Exhibit (g)(1)
CUSTODIAL SERVICES AGREEMENT
AGREEMENT dated as of the 1st day of July, 2000, between Forum Trust, LLC
("Custodian"), a limited liability company organized under the laws of the State
of Maine doing business as a nondepository trust company, and Core Trust
(Delaware), a business trust organized under the laws of the State of Delaware
("Customer").
WHEREAS, Customer is an open-end, management investment company registered
under the Investment Company Act of 1940, as amended ("1940 Act"), and 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, Custodian proposes to enter into a certain Subcustodian Agreement
with Union Bank of California ("Union Bank") dated as of the 1st day of July,
2000 (the "Subcustodian Agreement") under which Union Bank would provide certain
sub-custody services on behalf of the Portfolios to Custodian; and
WHEREAS, Customer wishes to retain Custodian to provide certain custodial
services to Customer for the benefit of the Portfolios, and Custodian 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 CUSTODIAN. Customer, on behalf of each Portfolio, hereby
employs Custodian as custodian of all assets of each Portfolio that are
delivered to and accepted by Custodian 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 Customer 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 Custodian shall have the right, in its
sole discretion, to refuse to accept as Property any property of a Portfolio
that Custodian considers not to be appropriate or in proper form for deposit for
any reason. Custodian shall not be responsible for any property of a Portfolio
held or received by Customer or others and not delivered to Custodian or any
Subcustodian.
2. MAINTENANCE OF SECURITIES AND CASH AT CUSTODIAN AND SUBCUSTODIAN
LOCATIONS. Pursuant to Instructions (as hereinafter defined in Section 15),
Customer shall direct Custodian 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 Customer'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. Except as provided in the last paragraph of Section 4,
Custodian agrees to establish and maintain one or more custody accounts on its
books each in the name of Customer on behalf of a Portfolio (each, an "Account")
for any and all Property from time to time received and accepted by Custodian or
any Subcustodian for the account of such Portfolio. Upon delivery by Customer to
Custodian of any acceptable Property belonging to a Portfolio, Customer 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 Portfolio, and Custodian shall allocate such
Property to the Accounts in accordance with the Instructions. Customer, on
behalf of each Portfolio, acknowledges (i) its responsibility as a principal for
all of its obligations to Custodian 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 Custodian or a Subcustodian and to give, and
authorize others to give, instructions relative thereto. Custodian may deliver
securities of the same class in place of those deposited in the Account.
Custodian 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 Custodian receives Instructions to the contrary, Custodian 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 Custodian 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 Custodian 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
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obtain Instructions such Instructions are not received in time
for Custodian to take timely action or if actual notice of such
actions was received too late to seek Instructions, sell in the
discretion of Custodian (which sale Customer hereby authorizes
Custodian to make) such rights entitlement or fractional interest
and credit the Account with the net proceeds of such sale;
(e) execute in Customer's name for an Account, whenever Custodian
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, Custodian shall notify Customer of the
amount of the shortfall and Customer may, or may cause the
Portfolio to, at its option, deposit additional Cash in such
Account or take steps to have sufficient Cash available.
Customer, on behalf of the Portfolios agrees, when and if
requested by Custodian and required in connection with the
payment of any such taxes, to cooperate with Custodian in
furnishing information, executing documents or otherwise;
(g) appoint brokers and agents for any of the ministerial
transactions involving the Securities described in (a) - (f),
including, without limitation, affiliates of Custodian or any
Subcustodian; and
(h) in the event of any loss of Securities or Cash, use its best
efforts to ascertain the circumstances relating to such loss and
promptly report the same to Customer.
4. SUBCUSTODIANS AND SECURITIES SYSTEMS. Customer authorizes and instructs
Custodian 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 Custodian with the following other securities intermediaries: (a)
another U.S. bank or trust company (including Union Bank pursuant to the
Subcustodian Agreement) 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
Custodian or of any U.S. Subcustodian, or a U.S. securities depository or
clearing agency or system in which Custodian or a U.S. Subcustodian participates
(individually, a "U.S. Securities System") or (b) one of Custodian'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 Custodian 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,
Custodian shall notify Customer of the appointment of such U.S. Subcustodian or
U.S. Securities System; 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" as defined by Rule 17f-5
under the 1940 Act ("Rule 17f-5") or (ii) an "eligible foreign custodian" within
the meaning of Rule 17f-5 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
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of the provisions of Rule 17f-5,and (b) the identity of the non-U.S.
Subcustodian and the agreement between Custodian and such non-U.S. Subcustodian
has been approved by Instructions; it being understood that Custodian 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 lists all
Subcustodians and Securities Systems that have been approved by Instructions.
Notwithstanding Section 20 hereof or any other provision hereof to the contrary,
Exhibit D may be amended solely by the delivery to Custodian of Instructions
pursuant to Section 15 hereof.
Upon receipt of Instructions from Customer, Custodian agrees to cease the
employment of any Subcustodian or Securities System with respect to Customer,
and if desirable and practicable, appoint a replacement Subcustodian or
securities system in accordance with the provisions of this Section. In
addition, Custodian may, at any time in its discretion, upon written
notification to Customer, terminate the employment of any Subcustodian or
Securities System.
Custodian shall deliver to Customer annually a certificate stating: (a) the
identity of each non-U.S. Subcustodian and non-U.S. Securities System then
acting on behalf of Custodian 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 Customer's Board of Trustees or if the Board of Trustees 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 Customer to ensure compliance with Rule 17f-5. If requested by the
Customer's Board of Trustees or the Board of Trustees responsible for any
Portfolio directly approves its foreign custody arrangements, Custodian also
shall furnish annually to Custodian information concerning such non-U.S.
Subcustodians and non-U.S. Securities Systems similar in kind and scope as that
furnished to Customer in connection with the initial approval of this Agreement.
Custodian agrees to promptly notify Customer if, in the normal course of its
custodial activities, Custodian learns of a material adverse change in the
financial condition of a non-U.S. Subcustodian or a non-U.S. Securities System
suffers a material loss of Property, or Custodian 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
or has ceased to be subject to an exemptive order from the SEC.
Notwithstanding any other provision hereof to the contrary, (i) all
Property shall be delivered (as contemplated by Section 1) by or on behalf of
Customer only to Union Bank or another Subcustodian, and (ii) all Instructions
and other directions (as contemplated by Section 2) shall be delivered by
Customer only to Union Bank or another Subcustodian. All provisions of this
Agreement (including, without limitation, the final paragraph of Section 3)
shall be interpreted to give effect to the preceding sentence and Forum shall
have authority to enter the Subcustodian Agreement as agent of Customer.
5. USE OF SUBCUSTODIAN. With respect to Property in an Account that is
maintained by Custodian through a Subcustodian employed pursuant to Section 4:
(a) Custodian will identify on its books as belonging to Customer on
behalf of a Portfolio, any Property maintained through such
Subcustodian.
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(b) Any Property in the Account held by a Subcustodian will be
subject only to the instructions of Custodian or its agents.
(c) Property deposited with a Subcustodian will be maintained in an
account holding only assets for customers of Custodian.
(d) Any agreement Custodian 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 Property so maintained is 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 its safe
custody or administration; (iii) beneficial ownership of
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 Customer or
as being held by Custodian, on behalf of Customer or all its
customers; (v) to the extent permitted by applicable law,
officers of or auditors employed by, or other representatives of
or designated by, Custodian, including the independent public
accountants of or designated by, Customer be given access to the
books and records of such Subcustodian relating to Property or
confirmation of the contents of those records; and (vi) Custodian
on behalf of Customer 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 Custodian or any Subcustodian through a Securities System
employed pursuant to Section 4:
(a) Custodian shall, and the Subcustodian will be required by its
agreement with Custodian to, identify on its books such Property
as being maintained for the account of Custodian or Subcustodian
for its customers.
(b) Any Property maintained through a Securities System for the
account of Custodian or a Subcustodian will be subject only to
the instructions of Custodian 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 customers of Custodian or
Subcustodian, as the case may be, unless precluded by applicable
law, rule, or regulation.
(d) Custodian shall provide Customer with any report obtained by
Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited in the Securities System.
7. AGENTS. Custodian 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 Custodian 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,
including Union Bank; PROVIDED, however, that the appointment of any agent
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shall not relieve Custodian of its responsibilities or liabilities hereunder.
Custodian shall provide reasonable notice to Customer 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
Custodian or indirectly through a Subcustodian or a Securities
System as authorized herein, shall be clearly recorded on
Custodian 's books as belonging to the appropriate Account and
not to the Custodian. Custodian shall keep accurate and detailed
accounts of all investments, receipts, disbursements and other
transactions for each Account. All accounts, books and records of
Custodian relating thereto shall be open to inspection and audit
at all reasonable times during normal business hours by any
person designated by Customer. All such accounts shall be
maintained and preserved in the form reasonably requested by
Customer. Custodian will supply to Customer from time to time, as
mutually agreed upon, a statement in respect to any Property in
an Account maintained by Custodian or by a Subcustodian. In the
absence of the filing in writing with Custodian by Customer of
exceptions or objections to any such statement within sixty (60)
days of the mailing thereof, Customer shall be deemed to have
approved such statement and in such case or upon written approval
of Customer of any such statement, such statement shall be
presumed to be for all purposes correct with respect to all
information set forth therein.
(b) Custodian shall take all reasonable action as Customer may
request to obtain from year to year favorable opinions from
Customer's independent certified public accountants with respect
to Custodian 's activities hereunder in connection with the
preparation of Customer's registration statement on Form N-1A and
Customer'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 Customer, Custodian shall deliver, and shall
cause the Subcustodians to deliver, to Customer a written report
prepared by Custodian 's independent certified public accountants
with respect to the services provided by Custodian under this
Agreement, including, without limitation, Custodian'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 Customer and
as may reasonably be obtained by Custodian.
(d) Customer may elect to participate in any of the electronic
on-line service and communications systems offered by Custodian
or a Subcustodian that can provide Customer, on a daily basis,
with the ability to view on-line or to print in 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, Customer
hereby acknowledges that Custodian or such Subcustodian now
obtains and may in the future obtain information on such values
from outside sources that Custodian or such Subcustodian
considers to be
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reliable, and Customer agrees that Custodian and such
Subcustodian (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 subject to the standard of care set
forth in Section 16 of this Agreement 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 Custodian or any Subcustodian may be held directly by such entity
in the name of Customer or in bearer form or maintained, on behalf of a
Portfolio, in Custodian's or Subcustodian's name or in the name of Custodian'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
Custodian's or Subcustodian's customers, unless prohibited by law, rule, or
regulation. Custodian or Subcustodian, as the case may be, may combine
certificates representing Securities held in an Account with certificates of the
same issue held by Custodian or Subcustodian as fiduciary or as a custodian. In
the event that any Securities in the name of Custodian 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, Custodian 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 Custodian deems to be fair and equitable. Securities
maintained with a Securities System shall be maintained subject to the rules of
that 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, Custodian
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
Custodian and Customer. The liability and responsibility of Custodian in
connection with the Proxy Service referred to in (ii) of the immediately
preceding sentence and in connection with any additional services which
Custodian and Customer 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 Custodian and Customer in connection with the
furnishing of any such additional service and shall not be affected by any other
term of this Agreement. Neither Custodian 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 Customer in complying with the
requirements of the 1940 Act and the rules and regulations thereunder, Custodian
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 Custodian or a Subcustodian upon receipt by Custodian of
Instructions that include all information required by Custodian. 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
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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 Custodian in effect from time to time for that
jurisdiction or market. Custodian 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.
Custodian or a Subcustodian may settle purchases and sales against, or
credit income to, an Account, and Custodian may, at its sole option upon written
notice to Customer, 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 Customer agrees to hold Custodian harmless from any losses
that may result therefrom. With respect to the activities of Union Bank as
Subcustodian under the Subcustodian Agreement, such credits and reversals, if
any, shall be on a contractual basis, as outlined in the Union Bank Service
Standards, as described below and provided to Customer by Custodian.
The applicable Service Standards shall mean the Global Guide, the Policies
and Standards Manual, and any other documents issued by the Custodian, Union
Bank and other Subcustodians from time to time specifying the procedures for
communicating with a customer, the terms of any additional services to be
provided to a customer, and such other matters as may be agreed between the
parties from time to time. Copies of the current Service Standards have been
delivered to Customer.
13. CONDITIONAL CREDITS.
(a) Notwithstanding any other provision of this Agreement,
Custodian or a Subcustodian 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 Custodian has
received Instructions to settle on that date ("Settlement
Date"), Custodian, 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 Custodian has received
Instructions to settle on any Settlement Date, Custodian,
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.
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(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, Custodian shall make the Conditional Credit a
final entry on its books and records. In such case, Customer
shall be liable to Custodian only for late charges at a rate
that Custodian 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, Custodian 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, Customer shall continue to be liable to
Custodian for any shortfall. Custodian 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 Customer of the purchase price
for Securities subject to a Conditional Credit, and
Custodian's making a Conditional Credit a final entry on its
books, and, unless consented to by Custodian, Customer shall
have no right to give further Instructions in respect of
Securities subject to a Conditional Credit. Custodian shall
have the sole discretion to determine which Securities shall
be deemed to have been paid for by Customer out of funds
available in the Account. Any such Conditional Credit may be
reversed (and any corresponding Debit shall be canceled) by
Custodian unless and until Custodian 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 Customer, whether voluntary or involuntary.
(e) Customer 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. Customer 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.
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(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 Customer 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 Customer.
(i) For the purpose of redeeming shares of the capital stock of
Customer against delivery of the shares to be redeemed to
Custodian, a Subcustodian or Customer's transfer agent.
(j) For the purpose of redeeming in kind shares of Customer
against delivery of the shares to be redeemed to Custodian,
a Subcustodian or Customer's transfer agent.
(k) For delivery in accordance with the provisions of any
agreement among Customer, 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 Customer.
(l) For release of Securities to designated brokers under
covered call options, provided, however, that such
Securities shall be released only upon payment to Custodian
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, Custodian will receive the
Securities previously deposited from broker. Custodian 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.
Customer agrees that Custodian and any Subcustodian shall have no
obligation to verify the purpose for which a transaction is being effected.
- 10 -
15. INSTRUCTIONS. The term "Instructions" means instructions from Customer
in respect of any of Custodian's duties hereunder that have been received by
Custodian 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 Customer 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 Custodian; or (ii) which have been transmitted
electronically through an electronic on-line service and communications system
offered by Custodian or other electronic instruction system acceptable to
Custodian; or (iii) a telephonic or oral communication by one or more persons as
Customer shall have from time to time authorized to give the particular class of
Instructions in question and whose name has been filed with Custodian; or (iv)
upon receipt of such other form of instructions as Customer may from time to
time authorize in writing and which Custodian has agreed in writing to accept.
Instructions in the form of oral communications shall be confirmed by Customer
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 Custodian
in reliance upon such oral instructions prior to Custodian '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.
Custodian shall have the right to assume in the absence of notice to the
contrary from Customer that any person whose name is on file with Custodian
pursuant to this Section has been authorized by Customer to give the
Instructions in question and that such authorization has not been revoked.
Custodian may act upon and conclusively rely on, without any liability to
Customer 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, the Custodian 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 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. The Custodian 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 the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian 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 the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
If the Trust requires the Custodian to advance cash or securities for any
purpose for the benefit of a Portfolio or in the event that the Custodian 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
- 11 -
action, negligent failure to act or willful misconduct, the Custodian 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. Neither Custodian nor any Subcustodians shall be liable to Customer
or a Portfolio and Customer agrees to indemnify Custodian, all Subcustodians and
their nominees, for any loss, damage or expense suffered or incurred by
Custodian, any Subcustodian or their nominees arising out of any violation of
any investment restriction or other restriction or limitation applicable to
Customer or any Portfolio pursuant to any contract or any law or regulation.
18. FEES AND EXPENSES. Customer agrees to pay to Custodian 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 Custodian be
required to account for, any profits or commissions received by Custodian in
connection with its provision of custody services under this agreement. Customer
hereby agrees to hold Custodian 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 Custodian, its Subcustodians, and their respective nominees
harmless from any liability as a record holder of Property in such Account.
Custodian is authorized to charge the applicable Account for such items, and
Custodian shall have a lien on the Property in the applicable Account for any
amount payable to Custodian under this Agreement, including but not limited to
amounts payable pursuant to Section 13 and pursuant to indemnities granted by
Customer 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, Custodian
shall perform such services with respect thereto as are described in the
applicable Service Standards and shall in 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 D may be amended as provided in Section 4 hereof and
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 Customer or Custodian by
ninety (90) days' written notice to the other; PROVIDED that
notice by Customer shall specify the names of the persons to
whom Custodian 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 Custodian, Customer shall,
within ninety (90) days following the giving of such notice,
deliver to Custodian a written notice specifying the names
of the persons to whom Custodian shall deliver the
Securities in each Account and to whom the Cash
- 12 -
in such Account shall be paid. In either case, Custodian
will deliver such Property to the persons so specified,
after deducting therefrom any amounts that Custodian
determines to be owed to it hereunder. In addition,
Custodian may in its discretion withhold from such delivery
such Property as may be necessary to settle transactions
pending at the time of such delivery. Customer grants to
Custodian 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
Custodian, Custodian does not receive the aforementioned
written notice specifying the names of the persons to whom
Custodian shall deliver the Securities in each Account and
to whom the Cash in such Account shall be paid, Custodian,
at its election, may deliver such Securities and pay such
Cash to a bank or trust company doing business in the State
of New York 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 Custodian, provided that from and after the
ninetieth day Custodian 's obligations shall be limited to
safekeeping.
(b) This Agreement may be terminated by Customer or Custodian 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 Section 21(a) 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 Custodian and Customer hereunder with
respect to the other Portfolios set forth in Exhibit A, as
amended from time to time.
(c) Sections 16, 17, 18, 27 and 31 shall survive the termination
of this Agreement as to one or more or all Portfolios.
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 Customer on behalf of each Portfolio and each of its related Accounts arising
out of this Agreement, Custodian 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 Customer had separately contracted
with Custodian by separate written instrument with respect to each Portfolio and
its related Accounts.
24. SECURITY FOR PAYMENT. To secure payment of all obligations due
hereunder, Customer hereby grants to Custodian 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;
- 13 -
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
Customer fail to pay promptly any amounts owed hereunder, Custodian 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, Custodian
shall be entitled to take such other actions or exercise such other options,
powers and rights as Custodian now or hereafter has as a secured creditor under
the UCC or any other applicable law, including, without limitation, granting to
any Subcustodian a security interest in such Accounts on terms similar to those
set forth in this Section 24.
25. REPRESENTATIONS AND WARRANTIES.
(a) Customer hereby represents and warrants to Custodian that:
(i) the employment of Custodian 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 Customer 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 Customer and each Portfolio in accordance with its
terms; and
(iv) it will deliver to Custodian a duly executed
Secretary's Certificate in the form of Exhibit C hereto
or such other evidence of such authorization as
Custodian may reasonably require, whether by way of a
certified resolution or otherwise.
(b) Custodian hereby represents and warrants to Customer that:
(i) the terms of this Agreement do not violate any
obligation by which Custodian 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 Custodian in accordance with its terms;
(iii)it will deliver to Customer such evidence of such
authorization as Customer may reasonably require,
whether by way of a certified resolution or otherwise;
(iv) it is qualified as a custodian under Section 26(a) of
the 1940 Act and that it will remain so qualified or
upon ceasing to be so qualified shall promptly notify
Customer in writing; and
- 14 -
(v) it has taken steps (a) believed by it in good faith to
be reasonably designed to address the risk that
critical computer systems and equipment containing the
embedded microchips that it uses relating to its
operations (the "Systems") may be unable to process
properly and calculate date-related information and
data from and after January 1, 2000 (the "Year 2000
Problem"), and (b) to obtain assurances deemed
reasonable by Custodian that its material service
providers, including each Subcustodian, Securities
System, agent or other financial institution employed
by Custodian to provide services to Customer under this
Agreement, have taken reasonable steps to address the
Year 2000 Problem. Custodian reasonably expects that
the effects of the Year 2000 Problem should not result
in a material adverse effect on the business, financial
condition or ability to timely perform any of its
material obligations under this Agreement (a "Material
Adverse Effect"). In addition, Custodian agrees to
notify Customer promptly if it has reason to believe
that a Material Adverse Effect is likely to result from
a Year 2000 Problem with respect to Custodian or its
material service providers.
26. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS, OFFICERS,
EMPLOYEES AND AGENT. A copy of the Trust Instrument of the Trust is on file with
the Secretary of the Trust. The parties agree that neither the Shareholders,
Trustees, officers, employees nor any agent of the Trust shall be liable
hereunder and that the parties to this Agreement other than the Trust shall look
solely to the Trust property for the performance of this Agreement or payment of
any claim under this Agreement.
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 Customer and
Custodian.
28. THIRD-PARTY BENEFICIARY. Customer hereby acknowledges and agrees that
with respect to the Accounts:
(a) Customer authorizes Custodian to appoint Union Bank as a
Subcustodian pursuant to the Subcustodian Agreement and to engage
Union Bank to perform any and all functions under this Agreement
on behalf of Customer, including those enumerated in the last
paragraph of Section 4.
(b) As an inducement to Union Bank to act as a Subcustodian, Customer
authorizes the Custodian to bind the Customer to those terms of
the Subcustodian Agreement, including Section 23 thereof, which
will obligate the Customer to pay obligations of each Portfolio
for Property of such Portfolio custodied pursuant to the
Subcustodian Agreement.
(c) Union Bank may rely, as fully as if it were a party hereto and
named as "Custodian" herein, on the representations, warranties,
covenants and indemnities of Customer set forth in Sections 8(d),
16, 17, 24 and 28 of this Agreement.
29. REPRESENTATIVE CAPACITY AND BINDING OBLIGATION. A copy of the
Certificate of Trust of Customer is on file with the Secretary of State of the
State of Delaware. Notice is hereby given
- 15 -
that this Agreement is not executed on behalf of the Trustees of Customer as
individuals, and the obligations of this Agreement are not binding upon any of
the Trustees, officers or shareholders of Customer individually but are binding
only upon the assets and property of the Portfolios.
Custodian agrees that no shareholder, Trustee or officer of Customer may be
held personally liable or responsible for any obligations of Customer arising
out of this Agreement.
30. SUBMISSION TO JURISDICTION. Intentionally Left Blank.
31. CONFIDENTIALITY. The Custodian agrees to treat all records and other
information relative to the Trust and its prior, present or potential
Shareholders confidentially and the Custodian on behalf of itself and its
employees agrees to keep confidential all such information, except after prior
notification to and approval in writing by the Trust, which approval shall not
be unreasonably withheld. The preceding notwithstanding, in the event legal
process is served upon the Custodian requiring certain disclosure, the Custodian
may divulge such information. In such event, the Custodian shall, if legally
permissible, advise the Trust of its receipt of such legal process.
32. 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.
33. ENTIRE AGREEMENT. This Agreement together with its Exhibits, contains
the entire agreement between the parties relating to the subject matter hereof
and supersedes any oral statements and prior writings with respect thereto.
34. HEADINGS. The headings of the sections hereof are included for
convenience of reference only and do not form a part of this Agreement.
35. 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.
- 16 -
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.
FORUM TRUST, LLC
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: President
CORE TRUST (DELAWARE)
By:/s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
- 17 -
CUSTODIAL SERVICES AGREEMENT
EXHIBIT A
LIST OF PORTFOLIOS
Treasury Cash Portfolio
Government Portfolio
Government Cash Portfolio
Cash Portfolio
Municipal Cash Portfolio
FORUM TRUST, LLC
By:/s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: President
CORE TRUST (DELAWARE)
By:/s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
A-1
CUSTODIAL SERVICES AGREEMENT
EXHIBIT B
FEE SCHEDULE
This Exhibit B shall be amended upon delivery by Custodian of a new Exhibit B to
Customer and acceptance thereof by Customer and shall be effective as of the
date of acceptance by Customer or a date agreed upon between Custodian and
Customer.
ANNUAL FEE AS A % OF
PORTFOLIO AVERAGE DAILY NET ASSETS
Total of Portfolios 0.025% of the first $1.5 billion,
0.020% of the next $1.0 billion and
0.015% of the balance
B-1
CUSTODIAL SERVICES AGREEMENT
EXHIBIT C
FORM OF SECRETARY'S CERTIFICATE
I, Xxxxxx X. Xxxxx, hereby certify that I am the Secretary of Core Trust
(Delaware), a business trust organized under the laws of the State of Delaware
(the "Trust"), and as such I am duly authorized to, and do hereby, certify that:
1. ORGANIZATIONAL DOCUMENTS. The Trust's organizational documents, and all
amendments thereto, have been filed with the appropriate governmental officials
of Delaware, the Trust 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 Trust's Bylaws have been duly adopted and no action has been
taken to repeal such Bylaws, the same being in full force and effect.
3. Resolutions. Resolutions have been duly adopted on behalf of the Trust,
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 proceedings
of the Trust now in force relating to or affecting the matters referred to
therein, including, without limitation, confirming that the Trust is duly
authorized to enter into a certain custody agreement with Forum Trust, LLC (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 Trust, in conformity with the requirements of the Trust's
organizational documents, Bylaws, and other pertinent documents to which the
Trust may be bound.
4. INCUMBENCY. The following named individuals are duly elected (or
appointed), qualified, and acting officers of the Trust holding those offices
set forth opposite their respective names as of the date hereof, each having
full authority, acting individually, to bind the Trust, as a legal matter, with
respect to all matters pertaining to the Agreement, and to execute and deliver
said Agreement on behalf of the Trust, and the signatures set forth opposite the
respective names and titles of said officers are their true, authentic
signatures:
NAME TITLE SIGNATURE
Xxxx X. Xxxxxx President /s/ XXXX X. XXXXXX
Xxxxx X. Xxxxxxxxx Vice President /s/ XXXXX X. XXXXXXXXX
Xxxxxx X. Xxxxxx Treasurer /s/ XXXXXX X. XXXXXX
C-1
IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of July,
2000.
Core Trust (Delaware)
By:/s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Secretary
I, Xxx X. Xxxxx, Assistant Secretary of the Trust, hereby certify that
on this 1st day of July, 2000, Xxxxxx X. Xxxxx is the duly elected Secretary of
the Trust and that the signature above is her genuine signature.
Core Trust (Delaware)
By:/s/ Xxx X. Xxxxx
Name: Xxx X. Xxxxx
Title: Assistant
Secretary
C-2
CUSTODIAL SERVICES AGREEMENT
EXHIBIT D
APPROVED SUBCUSTODIANS AND SECURITIES SYSTEMS
Union Bank of California
