EXHIBIT (viii)(1)(a)
ADDENDUM #2 TO CUSTODIAN CONTRACT BETWEEN
THE CHASE MANHATTAN BANK
AND
THE PRUDENTIAL SERIES FUND
This Addendum #2 to the Custodian Contract is by and between The Prudential
Series Fund, Inc. (the "Fund") and The Chase Manhattan Bank, formerly known as
Chemical Bank, formerly known as Manufacturers Hanover Trust Company (the
"Custodian"),
WHEREAS, the Fund is authorized to issue shares of capital stock ("Shares") in
separate classes, with each such class representing interests in a separate
Portfolio of securities and other assets which are referred to herein as the
"Funds";
WHEREAS, the Custodian is the custodian for the Fund, except for the joint
repurchase account of the Fund, pursuant to an agreement entered into on June 1,
1986 by the Custodian's predecessor company and the Fund;
WHEREAS, the Fund previously obtained an Order permitting such Portfolios as may
be determined by the Fund to participate in a joint repurchase agreement
account; and
WHEREAS, the Fund has been participating in a joint repurchase agreement account
and desires to change the custodian for such account to Custodian;
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. AMENDMENTS.
(a) The first paragraph of Section 1 is hereby amended to state:
"1. Employment of Custodian and Property to be Held by It
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The Fund hereby employs the Custodian as a custodian of its assets
pursuant to the provisions of the Fund's By-Laws. The Fund agrees to
deliver to the Custodian all securities and cash owned by it, and all
payments of income, payments of principal or capital distributions
received by it with respect to all securities owned by the Fund from
time to time, and the cash consideration received by it for such new
or treasury shares of capital stock, $0.01 par value, ("Shares") of
the Fund as may be issued or sold from time to time, and cash amounts
earmarked for repurchase agreements involving securities eligible for
the Federal Book Entry System entered into by the Fund and securities
related to such agreements. The CustodIan shall not be responsible
for any property of the Fund held or received by the Fund and not
delivered to the Custodian."
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(b) The following paragraph shall be added at the end of Section 2.1:
"All securities held by the Custodian in any account under this Agreement
which have been redeposited in a book-entry system authorized by the U.S.
Department of the Treasury should be separately identified on the
Custodian's official records from securities of other accounts
established under this Agreement, and from securities of any other
accounts held by the Custodian for the Fund under other custody
agreements."
(c) The following paragraph shall be added at the end of Section 2.2:
"14) For delivery to any other custodian of the Fund."
(d) Section 2.4 is hereby amended to state:
"2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account in the name of each of the Funds, or in the case of joint
repurchases, a bank account and/or accounts in the name of the Fund,
subject only to draft or order by the Custodian or the Fund acting
pursuant to the terms of this Contract, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from
or for the account of each of the Funds, or in the case of joint
repurchases, from or for the account of the Fund, other than cash
maintained by the Fund(s) in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940.
Funds held by the Custodian for the Fund may be deposited in the Banking
Department of the Custodian or in such other banks or trust companies as
it may in its discretion deem necessary or desirable; provided, however,
that every such bank or trust company shall be qualified to act as a
custodian under the Investment Company Act of 1940 and that each such
bank or trust company and the funds to be deposited with each such bank
or trust company shall be approved by vote of a majority of the Board of
Directors of the Fund. Such funds shall be deposited by the Custodian in
this capacity as Custodian and shall be withdrawable by the Custodian
only in that capacity."
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(e) The following paragraph shall be added as a second paragraph to
Section 2.6:
"In the case of the joint repurchase account, interest on securities held
by the Custodian under this Agreement either in a Securities System
account of the Custodian or in the name of the Custodian's nominee, will
be credited automatically to the designated account of the Fund when such
funds become due and payable, whether or not collected by the Custodian.
Amounts due on securities which mature or are redeemed will be credited
to the designated account of the Fund on the actual settlement date,
provided the securities are held by the Custodian and our delivery
instructions are received by the Custodian in a timely fashion. If the
amount of a matured or redeemed security is not credited to the
designated account of the Fund on the date on which such security matured
or was redeemable solely because of the error of the Custodian, the
Custodian will credit such account with such amount as of the date on
which such security matured or was redeemable. To the extent the
Custodian does not receive payment on any funds credited as herein before
provided to the designated account, Custodian shall be entitled to debit
the uncollected funds credited to such account as of the date such funds
were credited to the account."
(f) The following paragraphs shall be amended in Section 2.7 to state:
"2.7 Payment of Fund Moneys. Upon receipt of instructions, which may be
continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys for the Fund (from available funds in the
Fund Bank Account in the case of joint repurchase transactions) in the
following cases only:
1) Upon the purchase of securities for the account of each of the Funds,
and in the case of joint repurchases, for the account of the Fund, but
only (a) against the delivery of such securities to the Custodian (or any
bank, banking firm or trust company doing business in the United States
or abroad which is qualified under the Investment Company Act of 1940, as
amended, to act as a custodian and has been designated by the Custodian
as its agent for this purpose) registered in the name of the appropriate
Fund or in the name of a nominee of the Custodian referred to in Section
2.3 hereof or in proper form for transfer; (b) in the case of a purchase
effected through a Securities System, in accordance with the conditions
set forth in Section 2.10 hereof or in the case of repurchase
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agreements entered into between the Fund and the Custodian, or another
bank, or a broker or dealer, (i) against delivery of the securities
either in certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Fund of securities
owned by the Custodian along with written evidence of the agreement by
the Custodian to repurchase such securities from the Fund;"
(g) The following paragraph shall be added at the end of Section 2.7:
"7) To any other custodian of the Fund"
(h) The following paragraphs shall be amended in Section 2.10 to cstate:
"2) The records of the Custodian with respect to securities for the Fund
which are maintained in a Securities System shall identify by book-entry
those securities belonging to each of the Funds, or in the case of joint
repurchases, those securities belonging to the Fund;"
3) The Custodian shall pay for the securities purchased for each account
of the Fund, or in the case of joint repurchases, securities purchased
for the account of the Fund, upon (i) receipt of advice from the
Securities System that such securities have been transferred to the
Account, and (ii) the making of an entry on the records of the Custodian
to reflect such payment and transfer for the proper account of the Fund.
The Custodian shall transfer securities sold for each account of the Fund
upon (i) receipt of advice from the Securities System that payment for
such securities has been transferred to the Account, and (ii) the making
of an entry on the records of the Custodian to reflect such transfer and
payment for the proper account of the Fund. Copies of all advices from
the Securities System of transfers of securities for the accounts of the
Fund shall identify the Fund, be maintained for the Fund by the Custodian
and be provided to the Fund at its request. Upon request, the Custodian
shall furnish the Fund confirmation of each transfer to or from the
proper account of the Fund in the form of a written advice or notice and
shall furnish to the Fund copies of daily transaction sheets reflecting
each day's transactions in the Securities System for the accounts of the
Fund, or in the case of joint repurchases, the account of the Fund, on
the next business day;"
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(i) Paragraph 1 of Section 7 shall be amended to state:
"The Custodian will be strictly liable for all losses due to burglary,
robbery, theft, fire and mysterious disappearances, regardless of whether
such a loss occurs while the assets are on deposit with the Custodian, or
any nominee of the Custodian, or the Federal Reserve Bank of New York in
connection with book-entry procedures as provided in Treasury Department
regulations in effect from time to time, or a domestic securities
depository (hereinafter "depository") registered with the Securities and
Exchange Commission (the "SEC") under Section 17A of the Securities and
Exchange Act of 1934 ("1934 Act"), and any successor thereto, or any
other agent of the Custodian at the time of the loss. Anything in this
Agreement to the contrary notwithstanding, in no event shall the
Custodian be liable to the Fund under this Agreement for special,
indirect or consequential loss or damage of any kind whatsoever, whether
or not the Custodian is advised as to the possibility of such loss or
damage and regardless of the form of action any such loss or damage may
be claimed."
(j) Paragraph 2 of Section 7 shall be amended to state:
"For losses resulting from other causes the Custodian will be liable
unless the Custodian can prove that it and any of its agents or nominees,
the Federal Reserve Bank of New York in connection with book-entry
procedures, as provided in Treasury Department regulations in effect from
time to time, and any domestic securities depository registered with the
SEC under Section 17A of the 1934 Act, and any successor thereto, were
not negligent and did not act with willful misconduct. The Custodian may
apply for and obtain the advice and opinion of counsel to the Fund with
respect to questions of law and shall be fully protected with respect to
anything done or omitted by it in good faith in conformity with such
advise or opinion. Except as provided in the preceding paragraph, in the
performance of its duties hereunder, the Custodian shall exercise the
standard of care which a professional custodian engaged in the banking or
trust company industry and having professional expertise in financial and
securities processing transactions and custody would observe in these
affairs."
(k) Paragraph 3 of Section 7 shall be amended to state:
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"In the event of loss, damage or injury to the securities or cash while
on deposit with the Custodian, its agents or any nominee of the
Custodian, including the Federal Reserve Bank of New York in connection
with book-entry procedures, or any domestic securities depository
registered with the SEC under the 1934 Act, and any successor thereto, or
any other agent of the Custodian, the Custodian, at its option, shall
promptly cause such securities or cash to be replaced by other securities
or cash as the case may be, of like kind and quality, by among other
means posting appropriate security or bond, at Custodians own expense,
with the issuer(s) of such securities and obtaining their reissue,
together with all rights and privileges resulting from such loss,
including without limitation the value of any dividends, interest or
other distributions not received as a result of the loss of such
securities together with interest at the Federal Funds rate from the time
of such distribution until payment is made to the Fund (the "Lost
Benefits")."
(l) Paragraph 4 of Section 7 shall be amended to state:
"In the event the Custodian is unable to replace the securities in the
Fund's account(s), the Custodian shall remit to the Fund cash equal to
fair market value of the securities as of the date of the discovery of
the loss, together with any Lost Benefits. The Custodian may at its
option insure itself against loss from any cause but shall be under no
obligation to insure for the benefit of the Fund."
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the ____ day of December, 1996.
SEAL
ATTEST THE PRUDENTIAL SERIES FUND INC.
__________________________ By:____________________________
Title:_________________________
X-00
XXXX
XXXXXX
XXX XXXXX XXXXXXXXX XXXX
__________________________ By:____________________________
Title:_________________________
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