Exhibit (g)(2)
SUBCUSTODIAN AGREEMENT
AGREEMENT dated as of the 1st day of July, 2000, between Union Bank of
California, N.A. (the "Bank") and Forum Trust, LLC ("Forum").
WHEREAS, Forum provides custodial services to Core Trust (Delaware) (the
"Registrant"), an open-end, management investment company registered under the
Investment Company Act of 1940 (the "1940 Act") pursuant to a Custodian
Agreement entered into between Forum and Registrant; and
WHEREAS, Registrant may offer one or more series of shares, each of which
shall represent an interest in a separate portfolio of Securities and Cash (each
as hereinafter defined) (all such existing and additional series now or
hereafter listed on Exhibit A being hereafter referred to individually as a
"Portfolio" and collectively, as the "Portfolios"); and
WHEREAS, Forum wishes to retain the Bank to provide certain sub-custodian
services to Forum for the benefit of the Portfolios, and the Bank is willing to
provide such services;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. EMPLOYMENT OF THE BANK. Forum, on behalf of each Portfolio, hereby
employs the Bank as Agent to act as Sub-Custodian of all Securities and Cash of
each Portfolio that are delivered to and accepted by the Bank or any
Subcustodian (as that term is defined in Section 4) (the "Property") pursuant to
the terms and conditions set forth herein. For purposes of this Agreement,
"delivery" of Property shall include the acquisition by Forum of a security
entitlement (as that term is defined in the New York Uniform Commercial Code
("UCC")). Without limitation, such Property shall include stocks and other
equity interests of every type, evidences of indebtedness, other instruments
representing same or rights or obligations to receive, purchase, deliver or sell
same and other non-cash investment property of a Portfolio ("Securities") and
cash from any source and in any currency ("Cash"), provided that the Bank shall
have the right, in its sole discretion, to refuse to accept as Property any
property of a Portfolio that the Bank considers not to be appropriate or in
proper form for deposit for any reason. The Bank shall not be responsible for
any property of a Portfolio held or received by Forum or others and not
delivered to the Bank or any Subcustodian.
2. MAINTENANCE OF SECURITIES AND CASH AT THE BANK AND SUBCUSTODIAN
LOCATIONS. Pursuant to Instructions (as hereinafter defined in Section 15),
Forum shall direct the Bank to (a) settle Securities transactions and maintain
Cash in the country or other jurisdiction in which the principal trading market
for such Securities is located, where such Securities are to be presented for
payment or where such Securities are acquired and (b) maintain Cash and cash
equivalents in such countries in amounts reasonably necessary to effect Forum's
transactions in such Securities. Instructions to settle Securities transactions
in any country shall be deemed to authorize the holding of such Securities and
Cash in that country.
3. CUSTODY ACCOUNT. The Bank agrees to establish and maintain one or more
custody accounts on its books each in the name of a Portfolio or in the name of
Forum on behalf of a
Portfolio (each, an "Account") for any and all Property from time to time
received and accepted by the Bank or any Subcustodian for the account of such
Portfolio. Upon delivery by Forum to the Bank of any acceptable Property
belonging to a Portfolio, Forum shall, by Instructions, specifically indicate in
which Portfolio such Property belongs or if such Property belongs to more than
one Portfolio, shall allocate such Property to the appropriate Portfolios, and
the Bank shall allocate such Property to the Accounts in accordance with the
Instructions. Forum, on behalf of each Portfolio, acknowledges (i) its
responsibility as a principal for all of its obligations to the Bank arising
under or in connection with this Agreement, notwithstanding that it may be
acting on behalf of other persons, and (ii) warrants its authority to deposit in
the appropriate Account any Property received therefor by the Bank or a
Subcustodian and to give, and authorize others to give, instructions relative
thereto. The Bank may deliver securities of the same class in place of those
deposited in the Account.
The Bank shall hold, keep safe and protect as custodian for each Account
all Property in such Account and, to the extent such Property constitutes
"financial assets" as defined in the UCC, shall maintain those financial assets
in such Account as security entitlements in favor of the Portfolio in whose name
the Account is maintained. All transactions, including, but not limited to,
foreign exchange transactions, involving the Property shall be executed or
settled solely in accordance with Instructions (which shall specifically
reference the Account for which such transaction is being settled), except that
until the Bank receives Instructions to the contrary, the Bank will:
(a) collect all interest and dividends and all other income and
payments, whether paid in cash or in kind, on the Property, as
the same become payable and credit the same to the appropriate
Account;
(b) present for payment all Securities held in an Account that are
called, redeemed or retired or otherwise become payable and all
coupons and other income items that call for payment upon
presentation to the extent that the Bank or Subcustodian is
actually aware of such opportunities and hold the cash received
in such Account pursuant to this Agreement;
(c) (i) exchange Securities where the exchange is purely ministerial
(including, without limitation, the exchange of temporary
securities for those in definitive form and the exchange of
warrants, or other documents of entitlement to securities, for
the Securities themselves) and (ii) when notification of a tender
or exchange offer (other than ministerial exchanges described in
(i) above) is received for an Account, endeavor to receive
Instructions, provided that if such Instructions are not received
in time for the Bank to take timely action, no action shall be
taken with respect thereto;
(d) whenever notification of a rights entitlement or a fractional
interest resulting from a rights issue, stock dividend or stock
split is received for an Account and such rights entitlement or
fractional interest bears an expiration date, if after
endeavoring to obtain Instructions such Instructions are not
received in time for the Bank to take timely action or if actual
notice of such actions was received too late to seek
Instructions, sell in the discretion of the Bank (which sale
Forum hereby authorizes
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the Bank to make) such rights entitlement or fractional interest
and credit the Account with the net proceeds of such sale;
(e) execute in Forum's name for an Account, whenever the Bank deems
it appropriate, such ownership and other certificates as may be
required to obtain the payment of income from the Property in
such Account;
(f) pay for each Account, any and all taxes and levies in the nature
of taxes imposed on interest, dividends or other similar income
on the Property in such Account by any governmental authority. In
the event there is insufficient Cash available in such Account to
pay such taxes and levies, the Bank shall notify Forum of the
amount of the shortfall and Forum may, or may cause the Portfolio
to, at its option, deposit additional Cash in such Account or
take steps to have sufficient Cash available. Forum, on behalf of
the Portfolios agrees, when and if requested by the Bank and
required in connection with the payment of any such taxes, to
cooperate with the Bank in furnishing information, executing
documents or otherwise; and
(g) appoint brokers and agents for any of the ministerial
transactions involving the Securities described in (a) - (f),
including, without limitation, affiliates of the Bank or any
Subcustodian.
4. SUBCUSTODIANS AND SECURITIES SYSTEMS. Forum authorizes and instructs the
Bank to maintain the Property in each Account directly in one of its United
States ("U.S.") branches or indirectly through custody accounts that have been
established by the Bank with the following other securities intermediaries: (a)
another U.S. bank or trust company or branch thereof located in the U.S. that is
itself qualified under the 1940 Act, to act as custodian, or a non-U.S. branch
of the Bank or of any such other bank or trust company (individually, a "U.S.
Subcustodian"), or a U.S. securities depository or clearing agency or system in
which the Bank or a U.S. Subcustodian participates (individually, a "U.S.
Securities System") or (b) one of Bank's majority-owned non-U.S. subsidiaries, a
majority-owned subsidiary of a U.S. Subcustodian or a non-U.S. bank or trust
company, acting as custodian (individually, a "non-U.S. Subcustodian"; U.S.
Subcustodians and non-U.S. Subcustodians, collectively, "Subcustodians"), or a
non-U.S. depository or clearing agency or system in which the Bank or any
Subcustodian participates (individually, a "non-U.S. Securities System"; U.S.
Securities System and non-U.S. Securities System, collectively, "Securities
System"), PROVIDED that in each case in which a U.S. Subcustodian or U.S.
Securities System is employed, each such Subcustodian or Securities System shall
have been approved by Instructions; PROVIDED FURTHER that in each case in which
a non-U.S. Subcustodian or non-U.S. Securities System is employed, (a) such
Subcustodian or Securities System either is (i) a "qualified U.S. bank" or (ii)
an "eligible foreign custodian" as defined by rules 17f-5 and 17f-7, as amended,
under the 1940 Act or such Subcustodian or Securities System is the subject of
an order granted by the U.S. Securities and Exchange Commission ("SEC")
exempting such agent or the subcustody arrangements thereto from all or part of
the provisions of Rule 17f-5 and 17f-7, as amended, and (b) the identity of the
non-U.S. Subcustodian and the agreement between the Bank and such non-U.S.
Subcustodian has been approved by Instructions; it being understood that the
Bank shall have no liability or responsibility for determining whether the
approval of any Subcustodian or Securities System by Instructions is proper
under the 1940 Act or any rule or regulation thereunder. Exhibit D attached
hereto incorporates by reference all Subcustodians and Securities Systems
approved by the parties as of the date hereof.
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Upon receipt of Instructions, the Bank agrees to cease the employment of
any Subcustodian or Securities System with respect to Forum, and if desirable
and practicable, appoint a replacement Subcustodian or Securities System in
accordance with the provisions of this Section. In addition, the Bank may, at
any time in its discretion, upon written notification to Forum, terminate the
employment of any Subcustodian or Securities System.
The Bank shall deliver to Forum annually a certificate stating: (a) the
identity of each non-U.S. Subcustodian and non-U.S. Securities System then
acting on behalf of the Bank and the name and address of the governmental agency
or other regulatory authority that supervises or regulates such non-U.S
Subcustodian and non-U.S. Securities System; (b) the countries in which each
non-U.S. Subcustodian or non-U.S. Securities System is located; and (c) if
requested by Forum's Board of Directors, or if the Board of Trustees responsible
for any Portfolio, directly approves its foreign custody arrangements, such
other information relating to such non-U.S. Subcustodians and non-U.S.
Securities Systems as may reasonably be requested by Forum to ensure compliance
with Rule 17f-5 and 17f-7, as amended. If requested by Forum's Board of
Directors or if the Board of Trustees responsible for any Portfolio directly
approves its foreign custody arrangements, the Bank also shall furnish annually
to Forum information concerning such non-U.S. Subcustodians and non-U.S.
Securities Systems similar in kind and scope as that furnished to Forum in
connection with the initial approval of this Agreement. Bank agrees to promptly
notify Forum if, in the normal course of its custodial activities, the Bank
learns of a material adverse change in the financial condition of a non-U.S.
Subcustodian or if a non-U.S. Securities System suffers a material loss of
Property, or if the Bank has reason to believe that any non-U.S. Subcustodian or
non-U.S. Securities System has ceased to be a qualified U.S. bank or an eligible
foreign custodian each within the meaning of Rule 17f-5 and 17f-7, as amended,
or has ceased to be subject to an exemptive order from the SEC.
5. USE OF SUBCUSTODIAN. With respect to Property in an Account that is
maintained by the Bank through a Subcustodian employed pursuant to Section 4:
(a) The Bank will identify on its books as belonging to Forum on
behalf of a Portfolio, any Property maintained through such
Subcustodian.
(b) Any Property in the Account held by a Subcustodian will be
subject only to the instructions of the Bank or its agents.
(c) Property deposited with a Subcustodian will be maintained in an
account holding only assets for clients of the Bank.
(d) Any agreement the Bank shall enter into with a non-U.S.
Subcustodian with respect to maintaining Property shall require
that (i) the Account will be adequately indemnified or its losses
adequately insured; (ii) the Securities so maintained are not
subject to any right, charge, security interest, lien or claim of
any kind in favor of such Subcustodian or its creditors except a
claim for payment in accordance with such agreement for their
safe custody or administration; (iii) beneficial ownership of
such Securities be freely transferable without the payment of
money or value other than for safe custody or administration;
(iv) adequate records will be maintained identifying the Property
maintained pursuant to such Agreement as belonging to the Bank,
on behalf of its clients; (v) to the extent permitted by
applicable law, officers
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of or auditors employed by, or other representatives of or
designated by, the Bank including the independent public
accountants of or designated by, Forum be given access to the
books and records of such Subcustodian relating to Property or
confirmation of the contents of those records; and (vi) the Bank
on behalf of Forum will receive periodic reports with respect to
the safekeeping of the Property, including but not limited to
notification of any transfer of Property into or out of an
Account.
6. USE OF SECURITIES SYSTEM. With respect to Property in the Account(s)
that is maintained by the Bank or any Subcustodian through a Securities System
employed pursuant to Section 4:
(a) The Bank shall, and the Subcustodian will be required by its
agreement with the Bank to, identify on its books such Property
as being maintained for the account of the Bank or Subcustodian
for its clients.
(b) Any Property maintained through a Securities System for the
account of the Bank or a Subcustodian will be subject only to the
instructions of the Bank or such Subcustodian, as the case may
be.
(c) Property deposited with a Securities System will be maintained in
an account holding only assets for clients of the Bank, as the
case may be, unless precluded by applicable law, rule, or
regulation.
(d) The Bank shall provide Forum with any report obtained by the Bank
or Subcustodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System.
7. AGENTS. The Bank may at any time or times in its sole discretion appoint
(or remove) as its agent to carry out such of the provisions of this Agreement
as the Bank may from time to time direct any other U.S. bank or trust company
which is itself qualified under the 1940 Act to act as custodian; provided,
however, that the appointment of any agent shall not relieve the Bank of its
responsibilities or liabilities hereunder. Bank shall provide reasonable notice
to Forum of the appointment or removal of any agent.
8. RECORDS, OWNERSHIP OF PROPERTY, STATEMENTS, OPINIONS OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS.
(a) The ownership of the Property, whether maintained directly by the
Bank or indirectly through a Subcustodian or a Securities System
as authorized herein, shall be clearly recorded on the Bank's
books as belonging to the appropriate Account and not to the
Bank. The Bank shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions for
each Account. All accounts, books and records of the Bank
relating thereto shall be open to inspection and audit at all
reasonable times during normal business hours by any person
designated by Forum. All such accounts shall be maintained and
preserved in the form reasonably requested by Forum. The Bank
will supply to Forum from time to time, as mutually agreed upon,
a statement in respect to any Property in an Account maintained
by the Bank or by a Subcustodian.
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In the absence of the filing in writing with the Bank by Forum of
exceptions or objections to any such statement within sixty (60)
days of the mailing thereof, Forum shall be deemed to have
approved such statement and in such case or upon written approval
of Forum of any such statement, such statement shall be presumed
to be for all purposes correct with respect to all information
set forth therein.
(b) The Bank shall take all reasonable action as Forum may request to
obtain from year to year favorable opinions from each Portfolio's
independent certified public accountants with respect to the
Bank's activities hereunder in connection with the preparation of
the Registrant's registration statement on Form N-1A and the
Portfolio's Form N-SAR or other periodic reports to the SEC and
with respect to any other requirements of the SEC.
(c) At the request of Forum, the Bank shall deliver to Forum a
written report prepared by the Bank's independent certified
public accountants with respect to the services provided by the
Bank under this Agreement, including, without limitation, the
Bank's accounting system, internal accounting control and
procedures for safeguarding Cash and Securities, including Cash
and Securities deposited and/or maintained in a securities system
or with a Subcustodian. Such report shall be of sufficient scope
and in sufficient detail as may reasonably be required by Forum
and as may reasonably be obtained by the Bank. The Bank
authorizes Forum to deliver copies of such reports to the
Registrant.
(d) Forum may elect to participate in any of the electronic on-line
service and communications systems offered by the Bank that can
provide Forum, on a daily basis, with the ability to view on-line
or to print on hard copy various reports of Account activity and
of Securities and/or Cash being held in any Account. To the
extent that such service shall include market values of
Securities in an Account, Forum hereby acknowledges that the Bank
now obtains and may in the future obtain information on such
values from outside sources that the Bank considers to be
reliable and Forum agrees that the Bank (i) does not verify or
represent or warrant either the reliability of such service nor
the accuracy or completeness of any such information furnished or
obtained by or through such service and (ii) shall be without
liability in selecting and utilizing such service or furnishing
any information derived therefrom.
9. HOLDING OF SECURITIES, NOMINEES, ETC. Securities in an Account that are
maintained by the Bank or any Subcustodian may be held directly by such entity
in the name of Forum or in bearer form or maintained, on behalf of a Portfolio,
in the Bank's or Subcustodian's name or in the name of the Bank's or
Subcustodian's nominee. Securities that are maintained through a Subcustodian or
which are eligible for deposit in a Securities System as provided above may be
maintained with the Subcustodian or the Securities System in an account for
Forum, unless prohibited by law, rule, or regulation. The Bank or Subcustodian,
as the case may be, may combine certificates representing Securities held in an
Account with certificates of the same issue held by Bank or Subcustodian as
fiduciary or as a custodian. In the event that any Securities in the name of the
Bank or its nominee or held by a Subcustodian and registered in the name of such
Subcustodian or its nominee are called for partial redemption by the issuer of
such Security, the Bank may, subject to the rules or regulations pertaining to
allocation of any Securities System in which such Securities have been
deposited, allot, or cause to be allotted, the called portion of the respective
beneficial holders of such class of security in any manner the Bank deems to be
fair and equitable. Securities maintained with a Securities System shall be
maintained subject to the rules of that
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Securities System governing the rights and obligations among the Securities
System and its participants.
10. PROXIES, ETC. With respect to any proxies, notices, reports or other
communications pertaining to any of the Securities in any Account, the Bank
shall perform such services and only such services as are (i) set forth in
Section 3 of this Agreement, (ii) described in the applicable Service Standards
(the "Proxy Service") and (iii) as may otherwise be agreed upon between the Bank
and Forum. The liability and responsibility of the Bank in connection with the
Proxy Service referred to in (ii) of the immediately preceding sentence and in
connection with any additional services which the Bank and Forum may agree upon
as provided in (iii) of the immediately preceding sentence shall be as set forth
in the description of the Proxy Service and as may be agreed upon by the Bank
and Forum in connection with the furnishing of any such additional service and
shall not be affected by any other term of this Agreement. Neither the Bank nor
its nominees or agents shall vote upon or in respect of any of the Securities in
an Account, execute any form of proxy to vote thereon, or give any consent or
take any action (except as provided in Section 3) with respect thereto except
upon the receipt of Instructions.
11. SEGREGATED ACCOUNT. To assist Forum in complying with the requirements
of the 1940 Act and the rules and regulations thereunder, the Bank shall, upon
receipt of Instructions, establish and maintain a segregated account or accounts
on its books for and on behalf of a Portfolio.
12. SETTLEMENT PROCEDURES. Securities will be transferred, exchanged or
delivered by the Bank or a Subcustodian upon receipt by the Bank of Instructions
that include all information required by the Bank. Settlement and payment for
Securities received for an Account and delivery of Securities out of such
Account may be effected in accordance with the customary or established
securities trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering Securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such Securities from such purchaser
or dealer, as such practices and procedures may be modified or supplemented in
accordance with the standard operating procedures of the Bank in effect from
time to time for that jurisdiction or market. The Bank shall not be liable for
any loss which results from effecting transactions in accordance with the
customary or established securities trading or securities processing practices
and procedures in the applicable jurisdiction or market.
Notwithstanding that the Bank may settle purchases and sales against, or
credit income to, an Account, on a contractual basis, as outlined in the
applicable Service Standards as defined below and provided to Forum by the Bank,
the Bank may, at its sole option, reverse such credits or debits to the
appropriate Account in the event that the transaction does not settle, or the
income is not received in a timely manner, and Forum agrees to hold the Bank
harmless from any losses that may result therefrom.
Service Standards shall be defined as any documents issued by the Bank from
time to time specifying the procedures for communicating with Forum, the terms
of any additional services to be provided to Forum, and such other matters as
may be agreed between Forum and the Bank from time to time. Copies of the
current term standards have been delivered to Forum.
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13. CONDITIONAL CREDITS.
(a) Notwithstanding any other provision of this Agreement, the Bank
shall not be required to comply with any Instructions to settle
the purchase of any securities for the Account unless there are
sufficient immediately available funds in the relevant currency
in the Account, PROVIDED THAT, if, after all expenses, debits and
withdrawals of Cash in the relevant currency ("Debits")
applicable to the Account have been made and if after all
Conditional Credits, as defined below, applicable to the Account
have become final entries as set forth in (c) below, the amount
of immediately available funds of the relevant currency in such
Account is at least equal to the aggregate purchase price of all
securities for which the Bank has received Instructions to settle
on that date ("Settlement Date"), the Bank, upon settlement,
shall credit the Securities to the Account by making a final
entry on its books and records.
(b) Notwithstanding the foregoing, if after all Debits applicable to
the Account have been made, the amount of immediately available
funds in a given currency in such Account are less than the
aggregate purchase price in such currency of all securities for
which the Bank has received Instructions to settle on any
Settlement Date, the Bank, upon settlement, may credit the
securities to the Account by making a conditional entry on its
books and records ("Conditional Credit"), pending receipt of
sufficient immediately available funds in the relevant currency
in the Account.
(c) If, within a reasonable time from the posting of a Conditional
Credit and after all Debits applicable to the Account have been
made, immediately available funds in the relevant currency at
least equal to the aggregate purchase price in such currency of
all securities subject to a Conditional Credit on a Settlement
Date are deposited into the Account, the Bank shall make the
Conditional Credit a final entry on its books and records. In
such case, Forum shall be liable to the Bank only for late
charges at a rate that the Bank customarily charges for similar
extensions of credit.
(d) If (i) within a reasonable time from the posting of a Conditional
Credit, immediately available funds at least equal to the
resultant Debit on a Settlement Date are not deposited in the
Account, or (ii) any Proceeding (as defined below) shall occur,
the Bank may sell such of the Securities subject to the
Conditional Credit as it selects in its sole discretion and shall
apply the net proceeds of such sale to cover such Debit,
including related late charges, and any remaining proceeds shall
be credited to the Account. If such proceeds are insufficient to
satisfy such Debit in full, Forum shall continue to be liable to
the Bank for any shortfall. The Bank shall make the Conditional
Credit a final entry on its books as to the Securities not
required to be sold to satisfy such Debit. Pending payment in
full by Forum of the purchase price for Securities subject to a
Conditional Credit, and the Bank's making a Conditional Credit a
final entry on its books, and, unless consented to by the Bank,
Forum shall have no right to give further Instructions in respect
of Securities subject to a Conditional Credit. The Bank shall
have the sole discretion to determine which Securities shall be
deemed to have been paid for by Forum out of funds available in
the Account. Any such Conditional Credit may be reversed (and any
corresponding Debit shall be canceled) by the Bank unless and
until the Bank makes a final entry on its books crediting such
Securities to the Account. The term "Proceeding" shall mean any
insolvency, bankruptcy, receivership, reorganization or similar
proceeding relating to Forum, whether voluntary or involuntary.
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(e) Forum agrees that it will not use the Account to facilitate the
purchase of securities without sufficient funds in the Account
(which funds shall not include the expected proceeds of the sale
of the purchased securities).
14. PERMITTED TRANSACTIONS. Forum agrees that it will cause transactions to
be made pursuant to this Agreement only upon Instructions in accordance with
Section 15 (but subject to Section 3) and only for the purposes listed below.
(a) In connection with the purchase or sale of Securities at prices
as confirmed by Instructions.
(b) When Securities are called, redeemed or retired, or otherwise
become payable.
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger,
consolidation, reorganization, recapitalization or readjustment.
(d) Upon conversion of Securities pursuant to their terms into other
securities.
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities.
(f) For the payment of interest, taxes, management or supervisory
fees, distributions or operating expenses.
(g) In connection with any borrowings by a Portfolio or Forum
requiring a pledge of Securities, but only against receipt of
amounts borrowed or in order to satisfy requirements for
additional or substitute collateral.
(h) In connection with any loans, but only against receipt of
collateral as specified in Instructions which shall reflect any
restrictions applicable to a Portfolio or Forum.
(i) For the purpose of redeeming shares of the capital stock of a
Portfolio against delivery of the shares to be redeemed to the
Bank, a Subcustodian, Forum or a Portfolio's transfer agent.
(j) For the purpose of redeeming in kind shares of a Portfolio
against delivery of the shares to be redeemed to the Bank, a
Subcustodian, Forum, or a Portfolio's transfer agent.
(k) For delivery in accordance with the provisions of any agreement
among Forum, on behalf of a Portfolio, the Portfolio's investment
adviser and a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc., relating to compliance with the rules
of The Options Clearing Corporation, the Commodities Futures
Trading Commission or of any registered national securities
exchange, or of any similar organization or organizations,
regarding escrow or other arrangements in connection with
transactions by a Portfolio.
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(l) For release of Securities to designated brokers under covered
call options, provided, however, that such Securities shall be
released only upon payment to the Bank of monies for the premium
due and a receipt for the Securities which are to be held in
escrow. Upon exercise of the option, or at expiration, the Bank
will receive the Securities previously deposited from broker. The
Bank will act strictly in accordance with Instructions in the
delivery of Securities to be held in escrow and will have no
responsibility or liability for any such Securities which are not
returned promptly when due other than to make proper request for
such return.
(m) For spot or forward foreign exchange transactions to facilitate
security trading or receipt of income from Securities related
transactions.
(n) Upon the termination of this Agreement as set forth in Section
21.
(o) For other proper purposes.
Forum agrees that the Bank shall have no obligation to verify the purpose
for which a transaction is being effected.
15. INSTRUCTIONS. The term "Instructions" means instructions from Forum in
respect of any of the Bank's duties hereunder that have been received by the
Bank at its address set forth in Section 22 below (i) in writing (including,
without limitation, facsimile transmission) or by tested telex signed or given
by such one or more person or persons as Forum shall have from time to time
authorized in writing to give the particular class of Instructions in question
and whose name and (if applicable) signature and office address have been filed
with the Bank, or (ii) which have been transmitted electronically through an
electronic on-line service and communications system offered by the Bank or
other electronic instruction system acceptable to the Bank, or (iii) a
telephonic or oral communication by one or more persons as Forum shall have from
time to time authorized to give the particular class of Instructions in question
and whose name has been filed with the Bank; or (iv) upon receipt of such other
form of instructions as Forum may from time to time authorize in writing and
which the Bank has agreed in writing to accept. Instructions in the form of oral
communications shall be confirmed by Forum by tested telex or writing in the
manner set forth in clause (i) above, but the lack of such confirmation shall in
no way affect any action taken by the Bank in reliance upon such oral
instructions prior to the Bank's receipt of such confirmation. Instructions may
relate to specific transactions or to types or classes of transactions, and may
be in the form of standing instructions.
The Bank shall have the right to assume in the absence of notice to the
contrary from Forum that any person whose name is on file with the Bank pursuant
to this Section has been authorized by Forum to give the Instructions in
question and that such authorization has not been revoked. The Bank may act upon
and conclusively rely on, without any liability to Forum or any other person or
entity for any losses resulting therefrom, any Instructions reasonably believed
by it to be furnished by the proper person or persons as provided above.
16. STANDARD OF CARE. So long as and to the extent that it is in the
exercise of reasonable care, Bank shall not be responsible for the title,
validity or genuineness of any property or evidence of title thereto received by
it or delivered by it pursuant to this Agreement
- 10 -
and shall be held harmless in acting upon any notice, request, consent,
certificate or other instrument reasonably believed by it to be genuine and to
be signed by the proper party or parties. Bank shall be held to the exercise of
reasonable care in carrying out the provisions of this Agreement, but shall be
kept indemnified by and shall be without liability to the Trust for any action
taken or omitted by it in good faith without negligence. It shall be entitled to
rely on and may act upon advice of counsel acceptable to the Trust (who may be
counsel for the Trust) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.
If the Trust on behalf of a Portfolio requires Bank to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of Bank, result in Bank or its nominee assigned to
the Trust or the Portfolio being liable for the payment of money or incurring
liability of some other form, the Trust on behalf of the Portfolio, as a
prerequisite to requiring Bank to take such action, shall provide indemnity to
Bank in an amount and form satisfactory to it.
If the Trust requires Bank to advance cash or securities for any purpose
for the benefit of a Portfolio or in the event that Bank or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement, except such as
may arise from its or its nominees own negligent action, negligent failure to
act or willful misconduct, Bank promptly shall notify the Trust of the existence
of any such advances, their amount and the Portfolio to which the advance
applies. Such advances shall be payable on demand, on the first business day
following the Trust's receipt of notice of such demand.
17. INVESTMENT LIMITATIONS AND LEGAL OR CONTRACTUAL RESTRICTIONS OR
REGULATIONS. The Bank shall not be liable to Forum, the Registrant or a
Portfolio for any loss, damage or expense suffered or incurred by the Bank or
its nominees arising out of any violation of any investment restriction or other
restriction or limitation applicable to the Registrant or any Portfolio pursuant
to any contract or any law or regulation.
18. FEES AND EXPENSES. Forum agrees to pay to the Bank such compensation
for its services pursuant to this Agreement as may be mutually agreed upon in
writing from time to time. The initial fee schedule is attached hereto as
Exhibit B. Such fees will not be abated by, nor shall the Bank be required to
account for, any profits or commissions received by the Bank in connection with
its provision of custody services under this agreement. Forum hereby agrees to
hold the Bank harmless from any liability or loss resulting from any taxes or
other governmental charges, and any expense related thereto, which may be
imposed, or assessed with respect to any Property in an Account and also agree
to hold the Bank, its Subcustodians, and their respective nominees harmless from
any liability as a record holder of Property in such Account. The Bank is
authorized to charge the applicable Account for such items, and the Bank shall
have a lien on the Property in the applicable Account for any amount payable to
the Bank under this Agreement, including but not limited to amounts payable
pursuant to Section 13 and pursuant to indemnities granted by Forum under this
Agreement.
19. TAX RECLAIMS. With respect to withholding taxes deducted and which may
be deducted from any income received from any Property in an Account, the Bank
shall perform such services with respect thereto as are described in the
applicable Service Standards and shall in
- 11 -
connection therewith be subject to the standard of care set forth in such
Service Standards. Such standard of care shall not be affected by any other term
of this Agreement.
20. AMENDMENT, MODIFICATIONS, ETC. No provision of this Agreement may be
amended, modified or waived except in a writing signed by the parties hereto
(except that Exhibit B may be amended as provided for therein). No waiver of any
provision hereto shall be deemed a continuing waiver unless it is so designated.
No failure or delay on the part of either party in exercising any power or right
under this Agreement operates as a waiver, nor does any single or partial
exercise of any power or right preclude any other or further exercise thereof or
the exercise of any other power or right.
21. TERMINATION.
(a) This Agreement may be terminated by Forum or the Bank by ninety
(90) days' written notice to the other; PROVIDED that notice by
Forum shall specify the names of the persons to whom the Bank
shall deliver the Securities in each Account and to whom the Cash
in such Account shall be paid. If notice of termination is given
by the Bank, Forum shall, within ninety (90) days following the
giving of such notice, deliver to the Bank a written notice
specifying the names of the persons to whom the Bank shall
deliver the Securities in each Account and to whom the Cash in
such Account shall be paid. In either case, the Bank will deliver
such Property to the persons so specified, after deducting
therefrom any amounts that the Bank determines to be owed to it
hereunder. In addition, the Bank may in its discretion withhold
from such delivery such Property as may be necessary to settle
transactions pending at the time of such delivery. Forum grants
to the Bank a lien and right of setoff against the Account and
all Property held therein from time to time in the full amount of
the foregoing obligations. If within ninety (90) days following
the giving of a notice of termination by the Bank, the Bank does
not receive the aforementioned written notice specifying the
names of the persons to whom the Bank shall deliver the
Securities in each Account and to whom the Cash in such Account
shall be paid, the Bank, at its election, may deliver such
Securities and pay such Cash to a bank or trust company doing
business in the State of California to be held and disposed of
pursuant to the provisions of this Agreement, or may continue to
hold such Securities and Cash until a written notice as aforesaid
is delivered to the Bank, provided that from and after the
ninetieth day the Bank's obligations shall be limited to
safekeeping.
(b) This Agreement may be terminated by Forum or the Bank as to one
or more Portfolios (but less than all of the Portfolios) by
delivery of an amended Exhibit A deleting such Portfolios, in
which case termination as to such deleted Portfolios shall take
effect ninety (90) days after the date of such delivery, or such
earlier time as mutually agreed. The execution and delivery of an
amended Exhibit A that deletes one or more Portfolios shall
constitute a termination of this Agreement only with respect to
such deleted Portfolio(s), shall be governed by the preceding
provisions of Section 21 as to the identification of a successor
custodian and the delivery of Cash and Securities of the
Portfolio(s) so deleted to such successor custodian, and shall
not affect the obligations of the Bank and Forum hereunder with
respect to the other Portfolios set forth in Exhibit A, as
amended from time to time.
(c) Sections 16, 17, 18, 28 and 31 shall survive the termination of
this Agreement as to one or more or all Portfolios.
- 12 -
22. NOTICES. Except as otherwise provided in this Agreement, all requests,
demands or other communications between the parties or notices in connection
herewith (a) shall be in writing, hand delivered or sent by registered mail,
telex or facsimile addressed to such other address as shall have been furnished
by the receiving party pursuant to the provisions hereof and (b) shall be deemed
effective when received, or, in the case of a telex, when sent to the proper
number and acknowledged by a proper answerback.
23. SEVERAL OBLIGATIONS OF THE PORTFOLIOS. With respect to any obligations
of Forum on behalf of each Portfolio and each of its related Accounts arising
out of this Agreement, the Bank shall look for payment or satisfaction of any
obligation solely to the assets and property of the Portfolio and such Accounts
to which such obligation relates as though Forum had separately contracted with
the Bank by separate written instrument with respect to each Portfolio and its
related Accounts. Forum represents and warrants that it has been authorized by
the Registrant under its Custodian Agreement or Custodial Services Agreement
with the Registrant to enter into an agreement with the Bank which will obligate
the Registrant to be liable to the Bank for any and all obligations of any
Portfolio whose securities are offered by the Registrant arising out of Property
of such Portfolio custodied hereunder.
24. SECURITY FOR PAYMENT. To secure payment of all obligations due
hereunder, Forum hereby grants to the Bank a continuing security interest in and
right of setoff against each Account and all Property held therein from time to
time in the full amount of such obligations; PROVIDED THAT, if there is more
than one Account and the obligations secured pursuant to this Section can be
allocated to a specific Account or the Portfolio related to such Account, such
security interest and right of setoff will be limited to Property held for that
Account only and its related Portfolio. Should Forum fail to pay promptly any
amounts owed hereunder, the Bank shall be entitled to use available Cash in the
Account or applicable Account, as the case may be, and to dispose of Securities
in the Account or such applicable Account as is necessary. In any such case and
without limiting the foregoing, the Bank shall be entitled to take such other
actions or exercise such other options, powers and rights as the Bank now or
hereafter has as a secured creditor under the UCC or any other applicable law.
25. REPRESENTATIONS AND WARRANTIES.
(a) Forum hereby represents and warrants to the Bank in its own
capacity as Custodian and on behalf of the Registrant to the
extent applicable to the Registrant that:
(i) the employment of the Bank and the allocation of fees,
expenses and other charges to any Account as herein
provided, is not prohibited by law or any governing
documents or contracts to which it is subject;
(ii) the terms of this Agreement do not violate any obligation by
which Forum is bound, whether arising by contract, operation
of law or otherwise;
(iii)this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon
Forum and each Portfolio in accordance with its terms;
- 13 -
(iv) it will deliver to the Bank such evidence of such
authorization as the Bank may reasonably require, whether by
way of a certified resolution or otherwise;
(v) it has delivered to Bank a true and correct copy of each
custodian agreement or custodial services agreement between
it and the Registrant and each amendment to each such
agreement;
(vi) the Bank may rely, as fully as if it were a party thereto,
on the representations, warranties, covenants and
indemnities of the Registrant, on behalf of the applicable
Portfolios, set forth in Sections 8(d), 16, 17, 24 and 29 of
each agreement referred to in the foregoing representation;
(vii)it will deliver to the Bank a duly executed Secretary's
Certificate in the form provided for in each custodian
agreement or custodial services agreement between Forum and
the Registrant or such other evidence of such authorization
as the Bank may reasonably require, whether by way of a
certified resolution or otherwise; and
(viii) it is qualified as a custodian under Section 26(a) of the
1940 Act and warrants that it will remain so qualified or
upon ceasing to be so qualified shall promptly notify the
Bank in writing.
(b) The Bank hereby represents and warrants to Forum that:
(i) the terms of this Agreement do not violate any obligation by
which Bank is bound, whether arising by contract, operation
of law or otherwise;
(ii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon
Bank in accordance with its terms;
(iii)it will deliver to Forum such evidence of such
authorization as Forum may reasonably require, whether by
way of a certified resolution or otherwise; and
(iv) it is qualified as a custodian under Section 26(a) of the
1940 Act and warrants that it will remain so qualified or
upon ceasing to be so qualified shall promptly notify Forum
in writing.
26. LIMITED POWER OF ATTORNEY. The Bank is hereby granted a limited power
of attorney by Forum to execute on Forum's behalf any declarations,
endorsements, assignments, stock or bond powers, affidavits, certificates of
ownership or other documents required (i) to effect the sale, transfer, or other
disposition of Property held in an Account, (ii) to obtain payment with respect
to Property held in an Account, or (iii) to take any other action required with
respect to the Property held in an Account, and in the Bank's own name to
guarantee as Forum's signature any signature so affixed.
- 14 -
27. GOVERNING LAW AND SUCCESSORS AND ASSIGNS. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of Forum and the Bank.
28. PUBLICITY. Forum shall furnish to Bank prior to any distribution
thereof, copies of any material prepared by the Registrant for distribution to
any persons other than Registrant, Registrant's service providers, Forum and
Bank that refer in any way to the Bank. Forum shall not distribute or permit the
distribution of such materials if Bank reasonably objects in writing within five
(5) business days of receipt thereof (or such other time as may be mutually
agreed) after receipt thereof; provided, however, that Forum shall be permitted
to include the name of Bank and its position as subcustodian to each Portfolio
in the Registrant's registration statement and other filings with the SEC.
29. CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall
not be disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other than
through a breach of this Agreement, or that is required or requested to be
disclosed by any bank or other regulatory examiner of the Bank, Forum, or any
Subcustodian, any auditor of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation.
30. SEVERABILITY. If any provision of this Agreement is determined to be
invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other provision of this Agreement.
31. ENTIRE AGREEMENT. This Agreement together with any Exhibits attached
hereto, contains the entire agreement between the parties relating to the
subject matter hereof and supersedes any oral statements and prior writings with
respect thereto.
32. HEADINGS. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.
33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties hereto.
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IN WITNESS WHEREOF, each of the parties has caused it's duly authorized
signatories to execute this Agreement as of the date first written above.
UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
FORUM TRUST, LLC for itself and as agent
for Core Trust (Delaware)
By: /s/ XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: President
- 16 -
SUBCUSTODY AGREEMENT
EXHIBIT A
LIST OF PORTFOLIOS
As of July 1, 2000
Core Trust (Delaware)
Treasury Cash Portfolio
Government Portfolio
Government Cash Portfolio
Cash Portfolio
Municipal Cash Portfolio
UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
FORUM TRUST, LLC
By:/s/ XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: President
A-1
SUBCUSTODY AGREEMENT
EXHIBIT B
FEE SCHEDULE
This Exhibit B shall be amended upon delivery by Bank of a new Exhibit B to
Forum and acceptance thereof by Forum and shall be effective as of the date of
acceptance by Forum or a date agreed upon between Bank and Forum.
FEE AS A % OF
PORTFOLIO ANNUAL AVERAGE DAILY NET ASSETS
Total of All Portfolios 0.010%
Such fees shall be accrued by the Trust daily and payable monthly in arrears on
the first day of the next month.
B-1
SUBCUSTODY AGREEMENT
EXHIBIT C
UNION BANK OF CALIFORNIA, N.A.
AND
FORUM TRUST, LLC
SECRETARY'S CERTIFICATE
I, Xxxxx X. Xxxxxxxxx, hereby certify that I am the Secretary of Forum
Trust, LLC (the "Company"), a limited liability company organized under the laws
of the State of Maine and authorized to do business as a non-depositary trust
company thereunder and as such I am duly authorized to, and do hereby, certify
that:
1. ORGANIZATIONAL DOCUMENTS. The Company's organizational documents, and
all amendments thereto, have been filed with the appropriate governmental
officials of the State of Maine, the Company continues to be in existence and is
in good standing, and no action has been taken to repeal such organizational
documents, the same being in full force and effect on the date hereof.
2. BYLAWS. The Company's Amended and Restated Operating Agreement has been
duly adopted and no action has been taken to repeal such Amended and Restated
Operating Agreement, the same being in full force and effect.
3. RESOLUTIONS. Resolutions have been duly adopted on behalf of the
Company, which resolutions (i) have not in any way been revoked or rescinded,
(ii) have been in full force and effect since their adoption, to and including
the date hereof, and are now in full force and effect, and (iii) are the only
corporate proceedings of the Company now in force relating to or affecting the
matters referred to therein, including, without limitation, confirming that the
Company is duly authorized to enter into a certain subcustodian agreement with
Union Bank of California, N.A. (the "Agreement"), and that certain designated
officers, including those identified in paragraph 4 of this Certificate, are
authorized to execute said Agreement on behalf of the Company, in conformity
with the requirements of the Company's organizational documents, Amended and
Restated Operating Agreement, and other pertinent documents to which the Company
may be bound.
4. INCUMBENCY. The following named individuals are duly elected (or
appointed), qualified, and acting officers of the Company holding those offices
set forth opposite their respective names as of the date hereof, each having
full authority, acting individually, to bind the Company, as a legal matter,
with respect to all matters pertaining to the Agreement, and to execute and
deliver said Agreement on behalf of the Company, and the signatures set forth
opposite the respective names and titles of said officers are their true,
authentic signatures:
C-1
NAME TITLE SIGNATURE
Xxxx X. Xxxxxx President /s/ XXXX X. XXXXXX
Xxxxxx X. Xxxxxx Treasurer /s/ XXXXXX X. XXXXXX
Xxxxx X. Xxxxxxxxx Secretary /s/ XXXXX X. XXXXXXXXX
Xxxxxxxxx Xxxxxxx Assistant Treasurer /s/ XXXXXXXXX XXXXXXX
Xxxx X. Xxxxxx Assistant Secretary /s/ XXXX X. XXXXXX
5. AUTHORIZED INSTRUCTIONS.
(a). GENERAL. Any two of the officers of the Company listed in
Paragraph 4 are authorized to deliver instructions to Union Bank
of California, N.A. pursuant to Section 15 of the Agreement on
behalf of the Company or any Portfolio (as defined in the
Agreement) in accordance with the Agreement.
(b) SECURITIES AND CASH. Any of the following persons are authorized
to deliver instructions to transfers of Securities (as such term
is defined in the Agreement) of any Portfolio on behalf of a
Portfolio, and instructions with respect to transfers of Cash (as
such term is defined in the Agreement) of any Portfolio to or
from any money market mutual fund on behalf of a Portfolio and
the signatures set forth opposite the respective names and titles
of said persons are their true, authentic signatures:
NAME TITLE SIGNATURE
Xxxxxxx X. Xxxxxxx Portfolio Manager /s/ XXXXXXX X. XXXXXXX
Xxxx Xxxxx Xxxxxxxxx Asst. Portfolio Manager /s/ XXXX XXXXX XXXXXXXXX
Xxxxxx XxXxx Manager,
Information Services /s/ XXXXXX XXXXX
Xxxx X. Xxxxxx Lead Custody Analyst /s/ XXXX X. XXXXXX
Xxxxx Xxxxx Senior Manager,
Fund Accounting /s/ XXXXX XXXXX
Xxxxx Xxxx Senior Manager, /s/ XXXXX XXXX
Fund Accounting
Xxxx X. Xxxxxxxx Senior Manager, /s/ XXXX X. XXXXXXXX
Fund Accounting
C-2
(c) TRANSFER AGENCY. Any two of the persons authorized by Forum
Shareholder Services, LLC listed on Appendix A may deliver
instructions with respect to the transfer of cash in connection
the purchase and redemption of shares of any Portfolio, and the
payments of distributions to shareholders of any Portfolio.
(d) ADMINISTRATION. Any two of the persons authorized by Forum
Administrative Services, LLC listed on Appendix B may deliver
instructions with respect to approval of bills for the payment of
the expenses of any Portfolio, and the payments of distributions
to shareholders of any Portfolio.
IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of July,
2000.
/s/ XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxxxxx, Secretary
I, Xxxx X. Xxxxxx, President of the Company, hereby certify that on this
1st day of July, 2000, Xxxxx X. Xxxxxxxxx is the duly elected Secretary of the
Company and that the signature above is his genuine signature.
/s/ XXXX X. XXXXXX
Xxxx X. Xxxxxx, President
C-3
SUBCUSTODY AGREEMENT
EXHIBIT D
APPROVED SUBCUSTODIANS AND SECURITIES SYSTEMS
