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Exhibit G
CUSTODIAN SERVICES AGREEMENT
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THIS AGREEMENT is made as of 12-18-00, 2000 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and THE FINANCE COMPANY OF PENNSYLVANIA, a Pennsylvania
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" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other person
authorized by the Fund to give Oral or Written Instructions on behalf
of the Fund. An Authorized Person's scope of authority may be limited
by setting forth such limitation in a written document signed by both
parties hereto.
(d) "Book-Entry System" means Federal Reserve Treasury book-entry system
for
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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. PFPC Trust may, in its sole discretion in each
separate instance, consider and rely upon instructions it receives form an
Authorized Person via electronic mail as Oral Instructions.
(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;
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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 Fund,
which are received by PFPC Trust from time to time, from or
on behalf of the Fund.
(m) "Written Instructions" mean (i) written instructions signed by two
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
services to the Fund 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) 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 the Fund's advisory agreements;
(d) a copy of the distribution/underwriting agreement with respect to
each class of Shares;
(e) a copy of the Fund's administration agreement;
(f) copies of any distribution and/or shareholder servicing plans and
agreements made in respect of the Fund; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
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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 other entity.
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 Instruction or
Written Instruction 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 Directors 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 or differ
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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.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
should or should not take, PFPC Trust may request directions or
advice, including Oral Instructions or Written Instructions, from the
Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any question
of law pertaining to any action it should or should not take, PFPC
Trust may request advice from counsel of its own choosing (who may be
counsel for the Fund, the Fund's investment adviser or PFPC Trust, at
the option of PFPC Trust).
(c) Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Fund, and the advice it receives from counsel, PFPC
Trust shall be entitled to rely upon and follow the advice of counsel.
(d) Protection of PFPC Trust. PFPC Trust shall be protected in any 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
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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 and 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 the Fund, 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. 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 Trust, their
respective
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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, 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
independent public accountants and shall take all reasonable action to make
any requested information available to such accountants as reasonably
requested by the Fund.
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10. PFPC SYSTEM. PFPC Trust 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 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
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.
12. COMPENSATION. As compensation for custody services rendered by PFPC Trust
during the term of this Agreement, the Fund 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 agrees to 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
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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, gross negligence or reckless
disregard of its duties and obligations under this Agreement.
14. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust 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 Trust and the Fund in a written
amendment hereto. PFPC Trust shall be obligated to exercise care and
diligence in the performance of its duties hereunder and to act in good
faith in performing services provided for under this Agreement. PFPC
Trust shall be liable only for any damages arising out of PFPC Trust's
failure to perform its duties under this Agreement 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
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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, (i)
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 and (ii) PFPC Trust's cumulative liability to the Fund
for all losses, claims, suits, controversies, breaches or damages for
any cause whatsoever (including but not limited to those arising out
of or related to this Agreement) and regardless of the form of action
or legal theory shall not exceed the lesser of $100,000 or the fees
received by PFPC Trust for services provided hereunder during the 12
months immediately prior to the date of such loss or damage.
(d) No party may assert a cause of action against PFPC Trust or any of its
affiliates that allegedly occurred more than 12 months immediately
prior to the filing of the suit (or, if applicable, commencement of
arbitration proceedings) alleging such cause of action.
(e) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
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 Fund, including
cash received as a result of
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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 Fund,
subject to the terms of this Agreement. In addition, upon Written
Instructions, PFPC Trust shall open a separate custodial account for
the Fund (the "Account") and shall hold in the Account all cash
received from or for the Account of the Fund. PFPC Trust shall make
cash payments from or for the Account only for:
(i) purchases of securities in the name of the Fund, 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 and
management fees which are to be borne by the Fund;
(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
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sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks, drafts
or other orders for the payment of money received as custodian for the
Account.
(c) Receipt of Securities; Subcustodians.
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(i) PFPC Trust shall hold all securities received by it for the
Account 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 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
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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
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 the Fund 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 the Fund 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 the Fund 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 the Fund 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 Fund 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;
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(vii) release securities belonging to the Fund to any bank or
trust company for the purpose of a pledge or hypothecation
to secure any loan incurred by the Fund; 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 the Fund 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 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 Fund 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
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by the Fund, 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 the Fund which are maintained in the
Book-Entry System, the records of PFPC Trust shall identify by
Book-Entry or otherwise those securities belonging to the Fund.
(ii) Assets of the Fund 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 the Fund 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 the Fund may be registered in the name of the Fund, 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
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and which may from time to time be registered in the name of the Fund.
(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
the Fund, 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, 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 the Fund, 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 the Fund of such
receipt and credit such income, as collected, to the Fund'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 the Fund all securities
received as a distribution on the Fund'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 the Fund 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
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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 broker or dealer selling for the account of
the Fund 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 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 the Fund;
(2) collect interest and cash dividends received, with notice to the
Fund, to the account of the Fund;
(3) hold for the account of the Fund 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
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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 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 the Fund. 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) 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 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; and
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(vi) 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 the Fund pay out of the moneys held for the
account of the Fund 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; and
(vii) the location to which the security must be delivered and delivery
deadline, if any.
PFPC Trust shall deliver the securities upon receipt of the total amount payable
to the Fund 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:
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(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 the Fund, listing each portfolio security belonging
to the Fund with the adjusted average cost of each issue and the
market value at the end of such month and stating the cash account
of the Fund 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 the
Account with respect to (a) income, dividends, distributions, coupons,
option premiums, other payments or similar items on a contractual payment
date or otherwise in advance of PFPC Trust's actual receipt of the amount
due, (b) the proceeds of any sale or other disposition of assets on the
contractual settlement date or otherwise in advance of PFPC Trust's actual
receipt of the amount due or (c) provisional crediting of any amounts due,
and (i) PFPC Trust is subsequently unable to collect
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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 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).
(n) Collections. All collections of monies or other property in respect, or
which are to become part, of the Property (but not the safekeeping thereof
upon receipt by PFPC Trust) shall be at the sole risk of the Fund. If
payment is not received by PFPC Trust within a reasonable time after proper
demands have been made, PFPC Trust shall notify the Fund in writing,
including copies of all demand letters, any written responses and memoranda
of all oral responses and shall await instructions from the Fund. PFPC Trust
shall not be obligated 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
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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 Fund 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 (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, 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. 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 pursuant to
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Section 16 will be suspended from the time of such agreement until two
years after the Change of Control.
18. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 0000 Xxxxxxx
Xxxxxxxxx, 0xx Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx Xxxxxxxx; (b) if to the Fund, at The Finance Company of
Pennsylvania, 000 X Xxxxxxxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, XX
00000, Attention: Ms. Xxxxxxx Case; 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 The PNC Financial
Services Group, Inc., provided that PFPC Trust gives the Fund 30 days'
prior written notice of such assignment or delegation.
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.
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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. 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.
(b) No Representations or Warranties. Except as expressly provided in
this Agreement, PFPC Trust hereby disclaims all representations and
warranties, express or implied, made to the Fund or any other person,
including, without limitation, any warranties regarding quality,
suitability, merchantability, fitness for a particular purpose or
otherwise (irrespective of any course of dealing, custom or usage of
trade), of any services or any goods provided incidental to services
provided under this Agreement. PFPC Trust disclaims any warranty of
title or non-infringement except as otherwise set forth in this
Agreement.
(c) No Changes that Materially Affect Obligations. 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.
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(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
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.
(h) Facsimile Signatures. The facsimile signature of any party to this Agreement
shall constitute the valid and binding execution hereof by such party.
26
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/ [Illegible]
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Title: Vice President
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THE FINANCE COMPANY OF PENNSYLVANIA
By: /s/ Xxxxxxx X. Xxxxxx, III
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Title: President
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