ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of _________, 2003 by and between PFPC Inc., a
Massachusetts corporation ("PFPC"), and FIRST TRUST/FOUR CORNERS SENIOR FLOATING
RATE INCOME FUND, a Massachusetts business trust (the "Fund").
W I T N E S S E T H :
WHEREAS, the Fund is registered as a closed-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to provide administration and
accounting services and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the 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 duly authorized by the Fund to give Oral Instructions and
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) "Shares" mean the shares of beneficial interest of the Fund.
(e) "Oral Instructions" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be
an Authorized Person. PFPC may, in its sole discretion in each
-1-
separate instance, consider and rely upon instructions it receives
from an Authorized Person via electronic mail as Oral Instructions.
(f) "SEC" means the Securities and Exchange Commission.
(g) "Securities Laws" means the 1933 Act, the 1934 Act and the 1940 Act.
(h) "Written Instructions" mean (i) written instructions signed by an
Authorized Person and received by PFPC or (ii) trade instructions
transmitted (and received by PFPC) by means of an electronic
transaction reporting system access to which requires use of a
password or other authorized identifier. The instructions may be
delivered by hand, mail, tested telegram, cable, telex or facsimile
sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to provide administration and
accounting services to the Fund, in accordance with the terms set forth in
this Agreement. PFPC accepts such appointment and agrees to furnish such
services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC with the following:
(a) at PFPC's request, certified or authenticated copies of the
resolutions of the Fund's board of directors, approving the
appointment of PFPC or its affiliates to provide services to the
Fund and approving this Agreement;
(b) a copy of Fund's most recent effective registration statement;
(c) a copy of the Fund's advisory agreement or agreements;
(d) a copy of the distribution/underwriting agreement with respect to
each class of Interests representing an interest in the Fund;
(e) a copy of each additional administration agreement with respect to
the Fund;
(f) a copy of each distribution and/or shareholder servicing plan and
agreement made in respect of the Fund; and
(g) copies (certified or authenticated, where applicable) of any and all
amendments or supplements to the foregoing.
-2-
4. COMPLIANCE WITH RULES AND REGULATIONS.
PFPC undertakes to comply with all applicable requirements of the
Securities Laws, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be performed
by PFPC hereunder. Except as specifically set forth herein, PFPC assumes
no responsibility for such compliance by the Fund or other entity.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act only
upon Oral Instructions or Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instruction or Written
Instruction it receives from an Authorized Person (or from a person
reasonably believed by PFPC to be an Authorized Person) pursuant to
this Agreement. PFPC may assume that any Oral Instruction or Written
Instruction received hereunder is not in any way inconsistent with
the provisions of organizational documents or this Agreement or of
any vote, resolution or proceeding of the Fund's board of directors
or of the Fund's shareholders, unless and until PFPC receives
Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions confirming
Oral Instructions (except where such Oral Instructions are given by
PFPC or its affiliates) so that PFPC 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 or differ from the Oral
Instructions shall in no way invalidate the transactions or
-3-
enforceability of the transactions authorized by the Oral
Instructions or PFPC's ability to rely upon such Oral Instructions.
6. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PFPC is in doubt as to any action it should
or should not take, PFPC may request directions or advice, including
Oral Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any question of
law pertaining to any action it should or should not take, PFPC may
request advice from counsel of its own choosing (who may be counsel
for the Fund, the Fund's investment adviser or PFPC, at the option
of PFPC).
(c) Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC receives
from the Fund and the advice PFPC receives from counsel, PFPC may
rely upon and follow the advice of counsel.
(d) Protection of PFPC. PFPC shall be indemnified by the Fund and
without liability for any action PFPC takes or does not take in
reliance upon directions or advice or Oral Instructions or Written
Instructions PFPC receives from or on behalf of the Fund or from
counsel and which PFPC believes, in good faith, to be consistent
with those directions or advice and Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as to
impose an obligation upon PFPC (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.
-4-
7. RECORDS; VISITS.
(a) The books and records pertaining to the Fund which are in the
possession or under the control of PFPC 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's normal business
hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by PFPC to the Fund or to an
Authorized Person, at the Fund's expense.
(b) PFPC shall keep the following records:
(i) all books and records with respect to the Fund's books of
account;
(ii) records of the Fund's securities transactions; and
(iii) all other books and records as PFPC is required to maintain
pursuant to Rule 31a-1 of the 1940 Act in connection with the
services provided hereunder.
8. CONFIDENTIALITY. Each party shall keep confidential any information
relating to the other party's business ("Confidential Information").
Confidential Information shall include (a) any data or information that is
competitively sensitive material, and not generally known to the public,
including, but not limited to, information about product plans, marketing
strategies, finances, operations, customer relationships, customer
profiles, customer lists, sales estimates, business plans, and internal
performance results relating to the past, present or future business
activities of the Fund or PFPC, their respective subsidiaries and
affiliated companies and the customers, clients and suppliers of any of
them; (b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and
-5-
secret in the sense that its confidentiality affords the Fund or PFPC a
competitive advantage over its competitors; (c) all confidential or
proprietary concepts, documentation, reports, data, specifications,
computer software, source code, object code, flow charts, databases,
inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as confidential.
Notwithstanding the foregoing, information shall not be subject to such
confidentiality obligations if: (a) release of such information is
necessary or desirable in connection with PFPC's provision of services
under this Agreement; (b) it is already known to the receiving party at
the time it is obtained; (c) it is or becomes publicly known or available
through no wrongful act of the receiving party; (d) 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; (e) it is released by
the protected party to a third party without restriction; (f) it is
required to be disclosed by the receiving party pursuant to a requirement
of a court order, subpoena, governmental or regulatory agency or law
(provided the receiving party will provide the other party written notice
of such requirement, to the extent such notice is permitted); (g) it is
relevant to the defense of any claim or cause of action asserted against
the receiving party; or (h) it has been or is independently developed or
obtained by the receiving party.
9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses, fiscal
year summaries, and other audit-related schedules with respect to the
Fund. PFPC shall take all reasonable action in the performance of its
duties under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their opinion, as
required by the Fund.
-6-
10. PFPC SYSTEM. PFPC shall retain title to and ownership of any and all data
bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable
or copyrightable matters, concepts, expertise, patents, copyrights, trade
secrets, and other related legal rights utilized by PFPC in connection
with the services provided by PFPC to the Fund.
11. DISASTER RECOVERY. PFPC 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 shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PFPC 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's own willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
obligations under this Agreement.
12. COMPENSATION. As compensation for services rendered by PFPC during the
term of this Agreement, the Fund will pay to PFPC a fee or fees as may be
agreed to in writing by the Fund and PFPC.
13. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold harmless PFPC and its
affiliates, including their respective officers, directors, agents
and employees, from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, reasonable
attorneys' fees and disbursements and liabilities arising under the
Securities Laws and any state and foreign securities and blue sky
-7-
laws) ("Claims") arising directly or indirectly from any action or
omission to act which PFPC takes in connection with the provision of
services to the Fund. Neither PFPC, nor any of its affiliates, shall
be indemnified against any liability (or any expenses incident to
such liability) caused by PFPC's or its affiliates' own willful
misfeasance, bad faith, negligence or reckless disregard in the
performance of PFPC's activities under this Agreement. The
provisions of this Section 13 shall survive termination of this
Agreement.
(b) Indemnification of the Fund. PFPC agrees to defend, indemnify and
hold the Fund and its officers, directors and employees harmless
from any and all Claims arising directly or indirectly from the
negligence, bad faith or willful misfeasance of PFPC in the
performance of its duties hereunder. Notwithstanding the foregoing,
the Fund shall not be indemnified against any Claim caused by the
Fund's or the Fund's other service providers' willful misfeasance,
bad faith or negligence.
(c) Indemnification Procedure.
(i) Notice of the Action. A party that seeks indemnification under
this Agreement must promptly give the other party notice of
any legal action; provided, however, that 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
-8-
assume the defense by giving notice to the other party. After
assuming the defense, the indemnifying party:
(1) must select an attorney that is satisfactory to the other
party;
(2) is not liable to the other 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.
14. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action hereunder on behalf
of the Fund except as specifically set forth herein or as may be
specifically agreed to by PFPC and the Fund in a written amendment
hereto. PFPC 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 shall be
liable only for any damages arising out of PFPC's failure to perform
its duties under this Agreement to the extent such damages arise out
of PFPC's willful misfeasance, bad faith, negligence or reckless
disregard of such duties.
(b) Notwithstanding anything in this Agreement to the contrary, (i) PFPC
-9-
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 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
reasonably believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC 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 or its affiliates.
(d) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(e) The provisions of this Section 14 shall survive termination of this
Agreement.
15. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following accounting services with respect to the
Fund:
(i) Journalize investment, capital share and income and expense
activities;
(ii) Verify investment buy/sell trade tickets when received from the
investment adviser for the Fund (the "Adviser") and transmit
trades to the Fund's custodian (the "Custodian") for proper
settlement;
-10-
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of the Fund with the
Custodian, and provide the Adviser with the beginning cash balance
available for investment purposes;
(vi) Update the cash availability throughout the day as required by the
Adviser;
(vii) Post to and prepare the Statement of Assets and Liabilities and
the Statement of Operations;
(viii) Calculate various contractual expenses (e.g., advisory and custody
fees);
(ix) Monitor the expense accruals and notify an officer of the Fund of
any proposed adjustments;
(x) Control all disbursements and authorize such disbursements upon
Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Obtain security market quotes from independent pricing services
approved by the Adviser, or if such quotes are unavailable, then
obtain such prices from the Adviser, and in either case calculate
the market value of the Fund's Investments;
(xiv) Transmit or mail a copy of the daily portfolio valuation to the
Adviser;
(xv) Compute net asset value; and
(xvi) As appropriate, compute yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average
dollar-weighted maturity.
16. DESCRIPTION OF ADMINISTRATION SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following administration services with respect to
the Fund:
(i) Prepare quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
-11-
(iii) Supply various normal and customary Fund statistical data as
requested on an ongoing basis;
(iv) Prepare for execution and file the Fund's Federal and state tax
returns;
(v) Monitor the Fund's status as a regulated investment company under
Sub-chapter M of the Internal Revenue Code of 1986, as amended;
(vi) Prepare the Fund's annual and semi-annual shareholder reports;
(vii) Prepare and coordinate with the Fund's counsel post-effective
amendments to the Fund's registration statement on Form N-2, as
needed, and coordinate with the Fund's financial printer to file
such amendments; and prepare and file semi-annual reports on Form
N-SAR, subject to the review of Fund management;
(viii) Assist in the preparation of notices of annual or special meetings
of shareholders and proxy materials relating to such meetings;
(ix) Assist in obtaining the fidelity bond and directors' and
officers'/errors and omissions insurance policies for the Fund in
accordance with the requirements of Rule 17g-1 and 17d-1(d)(7)
under the 1940 Act as such bond and policies are approved by the
Fund's board of directors;
(x) Monitor the Fund's assets to assure adequate fidelity bond
coverage is maintained;
(xi) Draft agendas, resolutions and materials for quarterly and special
board meetings and draft written consents of the board;
(xii) Coordinate the preparation, assembly and mailing of board
materials;
(xiii) Attend board meetings and draft minutes thereof;
(xiv) Maintain a calendar to assure compliance with various SEC filing
and board approval deadlines;
(xv) Assist the Fund in the handling of SEC examinations and responses
thereto;
(xvi) If the chief executive officer or chief financial officer of the
Fund is required to provide a certification as part of the Fund's
Form N-SAR or Form N-CSR filing pursuant to regulations
promulgated by the Securities and Exchange Commission under
Section 302 of the Xxxxxxxx-Xxxxx Act of 2002, PFPC will provide
(to such person or entity as agreed between the Fund and PFPC) a
sub-certification in support of certain matters set forth in the
aforementioned certification, such sub-certification to be in such
form and relating to such matters as agreed between the Fund and
PFPC from time to time. PFPC shall be required to provide the
-12-
sub-certification only during the term of the Agreement and only
if it receives such cooperation as it may request to perform its
investigations with respect to the sub-certification. For clarity,
the sub-certification is not itself a certification under the
Xxxxxxxx-Xxxxx Act of 2002 or under any other regulatory
requirement; and
(xvii) Coordinate contractual relationships and communications between
the Fund and its contractual service providers.
17. DURATION AND TERMINATION.
(a) This Agreement shall be effective on the date first written above
and shall continue until June 12, 2008 (the "Initial Term").
(b) Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of one (1) year ("Renewal
Terms") each, unless the Fund or PFPC provides written notice to the
other of its intent not to renew. Such notice must be received not
less than ninety (90) days prior to the expiration of the Initial
Term or the then current Renewal Term.
(c) In the event a termination notice is given by the Fund, all expenses
associated with movement of records and materials and conversion
thereof to a successor accounting and administration services
agent(s) (and any other service provider(s)), and all trailing
expenses incurred by PFPC, will be borne by the Fund.
(d) 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
-13-
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.
18. NOTICES. Notices shall be addressed (a) if to PFPC, at 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: President; (b) if to the
Fund, at 0000 Xxxxxxxxxxx Xxxx, Xxxxx, XX 00000, Attention: W. Xxxxx
Xxxxxxx 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
telegram, cable, telex 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 three 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.
19. AMENDMENTS. This Agreement, or any term thereof, may be changed or waived
only by written amendment, signed by the party against whom enforcement of
such change or waiver is sought.
20. ASSIGNMENT. PFPC may assign its rights hereunder to any majority-owned
direct or indirect subsidiary of PFPC or of The PNC Financial Services
Group, Inc., provided that PFPC gives the Fund 30 days prior written
notice of such assignment.
21. 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.
22. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
-14-
23. MISCELLANEOUS.
(a) Notwithstanding anything in this Agreement to the contrary, the Fund
agrees not to make any modifications to its registration statement
or adopt any policies which would affect materially the obligations
or responsibilities of PFPC hereunder without the prior written
approval of PFPC, which approval shall not be unreasonably withheld
or delayed.
(b) Except as expressly provided in this Agreement, PFPC 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 disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
(c) 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. 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. Notwithstanding any provision
hereof, the services of PFPC are not, nor shall they be, construed
as constituting legal advice or the provision of legal services for
or on behalf of the Fund or any other person.
-15-
(d) 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.
(e) 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. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
(f) The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such party.
(g) The Fund and PFPC agree that the obligations of the Fund under the
Agreement shall not be binding upon any of the directors,
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 directors of
the Fund, and signed by an authorized officer of the Fund, acting as
such, and neither such authorization by such directors nor such
execution and delivery by such officer 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 shall bind only the assets and property of the
Fund (or applicable series thereof), as provided in the Articles of
Incorporation or Declaration of Trust.
-16-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By:_______________________________________
Title:____________________________________
FIRST TRUST/FOUR CORNERS SENIOR FLOATING
RATE INCOME FUND
By:_______________________________________
Title:____________________________________
-17-
