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DELEGATION AGREEMENT
BETWEEN
ING FUNDS TRUST
AND
INVESTORS FIDUCIARY TRUST COMPANY
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DELEGATION AGREEMENT
AGREEMENT, dated as of October 30, 1998 by and between
INVESTORS FIDUCIARY TRUST COMPANY, a corporation chartered under the laws of
Missouri (the "Delegate"), and ING FUNDS TRUST, an investment management company
organized under the laws of Delaware (the "Fund"), on behalf of its various
Portfolios, individually and not severally (collectively, the "Portfolios").
WHEREAS, the Delegate is the investment adviser of each the
Portfolios under an investment advisory agreement (the "Advisory Agreement").
WHEREAS, pursuant to the provisions of Rule 17f-5(b) under the
Investment Company Act of 1940, and subject to the terms and conditions set
forth herein, the Board of Trustees of the Fund desires to delegate to the
Delegate, and the Delegate hereby agrees to accept and assume, certain
responsibilities described herein concerning Assets held outside of the United
States.
NOW THEREFORE, in consideration of the premises and of the
mutual agreements contained herein, the parties hereto agree as follows:
1. DEFINITIONS
Capitalized terms in this Agreement have the following
meanings:
a. Assets
Assets means any of the Fund's investments (including
foreign currencies) for which the primary market is outside the United States,
and such cash and cash equivalents as are reasonably necessary to effect the
Fund's transactions in such investments.
b. Authorized Representative
Authorized Representative means any one of the
persons who are empowered, on behalf of the parties to this Agreement, to
receive notices from the other party, to send notices to the other party, to add
or delete jurisdictions pursuant to Article 4, and to otherwise bind the
respective parties with respect to the subject matter of this Agreement.
c. Board
Board means the Board of Trustees (or the body
authorized to exercise authority similar to that of the board of directors of a
corporation) of the Fund.
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d. Compulsory Securities Depository
Compulsory Securities Depository means a Securities
Depository the use of which is mandatory (i) by law or regulation; (ii) because
securities cannot be withdrawn from the depository; or (iii) because maintaining
securities outside the Securities Depository is not consistent with prevailing
custodial practices.
e. Country Risk
Country Risk means all factors reasonably related to
the systemic risk of holding assets in a particular country including, but not
limited to, such country's financial infrastructure (including any Securities
Depositories operating in such country); prevailing custody and settlement
practices; and laws applicable to the safekeeping and recovery of Assets held in
custody.
f. Eligible Foreign Custodian
Eligible Foreign Custodian has the meaning set forth
in Rule 17f-5(a)(1) and shall include branches of a U.S. Bank (as the term U.S.
Bank is defined in Rule 17f-5).
g. Foreign Custody Manager
Foreign Custody Manager has the meaning set forth in
Rule 17f-5(a)(2).
h. Monitor
Monitor means to re-assess or re-evaluate, at
reasonable intervals, a decision or determination previously made.
i. Securities Depository
Securities Depository has the meaning set forth in
Rule 17f-5(a)(6).
2. REPRESENTATIONS
a. Delegate's Representations
The Delegate represents that it is a corporation
chartered under the laws of the State of Missouri.
b. Fund's Representations
The Fund represents that the Board has determined that it is
reasonable to rely on the Delegate to perform the responsibilities delegated by
this Agreement.
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3. JURISDICTIONS COVERED
a. Initial Jurisdictions
The authority delegated by this Agreement applies
only with respect to Assets held in the jurisdictions listed in Appendix B.
b. Added Jurisdictions
Jurisdictions may be added to Appendix B by written
agreement in the form of Appendix C. The Delegate's responsibility and authority
with respect to any jurisdiction so added will commence at the later of (i) the
time that the Delegate's Authorized Representative and the Board's Authorized
Representative have both executed a copy of Appendix C listing such
jurisdiction, or (ii) the time that the Delegate's Authorized Representative
receives a copy of such fully executed Appendix C.
c. Withdrawn Jurisdictions
The Board may withdraw its delegation with respect to
any jurisdiction upon written notice to the Delegate. The Delegate may withdraw
its acceptance of delegated authority with respect to any jurisdiction upon
written notice to the Board. Ten days (or such longer period as to which the
parties agree) after receipt of any such notice by the Authorized Representative
of the party other than the party giving notice, the Delegate shall have no
further responsibility or authority under this Agreement with respect to the
jurisdiction or jurisdictions as to which authority is withdrawn.
4. DELEGATION OF AUTHORITY TO ACT AS FOREIGN CUSTODY MANAGER
a. Selection of Eligible Foreign Custodians
Subject to the provisions of this Agreement and the
requirements of Rule 17f-5 (and any other applicable law), the Delegate is
authorized and directed to place and maintain Assets in the care of any Eligible
Foreign Custodian or Custodians selected by the Delegate in each jurisdiction to
which this Agreement applies.
b. Contracts With Eligible Foreign Custodians
Subject to the provisions of this Agreement and the
requirements of Rule 17f-5 (and any other applicable law), the Delegate is
authorized to enter into, on behalf of the Fund and the Portfolios, such written
contracts governing the Fund's foreign custody arrangements with such Eligible
Foreign Custodians as the Delegate deems appropriate.
5. MONITORING OF ELIGIBLE FOREIGN CUSTODIANS AND CONTRACTS
In each case in which the Delegate has exercised the authority
delegated under this Agreement 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 Assets with
such Eligible Foreign Custodian. In each case in which the Delegate has
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exercised the authority delegated under this Agreement to enter into a written
contract governing the Fund's foreign custody arrangements, the Delegate is
authorized to, and shall, on behalf of the Fund, establish a system to Monitor
the appropriateness of such contract.
6. 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 a
Portfolio's investment adviser, pursuant to authority delegated by the Board)
has considered, and pursuant to its fiduciary duties to the Fund and the
Portfolios' 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 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 consideration of Country Risk.
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 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:
i. The Eligible Foreign Custodian's practices,
procedures and internal controls, including,
but not limited to, the physical protections
available for certificated securities (if
applicable), the method of keeping custodial
records, and the security and data
protection practices;
ii. Whether the Eligible Foreign Custodian has
the financial strength to provide reasonable
care for Fund Assets;
iii. The Eligible Foreign Custodian's general
reputation and standing and, in the case of
a Securities Depository, the Securities
Depository's operating history and number of
participants;
iv. Whether the Fund will have jurisdiction over
and be able to enforce judgments against the
Eligible Foreign Custodian, such as by
virtue of the existence of any offices of
the Eligible Foreign Custodian in the United
States or the Eligible Foreign Custodian's
consent to service of process in the United
States;
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v. In the case of an Eligible Foreign Custodian
that is a banking institution or trust
company, any additional factors and criteria
set forth in Appendix D to this Agreement;
and
vi. In the case of an Eligible Foreign Custodian
that is a Securities Depository, any
additional factors and criteria set forth in
Appendix E to this Agreement.
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, such contract,
the rules or established practices or procedures of the 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 ensures that the terms of such contracts
comply with the provisions of Rule 17f-5(c)(2).
d. Monitoring
In exercising the authority delegated under this
Agreement to establish a system to Monitor the appropriateness of maintaining
Assets with an Eligible Foreign Custodian or the appropriateness of a written
contract governing the Fund's foreign custody arrangements, the Delegate shall
consider any factors and criteria set forth in Appendix F to this Agreement. If,
as a result of its Monitoring of Eligible Foreign Custodian relationships
hereunder or otherwise, the Delegate determines in its sole discretion that it
is in the best interest of the safekeeping of the Assets to move such Assets to
a different Eligible Foreign Custodian, the Fund shall bear any expense related
to such relocation of Assets.
7. STANDARD OF CARE
In exercising the authority delegated under this Agreement,
the Delegate agrees to exercise reasonable care, prudence and diligence such as
a person having responsibility for the safekeeping of assets of an investment
company registered under the Investment Company Act of 1940 would exercise.
8. REPORTING REQUIREMENTS
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 quarterly for
consideration at the next regularly scheduled meeting of the Board or earlier if
deemed necessary or advisable by the Delegate in its sole discretion.
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9. PROVISION OF INFORMATION REGARDING COUNTRY RISK
With respect to the jurisdictions listed in Appendix B, or
added thereto pursuant to Article 4, the Delegate agrees to provide annually to
the Board such information relating to Country Risk, if available, as is
specified in Appendix G to this Agreement.
10. LIMITATION OF LIABILITY
a. Notwithstanding anything in this Agreement to the contrary,
in no event shall the Delegate or any of its officers, directors, employees or
agents (collectively, the "Indemnified Parties") be liable to the Fund or any
third party, and each Portfolio (individually, and not jointly) shall indemnify
and hold the Delegate and the Indemnified Parties harmless from and against any
and all loss, damage, liability, actions, suits, claims, costs and expenses,
including legal fees, (a "Claim") arising as a result of any act or omission of
the Delegate or any Indemnified Party under this Agreement, except for any Claim
resulting solely from the negligence, willful misfeasance or bad faith of the
Delegate or any Indemnified Party with respect to such Portfolio. Without
limiting the foregoing, neither the Delegate nor the Indemnified Parties shall
be liable for, and the Delegate and the Indemnified Parties shall be indemnified
against, any Claim arising as a result of:
i. Any act or omission by the Delegate or any
Indemnified party in reasonable good faith
reliance upon the terms of this Agreement,
any resolution of the Board, telegram,
telecopy, notice, request, certificate or
other instrument reasonably believed by the
Delegate to be genuine;
ii. Any information which the Delegate provides
or does not provide under Section 10 hereof;
iii. Any acts of God, earthquakes, fires, floods,
storms or other disturbances of nature,
epidemics, strikes, riots, nationalization,
expropriation, currency restrictions, acts
of war, civil war of terrorism,
insurrection, nuclear fusion, fission or
radiation, the interruption, loss or
malfunction of utilities, transportation or
computers (hardware of software) and
computer facilities, the unavailability of
energy sources and other similar happenings
or events.
b. Notwithstanding anything to the contrary in this Agreement,
in no event shall the Delegate or the Indemnified Parties be liable to the Fund
or any third party for lost profits or lost revenues or any special,
consequential, punitive or incidental damages of any kind whatsoever in
connection with this Agreement or any activities hereunder.
c. The Delegate shall indemnify the Fund and hold harmless the
Fund, its officers, trustees, employees and agents, against any claim resulting
solely from the negligence, willful misfeasance or bad faith of the Delegate.
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11. ARBITRATION OF DISPUTES
To the extent permitted by law, all disputes or claims arising
under this Agreement shall be resolved through arbitration. Arbitration under
this Article shall be conducted according to the laws of the State of Delaware.
This Article shall be enforced and interpreted exclusively in accordance with
applicable federal law, including the Federal Arbitration Act.
12. EFFECTIVENESS AND TERMINATION OF AGREEMENT
This Agreement shall be effective as of the later of the date
of execution on behalf of the Board or the Delegate and shall remain in effect
until terminated as provided herein. This Agreement may be terminated at any
time, without penalty, by written notice from the terminating party to the
non-terminating party. Termination will become effective 30 days after receipt
by the non-terminating party of such notice.
13. AUTHORIZED REPRESENTATIVES AND NOTICES
The respective Authorized Representatives of Fund and Board,
and the addresses to which notices and other documents under this Agreement are
to be sent to each, are as set forth in Appendix H. Any Authorized
Representative of a party may add or delete persons from that party's list of
Authorized Representatives by written notice to an Authorized Representative of
the other party.
14. GOVERNING LAW
This Agreement shall be constructed in accordance with the
laws of State of Delaware without regard to principals of choice of law.
15. LIMITATION OF LIABILITY
The Delegate understands that the obligations of the Fund
under this Agreement are not binding upon any Trustee or shareholder of the Fund
personally but bind only the Fund and the Fund's Property.
The Delegate represents that it has notice of the provision of
the Declaration of Trust of the Fund disclaiming shareholder and Trustee
liability for acts or obligations of the Fund.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Authorized Representatives of the Board and of the
Delegate have affixed their signatures as of the date first written above.
INVESTORS FIDUCIARY TRUST COMPANY
By: _____________________________
Name:
Title:
ING FUNDS TRUST, on behalf
of the Portfolios set forth in Appendix A,
individually and not jointly
By: _____________________________
Name:
Title:
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LIST OF APPENDICES
A -- List of Portfolios
B -- Jurisdictions Covered
C -- Additional Jurisdictions Covered
D -- Additional Factors and Criteria To Be Applied in the Selection
of Eligible Foreign Custodians That Are Banking Institutions
or Trust Companies
E -- Additional Factors and Criteria To Be Applied in the Selection
of Eligible Foreign Custodians That Are Securities Depositories
F -- Factors and Criteria To Be Applied in Establishing Systems For
The Monitoring of Foreign Custody Arrangements and Contracts
G -- Information Regarding Country Risk
H -- Authorized Representatives
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APPENDIX A
LIST OF PORTFOLIOS
ING Money Market Fund
ING U.S. Treasury Money Market Fund
ING Intermediate Bond Fund
ING High Yield Bond Fund
ING International Fixed Income Fund
ING Mortgage Income Fund
ING National Tax-Exempt Bond Fund
ING Large Cap Growth Fund
ING Growth and Income Fund
ING Mid Cap Growth Fund
ING Small Cap Growth Fund
ING Balanced Fund
ING Global Brand Names Fund
ING International Equity Fund
ING Emerging Markets Equity Fund
ING European Equity Fund
ING Tax Efficient Fund
ING Focus Fund
ING Global Information Technology Fund
ING Global Real Estate Fund
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JURISDICTIONS COVERED
[DELETE those countries which are NOT delegated]
Argentina Lithuania
Austria Luxembourg
Australia Malaysia
Bangladesh Mauritius
Belgium Mexico
Bahrain Morocco
Botswana Namibia
Brazil Netherlands
Canada New Zealand
Chile Norway
China Oman
Colombia Pakistan
Croatia Peru
Cyprus Philippines
Czech Republic Poland
Denmark Portugal
Ecuador Romania
Egypt Russia
Estonia Singapore
Euroclear Slovak Republic
Finland Slovenia
France South Africa
Germany Spain
Ghana Sri Lanka
Greece Swaziland
Hong Kong Sweden
Hungary Switzerland
India Taiwan
Indonesia Thailand
Ireland Turkey
Israel United Kingdom
Italy United States
Japan Uruguay
Jordan Venezuela
Kenya Zambia
Korea Zimbabwe
Latvia
Lebanon
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APPENDIX C
ADDITIONAL JURISDICTIONS COVERED
Pursuant to Article 4 of this Agreement, the Delegate and the Board
agree that the following jurisdictions shall be added to Appendix A:
[insert additional countries, if any]
INVESTORS FIDUCIARY TRUST COMPANY
By: ___________________________________
Name:
Title:
ING FUNDS TRUST, on behalf of
the Portfolios set forth in Appendix A,
individually and not jointly
By: ___________________________________
Name:
Title:
DATE: ______________________________
▇-▇
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ADDITIONAL FACTORS AND CRITERIA TO BE APPLIED
IN THE SELECTION OF ELIGIBLE FOREIGN CUSTODIANS
THAT ARE BANKING INSTITUTIONS OR TRUST COMPANIES
In addition to the factors set forth in Rule 17f-5(c)(1), in selecting
Eligible Foreign Custodians that are banking institutions or trust companies,
the Delegate shall consider the following factors, if such information is
available (check all that apply):
__________ None
__________ Other (list below)
▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
ADDITIONAL FACTORS AND CRITERIA TO BE
APPLIED IN THE SELECTION OF ELIGIBLE FOREIGN
CUSTODIANS THAT ARE SECURITIES DEPOSITORIES
In addition to the factors set forth in Rule 17f-5(c)(1), in selecting
Eligible Foreign Custodians that are Securities Depositories, the Delegate shall
consider the following factors, if such information is available (check all that
apply):
1. Whether use is voluntary or compulsory
2. Ownership
3. Operating history
4. Established rules, practices and procedures
5. Membership
6. Financial strength
7. Governing regulatory body
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FACTORS AND CRITERIA TO BE APPLIED
IN ESTABLISHING SYSTEMS FOR THE MONITORING OF
FOREIGN CUSTODY ARRANGEMENTS AND CONTRACTS
In establishing systems for the Monitoring of foreign custody
arrangements and contracts with Eligible Foreign Custodians, the Delegate shall
consider the following factors, if such information is available (check all that
apply).
1. Operating performance
2. Established practices and procedures
3. Relationship with market regulators
4. Contingency planning
F-1
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APPENDIX G
INFORMATION REGARDING COUNTRY RISK
To aid the Board in its determinations regarding Country Risk, the
Delegate will furnish the Board annually with respect to the jurisdictions
specified in Article 3, the following information:
1. Copy of Addenda or Side Letters to Subcustodian Agreements
2. Legal Opinion, if available, with regard to:
a) Access to books and records by the Fund's accountants
b) Ability to recover assets in the event of bankruptcy of a
custodian
c) Ability to recover assets in the event of a loss
d) Likelihood of expropriation or nationalization, if available
e) Ability to repatriate or convert cash or cash equivalents
3. Audit Report
4. Copy of Balance Sheet from Annual Report
5. Summary of Central Depository Information
6. Country Profile Matrix containing market practice for:
a) Delivery versus payment
b) Settlement method
c) Currency restrictions
d) Buy-in practice
e) Foreign ownership limits
f) Unique market arrangements
G-1
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APPENDIX H
AUTHORIZED REPRESENTATIVES
Notices under this Agreement shall be sent to any one of the following --
1. BOARD
a. _____________________________________________ (name)
_____________________________________________ (title)
_____________________________________________ (address)
b. _____________________________________________ (name)
_____________________________________________ (title)
_____________________________________________ (address)
c. _____________________________________________ (name)
_____________________________________________ (title)
_____________________________________________ (address)
2. DELEGATE
a.
b.
H-1
