exhibit g(1)
FORM OF CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of _______________, 2005 by and between PFPC
TRUST COMPANY, a limited purpose trust company incorporated under the laws of
Delaware ("PFPC Trust"), and CRM MUTUAL FUND TRUST, a Delaware statutory trust
(the "Fund").
WITNESSETH:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other
person authorized by the Fund to give Oral or Written Instructions
on behalf of the Fund. An Authorized Person's scope of authority may
be limited by setting forth such limitation in a written document
signed by both parties hereto.
(d) "Book-Entry System" means the Federal Reserve Treasury book-entry
system for United States and federal agency securities, its
successor or successors, and its
nominee or nominees and any book-entry system registered with the
SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Oral Instructions" mean oral instructions received by PFPC Trust
from an Authorized Person or from a person reasonably believed by
PFPC Trust to be an Authorized Person. PFPC Trust may, in its sole
discretion in each separate instance, consider and rely upon
instructions it receives from an Authorized Person via electronic
mail as Oral Instructions.
(g) "PFPC Trust" means PFPC Trust Company or a subsidiary or affiliate
of PFPC Trust Company.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(j) "Shares" mean the shares of beneficial interest of any series or
class of the Fund.
(k) "Property" means:
(i) any and all securities and other investment items which the
Fund may from time to time deposit, or cause to be deposited,
with PFPC Trust or which PFPC Trust may from time to time hold
for the Fund;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by PFPC Trust from time to time, from or on
behalf of the Fund.
(l) "Written Instructions" mean (i) written instructions signed by two
Authorized Persons (or persons reasonably believed by PFPC Trust to
be Authorized Persons) and received by PFPC Trust or (ii) trade
instructions transmitted by means of an
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electronic transaction reporting system which requires the use of a
password or other authorized identifier in order to gain access. The
instructions may be delivered electronically (with respect to
sub-item (ii) above) or by hand, mail or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund as set forth herein, on behalf of each of its
investment series (each, a "Series"), and PFPC Trust accepts such
appointment and agrees to furnish such services.
3. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with material applicable requirements of
the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to
be performed by PFPC Trust hereunder. Except as specifically set forth
herein, PFPC Trust assumes no responsibility for such compliance by the
Fund or any other entity.
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction or
Written Instruction it receives pursuant to this Agreement. PFPC
Trust may assume that any Oral Instructions or Written Instructions
received hereunder are not in any way inconsistent with the
provisions of organizational documents of the Fund or of any vote,
resolution or proceeding of the Fund's Board of Trustees or of the
Fund's shareholders, unless and until PFPC Trust receives Written
Instructions to the contrary.
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(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral Instructions
are given by PFPC Trust or its affiliates) so that PFPC Trust
receives the Written Instructions by the close of business on the
same day that such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by PFPC Trust
or differ from the Oral Instructions shall in no way invalidate the
transactions or enforceability of the transactions authorized by the
Oral Instructions or PFPC Trust's ability to rely upon such Oral
Instructions. If the Written Instructions differ from the Oral
Instructions, any actions that PFPC Trust takes or omits based on
the Oral Instructions before PFPC Trust has a reasonable opportunity
to act on the Written Instructions shall be valid and enforceable.
5. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
should or should not take, PFPC Trust may request directions or
advice, including Oral Instructions or Written Instructions, from
the Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should not
take, PFPC Trust may request advice from counsel of its own choosing
(who may be counsel for the Fund, the Fund's investment adviser or
PFPC Trust, at the option of PFPC Trust).
(c) Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Fund, and the advice it receives from counsel,
PFPC Trust shall be entitled to rely upon and follow the advice of
counsel. PFPC shall provide the Fund with prior written
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notice of its intention to follow advice of counsel that is
materially inconsistent with Oral or Written Instructions. PFPC
shall further provide the Fund with a copy of such advice of
counsel.
(d) Protection of PFPC Trust. PFPC Trust shall be indemnified by the
Fund and without liability for any action PFPC Trust takes or does
not take in reliance upon directions or advice or Oral Instructions
or Written Instructions PFPC Trust receives from or on behalf of the
Fund or from counsel and which PFPC Trust believes, acting
reasonably, to be consistent with those directions or advice or Oral
Instructions or Written Instructions. Nothing in this section shall
be construed so as to impose an obligation upon PFPC Trust (i) to
seek such directions or advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such directions or
advice or Oral Instructions or Written Instructions.
6. RECORDS; VISITS. The books and records pertaining to the Fund and any
Series, which are in the possession or under the control of PFPC Trust,
shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the 1940 Act and other applicable
securities laws, rules and regulations. The Fund and Authorized Persons
shall have access to such books and records at all times during PFPC
Trust's normal business hours. Upon the reasonable request of the Fund,
copies of any such books and records shall be provided by PFPC Trust to
the Fund or to an authorized representative of the Fund, at the Fund's
expense.
7. CONFIDENTIALITY. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a)
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any data or information that is competitively sensitive material, and not
generally known to the public, including, but not limited to, information
about product plans, marketing strategies, finances, operations, customer
relationships, customer profiles, customer lists, sales estimates,
business plans, and internal performance results relating to the past,
present or future business activities of the Fund or PFPC Trust, their
respective subsidiaries and affiliated companies; (b) any scientific or
technical information, design, process, procedure, formula, or improvement
that is commercially valuable and secret in the sense that its
confidentiality affords the Fund or PFPC Trust a competitive advantage
over its competitors; (c) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software, source
code, object code, flow charts, databases, inventions, know-how, and trade
secrets, whether or not patentable or copyrightable; and (d) anything
designated as confidential. Notwithstanding the foregoing, information
shall not be Confidential Information and shall not be subject to such
confidentiality obligations if: (a) it is already known to the receiving
party at the time it is first obtained, and was previously obtained
through an unrelated source and not subject to a duty of confidentiality;
(b) it is or becomes publicly known or available through no wrongful act
of the receiving party; (c) it is rightfully received from a third party
who, to the best of the receiving party's knowledge, is not under a duty
of confidentiality; (d) it is requested or required to be disclosed by the
receiving party pursuant to a court order, subpoena, governmental or
regulatory agency request or law (provided the receiving party will
provide the other party written notice of the same, to the extent such
notice is permitted); (e) release of such information by PFPC Trust is
necessary in connection with the provision of services under this
Agreement; (g) it is relevant to the defense of any claim
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or cause of action asserted against the receiving party; or (f) it has
been or is independently developed or obtained by the receiving party.
8. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the Fund's
independent public accountants and shall take all reasonable action to
make any requested information available to such accountants as reasonably
requested by the Fund.
9. PFPC SYSTEM. PFPC Trust shall retain title to and ownership of any and all
of its proprietary data bases, computer programs, screen formats, report
formats, interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise,
patents, copyrights, trade secrets, and other related legal rights
utilized by PFPC Trust in connection with the services provided by PFPC
Trust to the Fund.
10. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to
the extent appropriate equipment is available. In the event of equipment
failures, PFPC Trust shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions. PFPC Trust shall have
no liability with respect to the loss of data or service interruptions
caused by equipment failure provided such loss or interruption is not
caused by PFPC Trust's own willful misfeasance, bad faith, negligence or
reckless disregard of its duties or obligations under this Agreement.
11. COMPENSATION.
(a) As compensation for custody services rendered by PFPC Trust during the
term of this Agreement, the Fund, on behalf of each of the Series, will
pay to PFPC Trust a fee or fees
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as may be agreed to in writing from time to time by the Fund and PFPC
Trust. The Fund acknowledges that PFPC Trust may receive float benefits in
connection with maintaining certain accounts required to provide services
under this Agreement.
(b) The undersigned hereby represents and warrants to PFPC Trust that (i)
the terms of this Agreement, (ii) the fees and expenses associated with
this Agreement, and (iii) any benefits accruing to PFPC Trust or to the
adviser or sponsor to the Fund in connection with this Agreement,
including but not limited to any fee waivers, conversion cost
reimbursements, up front payments, signing payments or periodic payments
made or to be made by PFPC Trust to such adviser or sponsor or any
affiliate of the Fund relating to this Agreement have been fully disclosed
to the Board of Trustees of the Fund and that, if required by applicable
law, such Board of Trustees has approved or will approve the terms of this
Agreement, any such fees and expenses, and any such benefits.
12. INDEMNIFICATION. (a) The Fund, on behalf of each Series, agrees to
indemnify, defend and hold harmless PFPC Trust and its affiliates,
including their respective officers, directors, agents and employees from
all taxes, charges, expenses, assessments, claims and liabilities
(including reasonable attorneys' fees and disbursements and liabilities
arising under the Securities Laws and any state and foreign securities and
blue sky laws) arising directly or indirectly from any action or omission
to act which PFPC Trust takes in connection with the provision of services
to the Fund. Notwithstanding the foregoing, neither PFPC Trust, nor any of
its affiliates, nor any of their officers, directors, agents, or employees
shall be indemnified against any liability (or any expenses incident to
such liability) caused by PFPC Trust's or its affiliates' own willful
misfeasance, bad faith, negligence or reckless disregard in the
performance of PFPC Trust's activities under this
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Agreement or any material breach by PFPC Trust of this Agreement or any
other agreement between PFPC Trust and the Fund.
(b) PFPC Trust agrees to defend, indemnify and hold the Fund and its
officers, directors and employees harmless from all taxes, charges,
expenses, assessments, claims and liabilities (including reasonable
attorneys' fees and disbursements and liabilities arising under the
Securities Laws and any state and foreign securities and blue sky laws)
arising under the Securities Laws and any state and foreign securities and
blue sky laws) caused by the negligence, bad faith or willful misfeasance
of PFPC Trust in the performance of its duties hereunder. Notwithstanding
the foregoing, the Fund shall not be indemnified against any liability (or
any expenses incident to such liability) caused by the Fund's or the
Fund's other service providers' misfeasance, bad faith or negligence or
any material breach by the Fund of this Agreement or any other agreement
between PFPC Trust and the Fund.
(c) LEGAL ACTION AGAINST INDEMNIFICATION PARTY.
(i) Notice of the Action
A party that seeks indemnification under Section 12 must promptly give the
other party notice of any legal action. But a delay in notice does not
relieve an indemnifying party of any liability to an indemnified party,
except to the extent the indemnifying party shows that the delay
prejudiced the defense of the action.
(ii) Participating in or Assuming the Defense
The indemnifying party may participate in the defense at any time or it
may assume the defense by giving notice to the other party. After assuming
the defense, the indemnifying party:
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(1) must select an attorney that is satisfactory to the other party;
(2) is not liable to the pother party for any later attorney's fees
or for any other later expenses that the other party incurs, except
for reasonable investigation costs; (3) must not compromise or
settle the action without the other party's consent (but the other
party must not unreasonably withhold its consent); and (4) is not
liable for any compromise or settlement made without its consent.
(iii) Failing to Assume the Defense
If the indemnifying party fails to participate in or assume the defense
within 15 days after receiving notice of the action, the indemnifying
party is bound by any determination made in the action or by any
compromise or settlement made by the other party.
(d) The provisions of this Section 12 shall survive termination of this
Agreement.
13. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action hereunder on
behalf of the Fund or any Series except as specifically set forth
herein or as may be specifically agreed to by PFPC Trust and the
Fund in a written amendment hereto. PFPC Trust shall be obligated to
exercise care and diligence in the performance of its duties
hereunder and to act in good faith in performing services provided
for under this Agreement. PFPC Trust shall be liable only for any
damages arising out of PFPC Trust's failure to perform its duties
under this Agreement and only to the extent such damages arise out
of PFPC Trust's willful misfeasance, bad faith, negligence or
reckless disregard of its duties under this Agreement or any
material breach of this Agreement.
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(b) Notwithstanding anything in this Agreement to the contrary, (i) PFPC
Trust shall not be liable for losses, delays, failure, errors,
interruption or loss of data occurring directly or indirectly by
reason of circumstances beyond its reasonable control, including
without limitation acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire; flood;
sabotage; epidemics; labor disputes; civil commotion; interruption,
loss or malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of nature; or
non-performance by a third party; and (ii) PFPC Trust shall not be
under any duty or obligation to inquire into and shall not be liable
for the validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any instruction,
direction, notice, instrument or other information which PFPC Trust
reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC Trust nor its affiliates shall be liable for any consequential,
special or indirect losses or damages, whether or not the likelihood
of such losses or damages was known by PFPC Trust or its affiliates.
Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(d) Notwithstanding anything in this Agreement to the contrary (other
than as specifically provided in Section 14(h)(ii)(B)(4) and Section
14(h)(iii)(A) of this Agreement), the Fund shall be responsible for
all filings, tax returns and reports on any transactions undertaken
pursuant to this Agreement, or in respect of the Property or any
collections undertaken pursuant to this Agreement, which may be
requested by any relevant authority. In addition, the Fund shall be
responsible for
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the payment of all taxes and similar items (including without
limitation penalties and interest related thereto).
(e) Notwithstanding anything in this Agreement to the contrary, PFPC
Trust shall have no liability either for any error or omission of
any of its predecessors as servicer on behalf of the Fund or for any
failure to discover any such error or omission.
(f) The provisions of this Section 13 shall survive termination of this
Agreement.
14. DESCRIPTION OF SERVICES.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Series,
including cash received as a result of the distribution of Shares,
during the term of this Agreement. PFPC Trust will not be
responsible for any assets until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon Written
Instructions, shall open and maintain a separate account for each
separate Series of the Fund (each an "Account") and shall maintain
in the Account of a particular Series all cash and other assets
received from or for the Fund specifically designated to such
Account.
PFPC Trust shall make cash payments from or for the Account of a
Series only for:
(i) purchases of securities in the name of a Series, PFPC Trust,
PFPC Trust's nominee or a sub-custodian or nominee thereof as
provided in sub-section (j) and for which PFPC Trust has
received a copy of the broker's or dealer's confirmation or
payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund delivered to PFPC
Trust;
(iii) payment of, subject to Written Instructions, interest, taxes
(provided that tax which PFPC Trust considers is required to
be deducted or withheld "at
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source" will be governed by Section 14(h)(iii)(B) of this
Agreement), administration, accounting, distribution, advisory
and management fees which are to be borne by a Series;
(iv) payment to, subject to receipt of Written Instructions, the
Fund's transfer agent, as agent for the shareholders, of an
amount equal to the amount of dividends and distributions
stated in the Written Instructions to be distributed in cash
by the transfer agent to shareholders, or, in lieu of paying
the Fund's transfer agent, PFPC Trust may arrange for the
direct payment of cash dividends and distributions to
shareholders in accordance with procedures mutually agreed
upon from time to time by and among the Fund, PFPC Trust and
the Fund's transfer agent;
(v) payments, upon receipt of Written Instructions, in connection
with the conversion, exchange or surrender of securities owned
or subscribed to by the Fund and held by or delivered to PFPC
Trust;
(vi) payments of the amounts of dividends received with respect to
securities sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii)payments to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks, drafts
or other orders for the payment of money received as custodian for the
Accounts.
(c) Receipt of Securities; Subcustodians.
(i) PFPC Trust shall hold all securities received by it for the
Accounts in a separate account that physically segregates such
securities from those of any other persons, firms or
corporations, except for securities held in a Book-Entry
System or through a sub-custodian or depository. All such
securities shall be held or disposed of only upon Written
Instructions or otherwise pursuant to the terms of this
Agreement. PFPC Trust shall have no power or authority to
assign, hypothecate, pledge or otherwise dispose of any such
securities or investment, except upon the express terms of
this Agreement or upon Written Instructions authorizing the
transaction. In no case may any member of the Fund's Board of
Trustees, or any officer, employee or agent of the Fund
withdraw any securities.
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At PFPC Trust's own expense and for its own convenience, PFPC
Trust may enter into sub-custodian agreements with other banks
or trust companies to perform duties described in this
sub-section (c) with respect to domestic assets. Such bank or
trust company shall have aggregate capital, surplus and
undivided profits, according to its last published report, of
at least one million dollars ($1,000,000), if it is a
subsidiary or affiliate of PFPC Trust, or at least twenty
million dollars ($20,000,000) if such bank or trust company is
not a subsidiary or affiliate of PFPC Trust. In addition, such
bank or trust company must be qualified to act as custodian
and agree to comply with the relevant provisions of applicable
rules and regulations. Any such arrangement will not be
entered into without prior written notice to the Fund (or as
otherwise provided in the 1940 Act).
In addition, PFPC Trust may enter into arrangements with
sub-custodians with respect to services regarding foreign
assets. Any such arrangement will not be entered into without
prior written notice to the Fund (or as otherwise provided in
the 1940 Act).
PFPC Trust shall remain responsible for the acts and omissions
of any sub-custodian chosen by PFPC Trust under the terms of
this sub-section (c) to the same extent that PFPC Trust is
responsible for its own acts and omissions under this
Agreement.
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC Trust
shall:
(i) deliver any securities held for a Series against the receipt
of payment for the sale of such securities or otherwise in
accordance with standard market practice;
(ii) execute and deliver to such persons as may be designated in
such Oral Instructions or Written Instructions, proxies,
consents, authorizations, and any other instruments whereby
the authority of a Series as owner of any securities may be
exercised;
(iii) deliver any securities to the issuer thereof, or its agent,
when such securities are called, redeemed, retired or
otherwise become payable at the option of the holder; provided
that, in any such case, the cash or other consideration is to
be delivered to PFPC Trust;
(iv) deliver any securities held for a Series against receipt of
other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, tender offer,
merger, consolidation or recapitalization of any
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corporation, or the exercise of any conversion privilege;
(v) deliver any securities held for a Series to any protective
committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or
other instruments or documents as may be issued to it to
evidence such delivery;
(vi) make such transfer or exchanges of the assets of the Series
and take such other steps as shall be stated in said Oral
Instructions or Written Instructions to be for the purpose of
effectuating a duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Fund;
(vii) release securities belonging to a Series to any bank or trust
company for the purpose of a pledge or hypothecation to secure
any loan incurred by the Fund on behalf of that Series;
provided, however, that securities shall be released only upon
payment to PFPC Trust of the monies borrowed, except that in
cases where additional collateral is required to secure a
borrowing already made subject to proper prior authorization,
further securities may be released for that purpose; and repay
such loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes
evidencing the loan;
(viii)release and deliver securities owned by a Series in
connection with any repurchase agreement entered into by the
Fund on behalf of that Series, but only on receipt of payment
therefor; and pay out monies of the Fund in connection with
such repurchase agreements, but only upon the delivery of the
securities;
(ix) release and deliver or exchange securities owned by the Fund
in connection with any conversion of such securities, pursuant
to their terms, into other securities;
(x) release and deliver securities to a broker in connection with
the broker's custody of margin collateral relating to futures
and options transactions;
(xi) release and deliver securities owned by the Fund for the
purpose of redeeming in kind shares of the Fund upon delivery
thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by the Fund
for other purposes.
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PFPC Trust must also receive a certified resolution describing
the nature of the corporate purpose and the name and address
of the person(s) to whom delivery shall be made when such
action is pursuant to sub-paragraph d(xii).
(e) Use of Book-Entry System or Other Depository. PFPC Trust will
deposit in Book-Entry Systems and other depositories all securities
belonging to the Series eligible for deposit therein and will
utilize Book-Entry Systems and other depositories to the extent
possible in connection with settlements of purchases and sales of
securities by the Series, and deliveries and returns of securities
loaned, subject to repurchase agreements or used as collateral in
connection with borrowings. PFPC Trust shall continue to perform
such duties until it receives Written Instructions or Oral
Instructions authorizing contrary actions. Notwithstanding anything
in this Agreement to the contrary, PFPC Trust's use of a Book-Entry
System shall comply with the requirements of Rule 17f-4 under the
1940 Act.
PFPC Trust shall administer a Book-Entry System or other depository as
follows:
(i) With respect to securities of each Series which are maintained
in a Book-Entry System or another depository, the records of
PFPC Trust shall identify by book-entry or otherwise those
securities as belonging to each Series.
(ii) Assets of each Series deposited in a Book-Entry System or
another depository will (to the extent consistent with
applicable law and standard practice) at all times be
segregated from any assets and cash controlled by PFPC Trust
in other than a fiduciary or custodian capacity but may be
commingled with other assets held in such capacities.
PFPC Trust will provide the Fund with such reports on its own system
of internal control as the Fund may reasonably request from time to
time.
(f) Registration of Securities. All securities held for a Series which
are issued or
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issuable only in bearer form, except such securities maintained in
the Book-Entry System or in another depository, shall be held by
PFPC Trust in bearer form; all other securities maintained for a
Series may be registered in the name of the Fund on behalf of that
Series, PFPC Trust, a Book-Entry System, another depository, a
sub-custodian, or any duly appointed nominee of the Fund, PFPC
Trust, Book-Entry System, depository or sub-custodian. The Fund
reserves the right to instruct PFPC Trust as to the method of
registration and safekeeping of the securities of the Fund. The Fund
agrees to furnish to PFPC Trust appropriate instruments to enable
PFPC Trust to maintain or deliver in proper form for transfer, or to
register in the name of its nominee or in the name of the Book-Entry
System or in the name of another appropriate entity, any securities
which it may maintain for the Accounts. With respect to
uncertificated securities which are registered in the name of the
Fund or a Series (or a nominee thereof), PFPC Trust will reflect
such securities on its records based upon the holdings information
provided to it by the issuer of such securities, but notwithstanding
anything in this Agreement to the contrary PFPC Trust shall not be
obligated to safekeep such securities or to perform other duties
with respect to such securities other than to make payment for the
purchase of such securities upon receipt of Oral or Written
Instructions, accept in sale proceeds received by PFPC Trust upon
the sale of such securities of which PFPC Trust is informed pursuant
to Oral or Written Instructions, and accept in other distributions
received by PFPC Trust with respect to such securities or reflect on
its records any reinvested distributions with respect to such
securities of which it is informed by the issuer of the securities.
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(g) Voting and Other Action. Neither PFPC Trust nor its nominee shall
vote any of the securities held pursuant to this Agreement by or for
the account of a Series, except in accordance with Written
Instructions. PFPC Trust, directly or through the use of another
entity, shall execute in blank and promptly deliver all notices,
proxies and proxy soliciting materials received by PFPC Trust as
custodian of the Property to the registered holder of such
securities. If the registered holder is not the Fund on behalf of a
Series, then Written Instructions or Oral Instructions must
designate the person who owns such securities.
(h) Transactions Not Requiring Instructions. Notwithstanding anything in
this Agreement requiring instructions in order to take a particular
action, in the absence of a contrary Written Instruction, PFPC Trust
is authorized to take the following actions without the need for
instructions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of each Series, all
income, dividends, distributions, coupons, option
premiums, other payments and similar items, included or
to be included in the Property, and, in addition,
promptly advise each Series of such receipt and credit
such income to each Series' custodian account;
(B) endorse and deposit for collection, in the name of the
Fund, checks, drafts, or other orders for the payment of
money;
(C) receive and hold for the account of each Series all
securities received as a distribution on the Series'
securities as a result of a stock dividend, share
split-up or reorganization, recapitalization,
readjustment or other rearrangement or distribution of
rights or similar securities issued with respect to any
securities belonging to a Series and held by PFPC Trust
hereunder;
(D) present for payment and collect the amount payable upon
all securities which may mature or be called, redeemed,
retired or
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otherwise become payable (on a mandatory basis) on the
date such securities become payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of such
income and other payments and the endorsement for
collection of checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(1) for examination by a broker or dealer selling for
the account of a Series in accordance with street
delivery custom;
(2) for the exchange of interim receipts or temporary
securities for definitive securities; and
(3) for transfer of securities into the name of the
Fund on behalf of a Series or PFPC Trust or a
sub-custodian or a nominee of one of the
foregoing, or for exchange of securities for a
different number of bonds, certificates, or other
evidence, representing the same aggregate face
amount or number of units bearing the same
interest rate, maturity date and call provisions,
if any; provided that, in any such case, the new
securities are to be delivered to PFPC Trust.
(B) PFPC Trust shall:
(1) pay all income items held by it which call for
payment upon presentation and hold the cash
received by it upon such payment for the account
of each Series;
(2) collect interest and cash dividends received, with
notice to the Fund, to the account of each Series;
(3) hold for the account of each Series all stock
dividends, rights and similar securities issued
with respect to any securities held by PFPC Trust;
and
(4) subject to receipt of such documentation and
information as
19
PFPC Trust may request, execute as agent on behalf
of the Fund all necessary ownership certificates
required by a national governmental taxing
authority or under the laws of any U.S. state now
or hereafter in effect, inserting the Fund's name,
on behalf of a Series, on such certificate as the
owner of the securities covered thereby, to the
extent it may lawfully do so.
(iii) Other Matters.
(A) Subject to receipt of such documentation and information
as PFPC Trust may request, PFPC Trust will, in such
jurisdictions as PFPC Trust may agree from time to time,
seek to reclaim or obtain a reduction with respect to
any withholdings or other taxes relating to assets
maintained hereunder (provided that PFPC Trust will not
be liable for failure to obtain any particular relief in
a particular jurisdiction); and
(B) PFPC Trust is authorized to deduct or withhold any sum
in respect of tax which PFPC Trust considers is required
to be deducted or withheld "at source" by any relevant
law or practice.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions or Oral
Instructions establish and maintain segregated accounts on its
records for and on behalf of each Series. Such accounts may be
used to transfer cash and securities, including securities in
a Book-Entry System or other depository:
(A) for the purposes of compliance by the Fund with the
procedures required by a securities or option exchange,
providing such procedures comply with the 1940 Act and
any releases of the SEC relating to the maintenance of
segregated accounts by registered investment companies;
and
(B) upon receipt of Written Instructions, for other
purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such shareholders holding Shares
through XXX accounts, in accordance with the Fund's
prospectuses, the Internal Revenue Code of 1986, as amended
(including regulations promulgated thereunder), and with such
other procedures as are mutually agreed upon from time to time
by and among the Fund, PFPC Trust and the Fund's transfer
agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt
20
of Oral Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the securities,
including CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased and
accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the Series involved; and
(vii) the name of the person from whom or the broker through whom
the purchase was made. PFPC Trust shall upon receipt of
securities purchased by or for a Series (or otherwise in
accordance with standard market practice) pay out of the
monies held for the account of the Series the total amount
payable to the person from whom or the broker through whom the
purchase was made, provided that the same conforms to the
total amount payable as set forth in such Oral Instructions or
Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities upon
receipt of Oral
Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom the
sale was made;
(vii) the location to which the security must be delivered and
delivery deadline, if any; and
21
(viii) the Series involved.
PFPC Trust shall deliver the securities upon receipt of the total amount
payable to the Series upon such sale, provided that the total amount
payable is the same as was set forth in the Oral Instructions or Written
Instructions. Notwithstanding anything to the contrary in this Agreement,
PFPC Trust may accept payment in such form as is consistent with standard
industry practice and may deliver assets and arrange for payment in
accordance with standard market practice.
(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Fund the following reports:
(A) such periodic and special reports as the Fund may
reasonably request;
(B) a monthly statement summarizing all transactions and
entries for the account of each Series, listing each
series security belonging to each Series (with the
corresponding security identification number) held at
the end of such month and stating the cash balance of
each Series at the end of such month.
(C) the reports required to be furnished to the Fund
pursuant to Rule 17f-4 of the 1940 Act; and
(D) such other information as may be agreed upon from time
to time between the Fund and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any proxy
statement, proxy material, notice of a call or conversion or
similar communication received by it as custodian of the
Property. PFPC Trust shall be under no other obligation to
inform the Fund as to such actions or events. For
clarification, upon termination of this Agreement PFPC Trust
shall have no responsibility to transmit such material or to
inform the Fund or any
22
other person of such actions or events.
(m) Crediting of Accounts. PFPC Trust may in its sole discretion credit
an Account with respect to income, dividends, distributions,
coupons, option premiums, other payments or similar items prior to
PFPC Trust's actual receipt thereof, and in addition PFPC Trust may
in its sole discretion credit or debit the assets in an Account on a
contractual settlement date with respect to any sale, exchange or
purchase applicable to the Account; provided that nothing herein or
otherwise shall require PFPC Trust to make any advances or to credit
any amounts until PFPC Trust's actual receipt thereof. If PFPC Trust
credits an Account with respect to (a) income, dividends,
distributions, coupons, option premiums, other payments or similar
items on a contractual payment date or otherwise in advance of PFPC
Trust's actual receipt of the amount due, (b) the proceeds of any
sale or other disposition of assets on the contractual settlement
date or otherwise in advance of PFPC Trust's actual receipt of the
amount due or (c) provisional crediting of any amounts due, and (i)
PFPC Trust is subsequently unable to collect full and final payment
for the amounts so credited within a reasonable time period using
reasonable efforts or (ii) pursuant to standard industry practice,
law or regulation PFPC Trust is required to repay to a third party
such amounts so credited, or if any Property has been incorrectly
credited, PFPC Trust shall have the absolute right in its sole
discretion without demand to reverse any such credit or payment, to
debit or deduct the amount of such credit or payment from the
Account, and to otherwise pursue recovery of any such amounts so
credited from the Fund. The Fund hereby grants to PFPC Trust and to
each sub-custodian
23
utilized by PFPC Trust in connection with providing services to the
Fund a first priority contractual possessory security interest in
and a right of setoff against the assets maintained in an Account
hereunder in the amount necessary to secure the return and payment
to PFPC Trust and to each such sub-custodian of any advance or
credit made by PFPC Trust and/or by such sub-custodian (including
charges related thereto) to such Account. Notwithstanding anything
in this Agreement to the contrary, PFPC Trust shall be entitled to
assign any rights it has under this sub-section (m) to any
sub-custodian utilized by PFPC Trust in connection with providing
services to the Fund which sub-custodian makes any credits or
advances with respect to the Fund.
(n) Collections. All collections of monies or other property in respect,
or which are to become part, of the Property (but not the
safekeeping thereof upon receipt by PFPC Trust) shall be at the sole
risk of the Fund. If payment is not received by PFPC Trust within a
reasonable time after proper demands have been made, PFPC Trust
shall notify the Fund in writing, including copies of all demand
letters, any written responses and memoranda of all oral responses
and shall await instructions from the Fund. PFPC Trust shall not be
obliged to take legal action for collection unless and until
reasonably indemnified to its satisfaction. PFPC Trust shall also
notify the Fund as soon as reasonably practicable whenever income
due on securities is not collected in due course and shall provide
the Fund with periodic status reports of such income collected after
a reasonable time.
(o) Excess Cash Sweep. PFPC Trust will, consistent with applicable law,
sweep any net excess cash balances daily into an investment vehicle
or other instrument
24
designated in writing by the Fund, so long as the investment vehicle
or instrument is acceptable to PFPC Trust, subject to a fee, paid to
PFPC Trust for such service, to be agreed between the parties. Such
investment vehicle or instrument may be offered by an affiliate of
PFPC Trust or by a PFPC Trust client and PFPC Trust may receive
compensation therefrom.
(p) Foreign Exchange. PFPC Trust and/or sub-custodians may enter into or
arrange foreign exchange transactions (at such rates as they may
consider appropriate) in order to facilitate transactions under this
Agreement, and such entities and/or their affiliates may receive
compensation in connection with such foreign exchange transactions.
15. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the date first written above
and unless terminated pursuant to its terms shall continue for a
period of one (1) year (the "Initial Term"). Upon the expiration of
the Initial Term, this Agreement will automatically renew for
successive terms of two (2) years (the "Renewal Terms"). Either
party may terminate this Agreement effective at the end of the
Initial Term, or any Renewal Term by providing written notice to the
other party of its intent not to renew. Notice of termination must
be received not less than thirty (30) days prior to the expiration
of the Initial Term or the then current Renewal Term, as applicable.
(b) In the event this Agreement is terminated (pending appointment of a
successor to PFPC Trust or vote of the shareholders of the Fund to
dissolve or to function without a custodian of its cash, securities
or other property), PFPC Trust shall not
25
deliver cash, securities or other property of the Series to the
Fund. It may deliver them to a bank or trust company of PFPC Trust's
choice, having aggregate capital, surplus and undivided profits, as
shown by its last published report, of not less than twenty million
dollars ($20,000,000), as a custodian for the Fund to be held under
terms similar to those of this Agreement. PFPC Trust shall not be
required to make any delivery or payment of assets upon termination
until full payment shall have been made to PFPC Trust of all of its
fees, compensation, costs and expenses (including without limitation
fees and expenses associated with deconversion or conversion to
another service provider and other trailing expenses incurred by
PFPC Trust). PFPC Trust shall have a security interest in and shall
have a right of setoff against the Property as security for the
payment of such fees, compensation, costs and expenses.
(c) If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other
party (the "Non-Defaulting Party") may give written notice thereof
to the Defaulting Party, and if such material breach shall not have
been remedied within thirty (30) days after such written notice is
given, then the Non-Defaulting Party may terminate this Agreement by
giving thirty (30) days written notice of such termination to the
Defaulting Party. In all cases, termination by the Non-Defaulting
Party shall not constitute a waiver by the Non-Defaulting Party of
any other rights it might have under this Agreement or otherwise
against the Defaulting Party.
16. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 0000 Xxxxxxx
Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxx
Xxxxxxxx; (b) if to the Fund, at
26
000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx
Xxxx; or (c) if to neither of the foregoing, at such other address as
shall have been given by like notice to the sender of any such notice or
other communication by the other party. If notice is sent by confirming
electronic delivery, hand or facsimile sending device, it shall be deemed
to have been given immediately. If notice is sent by first-class mail, it
shall be deemed to have been given five days after it has been mailed. If
notice is sent by messenger, it shall be deemed to have been given on the
day it is delivered.
17. AMENDMENTS. This Agreement, or any term hereof, may be changed or waived
only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. DELEGATION; ASSIGNMENT. PFPC Trust may assign its rights and delegate its
duties hereunder to any affiliate of PFPC Trust or of The PNC Financial
Services Group, Inc., provided that PFPC Trust gives the Fund 30 days'
prior written notice of such assignment or delegation.
19. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
20. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof,
provided that the parties may embody in one or more separate
documents their agreement, if any, with respect to delegated duties.
27
(b) No Representations or Warranties. Except as expressly provided in
this Agreement, PFPC Trust hereby disclaims all representations and
warranties, express or implied, made to the Fund or any other
person, including, without limitation, any warranties regarding
quality, suitability, merchantability, fitness for a particular
purpose or otherwise (irrespective of any course of dealing, custom
or usage of trade), of any services or any goods provided incidental
to services provided under this Agreement. PFPC Trust disclaims any
warranty of title or non-infringement except as otherwise set forth
in this Agreement.
(c) No Changes that Materially Affect Obligations. The Fund will notify
PFPC Trust of any changes to its registration statement or policies
that would likely affect the obligations or responsibilities of PFPC
Trust hereunder. Notwithstanding anything in this Agreement to the
contrary, the Fund agrees that PFPC Trust shall not be bound by any
changes to the Fund's registration statement or changes in policies
which, in either case, would affect materially the obligations or
responsibilities of PFPC Trust hereunder unless PFPC Trust shall
have accepted such modifications or changes, which acceptance shall
not be unreasonably withheld or delayed. PFPC Trust will reasonably
cooperate with the Fund in good faith to address any such
modifications or changes that increase PFPC Trust's work burden or
that pose operational difficulties.
(d) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect.
(e) Information. The Fund will provide such information and
documentation as PFPC
28
Trust may reasonably request in connection with services provided by
PFPC Trust to the Fund.
(f) Governing Law. This Agreement shall be deemed to be a contract made
in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(g) Partial Invalidity. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
(h) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(i) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.
(j) The Fund and PFPC agree that the obligations of the Fund under the
Agreement shall not be binding upon any of the trustees,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of the Fund individually, but are binding only
upon the assets and property of the Fund (or applicable series
thereof), as provided in the Declaration of Trust. The execution and
delivery of this Agreement have been authorized by the trustees of
the Fund, and signed by an authorized officer of the Fund, acting as
such, and neither such authorization by such trustees nor such
execution and delivery by such officers shall be deemed to have been
made by any of them or any shareholder of the Fund individually or
to impose any liability on any of them or any shareholder of the
Fund personally, but
29
shall bind only the assets and property of the Fund (or applicable
series thereof), as provided in the Declaration of Trust.1
(k) Customer Identification Program Notice. To help the U.S. government
fight the funding of terrorism and money laundering activities, U.S.
Federal law requires each financial institution to obtain, verify,
and record certain information that identifies each person who
initially opens an account with that financial institution on or
after October 1, 2003. Consistent with this requirement, PFPC Trust
may request (or may have already requested) the Fund's name, address
and taxpayer identification number or other government-issued
identification number, and, if such party is a natural person, that
party's date of birth. PFPC Trust may also ask (and may have already
asked) for additional identifying information, and PFPC Trust may
take steps (and may have already taken steps) to verify the
authenticity and accuracy of these data elements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By: ____________________
Title: _________________
CRM MUTUAL FUND TRUST
By: Xxxxxx X. XxXxxxx
Title: CEO
30
