1
EXHIBIT 23(g)(1)
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of June 28, 2000 by and between PFPC TRUST
COMPANY, a limited purpose trust company incorporated under the laws of Delaware
("PFPC Trust"), and MONUMENT SERIES FUND, INC., a Maryland corporation that will
become a Delaware business trust known as Monument Series Fund effective June
30, 2000 (the "Fund") for the benefit of each of the portfolios identified in
Schedule A.
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 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.
2
(d) "Book-Entry System" means Federal Reserve Treasury book-entry
system for United States and federal agency securities, its
successor or successors, and its nominee or nominees and any
book-entry system maintained by an exchange registered with the
SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Change of Control" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parent(s), or as otherwise defined
in the 1940 Act.
(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. Instructions received by
PFPC Trust via electronic mail will be considered Oral
Instructions.
(h) "PFPC Trust" means PFPC Trust Company or a subsidiary or
affiliate of PFPC Trust Company.
(i) "SEC" means the Securities and Exchange Commission.
(j) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act
and the CEA and all regulations under those laws.
(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;
2
3
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by PFPC Trust from time to time, from
or on behalf of the Fund.
(m) "Written Instructions" mean (i) written instructions signed by
two Authorized Persons 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 the investment portfolios
identified in Schedule A (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) a copy of the Fund's most recent effective registration
statement;
(b) a copy of each Portfolio's advisory agreement or agreements;
(c) a copy of the distribution/underwriting agreement with respect to
each class of Shares representing an interest in a Portfolio;
(d) a copy of each additional administration agreement with respect
to a Portfolio;
(e) copies of any distribution and/or shareholder servicing plans and
agreements made in respect of the Fund or a Portfolio; and
(f) certified or authenticated copies of any and all amendments or
supplements to the
3
4
foregoing.
4. COMPLIANCE WITH LAWS.
PFPC Trust undertakes to comply with all applicable requirements of the
Securities Laws and any 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 this
Agreement 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
4
5
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 for 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 that the Fund seek guidance from its
counsel. Alternatively, PFPC Trust, at its own expense, may
request advice from counsel of its own choosing (who may be
counsel for the Fund, the Fund's investment adviser or PFPC
Trust, at the option of PFPC Trust).
(c) Conflicting Advice. In the event of a conflict between directions
or advice or Oral Instructions or Written Instructions PFPC Trust
receives from the Fund, and the advice PFPC Trust receives from
its own counsel, the parties will address the issue together and
agree on the appropriate course of action with the assistance of
counsel and/or the Fund's independent public accountants;
provided that if the parties are not able to agree on a course of
action, PFPC Trust may rely upon and
5
6
follow the advice of its own 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 based on standards considered reasonable in the
industry, to be consistent with those directions or advice or
Oral Instructions or Written Instructions. Nothing in this
section shall be construed so as to impose an obligation upon
PFPC Trust (i) to seek such directions or advice or Oral
Instructions or Written Instructions, or (ii) to act in
accordance with such directions or advice or Oral Instructions or
Written Instructions unless, under the terms of other provisions
of this Agreement, the same is a condition of PFPC Trust's
properly taking or not taking such action.
7. RECORDS; VISITS. The books and records pertaining to 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
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
6
7
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
7
8
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. To the extent PFPC Trust has a prior legal right to such
property, PFPC Trust shall retain title to and ownership of any and all
data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise,
patents, copyrights, trade secrets, and other related legal rights
utilized by PFPC Trust in connection with the services provided by PFPC
Trust to the Fund.
11. DISASTER RECOVERY. PFPC Trust shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to
the extent appropriate equipment is available. In the event of equipment
failures, PFPC Trust shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions. PFPC Trust shall
have no liability with respect to the loss of data or service
interruptions caused by equipment failure provided such loss or
interruption is not caused by PFPC Trust's own negligence.
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.
8
9
Notwithstanding anything to the contrary in this Agreement, PFPC Trust
will be held to the exercise of reasonable care in carrying out the
provisions of this Agreement.
(a) The Fund, on behalf of each Portfolio, agrees to indemnify and
hold harmless PFPC Trust and its affiliates from all taxes, charges,
expenses, assessments, claims and liabilities (including, without
limitation, attorneys' fees and disbursements and liabilities arising
under the Securities Laws and any state and foreign securities and blue
sky laws) arising directly or indirectly from any action or omission to
act which PFPC Trust takes in connection with the provision of services
to the Fund. Neither PFPC Trust, nor any of its affiliates, shall be
indemnified against any liability (or any expenses incident to such
liability) caused by PFPC Trust's or its affiliates' own negligence.
(b) Without prejudice to the indemnity set forth in Section 13 (a)
above, (i) it is understood that if in any case the Fund may be asked to
indemnify or hold PFPC Trust harmless, the Fund will be fully and
promptly advised of all pertinent facts concerning the situation in
question and (ii) it is further understood that PFPC Trust will use
reasonable care to identify and notify the Fund promptly concerning any
situation that presents the probability of such a claim for
indemnification against the Fund.
(a) The Fund will have the option to defend PFPC Trust against any claim
that may be the subject of this indemnification. In the event the
Fund elects to defend PFPC Trust, the Fund will notify PFPC Trust of
that decision and will take over complete defense of the claim. The
Fund will not take any action to settle any claim without the
approval of PFPC Trust. PFPC Trust will initiate no further legal or
other expenses for which it will seek indemnification under this
Section. PFPC Trust will in no case confess any claim or make any
compromise in any case in which the Fund will be
9
10
asked to indemnify PFPC Trust except with the Fund's prior written
consent. Nothing in this Section will be construed to limit any
right or cause of action on the part of PFPC Trust under this
Agreement which is independent of any right or cause of action on
the part of the Fund. PFPC Trust will be entitled to rely on and may
act upon advice of counsel on all matters, and will be without
liability for any action taken or omitted pursuant to such advice.
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 negligence, willful
misfeasance, bad faith 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
10
11
thereof of any Oral Instruction or Written Instruction, notice or
other instrument which PFPC Trust reasonably believes to be
genuine.
(c) Notwithstanding anything in this Agreement to the contrary,
neither PFPC Trust nor its affiliates shall be liable for any
consequential, special or indirect losses or damages, whether or
not the likelihood of such losses or damages was known by PFPC
Trust or its affiliates.
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 mediation sessions or arbitration proceedings)
alleging such cause of action; except, however, that this
proscription will not apply: (i) unless the Fund had knowledge of
the circumstances and accordingly knew or should have known of
the existence of the claim during that time period; (ii) if PFPC
Trust or any of its affiliates withheld information from the
party asserting the claim that would have been deemed material in
the decision to file a claim; (iii) if PFPC Trust or any of its
affiliates employed delaying tactics that resulted in the passage
of the time period during which a claim would have been filed but
for the delaying tactics; or (iv) if, during the 12-month period
following the action giving rise to the claim, the party
asserting the claim notifies PFPC Trust or any of its affiliates
in writing of its intent to commence a legal action once
sufficient information has been collected.
(d) Each party shall have a duty to mitigate damages for which the
other party may become responsible.
15. DESCRIPTION OF SERVICES.
11
12
(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 as nominee, PFPC Trust's nominee or a
sub-custodian's nominee 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) proceeds of a purchase or redemption of Shares of a
Portfolio delivered to PFPC Trust;
(iii) payment of, subject to Written Instructions, interest,
taxes, administration, accounting, distribution, advisory,
management fees or similar expenses which are to be borne
by a Portfolio;
(iv) payment to, subject to receipt of Written Instructions,
the Fund's transfer agent, as agent for the shareholders,
of an amount equal to the amount of dividends and
distributions stated in the Written Instructions to be
distributed in cash by the transfer agent to shareholders,
or, in lieu of paying the Fund's transfer agent, PFPC
Trust may arrange for the direct payment of cash dividends
and distributions to shareholders in accordance with
procedures mutually agreed upon from time to time by and
among the Fund, PFPC Trust and the Fund's transfer agent.
12
13
(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 made to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(viii) 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 Trustees, 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).
13
14
In addition, arrangements regarding foreign custody may be
entered into in accordance with the requirements of 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;
(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 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;
14
15
(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
15
16
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, or any duly appointed nominee of the Fund, PFPC Trust,
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 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.
16
17
(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
17
18
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
18
19
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 ▇▇▇
custodian accounts for such shareholders holding Shares
through ▇▇▇ 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
which the
19
20
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 which 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 which 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:
20
21
(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.
(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
21
22
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. PFPC Trust shall have a contractual 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. This Agreement shall continue for an initial
term of one year (provided that the Fund's Board of Director's may
terminate this Agreement prior to the conclusion of such one year
initial term if PFPC Trust has materially breached this
22
23
Agreement and such breach has not been remedied by PFPC Trust within
thirty days written notice to PFPC Trust of such breach). Thereafter,
this Agreement shall continue until terminated by the Fund or PFPC Trust
on ninety (90) days' prior written notice to the other party. In the
event this Agreement is terminated (pending appointment of a successor
to PFPC Trust or vote of the shareholders of the Fund to dissolve or to
function without a custodian of its cash, securities or other property),
PFPC Trust shall not deliver cash, securities or other property of the
Portfolios to the Fund. It may deliver them to a bank or trust company
of PFPC Trust's choice, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less
than twenty million dollars ($20,000,000), as a custodian for the Fund
to be held under terms similar to those of this Agreement. PFPC Trust
will release to a successor service provider, or to a bank or trust
company pending appointment of such successor, the assets maintained
hereunder upon full payment 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, the conversion process, and all trailing expenses
incurred by PFPC Trust. PFPC Trust shall have a contractual right of
setoff against the Property for the payment of such fees, compensation,
costs and expenses that are validly earned or subject to reimbursement.
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 nine months
after the Change of Control.
23
24
18. NOTICES. Notices shall be addressed (a) if to PFPC Trust at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇
▇▇▇▇▇▇▇▇; (b) if to the Fund, at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Office of Compliance; 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, including all exhibits,
attachments and
24
25
appendices, embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents
their agreement, if any, with respect to delegated duties.
(b) No Representations or Warranties. Except as expressly provided in
this Agreement, PFPC Trust hereby disclaims all representations
and warranties, express or implied, made to the Fund or any other
person, including, without limitation, any warranties regarding
quality, suitability, merchantability, fitness for a particular
purpose or otherwise (irrespective of any course of dealing,
custom or usage of trade), of any services or any goods provided
incidental to services provided under this Agreement. PFPC Trust
disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
(c) No Changes that Materially Affect Obligations. Notwithstanding
anything in this Agreement to the contrary, the Fund agrees not
to make any modifications to its registration statement or adopt
any policies which would affect materially the obligations or
responsibilities of PFPC Trust hereunder without the prior
written approval of PFPC Trust, which approval shall not be
unreasonably withheld or delayed.
(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
25
26
of law.
(f) Partial Invalidity. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected
thereby.
(g) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(h) Facsimile Signatures. The facsimile signature of any party to
this Agreement shall constitute the valid and binding execution
hereof by such party.
26
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC TRUST COMPANY
By:
-----------------------------------------
Title:
--------------------------------------
MONUMENT SERIES FUND INC.
By:
---------------------------------------
Title:
------------------------------------
27
28
SCHEDULE A
June 28, 2000
PFPC Trust will provide custody services for the following Portfolios of
the Fund:
Monument Internet Fund
Monument Medical Sciences Fund
Monument Telecommunications Fund
28
29
June 28, 2000
MONUMENT SERIES FUND INC.
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 June 28, 2000 between PFPC Trust and Monument Series
Fund Inc. ("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
total gross assets and payable monthly, in the following amounts:
.01% of the first $100 million of average gross assets;
.009% of the next $400 million of average gross assets; and
.008% of 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
30
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 1,250 per Portfolio investing in
domestic securities, excluding transaction charges and out-of-pocket expenses.
Asset based fees for each Portfolio will be calculated on a monthly basis. If
the asset based fees are less than the minimum, the difference will be billed.
All differences will be billed as a "relationship fee" which the fund family can
allocate across the Portfolios as appropriate.
OUT-OF-POCKET EXPENSES:
PFPC Trust's out-of-pocket expenses, include, but are not limited to,
global sub-custody costs, federal express delivery, deconversion costs, cost of
access to data warehouse, 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 designated in writing by the Fund and agreed to by PFPC Trust
and will credit the Fund with such sweep earnings on a monthly basis. PFPC Trust
will be paid .25% of assets swept.
Any fee, transaction charge or out-of-pocket expenses not paid within 30
days of the original invoice will be charged a late payment fee of 1% per month
until payment of the fees is received by PFPC Trust.
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.
If the foregoing accurately sets forth our agreement and you intend to
be legally bound
2
31
thereby, please execute a copy of this letter and return it to us.
Very truly yours,
PFPC TRUST COMPANY
By:
----------------------
Name:
--------------------
Title:
-------------------
Agreed and Accepted:
MONUMENT SERIES FUND INC.
By:
----------------------
Name:
--------------------
Title:
----------------
3