Exhibit 23(g)
FORM OF
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of __________, 2002 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and SMITHGRAHAM INSTITUTIONAL FUNDS, a Delaware business trust
(the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions. As Used in This Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other
person authorized by the Fund to give Oral or Written Instructions on
behalf of the Fund. An Authorized Person's scope of authority may be
limited by setting forth such limitation in a written document signed
by both parties hereto.
(d) "Book-Entry System" means Federal Reserve Treasury book-entry system
for
United States and federal agency securities, its successor or
successors, and its nominee or nominees and any book-entry system
maintained by an exchange registered with the SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Oral Instructions" mean oral instructions received by PFPC Trust
from an Authorized Person or from a person reasonably believed by
PFPC Trust to be an Authorized Person. PFPC Trust may, in its sole
discretion in each separate instance, consider and rely upon
instructions it receives from an Authorized Person via electronic
mail as Oral Instructions.
(g) "PFPC Trust" means PFPC Trust Company or a subsidiary or affiliate of
PFPC Trust Company.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(j) "Shares" mean the shares of beneficial interest of any series or
class of the Fund.
(k) "Property" means:
(i) any and all securities and other investment items which the
Fund may from time to time deposit, or cause to be deposited,
with PFPC Trust or which PFPC Trust may from time to time hold
for the Fund;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by PFPC Trust from time to time, from or on
behalf of the Fund.
(l) "Written Instructions" mean (i) written instructions signed by two
Authorized Persons and received by PFPC Trust or (ii) trade
instructions transmitted by
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means of an electronic transaction reporting system which requires
the use of a password or other authorized identifier in order to gain
access. The instructions may be delivered electronically or by hand,
mail or facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund, on behalf of each of its investment portfolios
(each, a "Portfolio"), and PFPC Trust accepts such appointment and agrees
to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
provide PFPC Trust with the following:
(a) at PFPC Trust's request, certified or authenticated copies of the
resolutions of the Fund's Board of Trustees, approving the
appointment of PFPC Trust or its affiliates to provide services;
(b) a copy of the Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreements;
(d) a copy of the distribution/underwriting agreement with respect to
each class of Shares;
(e) a copy of each Portfolio's administration agreement;
(f) copies of any distribution and/or shareholder servicing plans and
agreements made in respect of the Fund or a Portfolio; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. Compliance with Laws.
PFPC Trust undertakes to comply with material applicable requirements of
the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to
be performed by PFPC Trust hereunder. Except as specifically set forth
herein, PFPC Trust assumes no responsibility for such
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compliance by the Fund or any other entity.
5. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction or
Written Instruction it receives from an Authorized Person (or from a
person reasonably believed by PFPC Trust to be an Authorized Person)
pursuant to this Agreement. PFPC Trust may assume that any Oral
Instructions or Written Instructions received hereunder are not in
any way inconsistent with the provisions of organizational documents
of the Fund or of any vote, resolution or proceeding of the Fund's
Board of Trustees or of the Fund's shareholders, unless and until
PFPC Trust receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral Instructions are
given by PFPC Trust or its affiliates) so that PFPC Trust receives
the Written Instructions by the close of business on the same day
that such Oral Instructions are received. The fact that such
confirming Written Instructions are not received by PFPC Trust or
differ from the Oral Instructions shall in no way invalidate the
transactions or enforceability of the transactions authorized by the
Oral Instructions or PFPC Trust's ability to rely upon such Oral
Instructions.
6. Right to Receive Advice.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
should or should not take, PFPC Trust may request directions or
advice, including Oral Instructions
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or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any question
of law pertaining to any action it should or should not take, PFPC
Trust may request advice from counsel of its own choosing (who may be
counsel for the Fund, the Fund's investment adviser or PFPC Trust, at
the option of PFPC Trust).
(c) Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Fund, and the advice it receives from counsel, PFPC
Trust shall be entitled to rely upon and follow the advice of
counsel.
(d) Protection of PFPC Trust. PFPC Trust shall be indemnified by the Fund
and without liability for any action PFPC Trust takes or does not
take in reliance upon directions or advice or Oral Instructions or
Written Instructions PFPC Trust receives from or on behalf of the
Fund or from counsel and which PFPC Trust believes, in good faith, to
be consistent with those directions or advice or Oral Instructions or
Written Instructions. Nothing in this section shall be construed so
as to impose an obligation upon PFPC Trust (i) to seek such
directions or advice or Oral Instructions or Written Instructions, or
(ii) to act in accordance with such directions or advice or Oral
Instructions or Written Instructions.
7. Records; Visits. The books and records pertaining to the Fund and any
Portfolio, which are in the possession or under the control of PFPC Trust,
shall be the property of the Fund. Such books and records shall be prepared
and maintained as required by the 1940 Act and other applicable securities
laws, rules and regulations. The Fund and Authorized Persons shall have
access to such books and records at all times during PFPC Trust's
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normal business hours. Upon the reasonable request of the Fund, copies of
any such books and records shall be provided by PFPC Trust to the Fund or
to an authorized representative of the Fund, at the Fund's expense.
8. Confidentiality. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that is
competitively sensitive material, and not generally known to the public,
including, but not limited to, information about product plans, marketing
strategies, finances, operations, customer relationships, customer
profiles, customer lists, sales estimates, business plans, and internal
performance results relating to the past, present or future business
activities of the Fund or PFPC Trust, their respective subsidiaries and
affiliated companies and the customers, clients and suppliers of any of
them; (b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and secret
in the sense that its confidentiality affords the Fund or PFPC Trust a
competitive advantage over its competitors; (c) all confidential or
proprietary concepts, documentation, reports, data, specifications,
computer software, source code, object code, flow charts, databases,
inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as confidential. Notwithstanding
the foregoing, information shall not be subject to such confidentiality
obligations if it: (a) is already known to the receiving party at the time
it is obtained; (b) is or becomes publicly known or available through no
wrongful act of the receiving party; (c) is rightfully received from a
third party who, to the best of the receiving party's knowledge, is not
under a duty of confidentiality; (d) is released by the protected party to
a third party without restriction; (e) is required to be
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disclosed by the receiving party pursuant to a requirement of a court
order, subpoena, governmental or regulatory agency or law (provided the
receiving party will provide the other party written notice of such
requirement, to the extent such notice is permitted); (f) is relevant to
the defense of any claim or cause of action asserted against the receiving
party; or (g) has been or is independently developed or obtained by the
receiving party.
9. Cooperation with Accountants. PFPC Trust shall cooperate with the Fund's
independent public accountants and shall take all reasonable action to make
any requested information available to such accountants as reasonably
requested by the Fund.
10. PFPC System. PFPC Trust shall retain title to and ownership of any and all
data bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade
secrets, and other related legal rights utilized by PFPC Trust in
connection with the services provided by PFPC Trust to the Fund.
11. Disaster Recovery. PFPC Trust shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment
failures, PFPC Trust shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions. PFPC Trust shall have
no liability with respect to the loss of data or service interruptions
caused by equipment failure provided such loss or interruption is not
caused by PFPC Trust's own willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties or obligations under this Agreement.
12. Compensation. As compensation for custody services rendered by PFPC Trust
during
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the term of this Agreement, the Fund, on behalf of each of the Portfolios,
will pay to PFPC Trust a fee or fees as may be agreed to in writing from
time to time by the Fund and PFPC Trust. The Fund acknowledges that PFPC
Trust may receive float benefits in connection with maintaining certain
accounts required to provide services under this Agreement.
13. Indemnification. The Fund, on behalf of each Portfolio, agrees to
indemnify, defend and hold harmless PFPC Trust and its affiliates,
including their respective officers, directors, agents and employees from
all taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, attorneys' fees and disbursements and
liabilities arising under the Securities Laws and any state and foreign
securities and blue sky laws) arising directly or indirectly from any
action or omission to act which PFPC Trust takes in connection with the
provision of services to the Fund. Neither PFPC Trust, nor any of its
affiliates, shall be indemnified against any liability (or any expenses
incident to such liability) caused by PFPC Trust's or its affiliates' own
willful misfeasance, bad faith, gross negligence or reckless disregard in
the performance of PFPC Trust's activities under this Agreement. The
provisions of this Section 13 shall survive termination of this Agreement.
14. Responsibility of PFPC Trust.
(a) PFPC Trust shall be under no duty to take any action hereunder on
behalf of the Fund or any Portfolio except as specifically set forth
herein or as may be specifically agreed to by PFPC Trust and the Fund
in a written amendment hereto. PFPC Trust shall be obligated to
exercise care and diligence in the performance of its duties
hereunder and to act in good faith in performing services provided
for
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under this Agreement. PFPC Trust shall be liable only for any damages
arising out of PFPC Trust's failure to perform its duties under this
Agreement to the extent such damages arise out of PFPC Trust's
willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, (i) PFPC
Trust shall not be liable for losses, delays, failure, errors,
interruption or loss of data occurring directly or indirectly by
reason of circumstances beyond its reasonable control, including
without limitation acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire; flood;
sabotage; epidemics; labor disputes; civil commotion; interruption,
loss or malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of nature; or
non-performance by a third party; and (ii) PFPC Trust shall not be
under any duty or obligation to inquire into and shall not be liable
for the validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other information which PFPC Trust
reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, (i)
neither PFPC Trust nor its affiliates shall be liable for any
consequential, special or indirect losses or damages, whether or not
the likelihood of such losses or damages was known by PFPC Trust or
its affiliates and (ii) PFPC Trust's cumulative liability to the Fund
for all losses, claims, suits, controversies, breaches or damages for
any cause whatsoever (including but not limited to those arising out
of or related to this Agreement) and regardless of the form of action
or legal theory shall not
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exceed the lesser of $100,000 or the fees received by PFPC Trust for
services provided hereunder during the 12 months immediately prior to
the date of such loss or damage.
(d) No party may assert a cause of action against PFPC Trust or any of
its affiliates that allegedly occurred more than 12 months
immediately prior to the filing of the suit (or, if applicable,
commencement of arbitration proceedings) alleging such cause of
action.
(e) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(f) The provisions of this Section 14 shall survive termination of this
Agreement.
15. Description of Services.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Portfolios,
including cash received as a result of the distribution of Shares,
during the term of this Agreement. PFPC Trust will not be responsible
for such property until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon Written
Instructions, shall open and maintain separate accounts in the Fund's
name using all cash received from or for the account of the Fund,
subject to the terms of this Agreement. In addition, upon Written
Instructions, PFPC Trust shall open separate custodial accounts for
each separate Portfolio of the Fund (collectively, the "Accounts")
and shall hold in the Accounts all cash received from or for the
Accounts of the Fund specifically designated to each separate
Portfolio. PFPC Trust shall make cash payments from or for the
Accounts of a Portfolio
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only for:
(i) purchases of securities in the name of a Portfolio, PFPC
Trust, PFPC Trust's nominee or a sub-custodian or nominee
thereof as provided in sub-section (j) and for which PFPC
Trust has received a copy of the broker's or dealer's
confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund delivered to PFPC
Trust;
(iii) payment of, subject to Written Instructions, interest, taxes,
administration, accounting, distribution, advisory and
management fees which are to be borne by a Portfolio;
(iv) payment to, subject to receipt of Written Instructions, the
Fund's transfer agent, as agent for the shareholders, of an
amount equal to the amount of dividends and distributions
stated in the Written Instructions to be distributed in cash
by the transfer agent to shareholders, or, in lieu of paying
the Fund's transfer agent, PFPC Trust may arrange for the
direct payment of cash dividends and distributions to
shareholders in accordance with procedures mutually agreed
upon from time to time by and among the Fund, PFPC Trust and
the Fund's transfer agent.
(v) payments, upon receipt of Written Instructions, in connection
with the conversion, exchange or surrender of securities owned
or subscribed to by the Fund and held by or delivered to PFPC
Trust;
(vi) payments of the amounts of dividends received with respect to
securities sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks, drafts
or other orders for the payment of money received as custodian for the
Accounts.
(c) Receipt of Securities; Subcustodians.
(i) PFPC Trust shall hold all securities received by it for the
Accounts in a separate account that physically segregates such
securities from those of any other persons, firms or
corporations, except for securities held in a
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Book-Entry System. All such securities shall be held or disposed
of only upon Written Instructions of the Fund pursuant to the
terms of this Agreement. PFPC Trust shall have no power or
authority to assign, hypothecate, pledge or otherwise dispose of
any such securities or investment, except upon the express terms
of this Agreement or upon Written Instructions authorizing the
transaction. In no case may any member of the Fund's Board of
Trustees, or any officer, employee or agent of the Fund withdraw
any securities.
At PFPC Trust's own expense and for its own convenience, PFPC
Trust may enter into sub-custodian agreements with other banks
or trust companies to perform duties described in this
sub-section (c) with respect to domestic assets. Such bank or
trust company shall have an aggregate capital, surplus and
undivided profits, according to its last published report, of at
least one million dollars ($1,000,000), if it is a subsidiary or
affiliate of PFPC Trust, or at least twenty million dollars
($20,000,000) if such bank or trust company is not a subsidiary
or affiliate of PFPC Trust. In addition, such bank or trust
company must be qualified to act as custodian and agree to
comply with the relevant provisions of applicable rules and
regulations. Any such arrangement will not be entered into
without prior written notice to the Fund (or as otherwise
provided in the 1940 Act).
In addition, PFPC Trust may enter into arrangements with
sub-custodians with respect to services regarding foreign
assets. Any such arrangement will be entered into with prior
written notice to the Fund (or as otherwise provided in the 1940
Act).
PFPC Trust shall remain responsible for the performance of all
of its duties as described in this Agreement and shall hold the
Fund and each Portfolio harmless from its own acts or omissions,
under the standards of care provided for herein, or the acts and
omissions of any sub-custodian chosen by PFPC Trust under the
terms of this sub-section (c).
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC Trust,
directly or through the use of the Book-Entry System, shall:
(i) deliver any securities held for a Portfolio against the receipt
of payment for the sale of such securities;
(ii) execute and deliver to such persons as may be designated in such
Oral Instructions or Written Instructions, proxies, consents,
authorizations, and
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any other instruments whereby the authority of a
Portfolio as owner of any securities may be
exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable at the option of
the holder; provided that, in any such case, the cash
or other consideration is to be delivered to PFPC
Trust;
(iv) deliver any securities held for a Portfolio against
receipt of other securities or cash issued or paid in
connection with the liquidation, reorganization,
refinancing, tender offer, merger, consolidation or
recapitalization of any corporation, or the exercise
of any conversion privilege;
(v) deliver any securities held for a Portfolio to any
protective committee, reorganization committee or
other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization
or sale of assets of any corporation, and receive and
hold under the terms of this Agreement such
certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to
evidence such delivery;
(vi) make such transfer or exchanges of the assets of the
Portfolios and take such other steps as shall be
stated in said Oral Instructions or Written
Instructions to be for the purpose of effectuating a
duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the
Fund;
(vii) release securities belonging to a Portfolio to any
bank or trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by the Fund
on behalf of that Portfolio; provided, however, that
securities shall be released only upon payment to
PFPC Trust of the monies borrowed, except that in
cases where additional collateral is required to
secure a borrowing already made subject to proper
prior authorization, further securities may be
released for that purpose; and repay such loan upon
redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note
or notes evidencing the loan;
(viii) release and deliver securities owned by a Portfolio
in connection with any repurchase agreement entered
into on behalf of the Fund, but only on receipt of
payment therefor; and pay out moneys of the Fund in
connection with such repurchase agreements, but only
upon the delivery of the securities;
(ix) release and deliver or exchange securities owned by
the Fund in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
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(x) release and deliver securities to a broker in
connection with the broker's custody of margin
collateral relating to futures and options
transactions;
(xi) release and deliver securities owned by the Fund for
the purpose of redeeming in kind shares of the Fund
upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by
the Fund for other purposes.
PFPC Trust must also receive a certified resolution
describing the nature of the corporate purpose and
the name and address of the person(s) to whom
delivery shall be made when such action is pursuant
to sub-paragraph d(xii).
(e) Use of Book-Entry System. PFPC Trust is authorized and
instructed, on a continuous basis, to deposit in the
Book-Entry System all securities belonging to the Portfolios
eligible for deposit therein and to utilize the Book-Entry
System to the extent possible in connection with settlements
of purchases and sales of securities by the Portfolios, and
deliveries and returns of securities loaned, subject to
repurchase agreements or used as collateral in connection with
borrowings. PFPC Trust shall continue to perform such duties
until it receives Written Instructions or Oral Instructions
authorizing contrary actions.
PFPC Trust shall administer the Book-Entry System as follows:
(i) With respect to securities of each Portfolio which
are maintained in the Book-Entry System, the records
of PFPC Trust shall identify by Book-Entry or
otherwise those securities belonging to each
Portfolio.
(ii) Assets of each Portfolio deposited in the Book-Entry
System will at all times be segregated from any
assets and cash controlled by PFPC Trust in other
than a fiduciary or custodian capacity but may be
commingled with other assets held in such capacities.
PFPC Trust will provide the Fund with such reports on its own
system of internal
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control as the Fund may reasonably request from time to time.
(f) Registration of Securities. All Securities held for a
Portfolio which are issued or issuable only in bearer form,
except such securities held in the Book-Entry System, shall be
held by PFPC Trust in bearer form; all other securities held
for a Portfolio may be registered in the name of the Fund on
behalf of that Portfolio, PFPC Trust, the Book-Entry System, a
sub-custodian, or any duly appointed nominee of the Fund, PFPC
Trust, Book-Entry System or sub-custodian. The Fund reserves
the right to instruct PFPC Trust as to the method of
registration and safekeeping of the securities of the Fund.
The Fund agrees to furnish to PFPC Trust appropriate
instruments to enable PFPC Trust to hold or deliver in proper
form for transfer, or to register in the name of its nominee
or in the name of the Book-Entry System or in the name of
another appropriate entity, any securities which it may hold
for the Accounts and which may from time to time be registered
in the name of the Fund on behalf of a Portfolio.
(g) Voting and Other Action. Neither PFPC Trust nor its nominee
shall vote any of the securities held pursuant to this
Agreement by or for the account of a Portfolio, except in
accordance with Written Instructions. PFPC Trust, directly or
through the use of the Book-Entry System, shall execute in
blank and promptly deliver all notices, proxies and proxy
soliciting materials received by PFPC Trust as custodian of
the Property to the registered holder of such securities. If
the registered holder is not the Fund on behalf of a
Portfolio, then Written Instructions or Oral Instructions must
designate the person who owns such securities.
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(h) Transactions Not Requiring Instructions. In the absence of
contrary Written
Instructions, PFPC Trust is authorized to take the following
actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of each
Portfolio, all income, dividends,
distributions, coupons, option premiums,
other payments and similar items, included
or to be included in the Property, and, in
addition, promptly advise each Portfolio of
such receipt and credit such income, as
collected, to each Portfolio's custodian
account;
(B) endorse and deposit for collection, in the
name of the Fund, checks, drafts, or other
orders for the payment of money;
(C) receive and hold for the account of each
Portfolio all securities received as a
distribution on the Portfolio's securities
as a result of a stock dividend, share
split-up or reorganization,
recapitalization, readjustment or other
rearrangement or distribution of rights or
similar securities issued with respect to
any securities belonging to a Portfolio and
held by PFPC Trust hereunder;
(D) present for payment and collect the amount
payable upon all securities which may mature
or be, on a mandatory basis, called,
redeemed, or retired, or otherwise become
payable on the date such securities become
payable; and
(E) take any action which may be necessary and
proper in connection with the collection and
receipt of such income and other payments
and the endorsement for collection of
checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause
to be delivered Property against payment or
other consideration or written receipt
therefor in the following cases:
(1) for examination by a broker or
dealer selling for the account of a
Portfolio in accordance with street
delivery custom;
(2) for the exchange of interim receipts
or temporary securities for
definitive securities; and
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(3) for transfer of securities into the
name of the Fund on behalf of a
Portfolio or PFPC Trust or a
sub-custodian or a nominee of one of
the foregoing, or for exchange of
securities for a different number of
bonds, certificates, or other
evidence, representing the same
aggregate face amount or number of
units bearing the same interest
rate, maturity date and call
provisions, if any; provided that,
in any such case, the new securities
are to be delivered to PFPC Trust.
(B) unless and until PFPC Trust receives Oral
Instructions or Written Instructions to the
contrary, PFPC Trust shall:
(1) pay all income items held by it
which call for payment upon
presentation and hold the cash
received by it upon such payment for
the account of each Portfolio;
(2) collect interest and cash dividends
received, with notice to the Fund,
to the account of each Portfolio;
(3) hold for the account of each
Portfolio all stock dividends,
rights and similar securities issued
with respect to any securities held
by PFPC Trust; and
(4) execute as agent on behalf of the
Fund all necessary ownership
certificates required by the
Internal Revenue Code or the Income
Tax Regulations of the United States
Treasury Department or under the
laws of any state now or hereafter
in effect, inserting the Fund's
name, on behalf of a Portfolio, on
such certificate as the owner of the
securities covered thereby, to the
extent it may lawfully do so.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions
or Oral Instructions establish and maintain
segregated accounts on its records for and on behalf
of each Portfolio. Such accounts may be used to
transfer cash and securities, including securities in
the Book-Entry System:
(A) for the purposes of compliance by the Fund
with the procedures required by a securities
or option exchange, providing such
procedures comply with the 1940 Act and any
releases of the SEC relating to the
maintenance of segregated accounts by
registered investment companies; and
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(B) upon receipt of Written Instructions, for other
purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such shareholders holding
Shares through XXX accounts, in accordance with the
Fund's prospectuses, the Internal Revenue Code of
1986, as amended (including regulations promulgated
thereunder), and with such other procedures as are
mutually agreed upon from time to time by and among
the Fund, PFPC Trust and the Fund's transfer agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written
Instructions that specify:
(i) the name of the issuer and the title of the
securities, including CUSIP number if applicable;
(ii) the number of shares or the principal amount
purchased and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the broker
through whom the purchase was made. PFPC Trust shall
upon receipt of securities purchased by or for a
Portfolio pay out of the moneys held for the account
of the Portfolio the total amount payable to the
person from whom or the broker through whom the
purchase was made, provided that the same conforms to
the total amount payable as set forth in such Oral
Instructions or Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities
upon receipt of Oral Instructions or Written Instructions that
specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and
accrued interest, if any;
(iii) the date of trade and settlement;
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(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to
whom the sale was made;
(vii) the location to which the security must be delivered
and delivery deadline, if any; and
(viii) the Portfolio involved.
PFPC Trust shall deliver the securities upon receipt of the total
amount payable to the Portfolio upon such sale, provided that the total
amount payable is the same as was set forth in the Oral Instructions or
Written Instructions. Notwithstanding the other provisions thereof,
PFPC Trust may accept payment in such form as shall be satisfactory to
it, and may deliver securities and arrange for payment in accordance
with the customs prevailing among dealers in securities.
(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Fund the following
reports:
(A) such periodic and special reports as the
Fund may reasonably request;
(B) a monthly statement summarizing all
transactions and entries for the account of
each portfolio, listing each portfolio
security belonging to each Portfolio with
the adjusted average cost of each issue and
the market value at the end of such month
and stating the cash account of each
Portfolio including disbursements;
(C) the reports required to be furnished to the
Fund pursuant to Rule 17f-4 of the 1940 Act;
and
(D) such other information as may be agreed upon
from time to time between the Fund and PFPC
Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any
proxy statement,
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proxy material, notice of a call or conversion or similar
communication received by it as custodian of the Property.
PFPC Trust shall be under no other obligation to inform
the Fund as to such actions or events. For clarification,
upon termination of this Agreement PFPC Trust shall have
no responsibility to transmit such material or to inform
the Fund or any other person of such actions or events.
(m) Crediting of Accounts. If PFPC Trust in its sole discretion
credits an Account with respect to (a) income, dividends,
distributions, coupons, option premiums, other payments or
similar items on a contractual payment date or otherwise in
advance of PFPC Trust's actual receipt of the amount due, (b)
the proceeds of any sale or other disposition of assets on the
contractual settlement date or otherwise in advance of PFPC
Trust's actual receipt of the amount due or (c) provisional
crediting of any amounts due, and (i) PFPC Trust is
subsequently unable to collect full and final payment for the
amounts so credited within a reasonable time period using
reasonable efforts or (ii) pursuant to standard industry
practice, law or regulation PFPC Trust is required to repay to
a third party such amounts so credited, or if any Property has
been incorrectly credited, PFPC Trust shall have the absolute
right in its sole discretion without demand to reverse any
such credit or payment, to debit or deduct the amount of such
credit or payment from the Account, and to otherwise pursue
recovery of any such amounts so credited from the Fund.
Nothing herein or otherwise shall require PFPC Trust to make
any advances or to credit any amounts until PFPC Trust's
actual receipt thereof. The Fund hereby grants a first
priority contractual possessory security interest in and a
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right of setoff against the assets maintained in an Account
hereunder in the amount necessary to secure the return and
payment to PFPC Trust of any advance or credit made by PFPC
Trust (including charges related thereto) to such Account.
(n) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not
the safekeeping thereof upon receipt by PFPC Trust) shall be
at the sole risk of the Fund. If payment is not received by
PFPC Trust within a reasonable time after proper demands have
been made, PFPC Trust shall notify the Fund in writing,
including copies of all demand letters, any written responses
and memoranda of all oral responses and shall await
instructions from the Fund. PFPC Trust shall not be obliged to
take legal action for collection unless and until reasonably
indemnified to its satisfaction. PFPC Trust shall also notify
the Fund as soon as reasonably practicable whenever income due
on securities is not collected in due course and shall provide
the Fund with periodic status reports of such income collected
after a reasonable time.
16. Duration and Termination.
(a) This Agreement shall be effective on the date first written
above and shall continue for a period of four (4) years (the
"Initial term").
(b) Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year
("Renewal Term") each, unless the Fund or PFPC provides
written notice to the other of its intent not to renew. Such
notice must be received not less then ninety (90) days prior
to the expiration of the Initial term or the then current
Renewal Term.
(c) In the event a termination notice is given by the Fund, all
expenses associated with
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the movement of records and material and conversion thereof to
a successor service provider will be borne by the Fund.
(d) If the party hereto is guilty of a material failure to perform
its duties and obligations hereunder (a "Defaulting Party")
the other party (the "Non-Defaulting Party") may give written
notice thereof to the Defaulting Party, and if such material
breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting
Party may terminate this Agreement by giving thirty (30) days
written notice of such termination of the Defaulting Party. In
all cases, termination by the Non-Defaulting Party shall not
constitute a waiver by the Non-Defaulting party of any other
rights it might have under this Agreement or otherwise against
the Defaulting Party.
In the event this Agreement is terminated (pending appointment
of a successor to PFPC Trust or vote of the shareholders of
the Fund to dissolve or to function without a custodian of its
cash, securities or other property), PFPC Trust shall not
deliver cash, securities or other property of the Portfolios
to the Fund. It may deliver them to a bank or trust company of
PFPC Trust's choice, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of
not less than twenty million dollars ($20,000,000), as a
custodian for the Fund to be held under terms similar to those
of this Agreement. PFPC Trust shall not be required to make
any delivery or payment of assets upon termination until full
payment shall have been made to PFPC Trust of all of its fees,
compensation, costs and expenses (such expenses include,
without limitation, expenses associated with movement (or
duplication) of records and materials and conversion thereof
to a successor service
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provider, or to a bank or trust company pending appointment of
such successor, and all trailing expenses incurred by PFPC
Trust). PFPC Trust shall have a security interest in and shall
have a right of setoff against the Property as security for
the payment of such fees, compensation, costs and expenses.
17. Notices. Notices shall be addressed (a) if to PFPC Trust at
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, Attention: Xxx Xxxxxxxx; (b) if to the Fund, at
____________, Attention: _____________; or (c) if to neither
of the foregoing, at such other address as shall have been
given by like notice to the sender of any such notice or other
communication by the other party. If notice is sent by
confirming electronic, hand or facsimile sending device, it
shall be deemed to have been given immediately. If notice is
sent by first-class mail, it shall be deemed to have been
given five days after it has been mailed. If notice is sent by
messenger, it shall be deemed to have been given on the day it
is delivered.
18. Amendments. This Agreement, or any term hereof, may be changed
or waived only by a written amendment, signed by the party
against whom enforcement of such change or waiver is sought.
19. Delegation; Assignment. PFPC Trust may assign its rights and
delegate its duties hereunder to any affiliate of PFPC Trust
or of The PNC Financial Services Group, Inc., provided that
PFPC Trust gives the Fund 30 days' prior written notice of
such assignment or delegation.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
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21. Miscellaneous.
(a) Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may embody in one or more
separate documents their agreement, if any, with respect to
delegated duties.
(b) No Representations or Warranties. Except as expressly provided
in this Agreement, PFPC Trust hereby disclaims all
representations and warranties, express or implied, made to
the Fund or any other person, including, without limitation,
any warranties regarding quality, suitability,
merchantability, fitness for a particular purpose or otherwise
(irrespective of any course of dealing, custom or usage of
trade), of any services or any goods provided incidental to
services provided under this Agreement. PFPC Trust disclaims
any warranty of title or non-infringement except as otherwise
set forth in this Agreement.
(c) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees
not to make any modifications to its registration statement or
adopt any policies which would affect materially the
obligations or responsibilities of PFPC Trust hereunder
without the prior written approval of PFPC Trust, which
approval shall not be unreasonably withheld or delayed.
(d) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.
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(e) Governing Law. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law, without regard
to principles of conflicts of law.
(f) Partial Invalidity. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
(g) Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(g) Facsimile Signatures. The facsimile signature of any party to
this Agreement shall constitute the valid and binding
execution hereof by such party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By:_________________________________________
Title_______________________________________
SMITHGRAHAM INSTITUTIONAL FUNDS
By:_________________________________________
Title_______________________________________
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