CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of April 30, 1999 by and between PFPC TRUST
COMPANY ("PFPC Trust"), and THE BERWYN FUNDS, a Delaware business trust (the
"Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Definitions. As Used in This Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other
person authorized by the Fund to give Oral or Written Instructions
on behalf of the Fund and listed on the Authorized Persons Appendix
attached hereto or any amendment thereto as may be received by PFPC
Trust. An Authorized Person's scope of authority may be limited by
the Fund by setting forth such limitation in the Authorized Persons
Appendix.
(d) "Book-Entry System" means Federal Reserve Treasury book-entry
system for United States and federal agency securities, its
successor or successors, and its nominee or nominees and any
book-entry system maintained by an exchange registered with the SEC
under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Change of Control" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parent(s).
(g) "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.
(h) "PFPC Trust" means PFPC Trust Company or a subsidiary or affiliate
of PFPC Trust Company.
(i) "SEC" means the Securities and Exchange Commission.
(j) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act
and the CEA.
(k) "Shares" mean the shares of beneficial interest of any series or
class of the Fund.
(l) "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.
(m) "Written Instructions" mean written instructions signed by two
Authorized Persons and received by PFPC Trust. The instructions may
be delivered by hand, mail, tested telegram, cable, telex or
facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund, on behalf of each of its investment portfolios
(each, a "Portfolio"), and PFPC Trust accepts such appointment and agrees
to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
provide PFPC Trust with the following: (a) certified or authenticated
copies of the resolutions of the Fund's Board of Trustees, approving the
appointment of PFPC Trust or its affiliates to provide services;
(b) a copy of the Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreements;
(d) a copy of the distribution agreement with respect to each class of
Shares;
(e) a copy of each Portfolio's administration agreement;
(f) copies of any shareholder servicing agreements made in respect of
the Fund or a Portfolio; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. Compliance with Laws.
PFPC Trust undertakes to comply with material applicable requirements of
the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to
be performed by PFPC Trust hereunder. Except as specifically set forth
herein, PFPC Trust assumes no responsibility for such compliance by the
Fund or any Portfolio.
5. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instructions
or Written Instructions it receives from an Authorized Person (or
from a person reasonably believed by PFPC Trust to be an
Authorized Person) pursuant to this Agreement. PFPC Trust may
assume that any Oral Instructions or Written Instructions
received hereunder are not in any way inconsistent with the
provisions of organizational documents of the Fund or of any
vote, resolution or proceeding of the Fund's Board of Trustees or
of the Fund's shareholders, unless and until PFPC Trust receives
Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral Instructions
are given by PFPC Trust or its affiliates) so that PFPC Trust
receives the Written Instructions by the close of business on the
same day that such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by PFPC
Trust shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral
Instructions. Where Oral Instructions or Written Instructions
reasonably appear to have been received from an Authorized
Person, PFPC Trust shall incur no liability to the Fund in acting
upon such Oral Instructions or Written Instructions provided that
PFPC Trust's actions comply with the other provisions of this
Agreement.
6. Right to Receive Advice.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
should or should not take, PFPC Trust may request directions or
advice, including Oral Instructions 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 at its own cost from such
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, 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. In the event PFPC Trust so relies
on the advice of counsel, PFPC Trust remains liable for any
action or omission on the part of PFPC Trust which constitutes
willful misfeasance, bad faith, negligence or reckless disregard
by PFPC Trust of any duties, obligations or responsibilities set
forth in this Agreement.
(d) Protection of PFPC Trust. PFPC Trust shall be protected in any act
ion it takes or does not take in reliance upon directions, advice or
Oral Instructions or Written Instructions it receives from the
Fund or from counsel and which PFPC Trust believes, in good
faith, to be consistent with those directions, 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, advice or Oral Instructions or
Written Instructions, or (ii) to act in accordance with such
directions, advice or Oral Instructions or Written Instructions
unless, under the terms of other provisions of this Agreement,
the same is a condition of PFPC Trust's properly taking or not
taking such action. Nothing in this subsection shall excuse
PFPC Trust when an action or omission on the part of PFPC Trust
constitutes willful misfeasance, bad faith, negligence or
reckless disregard by PFPC Trust of any duties, obligations or
responsibilities set forth in this Agreement.
7. Records; Visits. The books and records pertaining to the Fund and any
Portfolio, which are in the possession or under the control of PFPC
Trust, shall be the property of the Fund. Such books and records shall
be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund and
Authorized Persons shall have access to such books and records at all
times during PFPC Trust's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be
provided by PFPC Trust to the Fund or to an authorized representative
of the Fund, at the Fund's expense.
8. Confidentiality. PFPC Trust agrees to keep confidential all records of
the Fund and information relating to the Fund and its shareholders,
unless the release of such records or information is otherwise
consented to, in writing, by the Fund. The Fund agrees that such
consent shall not be unreasonably withheld and may not be withheld
where PFPC Trust may be exposed to civil or criminal contempt
proceedings or when PFPC Trust is required to divulge such information
or records to duly constituted authorities.
9. Cooperation with Accountants. PFPC Trust shall cooperate with the Fund's
independent public accountants and shall take all reasonable action to
make any requested information available to such accountants as reasonably
requested by the Fund.
10. 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. Year 2000 Readiness Disclosure. PFPC Trust (a) has reviewed its
business and operations as they relate to the services provided
hereunder, (b) has developed or is developing a program to remediate or
replace computer applications and systems, and (c) has developed a
testing plan to test the remediation or replacement of computer
applications/systems, in each case, to address on a timely basis the
risk that certain computer applications/systems used by PFPC Trust may
be unable to recognize and perform date sensitive functions involving
dates prior to, including and after December 31, 1999, including dates
such as February 29, 2000 (the "Year 2000 Challenge"). To the best of
PFPC Trust's knowledge and belief, the reasonably foreseeable
consequences of the Year 2000 Challenge will not adversely effect PFPC
Trust's ability to perform its duties and obligations under this
Agreement.
12. Compensation. As compensation for custody services rendered by PFPC Trust
during the term of this Agreement, the Fund, on behalf of each of the
Portfolios, will pay to PFPC Trust a fee or fees as may be agreed to in
writing from time to time by the Fund and PFPC Trust.
13. Indemnification. The Fund, on behalf of each Portfolio, agrees to
indemnify and hold harmless PFPC Trust from all taxes, charges,
expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the Securities Laws and any state
or foreign securities or blue sky laws, and amendments thereto, and
expenses, including (without limitation) attorneys' fees and
disbursements), arising directly or indirectly from any action or
omission to act which PFPC Trust takes (i) in connection with providing
its service hereunder, (ii) at the request or on the direction of or in
reliance on the advice of the Fund or (iii) upon Oral Instructions or
Written Instructions. PFPC Trust shall not be indemnified against any
liability (or any expenses incident to such liability) arising out of
PFPC Trust's willful misfeasance, bad faith, negligence or reckless
disregard of its duties under this Agreement.
14. Responsibility of PFPC Trust.
(a) PFPC Trust shall be under no duty to take any action on behalf of
the Fund or any Portfolio except as specifically set forth herein
or as may be specifically agreed to by PFPC Trust in writing.
PFPC Trust shall be obligated to exercise care and diligence in
the performance of its duties hereunder, to act in good faith and
to use its best efforts, within reasonable limits, in performing
services provided for under this Agreement. PFPC Trust shall be
liable for any damages arising out of PFPC Trust's failure to
perform its duties under this Agreement to the extent such
damages arise out of PFPC Trust's willful misfeasance, bad faith,
negligence or reckless disregard of its duties under this
Agreement.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, PFPC Trust shall not be under any
duty or obligation to inquire into and shall not be liable for
(i) the validity or invalidity or authority or lack thereof of
any Oral Instruction or Written Instruction, notice or other
instrument which PFPC Trust reasonably believes to be genuine; or
(ii) subject to Sections 10 and 11, delays, errors, loss of data
or other losses occurring by reason of circumstances beyond PFPC
Trust's control, including acts of civil or military authority,
national emergencies, fire, flood, catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC Trust nor its affiliates shall be liable to the Fund or to any
Portfolio for any consequential, special or indirect losses or
damages which the Fund may incur or suffer, whether or not the
likelihood of such losses or damages was known by PFPC Trust or its
affiliates.
15. Description of Services.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Portfolios,
including cash received as a result of the distribution of Shares,
during the period that is set forth in this Agreement. PFPC Trust
will not be responsible for such property until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon
Written Instructions, shall open and maintain separate accounts
in the Fund's name using all cash received from or for the
account of the Fund, subject to the terms of this Agreement. In
addition, upon Written Instructions, PFPC Trust shall open
separate custodial accounts for each separate Portfolio of the
Fund (collectively, the "Accounts") and shall hold in the
Accounts all cash received from or for the Accounts of the Fund
specifically designated to each separate Portfolio.
PFPC Trust shall make cash payments from or for the Accounts of a
Portfolio only for:
(i) purchases of securities in the name of a Portfolio, PFPC
Trust, PFPC Trust's nominee or a sub-custodian or nominee
thereof as provided in sub-section (j) and for which PFPC
Trust has received a copy of the broker's or dealer's
confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund delivered to PFPC
Trust;
(iii) payment of, subject to Written Instructions, interest, taxes,
administration, accounting, distribution, advisory, management
fees or similar expenses which are to be borne by a Portfolio;
(iv) payment to, subject to receipt of Written Instructions, the
Fund's transfer agent, as agent for the shareholders, of an
amount equal to the amount of dividends and distributions
stated in the Written Instructions to be distributed in
cash by the transfer agent to shareholders, or, in lieu of
paying the Fund's transfer agent, PFPC Trust may arrange
for the direct payment of cash dividends and distributions
to shareholders in accordance with procedures mutually
agreed upon from time to time by and among the Fund, PFPC
Trust and the Fund's transfer agent.
(v) payments, upon receipt of Written Instructions, in connection
with the conversion, exchange or surrender of securities owned
or subscribed to by the Fund and held by or delivered to PFPC
Trust;
(vi) payments of the amounts of dividends received with respect to
securities sold short;
(vii) payments made to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(viii)payments, upon Written Instructions, made for other Fund
purposes.
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. All such securities shall be held or disposed of
only upon Written Instructions of the Fund pursuant to the
terms of this Agreement. PFPC Trust shall have no power or
authority to assign, hypothecate, pledge or otherwise
dispose of any such securities or investment, except upon
the express terms of this Agreement and upon Written
Instructions authorizing the transaction. In no case may
any member of the Fund's Board of Trustees, or any officer,
employee or agent of the Fund withdraw any securities.
At PFPC Trust's own expense and for its own convenience, PFPC
Trust may enter into sub-custodian agreements with other banks
or trust companies to perform duties described in this
sub-section (c) with respect to domestic assets. Such bank or
trust company shall have an aggregate capital, surplus and
undivided profits, according to its last published report, of
at least one million dollars ($1,000,000), if it is a
subsidiary or affiliate of PFPC Trust, or at least twenty
million dollars ($20,000,000) if such bank or trust company is
not a subsidiary or affiliate of PFPC Trust. In addition, such
bank or trust company must be qualified to act as custodian
and agree to comply with the relevant provisions of applicable
rules and regulations. Any such arrangement will not be
entered into without prior written notice to the Fund (or as
otherwise provided in the 1940 Act).
In addition, PFPC Trust may enter into arrangements with
sub-custodians with respect to services regarding foreign
assets. Any such arrangement will be entered into with prior
written notice to the Fund (or as otherwise provided in the
1940 Act).
PFPC Trust shall remain responsible for the performance of all
of its duties as described in this Agreement and shall hold
the Fund and each Portfolio harmless from its own acts or
omissions, under the standards of care provided for herein, or
the acts and omissions of any sub-custodian chosen by PFPC
Trust under the terms of this sub-section (c).
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust, directly or through the use of the Book-Entry System,
shall:
(i) deliver any securities held for a Portfolio against the
receipt of payment for the sale of such
securities;
(ii) execute and deliver to such persons as may be designated in
such Oral Instructions or Written Instructions, proxies,
consents, authorizations, and any other instruments whereby
the authority of a Portfolio as owner of any securities may be
exercised;
(iii) deliver any securities to the issuer thereof, or its agent,
when such securities are called, redeemed, retired or
otherwise become payable at the option of the holder; provided
that, in any such case, the cash or other consideration is to
be delivered to PFPC Trust;
(iv) deliver any securities held for a Portfolio against receipt of
other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, tender offer,
merger, consolidation or recapitalization of any corporation,
or the exercise of any conversion privilege;
(v) deliver any securities held for a Portfolio to any
protective committee, reorganization committee or other
person in connection with the reorganization, refinancing,
merger, consolidation, recapitalization or sale of assets
of any corporation, and receive and hold under the terms of
this Agreement such certificates of deposit, interim
receipts or other instruments or documents as may be issued
to it to evidence such delivery;
(vi) make such transfer or exchanges of the assets of the
Portfolios and take such other steps as shall be stated in
said Oral Instructions or Written Instructions to be for the
purpose of effectuating a duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of
the Fund;
(vii) release securities belonging to a Portfolio to any bank or
trust company for the purpose of a pledge or hypothecation to
secure any loan incurred by the Fund on behalf of that
Portfolio; provided, however, that securities shall be
released only upon payment to PFPC Trust of the monies
borrowed, except that in cases where additional collateral is
required to secure a borrowing already made subject to proper
prior authorization, further securities may be released for
that purpose; and repay such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon surrender
of the note or notes evidencing the loan;
(viii)release and deliver securities owned by a Portfolio in
connection with any repurchase agreement entered into on
behalf of the Fund, but only on receipt of payment therefor;
and pay out moneys of the Fund in connection with such
repurchase agreements, but only upon the delivery of the
securities;
(ix) release and deliver or exchange securities owned by the Fund
in connection with any conversion of such securities, pursuant
to their terms, into other securities;
(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 corporate purposes.
PFPC Trust must also receive a certified resolution describing
the nature of the corporate purpose and the name and address
of the person(s) to whom delivery shall be made when such
action is pursuant to sub-paragraph d(xii).
(e) Use of Book-Entry System. PFPC Trust is authorized and
instructed, on a continuous basis, to deposit in the Book-Entry
System all securities belonging to the Portfolios eligible for
deposit therein and to utilize the Book-Entry System to the
extent possible in connection with settlements of purchases and
sales of securities by the Portfolios, and deliveries and returns
of securities loaned, subject to repurchase agreements or used as
collateral in connection with borrowings. PFPC Trust shall
continue to perform such duties until it receives Written
Instructions or Oral Instructions authorizing contrary
actions.
PFPC Trust shall administer the Book-Entry System as follows:
(i) With respect to securities of each Portfolio which are
maintained in the Book-Entry System, the records of PFPC Trust
shall identify by Book-Entry or otherwise those securities
belonging to each Portfolio.
(ii) Assets of each Portfolio deposited in the Book-Entry System
will at all times be segregated from any assets and cash
controlled by PFPC Trust in other than a fiduciary or
custodian capacity but may be commingled with other assets
held in such capacities.
PFPC Trust will provide the Fund with such reports on its own system
of internal control as the Fund may reasonably request from time to
time.
(f) Registration of Securities. All Securities held for a Portfolio
which are issued or issuable only in bearer form, except such
securities held in the Book-Entry System, shall be held by PFPC
Trust in bearer form; all other securities held for a Portfolio
may be registered in the name of the Fund on behalf of that
Portfolio, PFPC Trust, the Book-Entry System, a sub-custodian, or
any duly appointed nominee of the Fund, PFPC Trust, Book-Entry
System or sub-custodian. The Fund reserves the right to instruct
PFPC Trust as to the method of registration and safekeeping of
the securities of the Fund. The Fund agrees to furnish to PFPC
Trust appropriate instruments to enable PFPC Trust to hold or
deliver in proper form for transfer, or to register in the name
of its nominee or in the name of the Book-Entry System or in the
name of another appropriate entity, any securities which it may
hold for the Accounts and which may from time to time be
registered in the name of the Fund on behalf of a Portfolio.
(g) Voting and Other Action. Neither PFPC Trust nor its nominee
shall vote any of the securities held pursuant to this Agreement
by or for the account of a Portfolio, except in accordance with
Written Instructions. PFPC Trust, directly or through the use of
the Book-Entry System, shall execute in blank and promptly
deliver all notices, proxies and proxy soliciting materials
received by PFPC Trust as custodian of the Property to the
registered holder of such securities. If the registered holder
is not the Fund on behalf of a Portfolio, then Written
Instructions or Oral Instructions must designate the person who
owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, PFPC Trust is authorized to take
the following actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of each
Portfolio, all income, dividends, distributions,
coupons, option premiums, other payments and similar
items, included or to be included in the Property,
and, in addition, promptly advise each Portfolio of
such receipt and credit such income, as collected, to
each Portfolio's custodian account;
(B) endorse and deposit for collection, in the name of the
Fund, checks, drafts, or other orders for the payment of
money;
(C) receive and hold for the account of each Portfolio
all securities received as a distribution on the
Portfolio's securities as a result of a stock
dividend, share split-up or reorganization,
recapitalization, readjustment or other rearrangement
or distribution of rights or similar securities
issued with respect to any securities belonging to a
Portfolio and held by PFPC Trust hereunder;
(D) present for payment and collect the amount payable upon
all securities which may mature or be, on a mandatory
basis, called, redeemed, or retired, or otherwise become
payable on the date such securities become payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of such
income and other payments and the endorsement for
collection of checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(1) for examination by a broker or dealer selling for
the account of a Portfolio in accordance with
street delivery custom;
(2) for the exchange of interim receipts or temporary
securities for definitive securities; and
(3) for transfer of securities into the name of the
Fund on behalf of a Portfolio or PFPC Trust or a
sub-custodian or a nominee of one of the
foregoing, or for exchange of securities for a
different number of bonds, certificates, or other
evidence, representing the same aggregate face
amount or number of units bearing the same
interest rate, maturity date and call provisions,
if any; provided that, in any such case, the new
securities are to be delivered to PFPC Trust.
(B) unless and until PFPC Trust receives Oral Instructions
or Written Instructions to the contrary, PFPC Trust
shall:
(1) pay all income items held by it which call for
payment upon presentation and hold the cash
received by it upon such payment for the account
of each Portfolio;
(2) collect interest and cash dividends received, with
notice to the Fund, to the account of each
Portfolio;
(3) hold for the account of each Portfolio all stock
dividends, rights and similar securities issued
with respect to any securities held by PFPC Trust;
and
(4) execute as agent on behalf of the Fund all
necessary ownership certificates required by the
Internal Revenue Code or the Income Tax
Regulations of the United States Treasury
Department or under the laws of any state now or
hereafter in effect, inserting the Fund's name, on
behalf of a Portfolio, on such certificate as the
owner of the securities covered thereby, to the
extent it may lawfully do so.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions or Oral
Instructions establish and maintain segregated accounts on its
records for and on behalf of each Portfolio. Such accounts may
be used to transfer cash and securities, including securities
in the Book-Entry System:
(A) for the purposes of compliance by the Fund with the
procedures required by a securities or option exchange,
providing such procedures comply with the 1940 Act and
any releases of the SEC relating to the maintenance of
segregated accounts by registered investment companies;
and
(B) upon receipt of Written Instructions, for other
corporate purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such shareholders holding Shares
through XXX accounts, in accordance with the Fund's
prospectuses, the Internal Revenue Code of 1986, as amended
(including regulations promulgated thereunder), and with
such other procedures as are mutually agreed upon from time
to time by and among the Fund, PFPC Trust and the Fund's
transfer agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written Instructions
that specify:
(i) the name of the issuer and the title of the
securities, including CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased and
accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such
purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the broker through whom
the purchase was made. PFPC Trust shall upon receipt of
securities purchased by or for a Portfolio pay out of the
moneys held for the account of the Portfolio the total amount
payable to the person from whom or the broker through whom the
purchase was made, provided that the same conforms to the
total amount payable as set forth in such Oral Instructions or
Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities upon
receipt of Oral Instructions or Written Instructions that specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom the
sale was made;
(vii) the location to which the security must be delivered and
delivery deadline, if any; and
(viii)the Portfolio involved.
PFPC Trust shall deliver the securities upon receipt of the total amount
payable to the Portfolio upon such sale, provided that the total amount
payable is the same as was set forth in the Oral Instructions or Written
Instructions. Notwithstanding the other provisions thereof, PFPC Trust may
accept payment in such form as shall be satisfactory to it, and may
deliver securities and arrange for payment in accordance with the customs
prevailing among dealers in securities.
(l) Reports; Proxy Materials.
(i) PFPC Trust shall furnish to the Fund the following reports:
(A) such periodic and special reports as the Fund may
reasonably request;
(B) a monthly statement summarizing all transactions and
entries for the account of each portfolio, listing each
portfolio security belonging to each Portfolio with the
adjusted average cost of each issue and the market value
at the end of such month and stating the cash account of
each Portfolio including disbursements;
(C) the reports required to be furnished to the Fund
pursuant to Rule 17f-4 of the 1940 Act; and
(D) such other information as may be agreed upon from time
to time between the Fund and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any proxy
statement, 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.
(m) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not
the safekeeping thereof upon receipt by PFPC Trust) shall be at
the sole risk of the Fund. If payment is not received by PFPC
Trust within a reasonable time after proper demands have been
made, PFPC Trust shall notify the Fund in writing, including
copies of all demand letters, any written responses and memoranda
of all oral responses and shall await instructions from the
Fund. PFPC Trust shall not be obliged to take legal action for
collection unless and until reasonably indemnified to its
satisfaction. PFPC Trust shall also notify the Fund as soon as
reasonably practicable whenever income due on securities is not
collected in due course and shall provide the Fund with periodic
status reports of such income collected after a reasonable time.
16. Duration and Termination. This Agreement shall continue until
terminated by the Fund or PFPC Trust on sixty (60) days' prior written
notice to the other party. In the event this Agreement is terminated
(pending appointment of a successor to PFPC Trust or vote of the
shareholders of the Fund to dissolve or to function without a custodian
of its cash, securities or other property), PFPC Trust shall not
deliver cash, securities or other property of the Portfolios to the
Fund. It may deliver them to a bank or trust company of PFPC Trust's
choice, having an aggregate capital, surplus and undivided profits, as
shown by its last published report, of not less than twenty million
dollars ($20,000,000), as a custodian for the Fund to be held under
terms similar to those of this Agreement. PFPC Trust shall not be
required to make any delivery or payment of assets upon termination
until full payment shall have been made to PFPC Trust of all of its
fees, compensation, costs and expenses. PFPC Trust shall have a
security interest in and shall have a right of setoff against the
Property as security for the payment of such fees, compensation, costs
and expenses.
17. Change of Control. Notwithstanding any other provision of this Agreement,
in the event of an agreement to enter into a transaction that would result
in a Change of Control of the Fund's adviser or sponsor, the Fund's
ability to terminate the Agreement will be suspended from the time of such
agreement until two years after the Change of Control.
18. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notice shall be addressed (a) if to
PFPC Trust at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000; (b) if
to the Fund, at , Attn: ; 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 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.
19. 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.
20. Delegation; Assignment. PFPC Trust may assign its rights and delegate
its duties hereunder to any affiliate of PFPC Trust or of PNC Bank
Corp., provided that (i) PFPC Trust gives the Fund 30 days' prior
written notice of such assignment or delegation; (ii) the assignee or
delegate agrees to comply with the relevant provision of the 1940 Act;
and (iii) PFPC Trust and such assignee or delegate promptly provide
such information as the Fund may reasonably request, and respond to
such questions as the Fund may reasonably ask, relative to the
assignment or delegation (including, without limitation, the
capabilities of the assignee or delegate).
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.
23. Limitations of Liability of the Trustees and Shareholders. A copy of the
Declaration of Trust of the Fund is on file with
, and notice is hereby given that
this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this instrument
are not binding upon any of the Trustees or Shareholders individually but
are binding only upon the assets and property of the Fund.
24. 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
or Oral Instructions.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
(f) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.
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: /s/ Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
Title: Sr. Vice President
THE BERWYN FUNDS
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Title: President
AUTHORIZED PERSONS APPENDIX
NAME (Type) SIGNATURE
