PROCEDURAL AGREEMENT
AMONG ▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC.
World Income Fund Series of ▇▇▇ ▇▇▇ Funds
and Citibank
WHEREAS the undersigned World Income Fund Series of ▇▇▇ ▇▇▇ Funds
("Customer") has opened a trading account with the undersigned ▇▇▇▇▇▇▇ ▇▇▇▇▇
Futures Inc. ("Merrill"), a registered futures commission merchant, for the
purpose of trading futures contracts traded on duly registered boards of trade,
Including options on such futures contracts ("Contracts") through said firm; and
WHEREAS, in connection with the opening of the trading account, Customer
and Merrill have entered into a Customer Agreement which requires Customer to
deposit as collateral the initial margin (including any additional original
margin requirements for Customer's short option positions) ("Initial Margin")
with respect to each Contract as required by the rules and regulations of the
Chicago Mercantile Exchange, the Chicago Board of Trade, the Commodity Exchange,
and such other exchanges on which Merrill may effect or cause to be effected
transactions as broker for Customer; and
WHEREAS Customer, Merrill, and the undersigned Citibank ("Custodian") have
entered into a Safekeeping Agreement establishing an account entitled "▇▇▇▇▇▇▇
▇▇▇▇▇ Futures Inc. Customer Funds for the benefit of World Income Fund Series of
▇▇▇ ▇▇▇ Funds (Customer Segregated Account)" pursuant to which Custodian agrees
to maintain a Safekeeping Account (which for its general conditions is governed
by the Custodian Agreement between the Custodian and Customer) for the custody
of the Initial Margin which Customer is required to deposit and maintain, and
WHEREAS the Customer Agreement and the Safekeeping Agreement both provide
that the rights and duties of the parties thereto are subject to the provisions
of this Agreement.
NOW, THEREFORE, IT IS AGREED THAT:
1. Customer shall deposit and maintain as collateral in the Safekeeping
Account such Initial Margin as shall be required from time to time by the
exchange on which transactions are effected or caused to be effected by Merrill
as broker for Customer. Customer may deposit amounts in excess of such
requirements. The designation "Customer Funds" in the account title is intended
to indicate the status of the account under the Commodity Exchange Act and
Commodity Futures Trading Commission regulations; however, the provisions of
this agreement shall be controlling as to the rights of the parties in the
collateral deposited in the account.
2. The Initial Margin deposited and maintained in the Safekeeping
Account, created pursuant to the Safekeeping Agreement, shall be in the form, as
Customer elects, of cash or of eligible securities of the U.S. Government
(valued at the current market value less 10% of the principal value thereof) or
of a combination thereof. Customer may substitute U.S. Government securities of
equal or greater value upon prior approval by Merrill, which approval shall not
be unreasonably withheld. Upon receipt of such substitute securities, Merrill
agrees to give Instructions to Custodian to release from the Safekeeping Account
cash or eligible U.S. Government securities of an equal value, or such lesser
amount as may be directed by Customer. Any separate interest payments thereon
shall be automatically credited by Custodian in Federal funds to such demand
deposit accounts designated in instructions from
-2-
Customer on the date that such interest becomes due and payable unless notice
has been provided to Custodian pursuant to Paragraph 5 (a) below, and such
interest is required to meet additional Variation Margin requirements in
accordance with the procedure provided in Paragraphs 5 (a), (b) and (c). Amounts
due on securities which mature or are redeemed will be credited to the
Safekeeping Account in Federal funds on the date such amounts are received.
Amounts due to Customer as a result of the variation in value of Customer's
short option positions shall be credited to Customer by reducing the amount of
the collateral required to be maintained in the Safekeeping Account.
3. With respect to the deposit of Initial Margin, Custodian shall be
directed by Customer's custodian order to segregate specified assets in the
Safekeeping Account, and Custodian shall promptly provide Merrill and Customer
with a written confirmation of each transfer into or out of the Safekeeping
Account.
4. Withdrawals of Initial Margin from the Safekeeping Account shall be
effected upon receipt by the Custodian of Customer's custodian order and
▇▇▇▇▇▇▇'▇ prior written verification of such withdrawal. Merrill shall, upon
request of the Customer, inform Customer of the amount of any excess Initial
Margin in the Safekeeping Account.
5. Merrill shall have access to the collateral only in accordance with
the following, and only at such times as conditions set forth hereafter are
complied with:
(a) If notice by Merrill is given to Customer that additional margin
is required by Merrill as broker for the Customer due to variation in the
value of one or more futures contracts held in the trading account or
otherwise pursuant to the Customer Agreement
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("Variation Margin"), and such notice is given prior to 9:00 A.M. New York
time on a day on which the Customer is open for business, which Variation
Margin shall first have been satisfied from any amounts currently credited
to the Customer's trading account with Merrill in connection with which the
Variation Margin is required, the Customer shall transfer to Merrill such
Variation Margin not later than 3:00 P.M. on the same day. If Notice by
Merrill to the Customer is given of the need for Variation Margin
subsequent to 9:00 A.M. but prior to 4:00 P.M. New York time on a day on
which the Customer is open for business, the Customer shall provide such
Variation Margin to Merrill not later than 10:30 A.M. New York time on the
next succeeding day on which the Customer is open for business. Notice by
Merrill to the Customer of the receipt of Variation Margin shall be given
promptly.
(b) If Merrill has not received the requested Variation Margin within
the time period as provided in Paragraph 5(a), Notice by Merrill to
Customer of the failure to receive the Variation Margin shall be given
immediately.
(c) If Merrill does not receive the Variation Margin in accordance
with Paragraph 5(a), Merrill may give (i) Notice to Custodian of the
Customer's failure to provide Variation Margin and the amount of Variation
Margin required; and (ii) Notice to the Customer that such Notice has been
given to Custodian. Promptly upon receipt by Custodian of such Notice but
without prejudice to any rights of Merrill hereunder, Custodian shall give
Notice to the Customer of its receipt of such Notice.
-4-
(d) In the event Customer has failed to transfer the required
Variation Margin to Merrill during the time period as provided in Paragraph
5 (a), Merrill may give Notice to Custodian of the Customer's failure to
provide Variation Margin and that all conditions precedent to ▇▇▇▇▇▇▇'▇
right to direct disposition hereunder have been satisfied, and may give
instructions to Custodian (i) to transfer eligible U.S. Government
securities to Merrill, (i) to sell at the prevailing market price such of
the collateral in the Safekeeping Account relating to the trading account
in which the Variation Margin is required, in each case as necessary to
provide for payment to Merrill of the amount of Variation Margin that
Merrill shall have specified in the Notice, or (iii) with respect to
collateral in the form of cash, Merrill may give instructions to Custodian
to immediately transfer cash in the amount of the Variation Margin that
Merrill shall have specified in the Notice from such Safekeeping Account to
the account of Merrill. Custodian shall promptly give Notice to Customer of
its receipt of such instructions from Merrill and, upon taking any action
pursuant to such instructions, shall immediately give Notice to Customer of
such action. Subject to the notice provisions of Paragraph 5 set forth
above, which include Merrill giving Custodian a statement that all
conditions precedent to ▇▇▇▇▇▇▇'▇ right to direct disposition hereunder
have been satisfied, Custodian shall take instructions solely from Merrill
with respect to the sale of securities and/or the transfer of cash to
Merrill. In the event such statement is not given in writing, Merrill will
confirm the statement thereafter in writing to Custodian by the most
expeditious means which may be
-5-
by telecopy. In the event that Merrill receives eligible U.S. Government
securities pursuant to this Paragraph 5(d), it shall have the right to sell
or otherwise dispose of such securities and shall remit to Customer any
proceeds of such sale or disposition in excess of the amount of Variation
Margin specified in instructions from Merrill to Custodian.
(e) Custodian shall retain in the Safekeeping Account any collateral
in excess of the amount of Variation Margin specified in instructions from
Merrill to Custodian including any proceeds from the sale of securities in
excess of such amount. Custodian shall give consideration to any timely
request by Customer with respect to particular securities to be sold and
shall sell any securities in the principal market for such securities or,
in the event such principal market is closed, sell them in a manner
commercially reasonable for such securities.
6. Merrill shall promptly credit to the trading account of Customer any
Variation Margin resulting from the variation in value of one or more Contracts
purchased or sold by Customer in accordance with the rules of any contract
market, exchange or board of trade on which Contract transactions are effected
by Merrill for Customer. At Customer's direction, Merrill shall transfer trading
account balances to Customer in Federal funds to the Custodian or such bank
account in Customer's name as Customer shall otherwise direct. Customer may give
such directions to Merrill by telephone, confirmed thereafter in writing.
7. Custodian shall act only upon receipt of instructions from Merrill
regarding release of collateral. Custodian shall indemnify Customer from any
loss incurred by reasons of Custodian's negligence or
-6-
willful misconduct in acting on those instructions; provided that the
instructions are given in a timely fashion and comply in all other respects with
the provisions of this Agreement.
8. Unless otherwise provided, all notices or other communications called
for by this Agreement shall be given by the most expeditious means possible and
may be given by telephone. If a notice Is not given in writing, a written
confirmation shall be provided to appropriate parties within a reasonable time
after the notice is given.
9. Any and all expenses of. establishing, maintaining, or terminating the
Safekeeping Account, including without limitation any and all expenses incurred
by Custodian in connection with the Safekeeping Account, shall be borne by
Customer.
10. This Agreement and the Safekeeping Account, except as provided in the
Safekeeping Agreement, shall terminate only upon written consent of Customer and
Merrill, neither of which shall unreasonably withhold their consent, at which
time Custodian shall transfer to Customer, or to a substitute custodian
designated by Customer, all property held in the Safekeeping Account.
11. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
12. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto and any
actions taken or omitted by any party hereunder shall not affect any rights of
any other party hereunder.
13. No amendment of this Agreement shall be effective unless in writing
and signed by persons thereunto duly authorized.
-7-
14. Written communications hereunder shall be, except as otherwise
required hereunder, hand-delivered or mailed first class postage prepaid, except
that written notice of termination shall be sent by certified mail addressed:
(a) if to Custodian, to:
Citibank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
-8-
(b) (1) if to Customer, to:
World Income Fund Series of Van Eck Funds
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
(2) with copies to:
World Income Fund Series of Van Eck Funds
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(c) if to Merrill, to:
New York Futures Sales Office
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇;
15. This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually,. and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
World Income Fund Series of ▇▇▇ ▇▇▇ Funds
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Authorized Signature
Date: 8/5/87 Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ Futures Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Authorized Signature
Date: 8/12/87 Title: Vice President
Citibank
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Authorized Signature
Date: 8/5/87 Title: Vice President
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CUSTOMER AGREEMENT BETWEEN
▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC. AND
World Income Fund Series of ▇▇▇ ▇▇▇ Funds
In consideration of acceptance by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Futures Inc. ("Merrill") of
an account for World Income Fund Series of ▇▇▇ ▇▇▇ Funds ("Customer") introduced
by ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Inc., Merrill and Customer agree as
follows:
1. Customer authorizes Merrill to purchase and sell futures contracts and
option contracts thereon ("Contracts") traded on duly registered boards of trade
for Customer's account in accordance with Customer's oral or written
instructions from persons designated by Customer by resolution of Customer's
Board of Directors, Managing Partner, Board of Trustees, or person(s)
responsible for the management of Customer's account, duly certified and
delivered to Merrill. Customer hereby waives any defense that any such
instruction was not in writing as may be required by the Statute of Frauds or
any other law, rule or regulation.
2. Customer shall in connection with Contract transactions pay Merrill
(1) brokerage and commission charges as agreed upon by Merrill and Customer from
time to time, (2) any charges imposed on any transaction undertaken for Customer
by the contract market, exchange or clearinghouse through which it is executed
and any tax or fee imposed on such transactions by any competent authority or
self-regulatory organization, (3) any margin required by Merrill for Customer
due to the variation in value of one or more outstanding Contracts purchased or
sold by Customer ("Variation Margin") in accordance with Paragraph 7 hereof, or
as required by Merrill due to an increase in margin requirements for new or
existing positions, and (4)
interest and service charges on any Customer deficit balances at the rates
customarily charged by Merrill, together with ▇▇▇▇▇▇▇'▇ costs and attorney's
fees incurred in collecting such deficit. Such payments shall be made in Federal
funds to Merrill at such address as Merrill may designate.
3. A detailed statement of all transactions for or on the Customer's
behalf shall be furnished to Customer on a daily and a monthly basis. Such
statements shall be conclusive and binding on the Customer unless the Customer
notifies Merrill of any objection within five business days from the day the
Customer receives such statement; provided however that with respect to monthly
statements only the Customer may make such objection within ten business days.
4. Customer shall timely deposit and maintain in the Safekeeping Account
at all times Initial Margin (including any additional original margin
requirements for Customer's short option positions) ("Initial Margin") for
Customer's account in accordance with the Procedural Agreement. Customer shall
timely pay to Merrill the amount of any additional or Variation Margin with
respect to Customer's open positions on Contracts in accordance with the
Procedural Agreement. If, upon notice given by Merrill as set forth in the
Procedural Agreement, Customer fails to provide additional or Variation Margin
or if Customer fails to deposit or maintain in the Safekeeping Account required
Initial Margin, Merrill may without further notice to Customer take any action
set forth in Paragraphs 12 and 14 hereof.
5. Customer shall make timely delivery of or payment for financial
instruments in compliance with the terms of the Contracts purchased or sold by
Customer through Merrill unless such Contracts have been
-2-
terminated by an offsetting purchase or sale prior to the delivery date.
Customer shall advise Merrill of its intentions with respect to the delivery of
or payment for such financial instruments, and Merrill shall be entitled to
receive appropriate assurances with respect thereto.
6. Customer acknowledges that (a) any trading recommendations and market
or other information communicated to Customer by Merrill are incidental to the
conduct of ▇▇▇▇▇▇▇'▇ business as a futures commission merchant and do not
constitute an offer to sell or the solicitation of an offer to buy any Contracts
or instrument that is the subject of any Contract; (b) such recommendation and
information, although based upon information obtained from sources believed by
Merrill to be reliable, may be incomplete, may not be verified, and may be
changed without notice to Customer; and (c) Merrill makes no representation,
warranty or guarantee as to the accuracy or completeness of any market or other
information or trading recommendation furnished to Customer. Customer
understands that officers, employees, or affiliates of Merrill may have a
position in, may intend to, and may, buy or sell, Contracts or instruments that
are the subject of Contracts, including Contracts which are the Subject of
information or recommendations furnished to Customer, and that the position or
transactions of any such officer, employee, or affiliate may or may not be
consistent with the recommendations furnished by Merrill to Customer.
7. All transactions by Merrill on Customer's behalf shall be subject to
the applicable constitution, by-laws, rules, regulations, customs, usages,
rulings, and interpretations of the contract market and its clearinghouse on
which such transactions are executed or cleared by Merrill or its agents for
Customer's account, and to all applicable
-3-
governmental acts and statutes (such as the Commodity Exchange Act) and to rules
and regulations made thereunder; Merrill shall not be liable to Customer as a
result of any action taken by Merrill or its agents to comply with any such
constitution, by-law, rule, regulation, custom, usage, ruling, interpretation,
act, or statute.
8. Merrill shall have no responsibility for delays in the transmission of
orders due to (a) breakdown or failure of transmission or communication
facilities, or (b) any other cause beyond ▇▇▇▇▇▇▇'▇ control.
9 Merrill shall have no responsibility for compliance by Customer with
any law or regulation governing Customer's conduct as a fiduciary.
10. Merrill shall have no responsibility for compliance by any investment
adviser or commodity trading advisor of Customer with any law or regulation
governing the conduct of such investment adviser or commodity trading advisor as
a fiduciary to Customer.
11. Customer represents that (a) Customer is duly registered under the
Investment Company Act of 1940, as amended, and is validly existing and
empowered to enter into this agreement and to effectuate transactions in
financial futures contracts, and options on futures or cash contracts as
contemplated hereby; (b) Customer has reviewed the registration requirements
pertinent to commodity pool operators and commodity trading advisors of the
Commodity Futures Trading Commission and the National Futures Association in
accordance with the requirements of the Commodity Exchange Act and the
regulations of the Commodity Futures Trading Commission and has determined that
Customer and any investment adviser or commodity trading advisor of Customer are
in compliance with such requirements to the extent applicable.
-4-
12. In the event that (a) Customer shall be dissolved, become insolvent or
in any other way terminate; (b) fail to deposit or maintain Initial Margin or
make payment of additional or Variation Margin, as set forth in Paragraph 4
hereof; or (c) in the event Merrill reasonably feels that it is necessary for
its protection, after having made reasonable attempts to notify Customer,
Merrill may close out Customer's open Contracts in whole or in part, sell any or
all of Customer's property held by Merrill, buy any securities or other property
for Customer's account, and cancel any outstanding orders and commitments made
by Merrill on behalf of Customer. Subject to ▇▇▇▇▇▇▇'▇ obligation to use best
efforts to obtain a fair and reasonable price, any such sale, purchase, or
cancellation may be made at ▇▇▇▇▇▇▇'▇ discretion on the contract or other market
or through the clearinghouse where such business is then transacted without
advertising the same and without notice to Customer, and without prior tender,
demand or call upon Customer. Customer shall remain liable for and shall pay to
Merrill the amount of any deficiency resulting from any transaction described
above.
13. As used herein, the term insolvent means that (a) an order, judgment
or decree has been entered under the bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment or debt, dissolution of liquidation or
similar law (herein called the "Bankruptcy Law") or any jurisdiction
adjudicating the Customer insolvent; or (b) the Customer has petitioned or
applied to any tribunal for, or consented to, the appointment of, or taking
possession by, a trustee, receiver, liquidator or similar official, of the
Customer, or commenced a voluntary case ▇▇▇▇▇▇ the Bankruptcy Law of the United
-5-
States or any proceedings related to the Customer under the Bankruptcy Law of
any other jurisdiction, whether now or hereafter in effect; or (c) any such
petition or application has been filed, or any such proceedings commenced,
against the Customer and the Customer by any act has indicated its approval
thereof, consent thereto or acquiescence therein, or an order for relief has
been entered in an involuntary case against Customer under the Bankruptcy Law of
the United States, as now or hereafter constituted, or an order, judgment or
decree has been entered therein appointing any such trustee, receiver,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and in effect
for more than 30 days.
14. If at any time Customer fails to deliver to Merrill any property
previously sold by Merrill on Customer's behalf or fails to deliver financial
instruments in compliance with Contracts, Customer authorizes Merrill in its
discretion to borrow or to buy any property necessary to make delivery thereof,
and Customer shall pay Merrill for any cost, loss and damage which Merrill may
sustain from its inability to borrow or buy any such property.
15. All communications to Customer shall be to: World Income Fund Series
of Van Eck Funds, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; with copies to World Income Fund Series of Van
Eck Funds, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; or to such other addresses as Customer may hereafter
direct Merrill in writing to use. All communications to Merrill shall be to the
offices at ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Inc., New York Futures Sales
Office,
-6-
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇; or at such other addresses as the parties may designate.
16. This Agreement, the Procedural Agreement, and the Safekeeping
Agreement referred to in the Procedural Agreement contain the entire agreement
between the parties and supersede any prior agreements between the parties as to
the subject matter of this Agreement. Subject to Paragraph 7 hereof, no
provision of this Agreement shall in any respect be waived, altered, modified,
or amended unless such waiver, alteration, modification, or amendment be
committed to in writing and signed by Customer and a duly authorized officer of
Merrill.
17. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
18. This Agreement shall inure to the benefit of Merrill and Customer and
their respective successors and assigns.
19. If any term or provision hereof, or the application thereof to any
person or circumstances, shall to any extent be contrary to any contract market,
exchange or government regulation or otherwise invalid or unenforceable, the
remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is contrary, invalid,
or unenforceable, shall not be affected thereby, and it shall be enforced to the
fullest extent permitted by regulation and law.
-7-
20. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any thereof shall not preclude or
inhibit the exercise of additional rights and remedies.
21. This Agreement is executed on behalf of the Trustees of the Customer
as Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
22. Customer represents that (a) Customer will promptly notify Merrill in
writing if any of the above representations shall materially change or cease to
be true and correct; (b) Customer has read and understands the Commodity Futures
Trading Commission Risk Disclosure Statement, the Options on Futures Risk
Disclosure Statement (under separate cover) and the Margin Disclosure Statement;
and (c) no person or entity has any interest in or control of the account to
which this Agreement pertains other than Customer and the persons designated by
Customer as set forth in Paragraph 1 hereof.
23. Customer and Merrill agree to promptly furnish appropriate financial
statements to each other to show any material changes in their financial
positions and to furnish such other information concerning each other as each
may reasonably request.
24. Where the context hereof requires, the singular shall import the
plural and the masculine shall import the feminine and neuter.
25. Merrill shall be entitled to rely on any instruction received from
any person identified in writing to Merrill by Customer and such instruction
shall bind Customer. Customer agrees to hold Merrill harmless against any action
taken by Merrill in reliance upon this provision.
-8-
This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually, and-the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
26. This Agreement shall become a binding contract between Customer and
Merrill when signed by both parties.
World Income Fund Series of ▇▇▇ ▇▇▇ Funds
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
The undersigned Secretary of, or person serving in a similar capacity with
respect to World Income Fund Series of ▇▇▇ ▇▇▇ Funds the Customer which is party
to this Agreement, the Procedural Agreement and the Safekeeping Agreement,
hereby certifies that the individual whose name appears above as the signatory
of this Agreement, the Procedural Agreement and the Safekeeping Agreement on
behalf of the Customer holds the position with the Customer as identified above
and is authorized to execute this Agreement on behalf of the Customer.
World Income fund Series of ▇▇▇ ▇▇▇ Funds
By: /s/ ▇▇▇▇▇▇▇ ▇. Vallarta
Name: ▇▇▇▇▇▇▇ ▇. Vallarta
Secretary
APPROVED:
▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
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TO: World Income Fund Series of ▇▇▇ ▇▇▇ Funds
Account No. _______________
FROM: ▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC.
RISK DISCLOSURE STATEMENT
This statement is furnished to you because Regulation 1.55 of the Commodity
Futures Trading Commission requires it.
The risk of loss in trading commodity futures contracts can be substantial. You
should therefore carefully consider whether such trading is suitable for you in
light of your financial condition. In considering whether to trade, you should
be aware of the following:
(1) You may sustain a total loss of the Initial Margin funds and any additional
funds that you deposit with your broker to establish or maintain a position
in the commodity futures market. If the market moves against your position
you may be called upon by your broker to deposit a substantial amount of
additional margin funds, on short notice, in order to maintain your
position. If you do not provide the required funds within the prescribed
time, your position may be liquidated at a loss, and you will be liable for
any resulting deficit in your account.
(2) Under certain market conditions, you may find it difficult or impossible to
liquidate a position. This can occur, for example, when the market makes a
"limit move".
(3) Placing contingent orders, such as a "stop-loss" or "stop-limit" order,
will not necessarily limit your losses to the intended amounts since market
conditions may make it impossible to execute such orders.
(4) A "spread" position may not be less risky than a simple "long" or "short"
position.
(5) The high degree of leverage that is often obtainable in futures trading
because of the small margin requirements can work against you as well as
for you. The use of leverage can lead to large losses as well as gains.
-10-
This brief statement cannot, of course, disclose all the risks and other
significant aspects of the commodity markets. You should therefore carefully
study futures trading before you trade.
World Income Fund Series of ▇▇▇ ▇▇▇ Funds HAS RECEIVED AND THAT IT UNDERSTANDS
THE RISK DISCLOSURE DOCUMENT PROVIDED TO IT IN COMPLIANCE WITH REGULATION 1.55
OF THE COMMODITY FUTURES TRADING COMMISSION.
Dated: 8/5/87 By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
PLEASE SIGN AND RETURN ONE COPY TO ▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC.
RETAIN THE DUPLICATE COPY FOR YOUR RECORDS.
-11-
TO: World Income Fund Series of ▇▇▇ ▇▇▇ Funds
Account No. ____________________
FROM: ▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC.
COMMODITY OPTIONS RISK DISCLOSURE STATEMENT
World Income Fund Series of ▇▇▇ ▇▇▇ Funds ACKNOWLEDGES THAT IT HAS RECEIVED
(DELIVERED UNDER SEPARATE COVER) AND THAT IT UNDERSTANDS THE OPTIONS RISK
DISCLOSURE STATEMENT IN COMPLIANCE WITH REGULATION 33.7 OF THE COMMODITY FUTURES
TRADING COMMISSION.
World Income Fund Series of ▇▇▇ ▇▇▇ Funds
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ DATED: 8/5/87
ITS: Vice President
PLEASE SIGN AND RETURN ONE COPY TO ▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC. RETAIN THE
DUPLICATE COPY FOR YOUR RECORDS.
-12-
TO: World Income Fund Series of ▇▇▇ ▇▇▇ Funds
Account No. ___________________
FROM: ▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC.
MARGIN DISCLOSURE STATEMENT
This statement is furnished to you because Regulation 190.10(c) of the Commodity
Futures Trading Commission requires it for reasons of fair notice unrelated to
▇▇▇▇▇▇▇ ▇▇▇▇▇'▇ current financial condition.
1. You should know that in the unlikely event of ▇▇▇▇▇▇▇ ▇▇▇▇▇'▇ bankruptcy,
property, including property specifically traceable to you, will be
returned, transferred or distributed to you, or on your behalf, only to the
extent of your pro rata share of all property available for distribution to
customers.
2. Notice concerning the terms for the return of specifically identifiable
property will be by publication in a newspaper of general circulation.
3. The Commission's regulations concerning bankruptcies of commodity brokers
can be found at 17 Code of Federal Regulations Part 190.
World Income Fund Series of ▇▇▇ ▇▇▇ Funds HAS RECEIVED THE MARGIN DISCLOSURE
STATEMENT IN ACCORDANCE WITH REGULATION 190.10(c) OF THE COMMODITY FUTURES
TRADING COMMISSION.
Dated: 8/5/87 By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: /s/ Vice President
PLEASE SIGN AND RETURN ONE COPY TO ▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC. RETAIN THE
DUPLICATE COPY FOR YOUR RECORDS.
-13-
TO: World Income Fund Series of ▇▇▇ ▇▇▇ Funds
Account No. ___________________
FROM: ▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC.
HEDGE AGREEMENT
(To be signed by hedge customers only)
The undersigned represents that all transactions in this account are for hedging
purposes only and shall be entered into solely for the purpose of protecting
against losses which may be incurred in a cash position in a specific commodity,
or with respect to interest rate futures or stock index futures to protect
against losses that may be incurred in an existing securities portfolio.
These transactions are not for speculation. In the event that the undersigned
intends to enter into any transactions in this account for speculative purposes,
we shall notify ▇▇▇▇▇▇▇ ▇▇▇▇▇ in writing prior to the entry of such
transactions.
The undersigned is familiar with all laws, rules and regulations concerning
hedging in such contracts.
World Income Funds Series of ▇▇▇ ▇▇▇ Funds
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Dated: 8/5/97
CFTC Regulation 190.06 requires that in the unlikely event of ▇▇▇▇▇▇▇ ▇▇▇▇▇'▇
bankruptcy, you be given the opportunity to give instructions to the bankruptcy
trustee regarding the disposition of your open futures positions. Unless you
indicate a contrary preference in the space provided below, the trustee would be
authorized to liquidate your open positions, without seeking further
instructions from you.
[ ] World Income Fund Series of ▇▇▇ ▇▇▇ Funds would prefer to be contacted
by the bankruptcy trustee for instructions regarding the disposition of its open
futures positions.
PLEASE SIGN AND RETURN ONE COPY TO ▇▇▇▇▇▇▇ ▇▇▇▇▇ FUTURES INC. RETAIN THE
DUPLICATE COPY FOR YOUR RECORDS.
-14-
SAFEKEEPING AGREEMENT
World Income Fund Series of ▇▇▇ ▇▇▇ Funds ("Depositor") and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Futures Inc. ("Merrill") have interests in the subject Safekeeping Account
pursuant to a certain Procedural Agreement among Merrill, Depositor, and
Citibank ("Custodian") which Procedural Agreement governs over any inconsistent
provisions in this Safekeeping Agreement.
--------------------------------------------------------------------------------
Citibank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Gentlemen:
The Depositor hereby requests the Custodian to open and maintain a
Safekeeping Account, which shall be a subaccount under the Custodian Agreement
dated as of August 30, 1985 between Depositor and Custodian, and in the name of
"▇▇▇▇▇▇▇ ▇▇▇▇▇ Futures Inc. Customer Funds for the benefit of World Income Fund
Series of ▇▇▇ ▇▇▇ Funds (Customer Segregated Account)" for all monies and
securities now or hereafter deposited with and accepted by you for the initial
margin in futures and option contracts thereon including any additional original
margin requirements for Customer's short option positions.
In such custodial capacity you are limited to holding the securities in
safekeeping for the Depositor and dealing with them as herein expressed unless
otherwise mutually agreed in writing.
You shall make purchases, sales, and deliveries of securities only as the
Depositor may direct, and you are authorized and directed to:
1. Collect income and principal on bearer securities in the account:
2. Dispose of the monies received from income collections,
3. Send a daily confirmation of receipts and disbursements to the
Depositor and to Merrill;
4. Provide a monthly list of securities to the Depositor and to Merrill;
5. On request, confirm to Merrill and Depositor all account charges and
positions.
The general conditions of the Safekeeping Agreement shall be those of the
Custodian Agreement between Depositor and Custodian.
The compensation of the Custodian for its services hereunder shall be
payable monthly and shall be as the parties shall agree. No change in
compensation shall be applicable to this account except upon written notice to
Depositor.
The Custodian will acknowledge for Merrill by letter, Attachment A hereto,
that Custodian was informed that the monies and securities on deposit belong to
Depositor and are being held by Custodian, in the name of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Futures
Inc., in accordance with the Commodity Exchange Act and the regulations
thereunder.
All communications from the Custodian shall be sent to the Depositor
pursuant to the Custodian Agreement, and to Merrill at the address shown below,
or at such other address as the Depositor or Merrill shall from time to time
direct.
The Depositor is not a foreign citizen; if this citizenship status changes,
the Depositor will promptly notify the Custodian in writing.
This Agreement is executed on behalf of the Trustees of the Depositor as
Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Depositor.
-2-
This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually, and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
Either the Depositor or the Custodian, subject to the Procedural Agreement,
may close this account at any time upon 60 days prior notice.
Accepted: Very truly yours,
Citibank World Income Fund Series of ▇▇▇ ▇▇▇ Funds
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Acknowledged and Approved:
on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Futures Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
New York Futures Sales ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇;
Dated 8/12/87
-3-
Attachment A
------------
Date: ▇▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Gentlemen:
We refer to the account with your bank designated as "▇▇▇▇▇▇▇ ▇▇▇▇▇ Futures
Inc. Customer Funds for the benefit of World Income Fund Series of ▇▇▇ ▇▇▇
Funds (Customer Segregated Account)" account number __________ (the "Account"),
opened pursuant to a Safekeeping Agreement among World Income Fund Series of ▇▇▇
▇▇▇ Funds ("Depositor"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Futures Inc. ("Merrill") and your bank,
as custodian, dated __________.
The Account is being maintained by us in compliance with the provisions of
the Commodity Exchange Act and as a subaccount under the custodian agreement
between Depositor and you. Depositor will from time to time deposit with you in
such Account monies or obligations of the United States, general obligations of
any state or of any political subdivision thereof, or obligations fully
guaranteed as to principal and interest by the United States (collectively
referred to as "securities"). All such securities and monies will be treated
either as investments of our commodity and commodity option customer's funds or
as obligations belonging to such customer. Under the provisions of the Commodity
Exchange Act and regulations promulgated thereunder, these deposits are required
to be segregated and treated as belonging to the customer. By signing and
returning to us the enclosed copy of this letter, you acknowledge that you
understand the nature of the securities and monies deposited in the account.
You further acknowledge that the funds and securities held in the above
Account are those of a commodity or commodity option customer and are being held
by the bank subject to the requirements of the Commodity Exchange Act and
regulations promulgated thereunder. Such funds and securities will not be
treated by the bank as the funds or securities of any person other than such
depositor customer of Merrill, and will not be used by the bank in connection
with the obligations of any person other than Depositor, except as provided in
the Safekeeping Agreement and the Procedural Agreement.
You also acknowledge that the above Account is a special deposit, and you agree
that, in providing services to us or to any of our affiliates, including but not
limited to extending credit or granting accommodations or services relating to
uncollected, target, compensating or other balances to us or to any of our
affiliates, the bank
World Income Fund Series of ▇▇▇ ▇▇▇ Funds
Dated August 4, 1987
Page Two
Acknowledges that is has no claim, and will seek no lien, right of set off or
any other claim or interest in the funds or securities held in said Account, and
that it will not use the funds and securities in the above-described Account to
margin, collateralize, secure or to extend credit to Depositor, to any of its
affiliates, to us, to any of our affiliates or to any persons for such
activities or otherwise. You hereby agree that the obligations and records
accounting for the monies and securities held in the Account may be examined by
an authorized employee of the Commodity Futures Trading Commission.
Sincerely yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Futures Inc.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Financial Officer
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Treasurer
Citibank /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
AGREED AND ACKNOWLEDGED:
Title: Vice President
Dated: August 5, 1987
PROCEDURAL AGREEMENT
AMONG ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc.
World Income Fund of ▇▇▇ ▇▇▇ Funds
and Citibank
WHEREAS the undersigned World Income Fund Series of ▇▇▇ ▇▇▇ Funds
("Customer") has opened a trading account with the undersigned ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co., Inc. ("MS & Co"), a registered futures commission merchant, for the purpose
of trading futures contracts traded on duly registered boards of trade,
including options on such futures contracts ("Contracts") through said firm; and
WHEREAS, in connection with the opening of the trading account, Customer
and MS & Co have entered into a Customer Agreement which required Customer to
deposit as collateral the initial margin (including any additional original
margin requirements for Customer's short option positions) ("Initial Margin")
with respect to each Contract as required by MS & Co or by the rules and
regulations of the Chicago Mercantile Exchange, the Chicago Board of Trade, the
Commodity Exchange, and such other exchanges on which MS & Co may effect or
cause to be effected transactions as broker for Customer; and
WHEREAS Customer, MS & Co, and the undersigned Citibank ("Custodian") have
entered into a Safekeeping Agreement establishing an account entitled "▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co., Inc. Customer Funds for the benefit of World Income Fund Series
of ▇▇▇ ▇▇▇ Funds (Customer Segregated Account)" pursuant to which Custodian
agrees to maintain a Safekeeping Account(which for its general conditions is
governed by the
Custodian Agreement between the Custodian and Customer, except in the event of a
conflict between the Custodian Agreement and this Procedural Agreement, in which
case this Procedural Agreement shall govern) for the custody of the Initial
Margin which Customer is required to deposit and maintain, and
WHEREAS the Customer Agreement and the Safekeeping Agreement both provide
that the rights and duties of the parties thereto are subject to the provisions
of this Agreement.
NOW, THEREFORE IT IS AGREED THAT:
1. Customer shall deposit and maintain as collateral in the Safekeeping
Account such Initial Margin as shall be required from time to time by MS & Co or
by the exchange on which transactions are effected or caused to be effected by
MS & Co as broker for Customer. Customer may deposit amounts in excess of such
requirements. The designation "Customer Funds" in the account title is intended
to indicate the status of the account under the Commodity Exchange Act and
Commodity Futures Trading Commission regulations; however, the provisions of
this agreement to the extent not in conflict with the CEA and CFTC regulations
shall be controlling as to the rights of the parties in the collateral deposited
in the account.
2. The Initial Margin deposited and maintained in the Safekeeping
Account, created pursuant to the Safekeeping Agreement, shall be in the form, as
Customer elects, of cash
or of eligible securities of the U.S. Government (Treasury Bills shall be valued
at 90% of face value and Treasury Bonds and Notes shall be valued at 70% of face
value) or a combination thereof. Customer may substitute U.S. Government
securities of equal or greater value upon prior approval by MS & Co which
approval shall not be unreasonably withheld. Upon receipt of such substitute
securities, MS & Co agrees to give instructions to Custodian to release from the
Safekeeping Account cash or eligible U.S. Government securities of an equal
value, or such lesser amount as may be directed by Customer. Any separate
interest payments thereon shall be automatically credited by Custodian in
Federal funds to such demand deposit accounts designated in instructions from
Customer on the date that such interest becomes due and payable unless notice
has been provided to Custodian pursuant to Paragraph 5 (a) below, and such
interest is required to meet additional Variation Margin requirements in
accordance with the procedure provided in Paragraphs 5 (a), (b) and (c). Amounts
due on securities which mature or are redeemed will be credited to the
Safekeeping Account in Federal funds on the date such amounts are received.
Amounts due to Customer as a result of the variation in value of Customer's
short positions shall be credited to Customer by reducing the amount of the
collateral required to be maintained in the Safekeeping Account with prior
notice to MS & Co.
3. With respect to the deposit of Initial Margin,
Custodian shall be directed by Customer's custodian order to segregate specified
assets in the Safekeeping Account, and Custodian shall promptly provide MS & Co
and Customer with a written confirmation of each transfer into or out of the
Safekeeping Account.
4. Withdrawals of Initial Margin from the Safekeeping Account shall be
effected upon receipt by the Custodian of Customer's custodian order and MS &
Co's prior written verification of such withdrawal. MS & Co shall, upon request
of the Customer, inform Customer of the amount of any excess Initial Margin in
the Safekeeping Account.
5. MS & Co shall have access to the collateral only in accordance with
the following, and only at such times as conditions set forth hereafter are
complied with:
(a) If notice by MS & Co is given to Customer that additional margin
is required by MS & Co as broker for the Customer due to variation in the value
of one or more contracts held in the trading account or otherwise pursuant to
the Customer Agreement ("Variation Margin"), and such notice is given prior to
10:00 A.M. New York time on a day on which the Customer is open for business,
which Variation Margin shall first have been satisfied from any amounts
currently credited to the Customer's trading account with MS & Co in connection
with which the Variation Margin is required, the Customer shall transfer to MS &
Co such Variation Margin not later than 3:30 P.M. on the same day. If Notice by
MS & Co to the Customer is given of the need
for Variation Margin subsequent to 10:00 A.M. but prior to 4:00 P.M. New York
time on a day on which the Customer is open for business, the Customer shall
provide such Variation Margin to MS & Co not later than 10:30 A.M. New York time
on the next succeeding day on which the Customer is open for business. Notice by
MS & Co to the Customer of the receipt of Variation Margin shall be given
promptly.
(b) If MS & Co has not received the requested Variation Margin within
the-time period as provided in Paragraph 5(a), Notice by MS & Co to Customer of
the failure to receive the Variation Margin shall be given immediately.
(c) If MS & Co does not receive the Variation Margin in accordance
with Paragraph 5(a), MS & Co may give (i) Notice to Custodian of the Customer's
failure to provide Variation Margin and the amount of Variation Margin required;
and (ii) Notice to the Customer that such Notice has been given to Custodian.
Promptly upon receipt by Custodian of such Notice but without prejudice to any
rights of MS & Co hereunder, Custodian shall give Notice to the Customer of its
receipt of such Notice.
(d) In the event Customer has failed to transfer the required
Variation Margin to MS & Co during the time period as provided in Paragraph
5(a), MS & Co may give Notice to Custodian of the Customer's failure to provide
Variation Margin which Notice shall be the same Notice as in Paragraph 5(c) and
that all conditions precedent to MS & Co's right to direct disposition hereunder
have been
satisfied, and may give instructions to Custodian (i) to transfer eligible U.S.
Government securities to MS & CO (ii) to sell at the prevailing market price
such of the collateral in the Safekeeping Account relating to the trading
account in which the Variation Margin is required, in each case as necessary to
provide for payment to MS & Co of the amount of Variation Margin that MS & Co
shall have specified in the Notice, or (iii) with respect to collateral in the
form of cash, MS & Co may give instructions to Custodian to immediately transfer
cash in the amount of the Variation Margin that MS & Co shall have specified in
the Notice from such Safekeeping Account to the account of MS & Co. Custodian
shall promptly give Notice to Customer of its receipt of such instructions from
MS & Co and, upon taking any action pursuant to such instructions, shall
immediately give Notice to Customer of such action. Subject to the notice
provisions of Paragraph 5 set forth above, which include MS & Co giving
Custodian a statement that all conditions precedent to MS & Co's right to direct
disposition hereunder have been satisfied, Custodian shall take instructions
solely from MS & Co with respect to the sale of securities and/or the transfer
of cash to MS & Co. In the event such statement is not given in writing, MS & Co
will confirm the statement thereafter in writing to Custodian by the most
expeditions means which may be by telecopy. In the event that MS & Co receives
eligible U.S. Government securities pursuant to this Paragraph 5(d), it
shall have the right to sell or otherwise dispose of such securities and shall
remit to Customer any proceeds of such sale or disposition in excess of the
amount of Variation Margin specified in instructions from MS & Co to Custodian.
(e) Custodian shall retain in the Safekeeping Account any collateral
in excess of the amount of Variation Margin specified in instructions from MS &
Co to Custodian including any proceeds form the sale of securities in excess of
such amount. Custodian shall give consideration to any timely request by
Customer with respect to particular securities to be sold and shall sell any
securities in the principal market for such securities or, in the event such
principal amount is closed, sell them in manner commercially reasonable for such
securities.
6. MS & Co shall promptly credit to the trading account of Customer any
Variation Margin resulting from the variation in value of one or more Contracts
purchased or sold by Customer in accordance with the rules of any contract
market, exchange or board of trade on which Contract transactions are effected
by MS & Co for Customer. At Customer's direction, MS & Co shall transfer trading
account balances to Customer in Federal funds to the Custodian or such bank
account in Customer's name as customer shall otherwise direct. Customer may give
such directions to MS & Co by telephone, confirmed thereafter in writing.
7. Custodian shall act only upon receipt of
instructions from MS & Co regarding release of collateral. Custodian shall
indemnify Customer from any loss incurred by reasons of Custodian's negligence
or willful misconduct in acting on those instructions; provided that the
instructions are given in a timely fashion and comply in all other respects with
the provisions of this Agreement.
8. Unless otherwise provided, all notice or other communications called
for by this Agreement shall be given by the most expeditious means possible and
may be given by telephone. If a notice is not given in writing, a written
confirmation shall be provided to appropriate parties within a reasonable time
after the notice is given.
9. Any and all expenses of establishing, maintaining, or terminating the
Safekeeping Account, including without limitation any and all expenses incurred
by Custodian in connection with the Safekeeping Account, shall be borne by
Customer.
10. This Agreement and the Safekeeping Account, except as provided in the
Safekeeping Agreement, shall terminate only upon written consent of Customer and
MS & Co, neither of which shall unreasonably withhold their consent, at which
time Custodian shall transfer to Customer, or to a substitute custodian
designated by Customer, all property held in the Safekeeping Account.
11. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
12. Except as specifically provided herein, this Agreement does not in any
way affect other agreements entered into among the parties hereto and any
actions taken or omitted by any party hereunder shall not affect any rights of
any other party hereunder.
13. No amendment of this Agreement shall be effective unless in writing
and signed by persons thereunto duly
authorized.
14. Written communications hereunder shall be, except as otherwise
required hereunder, hand-delivered or mailed first class postage prepaid, except
that written notice of termination shall be sent by certified mail addressed:
(a) if to Custodian, to:
Citibank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Dela Capella
(b) (1) if to Customer, to:
World Income fund Series of Van Eck Funds
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
(2) with copies to:
World Income Fund Series of Van Eck funds
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Commodity Operations Manager
15. This Agreement is executed on behalf of the Trustees of the Fund as
Trustees and not individually, and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
World Income Fund Series of ▇▇▇ ▇▇▇ Funds
By:_______________________
Authorized Signature
Date:____________ Title:____________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc.
By:_______________________
Authorized Signature
Date:____________ Title:____________________
Citibank
By:_______________________
Authorized Signature
Date:___________ Title:____________________
CUSTOMER AGREEMENT BETWEEN
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc. AND
World Income Fund Series of ▇▇▇ ▇▇▇ Funds
In consideration of acceptance by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc. ("MS & Co") of
an account for World Income Fund Series of ▇▇▇ ▇▇▇ Funds ("Customer")
MS & Co and Customer agree as follows:
1. Customer authorizes MS & Co to purchase and sell futures contracts and
option contracts thereon ("Contracts") traded on duly registered boards of trade
for Customer's account in accordance with Customer's oral or written
instructions from persons designated by Customer by resolution of Customer's
Board of Directors, Managing Partner, Board of Trustees, or person(s)
responsible for the management of Customer's account, duly certified and
delivered to MS & Co. Customer hereby waives any defense that any such
instruction was not in writing as may be required by the Statue of Frauds or any
other law, rule or regulation.
2. Customer shall in connection with Contract transactions pay MS & Co
(1) brokerage and commission charges as agreed upon by MS & Co and Customer from
time to time, (2) any charges imposed on any transaction undertaken for Customer
by the contract market, exchange or clearinghouse through which it is executed
and any tax or fee imposed on such transactions by any competent authority or
self-regulatory organization, (3) any margin required by MS & Co for Customer
due to the variation in value of one or
more outstanding Contracts purchased or sold by Customer ("Variation Margin") in
accordance with Paragraph 7 hereof, or as required by MS & Co due to an increase
in margin requirements for new or existing positions, and (4) interest and
service charges on any Customer deficit balances at the rates customarily
charged by MS & Co together with MS & Co's costs and attorney's fees incurred in
collecting such deficit. Such payments shall be made in Federal funds to MS & Co
at such addresses as MS & Co may designate.
3. A detailed statement of all transactions for or on the Customer's
behalf shall be furnished to Customer on a daily and a monthly basis. Such
statements shall be conclusive and binding on the Customer unless the Customer
notifies MS & Co of any objection within five business days from the day the
Customer receives such statement; provided however that with respect to monthly
statements only the Customer may make such objection within ten business days.
4. Customer shall timely deposit and maintain in the Safekeeping Account
at all times Initial Margin (including any additional original margin
requirements for Customer's short option positions) ("Initial Margin") for
Customer's account in accordance with the Procedural Agreement. Customer shall
timely pay to MS & Co the amount of any additional or Variation Margin with
respect to Customer's open positions on Contracts in accordance with the
Procedural Agreement. If, upon notice given by MS & Co as set forth in the
Procedural Agreement, Customer fails to
provide additional or Variation Margin or if Customer fails to deposit or
maintain in the Safekeeping Account required Initial Margin, MS & Co may without
further notice to Customer take any action set forth in Paragraphs 12 and 14
hereof.
5. Customer shall make timely delivery of or payment for financial
instruments in compliance with the terms of the Contracts purchased or sold by
Customer through MS & Co unless such Contracts have been terminated by an
offsetting purchase or sale prior to the delivery date. Customer shall advise MS
& Co of its intentions with respect to the delivery of or payment for such
financial instruments, and MS & Co shall be entitled to receive appropriate
assurances with respect thereto.
6. Customer acknowledges that (a) any trading recommendations and market
or other information communicated to Customer by MS & Co are incidental to the
conduct of MS & Co's business as a futures commission merchant and do not
constitute an offer to sell or the solicitation of an offer to buy any Contracts
or instrument that is the subject of any Contract; (b) such recommendation and
information, although based upon information obtained from sources believed by
MS & Co to be reliable, may be incomplete, may not be verified, and may be
changed without notice to Customer; and (c) MS & Co makes no representation,
warranty or guarantee as to the accuracy or completeness of any market or other
information or trading recommendation
furnished to Customer. Customer understands that officers, employees, or
affiliates of MS & Co may have a position in, may intend to, and may, buy or
sell, Contracts or instruments that are the subject of Contracts, including
Contracts which are the subject of information or recommendations furnished to
Customer, and that the position or transactions of any such-officer, employee,
or affiliate may or may not be consistent with the recommendations furnished by
MS & Co to Customer.
7. All transactions by MS & Co on Customer's behalf shall be subject to
the applicable constitution, by-laws, rules, regulations, customs, usages,
rulings, and interpretations of the contract market and its clearinghouse on
which such transactions are executed or cleared by MS & Co or its agents for
Customer's account, and to all applicable governmental acts and statutes (such
as the Commodity Exchange Act) and to rules and regulations made thereunder; MS
& Co shall not be liable to Customer as a result of any action taken by MS & Co
or its agents to comply with any such constitution, by-law, rule, regulation,
custom, usage, ruling, interpretation, act, or statute.
8. MS & Co shall have no responsibility for delays in the transmission of
orders due to (a) breakdown or failure of transmission or communication
facilities, or (b) any other cause beyond MS & Co's control.
9. MS & Co shall have no responsibility for compliance by Customer with
any law or regulation governing
Customer's conduct as a fiduciary.
10. MS & Co shall have no responsibility for compliance by any investment
adviser or commodity trading advisor of Customer with any law or regulation
governing the conduct of such investment adviser or commodity trading advisor as
a fiduciary to Customer.
11. Customer represents that (a) Customer is duly registered under the
Investment Company Act of 1940, as amended, and is validly existing and
empowered to enter into this Agreement and to effectuate transactions in futures
contracts which may include stock index, foreign currency and debt instrument
futures, and options on such futures or cash contracts as contemplated hereby;
(b) Customer has reviewed the registration requirements pertinent to commodity
pool operators and commodity trading advisors of the Commodity Futures Trading
Commission and the National Futures Association in accordance with the
requirements of the Commodity Exchange Act and the regulations of the Commodity
Futures Trading Commission and has determined that Customer and any investment
adviser or commodity trading advisor of Customer are in compliance with such
requirements to the extent applicable.
12. In the event that (a) Customer shall be dissolved, become insolvent or
in any other way terminate; (b) fail to deposit or maintain Initial Margin or
make payment of additional or Variation Margin, as set forth in Paragraph 4
hereof; or (c) in the event MS & Co reasonably feels that it
is necessary for its protection, after having made reasonable attempts to notify
Customer, MS & Co may close out Customer's open Contracts in whole or in part,
sell any or all of Customer's property held by MS & Co buy any securities or
other property for Customer's account, and cancel any outstanding orders and
commitments made by MS & Co on behalf of Customer. Subject to MS & Co's
obligation to use best efforts to obtain a fair and reasonable price, any such
sale, purchase, or cancellation may be made at MS & Co's discretion on the
contract or other market or through the clearinghouse where such business is
then transacted without advertising the same and without notice to Customer, and
without prior tender, demand or call upon Customer. Customer shall remain liable
for and shall pay to MS & Co the amount of any deficiency resulting from any
transaction described above.
13. As used herein, the term insolvent means that (a) an order, judgement
or decree has been entered under the bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution of liquidation or
similar law (herein called the "Bankruptcy Law") of any jurisdiction
adjudicating the Customer insolvent; or (b) the Customer has petitioned or
applied to any tribunal for, or consented to, the appointment of, or taking
possession by, a trustee, receiver, liquidator or similar official, of the
Customer, or commenced a voluntary case under the Bankruptcy Law of the United
States or any proceedings related to the
Customer under the Bankruptcy Law of any other jurisdiction, whether now or
hereafter in effect; or (c) any such petition or application has been filed, or
any such proceedings commenced, against the Customer and the Customer by any act
has indicated its approval thereof, consent thereto or acquiescence therein, or
an order for relief has been entered in an involuntary case against Customer
under the Bankruptcy Law of the United States, as now or hereafter constituted,
or an order, judgement or decree has been entered therein appointing any such
trustee, receiver, liquidator or similar official, or approving the petition in
any such proceedings, and such order, judgement or decree remains unstayed and
in effect for more than 30 days.
14. If at any time Customer fails to deliver to MS & Co any property
previously sold by MS & Co on Customer's behalf or fails to deliver financial
instruments in compliance with Contracts, Customer authorizes MS & Co in its
discretion to borrow or to buy any property necessary to make delivery thereof,
and Customer shall pay MS & Co for any cost, loss and damage which MS & Co may
sustain from its inability to borrow or buy any such property.
15. All communications to Customer shall be to: world Income Fund Series
of Van Eck Funds, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; with copies to World Income Fund Series of Van
Eck Funds, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; or to such other
addresses as Customer may hereafter direct MS & Co in writing to use. All
communications to MS & Co shall be to the offices at ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attn: Commodities Operations
Manager; or at such other addresses as the parties may designate.
16. This Agreement, the Procedural Agreement, and the Safekeeping
Agreement referred to in the Procedural Agreement contain the entire agreement
between the parties and supersede any prior agreements between the parties as to
the subject matter of this Agreement. Subject to Paragraph 7 hereof, no
provision of this Agreement shall in any respect be waived, altered, modified,
or amended unless such waiver, alteration, modification, or amendment be
committed to in writing and signed by Customer and a duly authorized officer of
MS & Co.
17. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of the State of
New York.
18. This Agreement shall inure to the benefit of MS & Co and Customer and
their respective successors and assigns, only upon prior written consent other
than assignment by MS & Co to an affiliate.
19. If any term or provision hereof, or the application thereof to any
person or circumstances, shall to any extent be contrary to any contract market,
exchange or government regulation or otherwise invalid or unenforceable,
the remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is contrary, invalid,
or unenforceable, shall not be affected thereby, and it shall be enforced to the
fullest extent permitted by regulation and law.
20. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any thereof shall not preclude or
inhibit the exercise of additional rights and remedies.
21. This Agreement is executed on behalf of the Trustees of the Customer
as Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Customer.
22. Customer represents that (a) Customer will promptly notify MS & Co in
writing if any of the above representations shall materially change or cease to
be true and correct; (b) Customer has read and understands the Commodity Futures
Trading Commission Risk Disclosure Statement, the Options on Futures Risk
Disclosure Statement (under separate cover) and the Margin Disclosure Statement;
and (c) no person or entity has any interest in or control of the account to
which this Agreement pertains other than Customer and the persons designated by
Customer as set forth in Paragraph 1 hereof.
23. Customer and MS & Co agree to promptly furnish appropriate financial
statements to each other to show any
material changes in their financial positions and to furnish such other
information concerning each other as each may reasonably request.
24. Where the context hereof requires, the singular shall import the plural
and the masculine shall import the feminine and neuter.
25. MS & Co shall be entitled to rely on any instruction received from any
person identified in writing to MS & Co by Customer and such instruction shall
bind Customer. Customer agrees to hold MS & Co harmless against any action taken
by MS & Co in reliance upon this provision.
26. This Agreement shall become a binding contract between Customer and MS
& Co when signed by both parties.
World Income Fund Series of
▇▇▇ ▇▇▇ Funds
By:_______________________
Title:____________________
The undersigned Secretary of, or person serving in a similar capacity with
respect to World Income Fund Series of ▇▇▇ ▇▇▇ Funds the Customer which is party
to this Agreement, the Procedural Agreement and the Safekeeping Agreement,
hereby certifies that the individual whose name appears above as the signatory
of this Agreement, the Procedural Agreement and the Safekeeping Agreement on
behalf of the Customer holds the position with the Customer as identified above
and is authorized to execute this Agreement on behalf of the Customer.
World Income Fund Series of
▇▇▇ ▇▇▇ Funds
By:_______________________
Name:_____________________
Secretary
Approved:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Co., Inc.
By:____________________
Title:_________________
SAFEKEEPING AGREEMENT
World Income Fund Series of ▇▇▇ ▇▇▇ Funds ("Depositor") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co., Inc. ("MS & Co") have interests in the subject Safekeeping Account pursuant
to a certain Procedural Agreement among MS & Co, Depositor, and Citibank
("Custodian") which Procedural Agreement governs over any inconsistent
provisions in this Safekeeping Agreement.
Citibank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Dela Capella
Gentlemen:
The Depositor hereby requests the Custodian to open and maintain a
Safekeeping Account, which shall be a subaccount under the Custodian Agreement
dated as of August 30, 1985, between Depositor and Custodian, and in the name of
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc. Customer Funds for the benefit of World Income Fund
Series of ▇▇▇ ▇▇▇ Funds (Customer Segregated Account)" for all monies and
securities now or hereafter deposited with and accepted by you for the initial
margin in futures and option contracts thereon including any additional original
margin requirements for Customer's short option positions.
In such custodial capacity you are limited to holding the securities in
safekeeping for the Depositor and dealing with them as herein expressed unless
otherwise mutually agreed in writing.
You shall make purchases, sales, and deliveries of securities only as the
Depositor may direct, and you are authorized and directed to:
1. Collect income and principal on bearer securities
in the account;
2. Dispose of the monies received from income collections, maturity,
redemption, sale or other disposition of the securities pursuant to said
Procedural Agreement;
3. Send a daily confirmation of receipts and disbursements to the
Depositor and to MS & Co;
4. Provide a monthly list of securities to the Depositor and to MS & Co;
5. on request, confirm to MS & Co and Depositor all account charges and
positions.
The general conditions of the Safekeeping Agreement shall be those of the
Custodian Agreement between Depositor and Custodian, except in the event of a
conflict between the Custodian Agreement and this Safekeeping Agreement, in
which case this Safekeeping Agreement shall govern.
The compensation of the Custodian for its services hereunder shall be
payable monthly and shall be as the parties shall agree. No change in
compensation shall be applicable to this account except upon written notice to
Depositor.
The Custodian will acknowledge for MS & Co by letter, Attachment A hereto,
that Custodian was informed that the monies and securities on deposit belong to
Depositor and are being held by Custodian, in the name of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.,
Inc., in accordance with the Commodity Exchange Act and the regulations
thereunder.
All communications from the Custodian shall be sent to
the Depositor pursuant to the Custodian Agreement, and to MS & Co at the address
shown below, or at such other address as the Depositor or MS & Co shall from
time to time direct.
The Depositor is not a foreign citizen; if this citizenship status changes,
the Depositor will promptly notify the Custodian in writing.
This Agreement is executed on behalf of the Trustees of the Depositor as
Trustees and not individually and the obligations of this Agreement are not
binding upon any of the Trustees but are binding only upon the assets and
property of the Depositor.
Either the Depositor or the Custodian, subject to the Procedural Agreement,
may close this account at any time upon 60 days prior notice.
Accepted: Very truly yours,
Citibank World Income Fund Series of
▇▇▇ ▇▇▇ Funds
By:_____________________ By:_______________________
Acknowledged and Approved:
on behalf of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc.
By:____________________
Dated:_________________
Attachment A
Date: November , 1987
Citibank
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Dela Capella
Gentlemen:
We refer to the account with your bank designated as a "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co., Inc. Customer Funds for the benefit of World Income Fund Series of ▇▇▇ ▇▇▇
Funds (Customer Segregated Account)" account number _________(the "Account"),
opened pursuant to a Safekeeping Agreement among World Income Fund Series of ▇▇▇
▇▇▇ Funds ("Depositor"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc. ("MS & Co") and your bank,
as custodian, dated ____________.
The Account is being maintained by us in compliance with the provisions of
the Commodity Exchange Act and as a subaccount under the custodian agreement
between Depositor and you. Depositor will form time to time deposit with you in
such Account monies or obligations of the United States, or obligations fully
guaranteed as to principal and interest by the United States (collectively
referred to as "securities"). All such securities and monies will be treated
either as investments of our commodity and commodity option customer's funds or
as obligations belonging to such customer. Under the provisions of the Commodity
Exchange Act and regulations promulgated thereunder, these deposits are required
to be segregated and treated as belonging to the customer. By signing and
returning to us the enclosed copy of this letter, you acknowledge that you
understand the nature of the securities and monies deposited in the account.
You further acknowledge that the funds and securities held in the above
Account are those of a commodity or commodity option customer and are being held
by the bank subject to the requirements of the Commodity Exchange Act and
regulations promulgated thereunder. Such funds and securities will not be
treated by the bank as the funds or securities of any person other than such
depositor customer of MS & Co and will not be used by the bank in connection
with the obligations of any person other than Depositor, except as provided in
the Safekeeping Agreement and Procedural Agreement.
You also acknowledge that the above Account is a
World Income Fund Series of ▇▇▇ ▇▇▇ Funds
Dated November , 1987
Page Two
special deposit, and you agree that, in providing services to us or to any of
our affiliates, including but not limited to the extending credit or granting
accommodations or services relating to uncollected, target, compensating or
other balances to us or to any of our affiliates, the bank acknowledges that it
has no claim, and will seek no lien, right of set off or any other claim or
interest in the funds or securities held in said Account, and that it will not
use the funds and securities in the above-described Account to margin,
collateralize, secure or to extend credit to Depositor, to any of its
affiliates, to us, to any of our affiliates or to any persons for such
activities or otherwise. You hereby agree that the obligations and records
accounting for the monies and securities held in the Account may be examined by
an authorized employee of the Commodity Futures Trading Commission.
Sincerely yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc.
__________________________
Citibank
AGREED AND ACKNOWLEDGED
_______________________
(title)
Dated ___________, 19__