CUSTODIAN SERVICES AGREEMENT
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THIS AGREEMENT is made as of ______________, 2001 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and THE XXXXXXXX FUNDS, INC., a Maryland corporation (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:
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(a) "1933 Act" shall mean the Securities Act of 1933, as amended.
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(b) "1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
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(c) "Authorized Person" shall mean any officer of the Fund and any other
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person authorized by the Fund to give Oral Instructions 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.
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(d) "Book-Entry System" shall mean Federal Reserve Treasury book-
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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" shall mean the Commodities Exchange Act, as amended.
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(f) "Oral Instructions" shall mean oral instructions received by PFPC
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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" shall mean PFPC Trust Company or a subsidiary or
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affiliate of PFPC Trust Company.
(h) "SEC" shall mean the Securities and Exchange Commission.
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(i) "Securities Laws" shall mean the 1933 Act, the 1934 Act, the 1940 Act
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and the CEA.
(j) "Shares" shall mean the shares of common stock of any series or class
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of a Portfolio (as defined below).
(k) "Property" shall mean:
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(i) any and all securities and other investment items which the Fund
may from time to time deposit, or cause to be deposited
hereunder, with PFPC Trust or which PFPC Trust may from time to
time hold for the Portfolios;
(ii) all income in respect of any of such securities or other
investment items;
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(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
Portfolios, which are received by PFPC Trust from time to time,
from or on behalf of the Portfolios.
(l) "Written Instructions" shall mean (i) written instructions
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signed by two (2) Authorized Persons and received by PFPC Trust or
(ii) trade instructions transmitted by means of an 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 or by hand, mail, tested telegram,
cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC Trust to provide custodian
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services to the Fund, on behalf of each of its investment portfolios (each,
a "Portfolio") listed on Exhibit A attached hereto, and PFPC Trust accepts
such appointment and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
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provide PFPC Trust with the following:
(a) at PFPC Trust's request, certified or authenticated copies of the
resolutions of the Fund's Board of Directors, 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/underwriting agreement with respect to each
class of Shares;
(e) a copy of each Portfolio's administration agreement;
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(f) copies of any distribution and/or shareholder servicing plans and
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.
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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.
5. Instructions.
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(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 from an Authorized Person as listed on
Exhibit B attached hereto (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 Directors 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. 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.
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(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
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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
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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
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advice or
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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.
(d) Protection of PFPC Trust. PFPC Trust shall be protected in any
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action it takes or does not take in reliance upon directions or 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 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 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.
7. Records; Visits. The books and records pertaining to any Portfolio,
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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.
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8. Confidentiality. Each party shall keep confidential any information
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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 Trust, 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 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 subject to such confidentiality
obligations if it: (a) is already known to the receiving party at the time
it is obtained; (b) is or becomes publicly known or available through no
wrongful act of the receiving party; (c) 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) is released by the protected party to
a third party without restriction; (e) is required to be disclosed by the
receiving party pursuant to a requirement of a court order, subpoena,
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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); (f) is relevant to the defense of any claim or
cause of action asserted against the receiving party; or (g) has been or is
independently developed or obtained by the receiving party.
9. Cooperation with Accountants. PFPC Trust shall cooperate with the Fund's
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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. PFPC System. PFPC Trust shall retain title to and ownership of any and all
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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.
11. Disaster Recovery. PFPC Trust shall enter into and shall maintain in
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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, gross negligence
or reckless disregard of its duties or obligations under this Agreement.
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12. Compensation. As compensation for custody services rendered by PFPC
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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. The
Fund acknowledges that PFPC Trust may receive float benefits in
connection with maintaining certain accounts required to provide
services under this Agreement.
13. Indemnification. The Fund, on behalf of each Portfolio, agrees to
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indemnify and hold harmless PFPC Trust and its affiliates from all
taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, 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. Neither PFPC
Trust, nor any of its affiliates, 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 of its duties and obligations under
this Agreement.
14. Responsibility of PFPC Trust.
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(a) PFPC Trust shall be under no duty to take any action hereunder on
behalf of the Fund or any Portfolio 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
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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 to the extent such
damages arise out of PFPC Trust's willful misfeasance, bad faith,
gross 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, (i) PFPC Trust shall not be liable
for losses beyond its control, including without limitation
(subject to Section 11), delays or errors or loss of data
occurring by reason of circumstances beyond PFPC Trust's control,
provided that PFPC Trust has acted in accordance with the
standard set forth in Section 14(a) above; 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 or authority
or lack thereof of any Oral Instruction or Written Instruction,
notice or other instrument 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.
(d) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
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15. Description of Services.
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(a) Delivery of the Property. The Fund will deliver or arrange for
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delivery to PFPC Trust, all the Property owned by the Portfolios,
including cash received as a result of the distribution of
Shares, during the term of 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 Portfolios, 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 Portfolio
delivered to PFPC Trust;
(iii) payment of, subject to Written Instructions, interest,
taxes, administration, accounting, distribution, advisory
and management fees 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
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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 Portfolio 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 PFC 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.
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(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 or upon Written Instructions authorizing the
transaction. In no case may any member of the Fund's
Board of Directors, 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
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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 and 00/100 Cents
($1,000,000.00), if it is a subsidiary or affiliate of
PFPC Trust, or at least Twenty Million Dollars and
00/100 Cents ($20,000,000.00) 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
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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;
(ii) 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;
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(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 a
Portfolio 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;
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(xi) release and deliver securities owned by a Portfolio
for the purpose of redeeming in kind shares of the
Portfolio upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by a
Portfolio for other 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
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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.
FPC 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.
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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
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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 Portfolios. 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
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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
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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
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contrary Written Instructions, PFPC Trust is authorized to take
the following actions:
(i) Collection of Income and Other Payments.
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(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.
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(A) PFPC Trust is authorized to deliver or cause to be
delivered
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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.
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(i) Segregated Accounts.
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(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
purposes.
(ii) If requested by the Fund, 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
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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
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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.
20
(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. For
clarification, upon termination of this Agreement PFPC Trust
shall have no responsibility to transmit such material or to
inform the Fund or any other person of such actions or events.
(m) Crediting of Accounts. If PFPC Trust in its sole discretion 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
21
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. Nothing herein or
otherwise shall require PFPC Trust to make any advances or to credit any amounts
until PFPC Trust s actual receipt thereof. The Fund hereby grants 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 of any advance or credit made by
PFPC Trust (including charges related thereto) to such Account.
(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
22
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 be effective on the date
------------------------
first above written and shall continue in effect until terminated by Fund
or by PFPC on ninety (90) 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 and 00/100 Cents ($20,000,000.00), 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 (such expenses include, without
limitation, expenses associated with movement (or duplication) of records
and materials and conversion thereof to a successor service provider, or to
a bank or trust company pending appointment of such successor,
23
and all 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.
17. Notices. Notices shall be addressed (a) if to PFPC Trust at 8800 Tinicum
-------
Xxxxxxxxx, 0/xx/ Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx Xxxxxxxx; (b) if to the Fund, at Plymouth Meeting Executive
Campus, 000 X. Xxxxxxxxxx Xxxx, Xxxxx 000 Plymouth, Pennsylvania 19462-
1050, Attention: President; 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 (5) 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.
18. 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.
19. 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 thirty (30)
days' prior written notice of such assignment or delegation. In the event
of any other assignment or delegation of PFPC
24
Trust's rights and duties under this Agreement, PFPC Trust must obtain the
consent of the Fund.
20. 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.
21. Further Actions. Each party agrees to perform such further acts and
---------------
execute such further documents as are necessary to effectuate the purposes
hereof.
22. 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 (1) or more separate
documents their agreement, if any, with respect to delegated duties.
(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.
25
(c) No Changes that Materially Affect Obligations. 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 Trust hereunder without the prior written
approval of PFPC Trust, which approval shall not be unreasonably
withheld or delayed.
(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) Governing Law. This Agreement shall be deemed to be a contract
-------------
made in the State of Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(f) 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.
(g) 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.
26
(h) 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:_____________________________________
Name:___________________________________
Title:__________________________________
THE XXXXXXXX FUNDS, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
27
EXHIBIT A
---------
THIS EXHIBIT A, dated as of ________________, 2001, is Exhibit A to that
certain Custodian Services Agreement dated as of ____________, 2001 between PFPC
Inc. and The Xxxxxxxx Funds, Inc.
PORTFOLIOS
----------
THE XXXXXXXX FUNDS, INC.
28
EXHIBIT B
---------
AUTHORISED PERSONS APPENDIX
---------------------------
Name (Typewritten) Signature
Xxxxx X. Xxxxxxxx _______________________
----------------------
Xxxx X. Xxxxxxx _______________________
----------------------
Xxxxx X. Xxxxx _______________________
----------------------
Xxxxxx X. Xxx Xxxx _______________________
----------------------
Xxxxxx X. Xxxxx _______________________
----------------------
Xxxxxxxx X. Xxxxx _______________________
----------------------
Xxxxxx X. Xxxxxx _______________________
----------------------
Xxxxxxxx X. Xxxxxx _______________________
----------------------
29
