CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of _______ , 2001 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and THE ELITE GROUP, 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 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 its
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nominee or nominees and any book-entry system maintained by an exchange
registered with the SEC under the 1934 Acct.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "CHANGE OF CONTROL" means a change in ownership or control (not including
transactions between wholly-owned direct or indirect subsidiaries of a
common parent) of 25% or more of the beneficial ownership of the shares of
common stock or shares of beneficial interest of an entity or its
parent(s).
(g) "ORAL INSTRUCTIONS" mean oral instructions received by PFPC Trust from an
Authorized Person or from a person reasonably believed by PFPC Trust to be
an Authorized Person. PFPC Trust may, in its sole discretion in each
separate instance, consider and rely upon instructions it receives from an
Authorized Person via electronic mail as Oral Instructions.
(h) "PFPC TRUST" means PFPC Trust Company or a subsidaiary or affiliate of PFPC
Trust Company.
(i) "SEC" means the Securities and Exchange Commission.
(j) "SECURITIES LAWS" mean the 1933 Act, the 1940 Act and the CEA.
(k) "SHARES" mean the shares of beneficial interest of any series or class of
the Fund.
(l) "PROPERTY" means:
(i) any and all securities and other investment items which the Fund may
from time to time deposit, or cause to be deposited, with PFPC Trust
or which PFPC Trust may from time to time hold for the Fund;
(ii) all income in respect of any of such securities or other investment
items;
(iii)all proceeds of the sale of any of such securities or investment
items; and
(iv) all proceeds of the sale of securities issued by the Fund, which are
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received by PFPC Trust from time to time, from or on behalf of the
Fund.
(m) "WRITTEN INSTRUCTIONS" means (i) written instructions signed by two
Authorized Persons and received by PFPC Trust or (ii) trade instructions
transmitted by means of an electronic transaction reporting system which
requires the use of a password or other authorized identifier in order to
gain access. The instructions may be delivered electronically or by hand,
mail, tested telegram, cable, telex or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC Trust to provide custodian
services to the Fund, on behalf of each of its investment portfolios (each,
a "Portfolio"), and PFPC Trust accepts such appointment and agrees to
furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC Trust with the following:
(a) at PFPC Trust's request, certified or authenticated copies of the
resolutions of the Fund's Board of Trustees, approving the
appointment of PFPC Trust or its affiliates to provide services;
(b) a copy of the Fund's most recent effective registration
statement;
(c) a copy of each Portfolio's advisory agreements;
(d) a copy of the distribution/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.
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4. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with material applicable requirements of
the Securities Laws and material laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to
be performed by PFPC Trust hereunder. Except as specifically set forth
herein, PFPC Trust assumes no responsibility for such compliance by the
Fund or any other entity.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act only
upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instruction or
Written Instruction it receives from an Authorized Person (or from a
person reasonably believed by PFPC Trust to be an Authorized Person)
pursuant to this Agreement. PFPC Trust may assume that any Oral
Instructions or Written Instructions received hereunder are not in any
way inconsistent with the provisions of organizational documents of
the Fund or of any vote, resolution or proceeding of the Fund's Board
of 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
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transactions authorized by the Oral Instructions or PFPC Trust's
ability to rely upon such Oral Instructions. Where Oral Instructions
or Written Instructions reasonable 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 questions
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 advisor or PFPC Trust, at
the option of PFPC Trust).
(c) CONFLICTING ADVICE. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Fund, and the advice it receives from counsel, PFPC
Trust shall be entitled to rely upon and follow the advice of counsel.
(d) PROTECTION OF PFPC TRUST. PFPC Trust shall be protected in any action
it takes or does not take in reliance upon directions or advice or
Oral Instructions or Written Instructions it receives from the Fund or
from counsel and which PFPC Trust believes, in good faith, to be
consistent with those directions or advice or Oral Instructions or
Written Instructions. Nothing in the section shall be construed so
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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 such action.
7. RECORDS; VISITS. The books and records pertaining to the Fund and any
Portfolio, which are in the possession or under the control of PFPC Trust,
shall be the property of the Fund. Such books and records shall be prepared
and maintained as required by the 1940 Act and other applicable securities
laws, rules and regulations. The Fund and Authorized Persons shall have
access to such books and records at all times during PFPC Trust's normal
business hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by PFPC Trust to the Fund or to an
authorized representative of the Fund, at the Fund's expense.
8. CONFIDENTIALITY. Each party shall keep confidential any information
relation 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, customers 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
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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.
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11. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment
failures, PFPC Trust shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions. PFPC Trust shall have
no liability with respect to the loss of data or service interruptions
cause 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. The Fund acknowledges
that PFPC Trust may receive float benefits in connection with maintaining
certain accounts required to provide services under this Agreement.
13. INDEMNIFICATION. The Fund, on behalf of each Portfolio, agrees to
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
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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 the 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, (i) PFPC Trust shall not be liable for
losses beyond its control, including without limitation ( subject to
Section 11 ), delays or errors or loss of data occurring by reason of
circumstances beyond PFPC Trust's control, provided that PFPC Trust
has acted in accordance with the standard set forth in Section 14 (a)
above; and (ii) PFPC Trust shall not be under any duty or obligation
to inquire into and shall not be liable for the validity or invalidity
or authority or lack thereof of any Oral Instruction or Written
Instruction, notice or other instrument which PFPC Trust reasonably
believes to be genuine.
(c) Notwithstanding anything in this Agreement to the contrary, (i)
neither PFPC
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Trust nor its affiliates shall be liable for any consequential,
special or indirect losses or damages, whether or not the likelihood
of such losses or damages was known by PFPC Trust or its affiliates
and (ii) PFPC Trust's cumulative liability to the Fund for all losses,
claims, suits, controversies, breaches or damages for any cause
whatsoever (including but not limited to those arising out of or
related to this Agreement) and regardless of the form of action or
legal theory shall not exceed the lesser of $100,000 or the fees
received by PFPC Trust for services provided hereunder during the 12
months immediately prior to the date of such loss or damage.
(d) No party may assert a cause of action against PFPC Trust or any of its
affiliates that allegedly occurred more than 12 months immediately
prior to the filing of the suit (or, if applicable, commencement of
arbitration proceedings) alleging such cause of action.
(e) Each party shall have a duty to mitigate damages for which the other
party may become responsible.
(f) The provisions of this Section 14 shall survive termination of the
Agreement.
15. DESCRIPTION OF SERVICES.
(a) DELIVERY OF THE PROPERTY. The Fund will deliver or arrange for
delivery to PFPC Trust, all the Property owned by the Portfolios,
including cash received as a result of the distribution of Shares,
during the 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
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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
(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 (i) 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 to PFPC Trust for its services hereunder;
(viii) payments to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
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(ix) other payments, upon Written Instructions.
PFPC Trust is herby 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 Trustees, or any officer,
employee or agent of the Fund with draw 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).
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(d) TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Oral Instructions
or Written Instructions and not otherwise, PFPC Trust, directly or
through the use of the Book-Entry System, shall:
(i) deliver any securities held for a Portfolio against the receipt
of payment for the sale of such securities;
(ii) execute and deliver to such persons as may be designated in such
Oral Instructions or Written Instructions, proxies, consents,
authorizations, and any other instruments whereby the authority
of a Portfolio as owner of any securities may be exercised;
(iii)deliver any securities to the issuer thereof, or its agent, when
such securities are called, redeemed, retired or otherwise become
payable at the option of the holder; provided that, in any such
case, the cash or other consideration is to be delivered to PFPC
Trust;
(iv) deliver any securities held for a Portfolio against receipt of
other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, tender offer, merger,
consolidation or recapitalization of any corporation, or the
exercise of any conversion privilege;
(v) deliver any securities held for a Portfolio to any protective
committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and
receive and hold under the terms of this Agreement such
certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such deliver;
(vi) make such transfer of 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
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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 deliver 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 settlement of purchases and sales of securities by the Portfolio,
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:
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(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 reasonable 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 or 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
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The use of the Book-Entry System, shall execute in blank and promptly
deliver all notices, proxies and proxy soliciting material 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 herunder;
(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.
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(ii) MISCELLANEOUS TRANSACTIONS.
(A) PFPC Trust is authorized to deliver or cause to be delivered
Property against payment or other consideration or written
receipt therefore in the following cases:
(1) for examination by a broker or dealer selling for the
account of a Portfolio in accordance with street
delivery custom;
(2) for the exchange of interim receipts or temporary
securities for definitive securities; and
(3) for transfer of securities into the name of the Fund on
behalf of a Portfolio or PFPC Trust or a sub-custodian
or a nominee of one of the foregoing, or for exchange
of securities for a different number of bonds,
certificates, or other evidence, representing the same
aggregate face amount or number of units bearing the
same interest rate, maturity date and call provisions,
if any; provided that, in any such case, the new
securities are to be delivered to PFPC Trust.
(B) unless and until PFPC Trust receives Oral Instructions or
Written Instructions to the contrary, PFPC Trust shall:
(1) pay all income items held by it which call for payment
upon presentation and hold the cash received by it upon
such payment for the account of each Portfolio;
(2) collect interest and cash dividends received, with
notice to the Fund, to the account of each Portfolio;
(3) hold for the account of each Portfolio all stock
dividends, rights and similar securities issued with
respect to any securities held by PFPC Trust; and
(4) execute as agent on behalf of the Fund all necessary
ownership certificates required by the Internal Revenue
Code or the Income Tax Regulations of the United States
Treasury Department or under the laws of any state now
or hereafter in effect, inserting the Fund's name on
behalf of a Portfolio, on such certificate as the owner
of the securities covered thereby, to the extent it may
lawfully do so.
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(i) SEGREGATED ACCOUNTS.
(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
18
the total amount payable as set forth in such Oral
Instructions or Written Instructions.
(k) SALES OF SECURITIES. PFPC Trust shall settle sold securities upon
receipt of Oral Instructions or Written Instructions that
specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom
the sale was made;
(vii)the location to which the security must be delivered and
delivery deadline, if any; and
(viii) the Portfolio involved.
PFPC Trust shall deliver the securities upon receipt of the total
amount payable to the Portfolio upon such sale, provided that the
total amount payable is the same as was set forth in the Oral
Instructions or Written Instructions. Notwithstanding the other
provisions thereof, PFPC Trust may accept payment in such form as
shall be satisfactory to it, and may deliver securities and arrange
for payment in accordance with the customs prevailing among dealers in
securities.
(l) REPORTS; PROXY MATERIALS.
(i) PFPC Trust shall furnish to the Fund the following reports:
(A) such periodic and special reports as the Fund may
reasonably request;
(B) a monthly statement summarizing all transactions and
entries for
19
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 the 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
20
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 form the Fund.
PFPC Trust shall not be obliged to take legal action for
collection unless and until reasonably indemnified to its
satisfaction. PFPC Trust shall also notify the Fund as soon as
reasonably practicable whenever income due on securities is not
collected in due course and shall provide the Fund with periodic
status reports of such income collected after a reasonable time.
16. DURATION AND TERMINATION. This Agreement shall continue until terminated by
the Fund or PFPC Trust on sixty (60) days' prior written notice to the
other party. In the
21
event this Agreement is terminated (pending appointment of a successor to
PFPC Trust or vote of the shareholders of the Fund to dissolve or to
function without a custodian of its cash, securities or other property),
PFPC Trust shall not deliver cash, securities or other property of the
Portfolios to the Fund. It may deliver them to a bank or trust company of
PFPC Trust's choice, having an aggregate capital, surplus and undivided
profits, as shown by its last published report, of not less then twenty
million dollars (20,000,000), as a custodian for the Fund to be held under
terms similar to those of this Agreement. PFPC Trust shall not be required
to make any delivery or payment of assets upon termination until full
payment shall have been made to PFPC Trust of all of its fees,
compensation, costs and expenses (such expenses include, without
limitation, expenses associated with movement (or duplication) of records
and materials and conversion thereof to a successor service provider, or to
a bank or trust company pending appointment of such successor, and all
trailing expenses incurred by PFPC Trust). PFPC Trust shall have a security
interest in and shall have a right of setoff against the Property as
security for the payment of such fees, compensation, costs and expenses.
17. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement,
in the event of an agreement to enter into a transaction that would result
in a Change of Control of the Fund's adviser or sponsor, the Fund's ability
to terminate the Agreement pursuant to Section 16 will be suspended from
the time of such agreement until two years after the Change of Control.
18. NOTICES. Notices shall be addressed (a) if to PFPC Trust at 0000 Xxxxxxx
Xxxxxxxxx, 0xx Xxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx Xxxxxxxx; (b) if to the Fund, at Puget Sound Plaza Center,
0000 0xx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000,
22
Attention: Xxxxxxx XxXxxxxxx; or (c) if to neither of the foregoing, at
such other address as shall have been given by like notice to the sender of
any such notice or other communication by the other party. If notice is
sent by confirming telegram, cable, telex or facsimile sending device, it
shall be deemed to have been given immediately. If notice is sent by
first-class mail, it shall be deemed to have been given five days after it
has been mailed. If notice is sent by messenger, it shall be deemed to have
been given on the day it is delivered.
19. AMENDMENTS. This Agreement, or any term hereof, may be changed or waived
only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
20. DELEGATION; ASSIGNMENT. PFPC Trust may assign its rights and delegate its
duties hereunder to any affiliate of PFPC Trust or of the PNC Financial
Services Group, Inc., provided that PFPC Trust gives the Fund 30 days'
prior written notice of such assignment or delegation.
21. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
22. FURTHER ACTIONS. Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
23. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements
and understandings relating to the subject matter hereof, provided
that the parties may
23
embody in one or more separate documents their agreement, if any, with
respect to delegated duties.
(b) NO REPRESENTATIONS OR WARRANTIES. Except as expressly provided in this
Agreement, PFPC Trust hereby disclaims all representations and
warranties, express or implied, made to the Fund or any other person,
including, without limitation, any warranties regarding quality,
suitability, merchantability, fitness for a particular purpose or
otherwise (irrespective of any course of dealing, custom or usage of
trade), of any services or any goods provided incidental to services
provided under this Agreement. PFPC Trust disclaims any warranty of
title or non-infringement except as otherwise set forth in this
Agreement.
(c) NO CHANGES THAT MATERIALLY AFFECT OBLIGATIONS. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees not to
make any modifications to its registration statement or adopt any
policies which would affect materially the obligations or
responsibilities of PFPC Trust hereunder without the prior written
approval of PFPC Trust, which approval shall not be unreasonably
withheld or delayed.
(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
24
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.
PCPC TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxx, III
---------------------------
Title: Vice President
THE ELITE GROUP
By: /s/ Xxxxxxx X. XxXxxxxxx
---------------------------
Title: President
25
_______________, 2001
THE ELITE GROUP
RE: CUSTODIAN SERVICES FEES
Dear Sir/Madam:
This letter constitutes our agreement with respect to compensation to be
paid to PFPC Trust Company ("PFPC Trust") under the terms of a Custodian
Services Agreement dated ___________, 2001 between PFPC Trust and The Elite
Group ("you" or the "Fund"), as amended from time to time (the "Agreement") for
services provided on behalf of each of the Fund's portfolios (the "Portfolios").
Pursuant to Paragraph 12 of the Agreement, and in consideration of the services
to be provided to each Portfolio, you will pay PFPC Trust certain fees and
reimburse PFPC Trust for its out-of-pocket expenses as follows:
ASSET BASED FEES:
The following fee will be calculated daily based upon each Portfolio's
average gross assets and payable monthly, in the following amounts:
.015% of each Portfolio's first $100 million of average gross assets;
.01% of each Portfolio's next $400 million of average gross assets; and
.008% of each Portfolio's average gross assets over $500 million.
TRANSACTION CHARGES:
A transaction includes buys, sells, calls, puts, maturities, free
deliveries, free receipts, exercised or expired options, opened or closed short
sales and the movement for each piece of underlying collateral for a repurchase
agreement, etc.
Fed Book entry $10.00
DTC Book entry $10.00
PTC Book entry $15.00
Physical certificate $17.00
Options contract $30.00
Futures margin variation $10.00
1
Short sale $15.00
Trade revision/cancellation $15.00
Holdings charge $ 2.00 per security, per month
MINIMUM MONTHLY FEES:
The minimum monthly fee will be $625 per Portfolio investing in domestic
securities, excluding transaction charges and out-of-pocket expenses.
OUT-OF-POCKET EXPENSES:
PFPC Trust's out-of-pocket expenses, include, but are not limited to,
global sub-custody costs, data warehouse access fees, federal express delivery,
data transmissions, deconversion costs, check processing fees, segregated
accounts and federal reserve wire fees.
MISCELLANEOUS:
With respect to any daily net overdrawn cash balances for a Portfolio, a
monthly charge shall be assessed based on 125% of the average federal funds rate
for that month.
PFPC Trust will sweep any net excess cash balances daily into an investment
vehicle or other instrument designated in writing by the Fund (from which PFPC
Trust may receive compensation), so long as the vehicle or instrument is
acceptable to PFPC Trust. PFPC Trust will credit the Fund with such sweep
earnings on a monthly basis. PFPC Trust will be paid by the Fund a fee of .25%
of assets swept.
PFPC Trust shall be entitled to deduct its fees and charges from the
applicable Portfolio's account monthly when due, provided that PFPC Trust shall
promptly account for such fees and charges to the Fund. Adjustments to such fees
and charges (if any) will be made in the next monthly payment period.
If during the next three years, PFPC Trust is removed from the Custodian
Services Agreement, PFPC Trust will recoup from the Fund 100% of any fees
waived.
The fee for the period from the day of the year this fee letter is entered
into until the end of that year shall be prorated according to the proportion
which such period bears to the full annual period.
2
If the foregoing accurately sets forth our agreement and you intend to be
legally bound thereby, please execute a copy of this letter and return it to us.
Very truly yours,
PFPC TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxx, III
--------------------------
Name: Xxxxxx X. Xxxxx, III
Title: Vice President
Agreed and Accepted:
THE ELITE GROUP
By: /s/ Xxxxxxx X. XxXxxxxxx
----------------------------
Name: Xxxxxxx X. XxXxxxxxx
Title: President
3
_________________ , 2001
THE ELITE GROUP
RE: Custodian Services Fee Waiver
-----------------------------
Dear Sir/Madam:
PFPC Trust Company ("PFPC Trust") agrees to waive certain fees under a
Custodian Services Agreement dated _____________ , 2001 between the Fund and
PFPC Trust as follows: with respect to services provided on behalf of The Elite
New Opportunity Fund only (the "Portfolio"), for the first six months of
operations, PFPC Trust will waive 100% of its minimum monthly fee for custodian
services (excluding transaction charges, miscellaneous fees and out-of-pocket
expenses) to the extent these fees are applicable. PFPC Trust shall charge 100%
of its minimum monthly fee for such Portfolio during the seventh month of
operations and for each month thereafter. Asset based fees, transaction charges,
and out-of-pocket expenses will be billed as incurred.
The greater of the adjusted monthly minimum fee or the corresponding
asset-based fee charge will be accrued on a monthly basis.
PFPC TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxx, III
-----------------------------
Title: Vice President
Agreed and Accepted:
THE ELITE GROUP
By: /s/ Xxxxxxx X. XxXxxxxxx
----------------------------
Title: President
4
