CUSTODIAN SERVICES AGREEMENT

      THIS  AGREEMENT  is made as of April 30,  1999 by and  between  PFPC TRUST
COMPANY ("PFPC  Trust"),  and THE BERWYN FUNDS,  a Delaware  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 and listed on the Authorized  Persons Appendix
            attached hereto or any amendment  thereto as may be received by PFPC
            Trust.  An Authorized  Person's scope of authority may be limited by
            the Fund by setting forth such limitation in the Authorized  Persons
            Appendix.

      (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).
 
      (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.

      (h)  "PFPC Trust" means PFPC Trust  Company or a subsidiary  or affiliate
           of PFPC Trust Company.

      (i)  "SEC" means the Securities and Exchange  Commission.

      (j)  "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act
           and the CEA.

      (k)  "Shares"  mean the shares of  beneficial  interest  of any series or
           class of the Fund.
 
      (l)  "Property" means:
           (i)   any and all  securities and other  investment  items which the
                 Fund may from time to time deposit,  or cause to be deposited,
                 with PFPC Trust or which PFPC Trust may from time to time hold
                 for the Fund;

           (ii)  all  income  in  respect  of any of such  securities  or other
                 investment items;

           (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  written  instructions  signed  by two
            Authorized  Persons and received by PFPC Trust. The instructions may
            be  delivered  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)  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  agreement with respect to each class of
            Shares;

      (e)   a copy of each Portfolio's administration agreement;

      (f)   copies of any  shareholder  servicing  agreements made in respect of
            the Fund or a Portfolio; and

      (g)   certified  or  authenticated  copies  of any and all  amendments  or
            supplements to the foregoing.

4.    Compliance with Laws.
      PFPC Trust undertakes to comply with material  applicable  requirements of
      the  Securities   Laws  and  material  laws,   rules  and  regulations  of
      governmental authorities having jurisdiction with respect to the duties to
      be performed by PFPC Trust  hereunder.  Except as  specifically  set forth
      herein,  PFPC Trust assumes no  responsibility  for such compliance by the
      Fund or any Portfolio.

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  Instructions
            or Written  Instructions 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   shall   in  no  way   invalidate   the   transactions   or
            enforceability   of  the  transactions   authorized  by  the  Oral
            Instructions.  Where Oral  Instructions  or  Written  Instructions
            reasonably  appear  to  have  been  received  from  an  Authorized
            Person,  PFPC Trust shall incur no liability to the Fund in acting
            upon such Oral Instructions or Written Instructions  provided that
            PFPC  Trust's  actions  comply with the other  provisions  of this
            Agreement.

6.    Right to Receive Advice.
      (a)   Advice of the Fund.  If PFPC  Trust is in doubt as to any  action it
            should or should not take,  PFPC  Trust may  request  directions  or
            advice,  including Oral Instructions or Written  Instructions,  from
            the Fund.

      (b)   Advice  of  Counsel.  If PFPC  Trust  shall  be in  doubt  as to any
            question  of law  pertaining  to any  action it should or should not
            take,  PFPC  Trust  may  request  advice  at its own cost  from such
            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,  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.  In the event PFPC Trust so relies
            on the  advice of  counsel,  PFPC  Trust  remains  liable  for any
            action or  omission  on the part of PFPC Trust  which  constitutes
            willful misfeasance,  bad faith,  negligence or reckless disregard
            by PFPC Trust of any duties,  obligations or responsibilities  set
            forth in this Agreement.

      (d)   Protection of PFPC Trust. PFPC Trust shall be protected in any act
            ion it takes or does not take in reliance upon directions, 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,  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,  advice  or Oral  Instructions  or
            Written  Instructions,  or (ii)  to act in  accordance  with  such
            directions,  advice or Oral  Instructions or Written  Instructions
            unless,  under the terms of other  provisions  of this  Agreement,
            the same is a condition  of PFPC  Trust's  properly  taking or not
            taking  such  action.  Nothing  in this  subsection  shall  excuse
            PFPC  Trust when an action or  omission  on the part of PFPC Trust
            constitutes  willful   misfeasance,   bad  faith,   negligence  or
            reckless  disregard  by PFPC Trust of any duties,  obligations  or
            responsibilities set forth in this Agreement.

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.  PFPC Trust agrees to keep  confidential all records of
      the  Fund and  information  relating  to the Fund and its  shareholders,
      unless  the  release  of  such  records  or   information  is  otherwise
      consented  to,  in  writing,  by the  Fund.  The Fund  agrees  that such
      consent  shall  not be  unreasonably  withheld  and may not be  withheld
      where  PFPC  Trust  may  be  exposed  to  civil  or  criminal   contempt
      proceedings  or when PFPC Trust is required to divulge such  information
      or records to duly constituted authorities.

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.   Disaster  Recovery.  PFPC Trust shall  enter into and shall  maintain in
      effect  with   appropriate   parties  one  or  more  agreements   making
      reasonable  provisions for emergency use of electronic  data  processing
      equipment  to the extent  appropriate  equipment  is  available.  In the
      event of equipment failures,  PFPC Trust shall, at no additional expense
      to the Fund, take reasonable  steps to minimize  service  interruptions.
      PFPC Trust shall have no  liability  with respect to the loss of data or
      service  interruptions caused by equipment failure provided such loss or
      interruption is not caused by PFPC Trust's own willful misfeasance,  bad
      faith,  negligence  or reckless  disregard of its duties or  obligations
      under this Agreement.

11.   Year  2000  Readiness  Disclosure.  PFPC  Trust  (a)  has  reviewed  its
      business  and  operations  as  they  relate  to  the  services  provided
      hereunder,  (b) has developed or is developing a program to remediate or
      replace  computer  applications  and  systems,  and (c) has  developed a
      testing  plan  to  test  the  remediation  or  replacement  of  computer
      applications/systems,  in each case,  to  address on a timely  basis the
      risk that certain computer  applications/systems  used by PFPC Trust may
      be unable to recognize and perform date  sensitive  functions  involving
      dates prior to,  including and after December 31, 1999,  including dates
      such as February  29, 2000 (the "Year 2000  Challenge").  To the best of
      PFPC  Trust's   knowledge  and  belief,   the   reasonably   foreseeable
      consequences  of the Year 2000 Challenge will not adversely  effect PFPC
      Trust's  ability  to  perform  its  duties  and  obligations  under this
      Agreement.

12.   Compensation.  As compensation for custody services rendered by PFPC Trust
      during  the term of this  Agreement,  the  Fund,  on behalf of each of the
      Portfolios,  will pay to PFPC  Trust a fee or fees as may be  agreed to in
      writing from time to time by the Fund and PFPC Trust.

13.   Indemnification.  The  Fund,  on  behalf  of each  Portfolio,  agrees to
      indemnify  and  hold  harmless  PFPC  Trust  from  all  taxes,  charges,
      expenses,   assessments,  claims  and  liabilities  (including,  without
      limitation,  liabilities arising under the Securities Laws and any state
      or foreign  securities or blue sky laws,  and  amendments  thereto,  and
      expenses,   including   (without   limitation)   attorneys'   fees   and
      disbursements),  arising  directly  or  indirectly  from any  action  or
      omission to act which PFPC Trust takes (i) in connection  with providing
      its service hereunder,  (ii) at the request or on the direction of or in
      reliance  on the advice of the Fund or (iii) upon Oral  Instructions  or
      Written  Instructions.  PFPC Trust shall not be indemnified  against any
      liability (or any expenses  incident to such  liability)  arising out of
      PFPC Trust's  willful  misfeasance,  bad faith,  negligence  or reckless
      disregard of its duties under this Agreement.

14.   Responsibility of PFPC Trust.
      (a)   PFPC Trust  shall be under no duty to take any action on behalf of
            the Fund or any Portfolio  except as specifically set forth herein
            or as may be  specifically  agreed  to by PFPC  Trust in  writing.
            PFPC Trust shall be  obligated to exercise  care and  diligence in
            the performance of its duties hereunder,  to act in good faith and
            to use its best efforts,  within reasonable  limits, in performing
            services  provided for under this  Agreement.  PFPC Trust shall be
            liable 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,
            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,  PFPC Trust  shall not be under any
            duty or  obligation  to  inquire  into and shall not be liable for
            (i) 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; or
            (ii) subject to Sections 10 and 11, delays,  errors,  loss of data
            or other losses occurring by reason of  circumstances  beyond PFPC
            Trust's  control,  including acts of civil or military  authority,
            national  emergencies,  fire,  flood,  catastrophe,  acts  of God,
            insurrection,  war, riots or failure of the mails, transportation,
            communication or power supply.

      (c)   Notwithstanding anything in this Agreement to the contrary,  neither
            PFPC Trust nor its affiliates  shall be liable to the Fund or to any
            Portfolio  for any  consequential,  special  or  indirect  losses or
            damages  which  the Fund may  incur or  suffer,  whether  or not the
            likelihood  of such losses or damages was known by PFPC Trust or its
            affiliates.

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 period  that is set forth in this  Agreement.  PFPC Trust
            will not be responsible for such property until actual receipt.

      (b)   Receipt  and  Disbursement  of  Money.  PFPC  Trust,  acting  upon
            Written  Instructions,  shall open and maintain  separate accounts
            in the  Fund's  name  using  all  cash  received  from  or for the
            account of the Fund,  subject to the terms of this  Agreement.  In
            addition,  upon  Written  Instructions,   PFPC  Trust  shall  open
            separate  custodial  accounts for each  separate  Portfolio of the
            Fund  (collectively,   the  "Accounts")  and  shall  hold  in  the
            Accounts  all cash  received  from or for the Accounts of the Fund
            specifically designated to each separate Portfolio.
            PFPC Trust shall make cash  payments from or for the Accounts of a
            Portfolio only for:

            (i)   purchases  of  securities  in the  name of a  Portfolio,  PFPC
                  Trust,  PFPC  Trust's  nominee or a  sub-custodian  or nominee
                  thereof  as  provided  in  sub-section  (j) and for which PFPC
                  Trust  has  received  a  copy  of  the  broker's  or  dealer's
                  confirmation or payee's invoice, as appropriate;

            (ii)  purchase or redemption of Shares of the Fund delivered to PFPC
                  Trust;

            (iii) payment of, subject to Written Instructions,  interest, taxes,
                  administration, accounting, distribution, advisory, management
                  fees or similar expenses which are to be borne by a Portfolio;

            (iv)  payment to, subject to receipt of Written Instructions,  the
                  Fund's transfer agent, as agent for the shareholders,  of an
                  amount  equal to the amount of dividends  and  distributions
                  stated in the  Written  Instructions  to be  distributed  in
                  cash by the transfer agent to  shareholders,  or, in lieu of
                  paying the Fund's  transfer  agent,  PFPC Trust may  arrange
                  for the direct payment of cash  dividends and  distributions
                  to  shareholders  in  accordance  with  procedures  mutually
                  agreed  upon from  time to time by and among the Fund,  PFPC
                  Trust and the Fund's transfer agent.

            (v)   payments, upon receipt of Written Instructions,  in connection
                  with the conversion, exchange or surrender of securities owned
                  or  subscribed to by the Fund and held by or delivered to PFPC
                  Trust;

            (vi)  payments of the amounts of dividends  received with respect to
                  securities sold short;

            (vii) payments  made to a  sub-custodian  pursuant to  provisions in
                  sub-section (c) of this Section; and

            (viii)payments,  upon  Written  Instructions,  made for  other  Fund
                  purposes.

           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  and  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).

                  In  addition,  PFPC  Trust may enter  into  arrangements  with
                  sub-custodians  with  respect to  services  regarding  foreign
                  assets.  Any such  arrangement will be entered into with prior
                  written  notice to the Fund (or as  otherwise  provided in the
                  1940 Act).

                  PFPC Trust shall remain responsible for the performance of all
                  of its duties as  described in this  Agreement  and shall hold
                  the  Fund  and each  Portfolio  harmless  from its own acts or
                  omissions, under the standards of care provided for herein, or
                  the acts and  omissions  of any  sub-custodian  chosen by PFPC
                  Trust under the terms of this sub-section (c).

      (d)   Transactions   Requiring   Instructions.   Upon  receipt  of  Oral
            Instructions  or  Written  Instructions  and not  otherwise,  PFPC
            Trust,  directly  or  through  the use of the  Book-Entry  System,
            shall:

            (i)   deliver  any  securities  held for a  Portfolio  against the
                  receipt    of    payment    for    the    sale    of    such
                  securities;

            (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;

            (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 corporate purposes.

                  PFPC Trust must also receive a certified resolution describing
                  the nature of the  corporate  purpose and the name and address
                  of the  person(s)  to whom  delivery  shall be made  when such
                  action is pursuant to sub-paragraph d(xii).

      (e)   Use  of  Book-Entry   System.   PFPC  Trust  is   authorized   and
            instructed,  on a continuous  basis,  to deposit in the Book-Entry
            System all  securities  belonging to the  Portfolios  eligible for
            deposit  therein  and to  utilize  the  Book-Entry  System  to the
            extent  possible in connection  with  settlements of purchases and
            sales of securities by the Portfolios,  and deliveries and returns
            of securities loaned,  subject to repurchase agreements or used as
            collateral  in  connection  with  borrowings.   PFPC  Trust  shall
            continue  to  perform  such  duties  until  it  receives   Written
            Instructions   or   Oral   Instructions    authorizing    contrary
            actions.

      PFPC Trust shall administer the Book-Entry System as follows:

            (i)   With  respect  to  securities  of  each  Portfolio  which  are
                  maintained in the Book-Entry System, the records of PFPC Trust
                  shall  identify by  Book-Entry or otherwise  those  securities
                  belonging to each Portfolio.

            (ii)  Assets of each Portfolio  deposited in the  Book-Entry  System
                  will at all  times  be  segregated  from any  assets  and cash
                  controlled  by  PFPC  Trust  in  other  than  a  fiduciary  or
                  custodian  capacity  but may be  commingled  with other assets
                  held in such capacities.

            PFPC Trust will provide the Fund with such reports on its own system
            of internal control as the Fund may reasonably  request from time to
            time.

      (f)   Registration  of Securities.  All Securities  held for a Portfolio
            which are issued or  issuable  only in bearer  form,  except  such
            securities  held in the Book-Entry  System,  shall be held by PFPC
            Trust in bearer form;  all other  securities  held for a Portfolio
            may be  registered  in the  name  of the  Fund on  behalf  of that
            Portfolio, PFPC Trust, the Book-Entry System, a sub-custodian,  or
            any duly  appointed  nominee of the Fund,  PFPC Trust,  Book-Entry
            System or  sub-custodian.  The Fund reserves the right to instruct
            PFPC Trust as to the method of  registration  and  safekeeping  of
            the  securities  of the Fund.  The Fund  agrees to furnish to PFPC
            Trust  appropriate  instruments  to enable  PFPC  Trust to hold or
            deliver in proper  form for  transfer,  or to register in the name
            of its nominee or in the name of the  Book-Entry  System or in the
            name of another  appropriate  entity,  any securities which it may
            hold  for  the  Accounts  and  which  may  from  time  to  time be
            registered in the name of the Fund on behalf of a Portfolio.

      (g)   Voting  and Other  Action.  Neither  PFPC  Trust  nor its  nominee
            shall vote any of the  securities  held pursuant to this Agreement
            by or for the account of a Portfolio,  except in  accordance  with
            Written  Instructions.  PFPC Trust, directly or through the use of
            the  Book-Entry  System,  shall  execute  in  blank  and  promptly
            deliver  all  notices,  proxies  and  proxy  soliciting  materials
            received  by  PFPC  Trust  as  custodian  of the  Property  to the
            registered  holder of such  securities.  If the registered  holder
            is  not  the  Fund  on  behalf  of  a   Portfolio,   then  Written
            Instructions  or Oral  Instructions  must designate the person who
            owns such securities.

      (h)   Transactions  Not  Requiring  Instructions.   In  the  absence  of
            contrary  Written  Instructions,  PFPC Trust is authorized to take
            the following actions:

            (i)   Collection of Income and Other Payments.

                  (A)   collect   and   receive   for  the   account  of  each
                        Portfolio,  all  income,   dividends,   distributions,
                        coupons,  option premiums,  other payments and similar
                        items,  included or to be  included  in the  Property,
                        and, in addition,  promptly  advise each  Portfolio of
                        such receipt and credit such income, as collected,  to
                        each Portfolio's custodian account;

                  (B)   endorse and deposit for  collection,  in the name of the
                        Fund, checks, drafts, or other orders for the payment of
                        money;

                  (C)   receive  and hold for the  account  of each  Portfolio
                        all  securities  received  as a  distribution  on  the
                        Portfolio's   securities   as  a  result  of  a  stock
                        dividend,    share    split-up   or    reorganization,
                        recapitalization,  readjustment or other rearrangement
                        or  distribution  of  rights  or  similar   securities
                        issued with respect to any  securities  belonging to a
                        Portfolio and held by PFPC Trust hereunder;

                  (D)   present for payment and collect the amount  payable upon
                        all  securities  which may mature or be, on a  mandatory
                        basis, called, redeemed, or retired, or otherwise become
                        payable on the date such securities become payable; and

                  (E)   take any  action  which may be  necessary  and proper in
                        connection  with  the  collection  and  receipt  of such
                        income  and  other  payments  and  the  endorsement  for
                        collection  of  checks,  drafts,  and  other  negotiable
                        instruments.

          (ii)    Miscellaneous Transactions.

                  (A)   PFPC  Trust  is  authorized  to  deliver  or cause to be
                        delivered    Property    against    payment   or   other
                        consideration   or  written  receipt   therefor  in  the
                        following cases:

                        (1)   for  examination by a broker or dealer selling for
                              the  account of a  Portfolio  in  accordance  with
                              street delivery custom;

                        (2)   for the exchange of interim  receipts or temporary
                              securities for definitive securities; and

                        (3)   for  transfer of  securities  into the name of the
                              Fund on behalf of a  Portfolio  or PFPC Trust or a
                              sub-custodian   or  a   nominee   of  one  of  the
                              foregoing,  or for  exchange of  securities  for a
                              different number of bonds, certificates,  or other
                              evidence,  representing  the same  aggregate  face
                              amount  or  number  of  units   bearing  the  same
                              interest rate,  maturity date and call provisions,
                              if any;  provided  that, in any such case, the new
                              securities are to be delivered to PFPC Trust.

                  (B)   unless and until PFPC Trust  receives Oral  Instructions
                        or  Written  Instructions  to the  contrary,  PFPC Trust
                        shall:

                        (1)   pay all  income  items  held by it which  call for
                              payment  upon   presentation  and  hold  the  cash
                              received  by it upon such  payment for the account
                              of each Portfolio;

                        (2)   collect interest and cash dividends received, with
                              notice  to  the  Fund,  to  the  account  of  each
                              Portfolio;

                        (3)   hold for the account of each  Portfolio  all stock
                              dividends,  rights and similar  securities  issued
                              with respect to any securities held by PFPC Trust;
                              and

                        (4)   execute  as  agent  on  behalf  of  the  Fund  all
                              necessary ownership  certificates  required by the
                              Internal   Revenue   Code   or  the   Income   Tax
                              Regulations   of  the   United   States   Treasury
                              Department  or under  the laws of any state now or
                              hereafter in effect, inserting the Fund's name, on
                              behalf of a Portfolio,  on such certificate as the
                              owner of the securities  covered  thereby,  to the
                              extent it may lawfully do so.

      (i)   Segregated Accounts.

            (i)   PFPC Trust shall upon receipt of Written  Instructions or Oral
                  Instructions establish and maintain segregated accounts on its
                  records for and on behalf of each Portfolio. Such accounts may
                  be used to transfer cash and securities,  including securities
                  in the Book-Entry System:

                  (A)   for the  purposes  of  compliance  by the Fund  with the
                        procedures  required by a securities or option exchange,
                        providing such  procedures  comply with the 1940 Act and
                        any releases of the SEC relating to the  maintenance  of
                        segregated accounts by registered  investment companies;
                        and

                  (B)   upon   receipt  of  Written   Instructions,   for  other
                        corporate purposes.

            (ii)  PFPC  Trust  shall  arrange  for  the  establishment  of IRA
                  custodian  accounts  for such  shareholders  holding  Shares
                  through  IRA  accounts,   in  accordance   with  the  Fund's
                  prospectuses,  the Internal Revenue Code of 1986, as amended
                  (including  regulations  promulgated  thereunder),  and with
                  such other  procedures as are mutually agreed upon from time
                  to time by and  among the Fund,  PFPC  Trust and the  Fund's
                  transfer agent.

      (j)   Purchases  of   Securities.   PFPC  Trust  shall  settle   purchased
            securities upon receipt of Oral Instructions or Written Instructions
            that  specify:

            (i)   the  name of the  issuer  and the  title  of the
                  securities, including CUSIP number if applicable;

            (ii)  the number of shares or the principal  amount  purchased and
                  accrued interest, if any;

            (iii) the date of purchase and settlement;

            (iv)  the purchase price per unit;

            (v)   the      total      amount       payable      upon      such
                  purchase;

            (vi)  the Portfolio involved; and

            (vii) the name of the person  from whom or the broker  through  whom
                  the  purchase  was made.  PFPC  Trust  shall  upon  receipt of
                  securities  purchased  by or for a  Portfolio  pay  out of the
                  moneys held for the account of the  Portfolio the total amount
                  payable to the person from whom or the broker through whom the
                  purchase  was made,  provided  that the same  conforms  to the
                  total amount payable as set forth in such Oral Instructions or
                  Written Instructions.

      (k)   Sales of Securities.  PFPC Trust shall settle sold  securities  upon
            receipt of Oral Instructions or Written Instructions that specify:

            (i)   the  name of the  issuer  and  the  title  of the  security,
                  including CUSIP number if applicable;

            (ii)  the number of shares or  principal  amount  sold,  and accrued
                  interest, if any;

            (iii) the date of trade and settlement;

            (iv)  the sale price per unit;

            (v)   the total amount payable to the Fund upon such sale;

            (vi)  the name of the broker  through whom or the person to whom the
                  sale was made;

            (vii) the  location  to which the  security  must be  delivered  and
                  delivery deadline, if any; and

            (viii)the Portfolio involved.

      PFPC Trust shall deliver the  securities  upon receipt of the total amount
      payable to the  Portfolio  upon such sale,  provided that the total amount
      payable is the same as was set forth in the Oral  Instructions  or Written
      Instructions. Notwithstanding the other provisions thereof, PFPC Trust may
      accept  payment  in such  form as shall  be  satisfactory  to it,  and may
      deliver  securities and arrange for payment in accordance with the customs
      prevailing among dealers in securities.

      (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 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)   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  until
      terminated  by the Fund or PFPC Trust on sixty (60) days' prior  written
      notice to the other party.  In the event this  Agreement  is  terminated
      (pending  appointment  of a  successor  to  PFPC  Trust  or  vote of the
      shareholders of the Fund to dissolve or to function  without a custodian
      of its  cash,  securities  or other  property),  PFPC  Trust  shall  not
      deliver  cash,  securities  or other  property of the  Portfolios to the
      Fund.  It may deliver  them to a bank or trust  company of PFPC  Trust's
      choice,  having an aggregate capital,  surplus and undivided profits, as
      shown by its last  published  report,  of not less than  twenty  million
      dollars  ($20,000,000),  as a  custodian  for the Fund to be held  under
      terms  similar  to those of this  Agreement.  PFPC  Trust  shall  not be
      required  to make any  delivery  or payment of assets  upon  termination
      until  full  payment  shall  have been made to PFPC  Trust of all of its
      fees,  compensation,  costs  and  expenses.  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 will be suspended from the time of such
      agreement until two years after the Change of Control.

18.   Notices.  All  notices  and  other  communications,   including  Written
      Instructions,  shall be in writing  or by  confirming  telegram,  cable,
      telex or facsimile  sending device.  Notice shall be addressed (a) if to
      PFPC Trust at 400 Bellevue Parkway,  Wilmington,  Delaware 19809; (b) if
      to      the      Fund,      at      ,      Attn:      ;      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 PNC Bank
      Corp.,  provided  that  (i) PFPC  Trust  gives  the Fund 30 days'  prior
      written notice of such  assignment or  delegation;  (ii) the assignee or
      delegate  agrees to comply with the relevant  provision of the 1940 Act;
      and (iii) PFPC Trust and such  assignee  or  delegate  promptly  provide
      such  information  as the Fund may  reasonably  request,  and respond to
      such  questions  as  the  Fund  may  reasonably  ask,  relative  to  the
      assignment   or   delegation   (including,   without   limitation,   the
      capabilities of the assignee or delegate).

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.   Limitations of Liability of the Trustees and  Shareholders.  A copy of the
      Declaration of Trust of the Fund is on file with
                                          , and  notice is hereby  given  that
      this  instrument  is  executed  on behalf of the  Trustees of the Trust as
      Trustees and not  individually and that the obligations of this instrument
      are not binding upon any of the Trustees or Shareholders  individually but
      are binding only upon the assets and property of the Fund.

24.   Miscellaneous.
      (a)   Entire Agreement.  This Agreement  embodies the entire agreement and
            understanding   between  the  parties  and   supersedes   all  prior
            agreements and understandings relating to the subject matter hereof,
            provided  that  the  parties  may  embody  in one or  more  separate
            documents their agreement,  if any, with respect to delegated duties
            or Oral Instructions.

      (b)   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.

      (c)   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.

      (d)   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.

      (e)   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.

      (f)   Facsimile  Signatures.  The facsimile signature of any party to this
            Agreement shall constitute the valid and binding execution hereof by
            such party.

IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be
executed as of    the day and year first above written.

                        PFPC TRUST COMPANY

                        By:  /s/ Joeph Gramlich   
                                 Joseph Gramlich

                        Title:   Sr. Vice President     


                        THE BERWYN FUNDS

                        By:  /s/ Robert E. Killen   
                                 Robert E. Killen

                        Title:  President                

<PAGE>
                           AUTHORIZED PERSONS APPENDIX

          NAME (Type)                                     SIGNATURE