Exhibit (g)
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
CUSTODIAN SERVICES AGREEMENT
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THIS AGREEMENT is made as of , _____ by and between PFPC TRUST COMPANY,
a limited purpose trust company incorporated under the laws of Delaware ("PFPC
Trust"), and THE ARMADA ADVANTAGE FUND, a Massachusetts business trust (the
"Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 ACT" means the Securities Act of 1933, as amended.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as
amended.
(c) "AUTHORIZED PERSON" means any authorized officer of the Fund
and any other 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.
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(d) "BOOK-ENTRY SYSTEM" means the Federal Reserve Treasury
book-entry system for United States and federal agency
securities, its successor or successors, and its nominee or
nominees and any book-entry system registered with the SEC
under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "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 instructions, other than Written
Instructions, actually received by PFPC Trust from an
Authorized Person or from a person reasonably believed by PFPC
Trust to be an Authorized Person. PFPC Trust may, in its sole
discretion in each separate instance, consider and rely upon
instructions it receives from an Authorized Person via
electronic mail as Oral Instructions.
(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 Federal Securities Laws as defined by
Rule 38a-1 under 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;
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(ii) all income in respect of any of such securities or
other investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by PFPC Trust from time to
time, from or on behalf of the Fund.
(m) "WRITTEN INSTRUCTIONS" mean (i) written instructions signed by
two Authorized Persons (or persons reasonably believed by PFPC
Trust to be Authorized Persons) and received by PFPC Trust or
(ii) trade instructions transmitted by means of an 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 or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund as set forth herein, on behalf of each of its
investment portfolios (each, a "Portfolio"), and PFPC Trust accepts
such appointment and agrees to furnish such services.
3. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with material applicable requirements
of the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties
to be performed by PFPC Trust hereunder. Except as specifically set
forth herein, PFPC Trust assumes no responsibility for such compliance
by the Fund or any other entity.
4. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall
act only upon Oral Instructions or Written Instructions.
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(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 Trustees
or of the Fund's shareholders, unless and until PFPC Trust
receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral
Instructions are given by PFPC Trust or its affiliates) so
that PFPC Trust receives the Written Instructions by the close
of business on the same day that such Oral Instructions are
received. The fact that such confirming Written Instructions
are not received by PFPC Trust 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.
5. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC Trust is in doubt as to any action
it should or should not take, PFPC Trust may request
directions or advice, including Oral Instructions or Written
Instructions, from the Fund.
(b) ADVICE OF COUNSEL. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should
not take, PFPC Trust may request advice from counsel of its
own choosing (who may be counsel for the Fund, the Fund's
investment adviser or PFPC Trust, at the option of PFPC
Trust).
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(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 indemnified by
the Fund and without liability for any action PFPC Trust takes
or does not take in reliance upon directions or advice or Oral
Instructions or Written Instructions PFPC Trust receives from
or on behalf of the Fund or from counsel and which PFPC Trust
believes, 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, pursuant to other provisions of this
Agreement, the same is a condition of PFPC Trust's properly
taking or not taking such action. Nothing in this subsection
shall excuse PFPC Trust, when an action or omission on the
part of PFPC Trust which is taken in reliance upon directions
or advice or Oral Instructions or Written Instructions
constitutes willful misfeasance, bad faith, negligence or
reckless disregard by PFPC Trust of any duties, obligations or
responsibilities set forth in this Agreement.
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
6. RECORDS; VISITS. The books and records pertaining to the Fund and any
Portfolio, which are in the possession or under the control of PFPC
Trust, shall be the property of the Fund. Such books and records shall
be prepared and maintained as required by the 1940 Act and other
applicable Securities Laws, and rules and regulations thereunder. The
Fund, Authorized Persons and the Fund's authorized representatives
shall have access to such books and records at all times during PFPC
Trust's normal business hours. Upon the reasonable request of the Fund,
copies of any such books and records shall be provided by PFPC Trust to
the Fund or to an authorized representative of the Fund, at the Fund's
expense.
7. CONFIDENTIALITY.
(a) The parties agree that Confidential Information (defined in
paragraph (c) below) and the contents of this Agreement are
confidential information of the parties and their respective
licensors. The Fund and PFPC Trust shall exercise at least the
same degree of care, but not less than reasonable care, to
safeguard the confidentiality of the Confidential Information
of the other as it would exercise to protect its own
Confidential Information. The Fund and PFPC Trust may use the
Confidential Information only to exercise their respective
rights or perform their respective duties under this
Agreement. Except as required by law and except as disclosed
in the Fund's registration statement or filed as an exhibit
thereto, the Fund and PFPC Trust shall not duplicate, sell or
disclose to others the Confidential Information of the other,
in whole or in part, without the prior written permission of
the other party. The Fund and PFPC Trust may, however,
disclose Confidential Information to their respective
employees who have a need to know the Confidential Information
to perform work for the other, provided that the Fund and PFPC
Trust shall use reasonable efforts to ensure that the
Confidential Information is not duplicated or disclosed by
their respective employees in breach of this Agreement. The
Fund and PFPC Trust may also disclose the Confidential
Information to independent contractors, auditors, and
professional advisors, provided they first agree in writing to
be bound by confidentiality obligations substantially similar
to this Section 7(a). Notwithstanding the previous sentence,
in no event shall either the Fund or PFPC Trust disclose the
Confidential Information to any competitor of the other
without specific, prior written consent.
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(b) Proprietary Information shall include (i) 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; (ii) 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; (iii) 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 (iv) anything designated
as confidential.
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(c) Confidential Information includes, without limitation,
Proprietary Information (as defined in paragraph (b) above),
all documents, inventions, substances, engineering and
laboratory notebooks, drawings, diagrams, specifications,
bills of material, equipment, prototypes and models, and any
other tangible manifestations of the foregoing of either party
which now exist or come into the control or possessions of the
other.
(d) Notwithstanding the foregoing, information shall not be
subject to such confidentiality obligations if: (i) it is
already known to the receiving party at the time it is
obtained; (ii) it is or becomes publicly known or available
through no wrongful act of the receiving party; (iii) it is
rightfully received from a third party who, to the best of the
receiving party's knowledge, is not under a duty of
confidentiality; (iv) it is released by the protected party to
a third party without restriction; (v) it is requested or
required to be disclosed by the receiving party pursuant to a
court order, subpoena, governmental or regulatory agency
request or law (provided the receiving party will provide the
other party written notice of the same, to the extent such
notice is permitted); (vi) release of such information by PFPC
Trust is necessary or desirable in connection with the
provision of services under this Agreement; (vii) it is
relevant to the defense of any claim or cause of action
asserted against the receiving party; or (viii) it has been or
is independently developed or obtained by the receiving party.
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
8. COOPERATION WITH ACCOUNTANTS. PFPC Trust shall cooperate with the
Fund's independent public accountants and shall take all reasonable
action to make any requested information available to such accountants
as reasonably requested by the Fund.
9. PFPC SYSTEM. PFPC Trust shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise,
patents, copyrights, trade secrets, and other related legal rights
utilized by PFPC Trust in connection with the services provided by PFPC
Trust to the Fund.
10. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in
effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing
equipment to the extent appropriate equipment is available. In the
event of equipment failures, PFPC Trust shall, at no additional expense
to the Fund, take reasonable steps to minimize service interruptions.
PFPC Trust shall have no liability with respect to the loss of data or
service interruptions caused by equipment failure provided such loss or
interruption is not caused by PFPC Trust's own willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
11. COMPENSATION. As compensation for custody services rendered by PFPC
Trust during the term of this Agreement, the Fund, on behalf of each of
the Portfolios, will pay to PFPC Trust a fee or fees as may be agreed
to in writing from time to time by the Fund and PFPC Trust. The Fund
acknowledges that PFPC Trust may receive float benefits in connection
with maintaining certain accounts required to provide services under
this Agreement.
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
12. INDEMNIFICATION.
(a) The Fund, on behalf of each Portfolio, agrees to indemnify,
defend and hold harmless PFPC Trust and its affiliates,
including their respective officers, directors, agents and
employees, from all taxes, charges, expenses, assessments,
claims and liabilities (including, 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 in
the performance of PFPC Trust's duties or responsibilities
under this Agreement. Subject to paragraph (b) below, the
provisions of this Section 12 shall survive termination of
this Agreement.
(b) A claim by PFPC Trust for indemnification under this Agreement
must be made prior to the earlier of (i) one year after PFPC
Trust becomes aware of the event for which indemnification is
claimed; or (ii) one year after the earlier of termination of
this Agreement or the expiration of the term of this
Agreement.
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(c) Except for remedies that cannot be waived as a matter of law
(and injunctive or professional relief), the provisions of
this Section 12 shall be PFPC Trust's sole and exclusive
remedy for claims or other actions or proceedings to which the
Fund's indemnification obligations pursuant to this Section 12
apply.
13. RESPONSIBILITY OF PFPC TRUST.
(a) PFPC Trust shall be under no duty to take any action hereunder
on behalf of the Fund or any 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 of its duties hereunder and to act in good faith
in performing services provided for under this Agreement. PFPC
Trust shall be liable only for any damages arising out of PFPC
Trust's failure to perform its duties under this Agreement and
only to the extent such damages arise out of PFPC Trust's
willful misfeasance, bad faith, negligence or reckless
disregard of its duties under this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary and
provided that PFPC Trust has acted in accordance with the
standard of care set forth above, (i) PFPC Trust shall not be
liable for losses, delays, failure, errors, interruption or
loss of data occurring directly or indirectly by reason of
circumstances beyond its reasonable control, including without
limitation acts of God; action or inaction of civil or
military authority; public enemy; war; terrorism; riot; fire;
flood; sabotage; epidemics; labor disputes; civil commotion;
interruption, loss or malfunction of utilities,
transportation, computer or communications capabilities;
insurrection; elements of nature; or non-performance by a
third party; and (ii) PFPC Trust shall not be under any duty
or obligation to inquire into and shall not be liable for the
validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any Oral
Instruction, Written Instruction, direction, notice,
instrument or other information which PFPC Trust reasonably
believes to be genuine.
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(c) Notwithstanding anything in this Agreement to the contrary,
neither party nor their affiliates or their directors,
trustees, officers, employees, agents or subcontractors shall
be liable to the other party for any consequential, special or
indirect losses or damages, whether or not the likelihood of
such losses or damages was known by a party.
(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.
(f) Notwithstanding anything in this Agreement to the contrary
(other than as specifically provided in Section
14(h)(ii)(B)(4) and Section 14(h)(iii)(A) of this Agreement),
the Fund shall be responsible for all filings, tax returns and
reports on any transactions undertaken pursuant to this
Agreement, or in respect of the Property or any collections
undertaken pursuant to this Agreement, which may be requested
by any relevant authority. In addition, the Fund shall be
responsible for the payment of all taxes and similar items
(including without limitation penalties and interest related
thereto).
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CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(g) The provisions of this Section 13 shall survive termination of
this Agreement.
(h) Notwithstanding anything in this Agreement to the contrary,
PFPC Trust shall have no liability either for any error or
omission of any of its predecessors as servicer on behalf of
the Fund or for any failure to discover any such error or
omission.
14. DESCRIPTION OF SERVICES.
(a) DELIVERY OF THE PROPERTY. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the
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 any assets until actual
receipt.
(b) RECEIPT AND DISBURSEMENT OF MONEY. PFPC Trust, acting upon
Written Instructions, shall open and maintain a separate
account for each separate Portfolio of the Fund (each an
"Account") and shall maintain in the Account of a particular
Portfolio all cash and other assets received from or for the
Fund specifically designated to such Account.
PFPC Trust shall make cash payments from or for the Account
of a Portfolio only for:
(i) purchases of securities in the name of a Portfolio,
PFPC Trust, PFPC Trust's nominee or a sub-custodian or
nominee thereof as provided in sub-section (j) and for
which PFPC Trust has received a copy of the broker's
or dealer's confirmation or payee's invoice, as
appropriate;
(ii) purchase or redemption of Shares of the Fund delivered
to PFPC Trust;
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CONFIDENTIAL AND PROPRIETARY
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(iii) payment of, subject to Written Instructions, interest,
taxes (provided that tax which PFPC Trust considers is
required to be deducted or withheld "at source" will
be governed by Section 14(h)(iii)(B) of this
Agreement), administration, accounting, transfer
agency, distribution, advisory, management fees or
similar expenses which are to be borne by a Portfolio;
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent, as agent for
the shareholders, of an amount equal to the amount of
dividends and distributions stated in the Written
Instructions to be distributed in cash by the transfer
agent to shareholders, or, in lieu of paying the
Fund's transfer agent, PFPC Trust may arrange for the
direct payment of cash dividends and distributions to
shareholders in accordance with procedures mutually
agreed upon from time to time by and among the Fund,
PFPC Trust and the Fund's transfer agent;
(v) payments, upon receipt of Written Instructions, in
connection with the conversion, exchange or surrender
of securities owned or subscribed to by the Fund and
held by or delivered to PFPC Trust;
(vi) payments of the amounts of dividends received with
respect to securities sold short;
(vii) payments to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(ix) other payments, upon Written Instructions.
PFPC Trust is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian
for the Accounts.
(c) RECEIPT OF SECURITIES; SUBCUSTODIANS.
(i) PFPC Trust shall hold all securities received by it
for the Accounts in a separate account that physically
segregates such securities from those of any other
persons, firms or corporations, except for securities
held in a Book-Entry System or through a sub-custodian
or depository. All such securities shall be held or
disposed of only upon Written Instructions or
otherwise pursuant to the terms of this Agreement.
PFPC Trust shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such
securities or investment, except upon the express
terms of this Agreement or upon Written Instructions
authorizing the transaction. In no case may any member
of the Fund's Board of Trustees, or any officer,
employee or agent of the Fund withdraw any securities.
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CONFIDENTIAL AND PROPRIETARY
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At PFPC Trust's own expense and for its own
convenience, PFPC Trust may enter into sub-custodian
agreements with other banks or trust companies to
perform duties described in this sub-section (c) with
respect to domestic assets. Such bank or trust company
shall have aggregate capital, surplus and undivided
profits, according to its last published report, of at
least one million dollars ($1,000,000), if it is a
subsidiary or affiliate of PFPC Trust, or at least
twenty million dollars ($20,000,000) if such bank or
trust company is not a subsidiary or affiliate of PFPC
Trust. In addition, such bank or trust company must be
qualified to act as custodian and agree to comply with
the relevant provisions of applicable rules and
regulations. Any such arrangement will not be entered
into without prior written notice to the Fund (or as
otherwise provided in the 1940 Act).
In addition, PFPC Trust may enter into arrangements
with sub-custodians with respect to services regarding
foreign assets in accordance with the requirements of
the 1940 Act and the rules and regulations thereunder.
Any such arrangement will not be entered into without
prior written notice to the Fund (or as otherwise
provided in the 1940 Act).
PFPC Trust shall remain responsible for the acts and
omissions of any sub-custodian chosen by PFPC Trust
under the terms of this sub-section (c) to the same
extent that PFPC Trust is responsible for its own acts
and omissions under this Agreement.
(d) TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust shall:
(i) deliver any securities held for a Portfolio against
the receipt of payment for the sale of such securities
or otherwise in accordance with standard market
practice;
(ii) execute and deliver to such persons as may be
designated in such Oral Instructions or Written
Instructions, proxies, consents, authorizations, and
any other instruments whereby the authority of a
Portfolio as owner of any securities may be exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable at the option of
the holder; provided that, in any such case, the cash
or other consideration is to be delivered to PFPC
Trust;
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CONFIDENTIAL AND PROPRIETARY
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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 (or reverse
repurchase agreement) entered into by the Fund on
behalf of that Portfolio, but only on receipt of
payment therefor; and pay out monies of the Fund in
connection with such repurchase agreements (or reverse
repurchase agreement), 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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CONFIDENTIAL AND PROPRIETARY
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(xi) release and deliver securities owned by a Portfolio
for the purpose of redeeming in kind shares of a
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 OR OTHER DEPOSITORY. PFPC Trust will
deposit in Book-Entry Systems and other depositories all
securities belonging to the Portfolios eligible for deposit
therein and will utilize Book-Entry Systems and other
depositories to the extent possible in connection with
settlements of purchases and sales of securities by the
Portfolios, and deliveries and returns of securities loaned,
subject to repurchase agreements (or reverse repurchase
agreements) or used as collateral in connection with
borrowings. PFPC Trust shall continue to perform such duties
until it receives Written Instructions or Oral Instructions
authorizing contrary actions. Notwithstanding anything in this
Agreement to the contrary, PFPC Trust's use of a Book-Entry
System shall comply with the requirements of Rule 17f-4 under
the 1940 Act.
PFPC Trust shall administer a Book-Entry System or other depository as
follows:
(i) With respect to securities of each Portfolio which are
maintained in a Book-Entry System or another
depository, the records of PFPC Trust shall identify
by book-entry or otherwise those securities as
belonging to each Portfolio.
(ii) Assets of each Portfolio deposited in a Book-Entry
System or another depository will (to the extent
consistent with applicable law and standard practice)
at all times be segregated from any assets and cash
controlled by PFPC Trust in other than a fiduciary or
custodian capacity but may be commingled with other
assets held in such capacities.
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CONFIDENTIAL AND PROPRIETARY
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(iii) Upon the Fund's request, PFPC Trust will provide the
Fund with copies of any reports obtained by PFPC Trust
on the system of internal accounting control of a
Book-Entry system or other depository promptly after
receipt of such a report by PFPC Trust.
PFPC Trust will provide the Fund with such reports on
its own system of internal control as the Fund may
reasonably request from time to time.
(f) REGISTRATION OF SECURITIES. All securities held for a
Portfolio which are issued or issuable only in bearer form,
except such securities maintained in the Book-Entry System or
in another depository, 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, a Book-Entry System, another
depository, a sub-custodian, or any duly appointed nominee of
the Fund, PFPC Trust, Book-Entry System, depository or
sub-custodian. The Fund reserves the right to instruct PFPC
Trust as to the method of registration and safekeeping of the
securities of the Fund. The Fund agrees to furnish to PFPC
Trust appropriate instruments to enable PFPC Trust to 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. With respect to
uncertificated securities which are registered in the name of
the Fund or a Portfolio (or a nominee thereof), PFPC Trust
will reflect such securities on its records based upon the
holdings information provided to it by the issuer of such
securities, but notwithstanding anything in this Agreement to
the contrary PFPC Trust shall not be obligated to safekeep
such securities or to perform other duties with respect to
such securities other than to make payment for the purchase of
such securities upon receipt of Oral Instructions or Written
Instructions, accept in sale proceeds received by PFPC Trust
upon the sale of such securities of which PFPC Trust is
informed pursuant to Oral Instructions or Written
Instructions, and accept in other distributions received by
PFPC Trust with respect to such securities or reflect on its
records any reinvested distributions with respect to such
securities of which it is informed by the issuer of the
securities.
18
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(g) VOTING AND OTHER ACTION. Neither PFPC Trust nor its nominee
shall vote any of the securities held pursuant to this
Agreement by or for the account of a Portfolio, except in
accordance with Written Instructions. PFPC Trust, directly or
through the use of another entity, shall execute in blank and
promptly deliver all notices, proxies and proxy soliciting
materials received by PFPC Trust as custodian of the Property
to the registered holder of such securities. If the registered
holder is not the Fund on behalf of a Portfolio, then Written
Instructions or Oral Instructions must designate the person
who owns such securities.
(h) TRANSACTIONS NOT REQUIRING INSTRUCTIONS. Notwithstanding
anything in this Agreement requiring instructions in order to
take a particular action, in the absence of a contrary Written
Instruction, PFPC Trust is authorized to take the following
actions without the need for instructions:
(i) COLLECTION OF INCOME AND OTHER PAYMENTS.
19
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(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 to each
Portfolio's 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 called, redeemed, retired or otherwise
become payable (on a mandatory basis) on the
date such securities become payable; and
(E) take any action which may be necessary and
proper in connection with the collection and
receipt of such income and other payments and
the endorsement for collection of checks,
drafts, and other negotiable instruments.
(ii) MISCELLANEOUS TRANSACTIONS.
(A) PFPC Trust is authorized to deliver or cause
to be delivered Property against payment or
other consideration or written receipt
therefor in the following cases:
(1) for examination by a broker or
dealer selling for the account of a
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.
20
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(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) subject to receipt of such
documentation and information as
PFPC Trust may request, execute as
agent on behalf of the Fund all
necessary ownership certificates
required by a national governmental
taxing authority or under the laws
of any U.S. state now or hereafter
in effect, inserting the Fund's
name, on behalf of a Portfolio, on
such certificate as the owner of the
securities covered thereby, to the
extent it may lawfully do so.
(iii) OTHER MATTERS.
(A) Subject to receipt of such documentation and
information as PFPC Trust may request, PFPC
Trust will, in such jurisdictions as PFPC
Trust may agree from time to time, seek to
reclaim or obtain a reduction with respect to
any withholdings or other taxes relating to
assets maintained hereunder (provided that
PFPC Trust will not be liable for failure to
obtain any particular relief in a particular
jurisdiction); and
(B) PFPC Trust is authorized to deduct or
withhold any sum in respect of tax which PFPC
Trust considers is required to be deducted or
withheld "at source" by any relevant law or
practice.
21
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(i) SEGREGATED ACCOUNTS.
(i) PFPC Trust shall upon receipt of Written Instructions
or Oral Instructions establish and maintain segregated
accounts on its records for and on behalf of each
Portfolio. Such accounts may be used to transfer cash
and securities, including securities in a Book-Entry
System or other depository:
(A) for the purposes of compliance by the Fund
with the procedures required by a securities
or option exchange, providing such procedures
comply with the 1940 Act and any releases of
the SEC relating to the maintenance of
segregated accounts by registered investment
companies; and
(B) upon receipt of Written Instructions, for
other purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such shareholders holding
Shares through XXX accounts, in accordance with the
Fund's prospectuses, the Internal Revenue Code of
1986, as amended (including regulations promulgated
thereunder), and with such other procedures as are
mutually agreed upon from time to time by and among
the Fund, PFPC Trust and the Fund's transfer agent.
(j) PURCHASES OF SECURITIES. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written
Instructions that specify:
(i) the name of the issuer and the title of the
securities, including CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased
and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the broker through
whom the purchase was made. PFPC Trust shall upon
receipt of securities purchased by or for a Portfolio
(or otherwise in accordance with standard market
practice) pay out of the monies 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.
22
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(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 anything to the contrary in this
Agreement, PFPC Trust may accept payment in such form as is consistent
with standard industry practice and may deliver assets and arrange for
payment in accordance with standard market practice.
(l) REPORTS; PROXY MATERIALS.
(i) PFPC Trust shall furnish to the Fund the following
reports:
(A) such periodic and special reports as the Fund
may reasonably request;
23
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(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 corresponding security identification
number) held at the end of such month and
stating the cash balance of each Portfolio at
the end of such month.
(C) the reports required to be furnished to the
Fund pursuant to Rule 17f-4 under 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. PFPC Trust may in its sole discretion
credit an Account with respect to income, dividends,
distributions, coupons, option premiums, other payments or
similar items prior to PFPC Trust's actual receipt thereof,
and in addition PFPC Trust may in its sole discretion credit
or debit the assets in an Account on a contractual settlement
date with respect to any sale, exchange or purchase applicable
to the Account; provided that nothing herein or otherwise
shall require PFPC Trust to make any advances or to credit any
amounts until PFPC Trust's actual receipt thereof. If PFPC
Trust credits an Account with respect to (a) income,
dividends, distributions, coupons, option premiums, other
payments or similar items on a contractual payment date or
otherwise in advance of PFPC Trust's actual receipt of the
amount due, (b) the proceeds of any sale or other disposition
of assets on the contractual settlement date or otherwise in
advance of PFPC Trust's actual receipt of the amount due or
(c) provisional crediting of any amounts due, and (i) PFPC
Trust is subsequently unable to collect full and final payment
for the amounts so credited within a reasonable time period
using reasonable efforts or (ii) pursuant to standard industry
practice, law or regulation PFPC Trust is required to repay to
a third party such amounts so credited, or if any Property has
been incorrectly credited, PFPC Trust shall have the absolute
right in its sole discretion without demand to reverse any
such credit or payment, to debit or deduct the amount of such
credit or payment from the Account, and to otherwise pursue
recovery of any such amounts so credited from the Fund. The
Fund hereby grants 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.
24
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(n) COLLECTIONS. All collections of monies or other property in
respect, or which are to become part, of the Property (but not
the safekeeping thereof upon receipt by PFPC Trust) shall be
at the sole risk of the Fund. If payment is not received by
PFPC Trust within a reasonable time after proper demands have
been made, PFPC Trust shall notify the Fund in writing,
including copies of all demand letters, any written responses
and memoranda of all oral responses and shall await
instructions from the Fund. PFPC Trust shall not be obliged to
take legal action for collection unless and until reasonably
indemnified to its satisfaction. PFPC Trust shall also notify
the Fund as soon as reasonably practicable whenever income due
on securities is not collected in due course and shall provide
the Fund with periodic status reports of such income collected
after a reasonable time.
25
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(o) FOREIGN EXCHANGE. PFPC Trust and/or sub-custodians may enter
into or arrange foreign exchange transactions (at such rates
as they may consider appropriate) in order to facilitate
transactions under this Agreement, and such entities and/or
their affiliates may receive compensation in connection with
such foreign exchange transactions.
15. DURATION AND TERMINATION. This Agreement shall continue until
terminated by the Fund or PFPC Trust on sixty (60) days' prior written
notice to the other party. In the event this Agreement is terminated
(pending appointment of a successor to PFPC Trust or vote of the
shareholders of the Fund to dissolve or to function without a custodian
of its cash, securities or other property), PFPC Trust shall not
deliver cash, securities or other property of the Portfolios to the
Fund. If, after the effective date of the termination of this
Agreement, the Fund has not appointed a successor custodian, PFPC Trust
may deliver the Fund's cash, securities and other property to a bank or
trust company of PFPC Trust's choice, having aggregate capital, surplus
and undivided profits, as shown by its last published report, of not
less than twenty million dollars ($20,000,000), as a custodian for the
Fund to be held under terms similar to those of this Agreement. PFPC
Trust shall not be required to make any delivery or payment of assets
upon termination until full payment shall have been made to PFPC Trust
of all of its fees, compensation, costs and expenses (including without
limitation fees and expenses associated with deconversion or conversion
to another service provider and other trailing expenses incurred by
PFPC Trust). PFPC Trust shall have a first priority contractual
possessory 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.
26
16. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 0000
Xxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx Xxxxxxxx; (b) if to the Fund, at NATIONAL CITY BANK,
0000 XXXX XXXXX XXXXXXX, 00XX XXXXX, XXXXXXXXX, XXXX 00000, Attention:
[XXXXXXXX XXXX], WITH A COPY TO XXXXXX X. XXXXXX, DRINKER XXXXXX &
XXXXX LLP, ONE XXXXX SQUARE, 00XX & XXXXXX XXXXXXX, XXXXXXXXXXXX,
XXXXXXXXXXXX, 00000-0000; or (c) if to neither of the foregoing, at
such other address as shall have been given by like notice to the
sender of any such notice or other communication by the other party. If
notice is sent by confirming electronic delivery, hand or facsimile
sending device, it shall be deemed to have been given immediately. If
notice is sent by first-class mail, it shall be deemed to have been
given five days after it has been mailed. If notice is sent by
messenger, it shall be deemed to have been given on the day it is
delivered.
17. AMENDMENTS. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
27
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
18. DELEGATION; ASSIGNMENT. This Agreement, its benefits and obligations
shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. This Agreement
may not be assigned or otherwise transferred by either party hereto,
without the prior written consent of the other party, which consent
shall not be unreasonably withheld; provided, however, that PFPC Trust
may, upon 30 days' prior written notice to the Fund, in its sole
discretion, assign all its right, title and interest in this Agreement
to an affiliate, parent or subsidiary, provided that, in its reasonable
judgment the Board of Trustees of the Fund, acting in its sole
discretion, determines that: (i) the financial capacity of such
assignee is not materially less than that of PFPC Trust; (ii) the
nature and quality of the services to be provided hereunder are not
materially adversely affected by such assignment; and (iii) the quality
and capacity of the personnel and facilities of the assignee are not
materially less than those of PFPC Trust.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
20. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may embody in one or more
separate documents their agreement, if any, with respect to
delegated duties.
(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.
28
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(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) INFORMATION. The Fund will provide such information and
documentation as PFPC Trust may reasonably request in
connection with services provided by PFPC Trust to the Fund.
(f) GOVERNING LAW. This Agreement shall be deemed to be a contract
made in Delaware and governed by Delaware law, without regard
to principles of conflicts of law.
29
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
(g) PARTIAL INVALIDITY. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(i) FACSIMILE SIGNATURES. The facsimile signature of any party to
this Agreement shall constitute the valid and binding
execution hereof by such party.
(j) CUSTOMER IDENTIFICATION PROGRAM NOTICE. To help the U.S.
government fight the funding of terrorism and money laundering
activities, U.S. Federal law requires each financial
institution to obtain, verify, and record certain information
that identifies each person who initially opens an account
with that financial institution on or after October 1, 2003.
Consistent with this requirement, PFPC Trust may request (or
may have already requested) the Fund's name, address and
taxpayer identification number or other government-issued
identification number, and, if such party is a natural person,
that party's date of birth. PFPC Trust may also ask (and may
have already asked) for additional identifying information,
and PFPC Trust may take steps (and may have already taken
steps) to verify the authenticity and accuracy of these data
elements.
(k) BUSINESS TRUST. The name The Armada Advantage Fund and of any
investment portfolio thereof, and any reference to the
"Trustees" of The Armada Advantage Fund, refer respectively to
the trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under the
Declaration of Trust which is hereby referred to and a copy of
which is on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of
the Fund. The obligations of the Fund entered into in its
name, or on behalf of any of its investment portfolios, or on
behalf thereof by any of the Trustees, representatives or
agents, are made not individually, but in such capacities, and
are not binding upon any of the Trustees, shareholders or
representatives of the Fund personally, but bind only the Fund
property, and all persons dealing with any class of shares of
the Fund must look solely to the Fund property belonging to
such class for the enforcement of any claims against the Fund.
30
CONFIDENTIAL AND PROPRIETARY
NOT FOR REPRODUCTION OR RE-DISTRIBUTION
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above
written.
PFPC TRUST COMPANY
By:
-----------------------------------------
Title:
--------------------------------------
THE ARMADA ADVANTAGE FUND
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Title: President
--------------------------------------
