CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of Dec. 30, 2002 by and between PFPC TRUST
COMPANY. a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and MERIDIAN FUND, INC., a Maryland corporation (the "Fund").
WITNESSETH:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services, and PFPC Trust wishes to furnish custodian services, either directly
or through an affiliate or affiliates, as more fully described herein.
NOW. THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(c) "Authorized Person" means any officer of the Fund and any
other person authorized by the Fund to give Oral or Written
Instructions on behalf of the Fund. 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 United States and federal agency securities. its
successor or successors- and nominee or nominees and any
book-entry system maintained by a clearing agency registered
with the SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "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 from an
Authorized Person via electronic mail as Oral Instructions.
(g) "PFPC Trust", means PFPC Trust Company or a subsidiary or
affiliate of PFPC Trust Company.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940
Act and the CEA.
(j) "Shares" mean the shares of beneficial interest of any series
or class of the Fund.
(k) "Property" means:
(i) any and all securities and other investment items
which the Fund may from time to time deposit, or
cause to be deposited, with PFPC Trust or which PFPC
Trust may from time to time hold for the Fund;
(ii) all income in respect of any of such securities or
other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by PFPC Trust from time to
time, from or on behalf of the Fund.
(l) "Written Instructions" mean (i) written instructions signed by
an appropriate number of 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 Written 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. on behalf of each of its investment portfolios (each, a
"Portfolio"), and PFPC Trust accepts such appointment and agrees to furnish such
services in accordance with the terms of this Agreement.
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 each Portfolio's advisory agreements:
(d) a copy of the distribution/underwriting agreement with respect
to each class of Shares.
(e) a copy of each Portfolio's administration agreement;
(f) copies of any distribution and/or shareholder servicing plans
and agreements made in respect of the Fund or a Portfolio; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. COMPLIANCE WITH LAWS.
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 except for any entity to which PFPC
delegates or assigns duties to be performed under this Agreement in
accordance with Section 19.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall
act only upon Oral Instructions or Written Instructions. PFPC
Trust undertakes to comply with all Oral Instructions or
Written Instructions received by it and believed to be
genuine, and shall act (or refrain from acting) strictly in
accordance with the terms of such 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 the organizational documents of the
Fund or of any vote, resolution or proceeding of the Fund's
Board of Directors or of the Portfolios' 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. 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. at its own expense, 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. Unless such advice
conflicts with advice given by the Fund's counsel as to a
legal requirement under the Securities Laws. PFPC Trust shall
promptly inform the Fund of any such conflict before taking
the actions in question.
(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
believes, in good faith, to be consistent with those
directions or advice or Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as
to impose an obligation upon PFPC Trust (i) to seek such
directions or advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such
directions or advice or Oral Instructions or Written
Instructions unless, under the terms of other provisions of
this Agreement, the same is a condition of PFPC Trust's
properly taking or not taking such action.
Nothing in this subsection shall excuse PFPC Trust from
liability for any action or omission on the part of PFPC Trust
that constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by PFPC Trust of any duties,
obligations or responsibilities set forth in this Agreement.
7. RECORDS; VISITS. (a) The books and records pertaining to the Fund and
any Portfolio, which are in the possession or under the control of PFPC
Trust, shall be the property of the Fund. Such books and records shall
be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund, Authorized
Persons and employees and agents of the SEC or other governmental
authorities with the approval of the Fund 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, or to employees and agents of
the SEC or other governmental authorities, at the Fund's expense. (b)
Upon termination of this Agreement. PFPC Trust shall, at the Fund's
reasonable request and in accordance with Written Instructions, deliver
a copy of the books and records pertaining to the Fund or Portfolios
that are in the possession or under control of PFPC Trust, to the Fund
or any other person designated by the Fund.
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 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.
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 communication and electronic
data processing equipment to the extent appropriate equipment is
available. In the event of equipment failures or other events, 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, on behalf of each of
the Portfolios, will pay to PFPC Trust a fee or fees as may be agreed
to in writing from time to time by the Fund and PFPC Trust.
13. INDEMNIFICATION. The Fund, on behalf of each Portfolio, agrees to
indemnify, 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 (i) at the request or
direction of or in reliance on the advice of the Fund or (ii) in
accordance with Oral Instructions or Written Instructions, provided
that neither PFPC Trust. nor any of its affiliates, shall be
indemnified, and PFPC Trust shall indemnify and hold harmless the Fund,
the Portfolios and their affiliates 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.
The provisions of this Section 13 shall survive termination of 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 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 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 and notwithstanding anything
in this Agreement to the contrary, and provided that PFPC
Trust is in compliance with Section 1 l hereof, (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; provided that PFPC Trust has acted in accordance
with the standard set forth in Section 14(a) above and (ii)
PFPC Trust shall not be under any duty or obligation to
inquire into and shall not be liable for the validity or
invalidity, authority or lack thereof, or truthfulness or
accuracy or lack thereof, of any
instruction, direction, notice, instrument or other
information which PFPC Trust reasonably believes to be
genuine.
(c) Notwithstanding anything in this Agreement to the contrary,
neither PFPC Trust nor its affiliates shall be liable for any
consequential, special or indirect losses or damages; whether
or not the likelihood of such losses or damages was known by
PFPC Trust or its affiliates.
(d) 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) The provisions of this Section 14 shall survive termination of
this Agreement.
15. DESCRIPTION OF CUSTODIAN 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 such property until
actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon
Written Instructions, shall open and maintain separate
accounts in the Fund's name using all cash received from or
for the account of the Fund,
subject to the terms of this Agreement. In addition, upon
Written Instructions, PFPC Trust shall open separate custodial
accounts for each separate Portfolio of the Fund
(collectively, the "Accounts") and shall hold in the Accounts
all cash received from or for the Accounts of the Fund
specifically designated to each separate Portfolio.
PFPC Trust shall make cash payments from or for the Accounts
of a Portfolio only for:
(i) purchases of securities in the name of a Portfolio,
PFPC Trust, PFPC Trust's nominee or a sub-custodian
or nominee thereof as provided in sub-section (j) and
for which PFPC Trust has received a copy of the
broker's or dealer's confirmation or payee's invoice,
as appropriate;
(ii) purchase or redemption of Shares of the Fund
delivered to PFPC Trust;
(iii) payment of, subject to Written Instructions,
interest, taxes, administration, accounting,
distribution, advisory and management fees which are
to be borne by a Portfolio;
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent, as agent for
the shareholders, of an amount equal to the amount of
dividends and distributions stated in the Written
Instructions to be 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 of proper compensation as described in this
Agreement 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. 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 provided in the 1940 Act).
PFPC Trust shall remain responsible for the
performance of
all of its duties as described in this Agreement and
shall hold the Fund and each Portfolio harmless from
its own acts or omissions, under the standards of
care provided for herein, or the acts and omissions
of any sub-custodian chosen by PFPC Trust under the
terms of this sub-section (c).
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust, directly or through the use of the Book-Entry System,
shall:
(i) deliver any securities held for a Portfolio against
the receipt of payment for the sale of such
securities;
(iii) execute and deliver to such persons as may be
designated in such Oral Instructions or Written
Instructions. proxies, consents, authorizations, and
any other instruments whereby the authority of a
Portfolio as owner of any securities may be
exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable at the option of
the holder; provided that, in any such case, the cash
or other consideration is to be delivered to PFPC
Trust;
(iv) deliver any securities held for a Portfolio against
receipt of other securities or cash issued or paid in
connection with the liquidation, reorganization,
refinancing, tender offer, merger, consolidation, or
recapitalization of any corporation, or the exercise
of any conversion privilege;
(v) deliver any securities held for a Portfolio to any
protective committee, reorganization committee or
other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization
or sale of assets of any corporation, and receive and
hold under the terms of this Agreement such
certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to
evidence such delivery;
(vi) make such transfer or exchanges of the assets of the
Portfolios and take such other steps as shall be
stated in said Oral Instructions or Written
Instructions to be for the purpose of effectuating a
duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the
Fund;
(vii) release securities belonging to a Portfolio to any
bank or trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by the Fund
on behalf of that Portfolio; provided, however, that
securities shall be released only upon payment to
PFPC Trust of the monies borrowed, except that in
cases where additional collateral is required to
secure a borrowing already made subject to proper
prior 'authorization, further securities may be
released for that purpose; and repay such loan upon
redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note
or notes evidencing the loan;
(viii) release and deliver securities owned by a Portfolio
in connection with any repurchase agreement entered
into on behalf of the Fund, but only on receipt of
payment therefor; and pay out moneys of the Fund in
connection with such repurchase agreements, but only
upon the delivery of the securities;
(ix) release and deliver or exchange securities owned by
the Fund in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
(x) release and deliver securities to a broker in
connection with the broker's custody of margin
collateral relating to futures and options
transactions;
(xi) release and deliver securities owned by the Fund for
the purpose of redeeming in kind shares of the Fund
upon delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by
the Fund for other purposes.
PFPC Trust must also receive a certified resolution describing
the nature of the corporate purpose and the name and address
of the person(s) to whom delivery shall be made when such
action is pursuant to sub-paragraph d(xii).
(e) Use of Book-Entry System. PFPC Trust is authorized and
instructed, on a continuous basis, to deposit in the
Book-Entry System all securities belonging to the Portfolios
eligible for deposit therein and to utilize the Book-Entry
System to the extent possible in connection
with settlements of purchases and sales of securities by the
Portfolios, and deliveries and returns of securities loaned,
subject to repurchase agreements or used as collateral in
connection with borrowings. PFPC Trust shall continue to
perform such duties until it receives Written Instructions or
Oral Instructions authorizing contrary actions.
PFPC Trust shall administer the Book-Entry System as follows:
(i) With respect to securities of each Portfolio which
are maintained in the Book-Entry System. the records
of PFPC Trust shall identify by Book-Entry or
otherwise those securities belonging to each
Portfolio.
(ii) Assets of each Portfolio deposited in the Book-Entry
System will at all times be segregated from any
assets and cash controlled by PFPC Trust in other
than a fiduciary or custodian capacity but may be
commingled with other assets held in such capacities.
PFPC Trust will provide the Fund with such reports on its own system of
internal control as the Fund may reasonably request from time to time.
(f) Registration of Securities. All Securities held for a
Portfolio which are issued or issuable only in bearer form,
except such securities held in the Book-Entry System, shall be
held by PFPC Trust in bearer form; all other securities held
for a Portfolio may be registered in the name of the Fund on
behalf of that Portfolio, PFPC Trust, the Book-Entry System, a
sub-custodian, or any duly appointed nominee of the Fund, PFPC
Trust, Book-Entry System or sub-custodian. The Fund reserves
the right to instruct PFPC Trust as to the method of
registration and safekeeping of the securities of the Fund.
The Fund agrees to furnish to PFPC Trust
appropriate instruments to enable PFPC Trust to hold or
deliver in proper form for transfer, or to register in the
name of its nominee or in the name of the Book-Entry System or
in the name of another appropriate entity, any securities
which it may hold for the Accounts and which may from time to
time be registered in the name of the Fund on behalf of a
Portfolio.
(g) Voting and Other Action. Neither PFPC Trust nor its nominee
shall vote any of the securities held pursuant to this
Agreement by or for the account of a Portfolio, except in
accordance with Written Instructions. PFPC Trust, directly or
through the use of the Book-Entry System, shall execute in
blank and promptly deliver all notices, proxies and proxy
soliciting materials received by PFPC Trust as custodian of
the Property to the registered holder of such securities. If
the registered holder is not the Fund on behalf of a
Portfolio, then Written Instructions or Oral Instructions must
designate the person who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of contrary
Written Instructions, PFPC Trust is authorized to take the following
actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of each
Portfolio, all income, dividends, distributions,
coupons, option premiums, other payments and similar
items, included or to be included in the Property,
and, in addition, promptly advise each Portfolio of
such receipt and credit such income, as collected, to
each Portfolio's custodian account;
(B) endorse and deposit for collection, in the name of
the Fund, checks, drafts, or other orders for the
payment of money;
(C) receive and hold for the account of each Portfolio
all securities received as a distribution on the
Portfolio's securities as a result of a stock
dividend, share split-up or reorganization,
recapitalization, readjustment or other rearrangement
or distribution of rights or similar securities
issued with respect to any securities belonging to a
Portfolio and held by PFPC Trust hereunder;
(D) present for payment and collect the amount payable
upon all securities which may mature or be, on a
mandatory basis, called, redeemed, or retired, or
otherwise become payable on the date such securities
become payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of such
income and other payments and the endorsement for
collection of checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(1) for examination by a broker or dealer
selling for the account of a Portfolio in
accordance with street delivery custom;
(2) for the exchange of interim receipts or
temporary securities for definitive
securities; and
(3) for transfer of securities into the name of
the Fund on behalf of a Portfolio or PFPC
Trust or a sub-custodian or a nominee of one
of the foregoing, or for exchange of
securities for a different number of bonds,
certificates, or other evidence,
representing the same aggregate face amount
or number of units bearing the same interest
rate, maturity date and call provisions, if
any; provided that, in any such case, the
new securities are to be delivered to PFPC
Trust.
(B) unless and until PFPC Trust receives Oral
Instructions or Written Instructions to the contrary,
PFPC Trust shall:
(1) pay all income items held by it which call
for payment upon presentation and hold the
cash received by it upon such
payment for the account of each Portfolio;
(2) collect interest and cash dividends
received, with notice to the Fund, to the
account of each Portfolio;
(3) hold for the account of each Portfolio all
stock dividends, rights and similar
securities issued with respect to any
securities held by PFPC Trust; and
(4) execute as agent on behalf of the Fund all
necessary ownership certificates required by
the Internal Revenue Code or the Income Tax
Regulations of the United States Treasury
Department or under the laws of any state
now or hereafter in effect, inserting the
Fund's name, on behalf of a Portfolio, on
such certificate as the owner of the
securities covered thereby, to the extent it
may lawfully do so.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions
or Oral Instructions establish and maintain
segregated accounts on its records for and on behalf
of each Portfolio. Such accounts may be used to
transfer cash and securities, including securities in
the Book-Entry System:
(A) for the purposes of compliance by the Fund
with the procedures required by a securities
or option exchange, providing such
procedures comply with the 1940 Act and any
releases of the SEC relating to the
maintenance of segregated accounts by
registered investment companies; and
(B) upon receipt of Written Instructions, for
other purposes.
(ii) PFPC Trust shall arrange for the establishment of XXX
custodian accounts for such shareholders holding
Shares through XXX accounts, in accordance with the
Fund's prospectuses, the Internal Revenue Code of
1986, as amended (including regulations promulgated
thereunder), and with such other procedures as are
mutually agreed upon from time to time by and among
the Fund, PFPC Trust and the Fund's transfer agent.
(j) Purchases of Securities. PFPC Trust shall settle purchased
securities upon receipt of Oral Instructions or Written
Instructions that specify:
(i) the name of the issuer and the title of the
securities, including CUSIP number if applicable;
(ii) the number of shares or the principal amount
purchased and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the broker
through whom the purchase was made. PFPC Trust shall
upon receipt of securities purchased by or for a
Portfolio pay out of the moneys held for the account
of the Portfolio the total amount payable to the
person from whom or the broker through whom the
purchase was made, provided that the same conforms to
the total amount payable as set forth in such Oral
Instructions or Written Instructions.
(k) Sales of Securities. PFPC Trust shall settle sold securities
upon receipt of Oral Instructions or Written Instructions that
specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and
accrued interest, if any:
(iii) the date of trade and settlement;
(iv) the sale price per unit:
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to
whom the sale was made;
(vii) the location to which the security must be delivered
and delivery deadline, if any; and
(viii) the Portfolio involved.
PFPC Trust shall deliver the securities upon receipt of the total
amount payable to the Portfolio upon such sale, provided that the total
amount payable is the same as was set forth in the Oral Instructions or
Written Instructions. Notwithstanding the other provisions thereof,
PFPC Trust may accept payment in such form as shall be satisfactory to
it, and may deliver securities and arrange for payment in accordance
with the customs prevailing among dealers in securities.
(1) Reports: Proxy Materials.
(i) PFPC Trust shall furnish to the Fund the following
reports:
(A) such periodic and special reports as the
Fund may reasonably request;
(B) a monthly statement summarizing all
transactions and entries for the account of
each portfolio, listing each portfolio
security belonging to each Portfolio with
the adjusted average cost of each issue and
the market value at the end of such month
and stating the cash account of each
Portfolio including disbursements;
(C) the reports required to be furnished to the
Fund pursuant to Rule 17f-4 of the 1940 Act;
and
(D) such other information as may be agreed upon
from time to time between the Fund and PFPC
Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any
proxy statement, proxy material, notice of a call or
conversion or similar communication received by it as
custodian of the Property. PFPC Trust shall be under
no other obligation to inform the Fund as to such
actions or events. For clarification, upon
termination of this Agreement PFPC Trust shall have
no
responsibility to transmit such material or to inform
the Fund or any other person of such actions or
events.
(m) Crediting of Accounts. If PFPC Trust in its. sole discretion
credits an Account with respect to (a) income, dividends,
distributions, coupons, option premiums, other payments or
similar items on a contractual payment date or otherwise in
advance of PFPC Trust's actual receipt of the amount due, (b)
the proceeds of any sale or other disposition of assets on the
contractual settlement date or otherwise in advance of PFPC
Trust's actual receipt of the amount due or (c) provisional
crediting of any amounts due, and (i) PFPC Trust is
subsequently unable to collect full and final payment for the
amounts so credited within a reasonable time period using
reasonable efforts or (ii) pursuant to standard industry
practice, law or regulation PFPC Trust is required to repay to
a third party such amounts so credited, or if any Property has
been incorrectly credited, PFPC Trust shall have the absolute
right in its sole discretion without demand to reverse any
such credit or payment, to debit or deduct the amount of such
credit or payment from the Account, and to otherwise pursue
recovery of any such amounts so credited from the Fund.
Nothing herein or otherwise shall require PFPC Trust to make
any -advances or to credit any amounts until PFPC Trust's
actual receipt thereof. The Fund hereby grants a first
priority contractual possessory security interest in and a
right of setoff against the assets maintained in an Account
hereunder in the
amount necessary to secure the return and payment to PFPC
Trust of any advance or credit made by PFPC Trust (including
charges related thereto) to such Account.
(n) Collections. All collections of monies or other property in
respect, or which are to become part, of the Property (but not
the safekeeping thereof upon receipt by PFPC Trust) shall be
at the sole risk of the Fund. If payment is not received by
PFPC Trust within a reasonable time after proper demands have
been made, PFPC Trust shall notify the Fund in writing,
including copies of all demand letters, any written responses
and memoranda of all oral responses and shall await
instructions from the Fund. PFPC Trust shall not be obliged to
take legal action for collection unless and until reasonably
indemnified to its satisfaction. PFPC Trust shall also notify
the Fund as soon as reasonably practicable whenever income due
on securities is not collected in due course and shall provide
the Fund with periodic status reports of such income collected
after a reasonable time.
16. DURATION AND TERMINATION. Either of the parties hereto may terminate
this Agreement by giving the other party a notice in writing specifying
the date of such termination, which shall not be less than 90 days
after the date of giving such notice. 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, PFPC Trust shall not deliver
cash, securities or other property of the Portfolios to the Fund. It
may deliver them to a bank or trust company of PFPC Trust's choice,
having an aggregate capital, surplus and undivided profits, as shown by
its last published report, of not less than twenty million dollars
($20,000,000), as a custodian for the Fund to be held under terms
similar to those of this Agreement. PFPC Trust shall not be required to
make any delivery or payment of assets upon termination until full
payment shall have been made to PFPC Trust of all of its fees,
compensation, costs and expenses (except as described below, 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. Should the Fund
terminate this Agreement because of a material breach by PFPC Trust,
PFPC Trust agrees that all expenses or costs associated with the
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, including all trailing expenses
incurred by PFPC Trust, will be borne by PFPC Trust.
17. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 8800
Tinicum Xxxxxxxxx. 0xx Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, Attention: Xxx Xxxxxxxx; (b) if to the Fund, at 00 X. Xxx
Xxxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, .Xxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxx, Xx., President; or (c) if to neither of
the foregoing, at such other address as shall have been given by like
notice to the sender of any such notice or other communication by the
other party. If
notice is sent by hand or by confirming electronic 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.
18. AMENDMENTS. This Agreement may not be altered or amended, except by an
instrument in writing, executed by both parties, and in the case of the
Fund, if appropriate, such alteration or amendment will be authorized
by its Board of Directors.
19. DELEGATION; ASSIGNMENT. PFPC Trust may assign its rights and delegate
its duties hereunder to any affiliate of PFPC Trust or of The PNC
Financial Services Group, Inc., provided that PFPC Trust gives the Fund
30 days' prior written notice of such assignment or delegation.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
21. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof.
22. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter
hereof, provided that the parties may embody in one 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 in either case would affect
materially the obligations or responsibilities of PFPC Trust
hereunder without the prior written approval of PFPC Trust,
which approval shall not be unreasonably withheld or delayed.
(d) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their
construction or effect.
(e) Governing Law. This Agreement shall be deemed to be a contract
made in 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.
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/ Xxxxxx Xxxxxxxx
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Title:
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MERIDIAN FUND, INC.
By: /s/ XXXXXXX X. XXXXX XX.
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Title: President
