funds, BTCo will transfer such net
excess to the Omnibus Account which will then be invested in additional Fund
shares pursuant to the foregoing directions and procedures. If, on any Business
Day, our Account has a net deficit of funds, BTCo will redeem available Fund
shares up to the amount of such net deficit and transfer the proceeds via the
Omnibus Account to our Account. Shares of the Fund will be redeemed at their net
asset value.
Our standing purchase order for Fund shares will not be effective until
cash balances in the form of Federal Funds become available in our Account. If,
as a result of our standing or directed purchase orders, an overdraft results in
our Account, we will be responsible for such overdraft.
BTCo will credit dividends earned by us in respect of Fund shares to
our Account monthly. In addition, BTCo will distribute to us a monthly report of
these transactions. We agree that BTCo may confirm such transactions in Fund
shares monthly and hereby waive receipt of more frequent confirmations.
We understand that the Fund shares are not deposits of BTCo and are
therefore not an obligation of or guaranteed by BTCo, the Federal Deposit
Insurance Corporation ("FDIC") or any other governmental agency. The Fund shares
are subject to investment risk, including possible loss of the principal
investment, and there can be no assurance that the Fund will maintain a net
asset value of $1 per share.
No fee, commission or other charges will be made with respect to the
purchase or redemption of Fund shares. BTCo may receive certain fees for
managing the Fund or providing other services to the Fund, as set forth in the
Fund's Prospectus (the "Prospectus").
We acknowledge that we have received a copy of the Prospectus which
contains a more complete description of the Fund and its operations and that we
understand and agree to the terms and conditions set forth therein. We
acknowledge that these terms are subject to change from time to time, as set
forth in the Prospectus. We will be notified in writing 30 days in advance of
any change in the operation of the sweep program. The decision to invest in the
Fund shares has been and will be made by us in our sole discretion, based on our
independent judgment and not in reliance on advice or recommendations made by
BTCo. We acknowledge that we have received all information we deem necessary to
make such investment decision.
These directions are continuing and shall remain in full force and
effect until revoked by us by a written notice addressed and mailed to your
office at the above address, but such revocation shall not affect any liability
in any way resulting from any transactions initiated prior to your receipt of
such notice of revocation and your noting such change in instructions in the
Account.
This letter shall be governed by and construed in accordance with the
laws of the State of New York (without giving effect to the conflicts of laws
principles thereof).
VARIABLE INSURANCE FUNDS
By: _______________________
Date: _____________________
Account(s) Title:
Variable Insurance Funds-AmSouth
International Equity Fund
ACCEPTED:
BANKERS TRUST COMPANY
By: ___________________________
Title: ________________________
December 14, 2000
Board of Trustees
Variable Insurance Funds
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Re: Delegation of Responsibilities as a Foreign Custody Manager
Dear Sirs:
Pursuant to the provisions of Rule 17f-5(b) under the Investment
Company Act of 1940, as amended ( the "1940 Act"), and subject to the terms and
conditions set forth herein, you (the "Board") on behalf of the AmSouth
International Equity Fund (the "Fund") hereby delegate, and Bankers Trust
Company, a New York banking corporation (the "Delegate"), hereby agrees to
accept and assume certain responsibilities described herein concerning custody
of (1) the Fund's investments for which the primary market is outside of the
United States and (2) such cash and cash equivalents as are reasonably necessary
to effect the Fund's transactions in such investments (such investments and cash
shall hereinafter be referred to collectively as "Assets").
1. Representations of the Parties
The Delegate represents and warrants that it is a US Bank within the
meaning of Rule 17f-5(a)(7) under the 1940 Act and has the power and authority
to execute, deliver and perform this Agreement.
The Board represents and warrants that it has determined that it is
reasonable to rely on the Delegate to perform the responsibilities delegated by
this Agreement and has duly authorized the execution and delivery of this
Agreement on behalf of the Fund.
2. Jurisdictions Covered
The authority delegated by this Agreement subject to the provisions of
the last paragraph of this Section 2 applies with respect to Assets held in the
jurisdictions covered by the Delegate's subcustodial network which are currently
listed in Appendix A. Jurisdictions may be added by flash notice. The Delegate's
responsibility and authority with respect to jurisdictions so added shall
commence subject to the provisions of the last paragraph of this Section 2 on
the date of, or set forth in, the flash notice.
Each of the Board and the Delegate may withdraw its delegation or its
acceptance of such delegation with respect to any jurisdiction upon written
notice to the Delegate or the Board, as the case may be. Such withdrawal shall
be effective thirty (30) days after receipt of such notice by the party to which
notice has been sent and thereafter the Delegate shall have no further
responsibility or authority under this Agreement with respect to the
jurisdiction or jurisdictions as to which authority or acceptance of delegation
is so withdrawn.
3. Delegation of Authority to Act as Foreign Custody Manager
(a) Subject to the provisions of this Agreement and the requirements of
applicable law, including Rule 17f-5 under the 1940 Act, the Delegate is
authorized to place and maintain Assets in the care of any Eligible Foreign
Custodian or Custodians within the meaning of Rule 17f-5(a)(1) of the 1940 Act
in each jurisdiction in which this Agreement applies and to enter into on behalf
of the Fund such written contract or contracts governing the Fund's foreign
custody arrangements with such Eligible Foreign Custodian or Custodians as the
Delegate deems appropriate.
(b) In addition, subject to the requirements of the 1940 Act and any
other applicable law or regulation, the Delegate is authorized to place and
maintain Assets in the care of any person (a "Permissible Foreign Custodian")
with which Assets may be placed and maintained outside of the United States
under the 1940 Act without regard to Rule 17f-5 thereunder or an order of the
Securities and Exchange Commission and to enter into on behalf of the Fund such
written contract governing the Fund's foreign custody arrangements with such
Permissible Foreign Custodian as the Delegate deems appropriate.
(c) The authority granted in (a) and (b) of this paragraph 3 shall
include subject to the same limitations set forth therein the authority to
withdraw Assets from an Eligible Foreign Custodian or Permissible Foreign
Custodian in any jurisdiction in which this Agreement applies and place and
maintain the Assets so withdrawn in the care of another Eligible Foreign
Custodian or Permissible Foreign Custodian in the same jurisdiction and to enter
into appropriate written contracts governing the Fund's foreign custody
arrangements with such Eligible Foreign Custodian or Permissible Foreign
Custodian.
4. Monitoring of Eligible Foreign Custodians and Contracts
In each case in which the Delegate has exercised the authority
delegated under this Agreement under Section 3(a) to place Assets with an
Eligible Foreign Custodian, the Delegate is authorized to, and shall on behalf
of the Fund, establish a system to monitor the appropriateness of maintaining
the Fund's Assets with such Eligible Foreign Custodian and the contract with
such Eligible Foreign Custodian.
5. Guidelines and Procedures for the Exercise of Delegated Authority
a. Board's Conclusive Determination Regarding Country Risk.
In exercising its delegated authority under this Agreement, the
Delegate may assume, for all purposes, that the Board (or the Fund's investment
adviser pursuant to authority delegated by the Board) has considered and,
pursuant to its fiduciary duties to the Fund and its shareholders, determined to
accept such country risk as is incurred by placing and maintaining Assets in the
jurisdictions to which this Agreement applies. In exercising its delegated
authority under this Agreement, the Delegate may also assume that the Board (or
the Fund's investment adviser pursuant to authority delegated by the Board) has,
and will continue to monitor such country risk to the extent that the Board
deems necessary or appropriate. Nothing in this Agreement shall require the
Delegate to make any selection or to engage in any monitoring on behalf of the
Fund that would entail the consideration of country risk. For purposes of this
Section 5(a), country risk means all factors reasonably related to the systemic
risk of holding assets in a particular country, including, without limitation,
such country's financial infrastructure (including any compulsory securities
depositories (as hereinafter defined) operating in such country); prevailing
custody and settlement practices; and laws and regulations applicable to the
safekeeping and recovery of assets held in custody. A compulsory securities
depository is a securities depository within the meaning of Rule 17f-5(a)(6)
under the 1940 Act the use of which is (i) mandatory by law or regulation or
(ii) in practice mandatory because (x) securities cannot be withdrawn from the
depository or (y) maintaining securities outside of the depository is not
consistent with prevailing custodial practices.
b. Selection of Eligible Foreign Custodians.
In exercising the authority delegated under this Agreement to place
Assets with an Eligible Foreign Custodian, the Delegate shall determine that
Assets will be held by such Eligible Foreign Custodian subject to reasonable
care based on the standards applicable to custodians in the market in which the
Assets will be held after considering all factors relevant to the safekeeping of
such Assets, including, without limitation, those set forth in Rule 17f-5(c)(1)
of the 1940 Act.
c. Evaluation of Written Contracts.
In exercising the authority delegated under this Agreement to enter
into written contracts governing the Fund's foreign custody arrangements with an
Eligible Foreign Custodian, the Delegate shall determine that such contracts
(or, in the case of a securities depository other than a compulsory securities
depository, such contract, the rules or established practices and procedures of
such depository, or any combination of the foregoing) provide reasonable care
for Assets based on the standards applicable to Eligible Foreign Custodians in
the relevant market. In making this determination, the Delegate shall consider
the provisions of Rule 17f-5(c)(2) of the 1940 Act.
6. Standard of Care
In exercising the authority delegated under this Agreement, the
Delegate will exercise reasonable care, prudence and diligence such as a person
having responsibility for the safekeeping of Assets would exercise but subject
to the provisions of this Agreement, including, without limitation, paragraph 5b
above.
7. Notification of Custodial Placement
The Delegate agrees to provide written reports notifying the Board of
the placement of Assets with a particular Eligible Foreign Custodian or
Permissible Foreign Custodian and of any material change in the Fund's foreign
custody arrangements. Such reports shall be provided to the Board at such times
as the Board and the Delegate may agree in writing.
8. Fees and Expenses
The Delegate shall charge fees and be reimbursed for expenses for
performing its functions under this Agreement as may be agreed between the
parties hereto.
9. Effectiveness and Termination
This Agreement shall become effective as of the date set forth above
upon the execution and delivery of this Agreement or a counterpart thereof by
each party thereto to the other party. This Agreement may be terminated at any
time, without penalty, by either party hereto, by written notice from the
terminating party to the non-terminating party. Such termination shall become
effective 30 days after receipt by the non-terminating party of such notice.
This Agreement shall also terminate upon the effectiveness of termination of the
employment of the Delegate as custodian of Assets.
10. Notices
All communications and notices between the parties hereto in connection
herewith (a) shall be in writing, hand delivered or sent by telex, telegram,
cable, facsimile or other means of electronic communication agreed upon by the
parties hereto addressed, if to the Fund, to:
Xxxx Xxxxxxx
President, AmSouth Funds
000 Xxxxxxxxxx Xxxxxxx Xxxx, XXX0
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to the Delegate, to:
Xxxxxxx Xxxxxxxx
Vice President
Global Institutional Services
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
or in either case to such other address as shall have been furnished to the
receiving party pursuant to the provisions hereof and (b) shall be deemed
effective when received, or, in the case of a telex, when sent to the proper
number and acknowledged by a proper answerback.
11. Governing Law and Successors and Assigns
This Agreement shall be construed in accordance with the laws of the
State of New York and shall not be assignable by either party but shall bind the
successors in interest of the Board and the Delegate. Any suit, action or
proceeding arising out of this Agreement may be instituted in any State or
Federal court sitting in the City of Xxx Xxxx, Xxxxx xx Xxx Xxxx, Xxxxxx Xxxxxx
of America, and the Fund irrevocably submits to the exclusive jurisdiction of
any such court in any such suit, action or proceeding and waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of venue of any such suit, action or proceeding brought in such a court
and any claim that such suit, action or proceeding was brought in an
inconvenient forum. Each party hereto irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by certified air mail, postage prepaid, to the
other party at its address set forth in Section 10 above or in any other manner
permitted by law.
12. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
If the foregoing correctly sets forth our understanding, please execute
in the space provided below and return to the undersigned the enclosed copy of
this Agreement.
Very truly yours,
BANKERS TRUST COMPANY
By:________________________
AGREED AS SET FORTH ABOVE
VARIABLE INSURANCE FUNDS
By:___________________________
APPENDIX A
The following are the jurisdictions covered by the Delegate's subcustodial
network, as referenced in Paragraph 2:
Argentina Pakistan
Australia Peru
Austria Poland
Bangladesh Portugal
Belgium Russia
Botswana Singapore
Brazil Slovak Republic
Canada South Africa
Chile South Korea
People's Republic of China-Shanghai Spain
People's Republic of China-Shenzhen Sri Lanka
Colombia Sweden
Czech Republic Switzerland
Denmark Taiwan
Ecuador Thailand
Egypt Turkey
Finland United Kingdom
France Venezuela
Germany Zambia
Ghana Zimbabwe
Greece
Hong Kong
Hungary
India
Indonesia
Ireland
Israel
Italy
Japan
Jordan
Kenya
Luxembourg
Malaysia
Mauritius
Mexico
Morocco
Netherlands
New Zealand
Norway
