EX-99.H.8 4 exh8-imc.txt Exhibit (h)(8) Deutsche Asset Management [LOGO] A Member of the Deutsche Bank Group One South Street Baltimore, MD 21202-3201 Tel 800 730 1313 September 10, 2004 The Scudder Funds (Chicago Board) Mr. Robert B. Hoffman 222 S. Riverside Plaza 3775 North Savannah Place Chicago, IL 60606 Vero Beach, FL 32963 Mr. John W. Ballantine Mrs. Shirley D. Peterson 1500 North Lake Shore Drive 3290 E. Camino Juan Paisano Chicago, IL 60610 Tucson, AZ 85718 Mr. Lewis A. Burnham Professor Fred B. Renwick 16410 Avila Boulevard 3 Hanover Square, Suite 20 H Tampa, FL 33613 New York, NY 10004 Mr. Donald L. Dunaway Dr. William P. Sommers 7011 Green Tree Drive 24717 Harbour View Drive Naples, FL 34108 Ponte Vedra Beach, FL 32082 Governor James R. Edgar Mr. John G. Weithers 1927 County Road 150 E 404 Kenmare Drive Seymour, IL 61875 Burr Ridge, IL 60527 Dr. Paul K. Freeman 3402 E. Eastman Avenue Denver, CO 80210 Re: Letters of Indemnity to The Scudder Funds Ladies and Gentlemen: Reference is made to the Letters of Indemnity from the Adviser, Deutsche Investment Management Americas, Inc. (hereafter "DeAM") to the Scudder Funds dated September 10, 2004 and September 10, 2004 (the "Letters"), copies of which are attached, in which DeAM agreed, subject to applicable law and regulation, to indemnify and hold harmless each of the Funds (as defined in the Letters) against any and all loss, damage, liability and expense, arising from the matters alleged in any Enforcement Actions or Private Litigation (as such terms are defined in the Letters), or any proceedings or actions that may be threatened or commenced in the future by any person (including any governmental authority), arising from or similar in subject matter to the matters alleged in the Enforcement Actions or Private Litigation (collectively "Covered Matters"). Deutsche Asset Management is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Bank Securities, Inc., Deutsche Asset Management Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Investment Management (Americas) Inc. and Scudder Trust Company. Whereas, DeAM recognizes that, in addition to its undertakings to the Funds under the Letters, and in light of the rebuttable presumption generally afforded to noninterested directors of investment companies that they have not engaged in disabling conduct, it may be appropriate for DeAM to pay directly the costs or expenses incurred by an independent director or trustee of the Funds (an "Independent Trustee"), and to indemnify the Independent Trustees for loss, damage, liability or expense with respect to the foregoing matters, rather than for the Independent Trustee to seek advancement of such costs or expenses, or indemnification for such loss, damage or liability, from the Funds; In consideration of the mutual undertakings set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, DeAM hereby agrees, subject to applicable law and regulation, to indemnify and hold harmless each of the Independent Trustees, and each of their respective spouses, estates, trusts and heirs, and the executors, administrators, other legal representatives, and beneficiaries of the estates of each of the Independent Trustees, against any and all loss, damage, liability and expense, including without limitation the advancement and payment as incurred of reasonable fees and expenses of counsel and consultants, and other customary costs and expenses incurred by the Independent Trustees, arising from the matters alleged in any Enforcement Actions or Private Litigation or any proceedings or actions that may be threatened or commenced in the future by any person (including any governmental authority) arising from or similar in subject matter to the matters alleged in the Enforcement Actions or Private Litigation, including without limitation: 1. all reasonable legal and other expenses incurred by the Independent Trustees in connection with the Enforcement Actions and Private Litigation, and any proceedings or actions that may be threatened or commenced in the future by any person (including any governmental authority), arising from or similar in subject matter to the matters alleged in the Enforcement Actions or Private Litigation, including without limitation expenses related to the defense of, service as a witness in, or monitoring of such proceedings or actions; 2. all liabilities and expenses incurred by any Independent Trustee in connection with any judgment resulting from, or settlement of, any such proceeding, action or matter; 3. any loss or expense incurred by any Independent Trustee as a result of the denial of, or dispute about, any insurance claim under, or actual or purported rescission or termination of, any policy of insurance arranged by DeAM (or by a representative of DeAM acting as such, acting as a representative of the Funds or of the Independent Trustees or acting otherwise) for the benefit of the Independent Trustee, to the extent that such denial, dispute or rescission is based in whole or in part upon any alleged misrepresentation made in the application for such policy or any other alleged improper conduct on the part of DeAM, any of its corporate affiliates, or any of their directors, officers or employees; 4. any loss or expense incurred by any Independent Trustee, whether or not such loss or expense is incurred with respect to a Covered Matter, which is otherwise covered under the terms of any policy of insurance specified in Exhibit A hereto, but for which the Independent Trustee is unable to obtain advancement of expenses or indemnification under any policy of insurance specified in Exhibit A hereto, due to the exhaustion of policy limits which is due in whole or in part to DeAM or any affiliate thereof having received advancement of expenses or indemnification under such policy (either on behalf of DeAM or any affiliate or with respect to a claim or loss of a Fund or an Independent Trustee) for or with respect to any Covered Matter; provided however, the total mount which DeAM shall be obligated to pay under this subpart for all loss or expense, regardless of the number of claims or claimants, shall not exceed the amount that DeAM and any of its affiliates actually receive under such policy of insurance for or with respect to any and all Covered Matters; and 5. all liabilities and expenses incurred by any Independent Trustee in connection with any proceeding or action to enforce his or her rights under this agreement, unless DeAM prevails on the merits of any such dispute in a final, nonappealable court order. 2 The Independent Trustees will use their best efforts to notify DeAM of any proceedings or actions commenced against them, but the failure to provide such notification shall not relieve DeAM of any liability or obligation hereunder. The Independent Trustees each shall be entitled to defend any such proceedings or actions against them using counsel of his or her own choosing; provided however, in furtherance of the goal of avoiding duplication of effort and expense, each Independent Trustee shall seek to select joint counsel for two or more Independent Trustees with respect to a particular proceeding or matter, and shall seek to coordinate work with respect thereto by separate counsel that are retained by one or more of them, to the extent reasonably consistent in the judgment of each Independent Trustee and their counsel, with considerations of actual or potential conflicts of interest and other pertinent facts and circumstances; provided further, each of the Independent Trustee(s) who retains separate or joint counsel shall provide notice to DeAM identifying the counsel selected, and the Independent Trustee(s) whom each such counsel will represent with respect to a particular proceeding or matter. DeAM shall be entitled, at its expense, to participate in the defense of any such proceedings or actions against an Independent Trustee and shall be entitled to defend any such proceedings or actions against DeAM, in each case using counsel of its choosing. The Independent Trustees will not enter into any settlement of any such proceeding or action without the consent of DeAM, which consent shall not be unreasonably withheld. The Independent Trustees will submit periodic statements of fees, costs and expenses that are incurred by the Independent Trustees and will provide reasonable assistance to DeAM in estimating future fees, costs and expenses hereunder. If a matter for which indemnification is sought under this agreement relates to one or more Funds that still are registered as an investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), a majority of the Independent Trustees shall make a determination at or prior to the time of counsel's retention as to whether counsel to each Independent Trustee who is also a board member of such Fund or Funds at the time counsel is retained is an "independent legal counsel" as defined by Rule 0-1(a)(6) (hereafter, "Rule 0-1") under the 1940 Act. If such counsel is not determined to be, at the time such counsel is retained, an "independent legal counsel" as defined in Rule 0-1, the Independent Trustee who retains such counsel shall provide prompt written notice of that fact to the Chief Compliance Officer of each such Fund and the Chairman of the Board of each such Fund. To the extent DeAM pays costs or expenses under this agreement, it may seek reimbursement for such payment under any applicable policies of insurance under which DeAM and an Independent Trustee are both insureds under such policy, and, at the request of DeAM, the Independent Trustee shall allow DeAM to pursue the Independent Trustee's claims under the policies of insurance specified in Attachment B to the Letters and receive the proceeds therefrom. Notwithstanding anything to the contrary above, DeAM shall not seek reimbursement hereunder in the event that a Fund, in accordance with the Letters, provides written notice to DeAM that the Fund reasonably believes that such requests for reimbursement may materially limit the ability of the Fund or its Independent Trustees to obtain indemnification or advancement of expenses under existing or prior insurance polices with respect to matters other than the matters covered by this agreement. Any such claim shall be treated as an insurance claim by DeAM for purposes of any other agreement establishing priority of payment of insurance claims among insureds covered under the same policy. Nothing in this agreement shall limit DeAM's right to pursue insurance recovery under any insurance policies under which DeAM is an insured, including but not limited to those specified in Attachment B to the Letters, for claims, liabilities, expenses, suits, investigations, and other matters involving DeAM, except as provided above concerning claims with respect to amounts paid by DeAM to the Independent Trustees under this agreement. Notwithstanding anything to the contrary in this agreement, DeAM is not required to pay costs or expenses or to provide indemnification under this agreement to or for any individual Independent Trustee (i) with respect to any particular proceeding or action as to which the Board of the Fund has determined that such Independent Trustee ultimately will not be entitled to indemnification with respect thereto, or (ii) for any liability of the Independent Trustee to the Fund or its shareholders to which such Independent Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Independent Trustee's duties as a director or trustee of the Fund as determined in a final adjudication in such proceeding or action. In addition, to the extent DeAM has paid costs or expenses under this agreement to any individual Independent Trustee with respect to a particular proceeding or action, and there is a final adjudication in such proceeding or action of the Independent Trustee's liability to the Fund or its shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Independent Trustee's duties as a director or trustee of the Fund, such Independent Trustee hereby undertakes to repay DeAM such costs or expenses. 3 The foregoing undertakings by DeAM are binding upon DeAM and each of its successors and assigns and shall survive the termination of any of the Investment Advisory Agreements referenced in the Letters, and the service of any individual Independent Trustee in that capacity, and shall inure to the benefit of the spouses, estates, trusts and heirs, and the executors, administrators, other legal representatives, and beneficiaries of the estates of each of the Independent Trustees. The rights of any Independent Trustee to indemnification and advancement of expenses under this agreement shall not be deemed to limit, supercede, or otherwise affect any other similar right under applicable law, the Agreement and Declaration of Trust (or Articles of Incorporation) and Bylaws of any Fund, any other agreement, any policy of insurance, or a vote of shareholders or resolution of the board of any Fund, and each Independent Trustee at his, her or their sole option may seek and obtain indemnification and/or advancement of expenses by exercising any one or more of the foregoing rights in any order of preference or priority. Each of the Independent Trustees, in his or her sole discretion in furtherance of or to secure or coordinate any other similar right of the Independent Trustee to indemnification and advancement of expenses as referenced in the foregoing paragraph, may assign the Independent Trustee's rights under this agreement to a third party, upon written notice to DeAM. DeAM shall not assign its obligations under this agreement to a third party, except with the written consent of each and all of the Independent Trustees, which consent may be withheld for any reason. If any term or provision of this agreement is held to be illegal or unenforceable, the remaining terms and provisions shall not be affected or impaired and the agreement shall be construed and enforced so as to give effect to the intent manifested herein without reference to the unenforceable term or provision. This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original for all purposes, but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this agreement. The parties agree to accept copies of the executed originals of this agreement, and of any notice provided in accordance herewith, as and in place of such originals. No supplement, modification or amendment of this agreement shall be binding unless in writing executed by both DeAM and the person with respect to whom or which the amendment shall apply. No waiver of any of the provisions of this agreement shall be deemed or shall constitute a wavier of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. This agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to the choice of law or conflict of law principles thereof. Please acknowledge your receipt and acceptance of the foregoing by signing the enclosed copy of this letter in the space provided below. Very truly yours, Deutsche Investment Management Americas, Inc. By: /s/William Shiebler ---------------------------- William Shiebler 4 The foregoing undertakings are hereby agreed to and accepted: /s/John W. Ballantine /s/Robert B. Hoffman ---------------------------------- ------------------------------ John W. Ballantine Robert B. Hoffman /s/Lewis A. Burnham /s/Shirley D. Peterson ---------------------------------- ------------------------------ Lewis A. Burnham Shirley D. Peterson /s/Donald L. Dunaway /s/Fred B. Renwick ---------------------------------- ------------------------------ Donald L. Dunaway Professor Fred B. Renwick /s/James R. Edgar /s/John G. Weithers ---------------------------------- ------------------------------ Governor James R. Edgar John G. Weithers /s/Paul K. Freeman /s/William P. Sommers ---------------------------------- ------------------------------ Dr. Paul K. Freeman Dr. William P. Sommers Exhibit A: Chicago Board Insurance Coverage 5