1
Exhibit 8(k)
CUSTODIAN SERVICES AGREEMENT TERMS AND CONDITIONS
This Agreement is made as of April 8, 1991 by and between THE XXXXXXX
XXXXXX FAMILY OF FUNDS (the "Fund"), a Massachusetts business trust, and
PROVIDENT NATIONAL BANK ("Provident"), a national banking association.
The Fund is registered as an open-end investment company under the
Investment Company Act of 1940 (the "1940" Act), as amended. The Fund wishes to
retain Provident to provide custody services to its investment portfolios as
listed in Schedule A attached ("Portfolio") , and Provident wishes to furnish
such services, either directly or though an affiliate or affiliates, as more
fully described herein.
In consideration of the promises and mutual covenants herein contained,
the parties agree as follows:
1. Definitions
(a) "Authorized Person." The term "Authorized Person" shall
mean any officer of the Fund and any other person, who is duly authorized by the
Fund's Governing Board, to give Oral and Written Instructions on behalf of the
Fund. Such persons are listed in the Certificate attached hereto as the
Authorized Persons Appendix.
(b) "Book-Entry System." The term "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.
(c) "CFTC." The term "CFTC" shall mean the Commodities Futures
Trading Commission.
(d) "Governing Board." The term "Governing Board" shall mean
the Fund's Board of Directors if the Fund is a corporation or the Fund's Board
of Trustees if the Fund is a trust, or, where duly authorized, a competent
committee thereof.
-1-
2
(e) "Oral Instructions." The term "Oral Instructions" shall
mean oral instructions received by Provident from an Authorized Person or from a
person reasonably believed by Provident to be an Authorized Person.
(f) "Provident." The term Provident shall mean Provident
National Bank or a subsidiary or affiliate of Provident National Bank.
(g) "SEC." The term "SEC" shall mean the Securities and
Exchange Commission.
(h) "Securities and Commodities Laws." The terms the "1933
Act" shall mean the Securities Act of 1933, the "1934 Act" shall mean the
Securities Exchange Act of 1934, the "1940 Act" shall mean the Investment
Company Act of 1940, as amended, and the "CEA" shall mean the Commodities
Exchange Act, as amended.
(i) "Shares." The term "Shares" shall mean the shares of stock
of any series or class of the Fund, or, where appropriate, units of beneficial
interest in a trust where the Fund is organized as a Trust.
(j) "Property." The term "Property" shall mean:
(i) any and all securities and other investment items
which the Fund may from time to time deposit, or
cause to be deposited, with Provident or which
Provident 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 Provident from
time to time, from or on behalf of the Fund.
-2-
3
(k) "Written Instructions." The term "Written Instructions"
shall mean written instructions signed by two Authorized Persons and received by
Provident. The instructions may be delivered by hand, mail, tested telegram,
cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints Provident to provide custodian
services to its Portfolios, and Provident accepts such appointment and agrees to
finish such services.
The Fund may from time to time issue separate series or classes or
classify and reclassify shares of such series or class. PFPC shall identify to
each such series or class property belonging to such series or class and in such
reports, confirmations and notices to the Fund called for under this Agreement
shall identify the series or class to which such report, confirmation or notice
pertains.
3. Delivery of Documents. The Fund has provided or, where applicable,
will provide Provident with the following:
(a) certified or authenticated copies of the resolutions of
the Fund's Governing Board, approving the appointment of
Provident or its affiliates to provide services;
(b) a copy of the Fund's most recent effective registration
statement;
(c) a copy of the Fund's advisory agreement or agreements;
(d) a copy of the Fund's distribution agreement or
agreements;
(e) a copy of the Fund's administration agreements if
Provident is not providing the Fund with such services;
(f) copies of any shareholder servicing agreements made in
respect of the Fund; and
(g) certified or authenticated copies of any and all
amendments or supplements to the foregoing.
4. Compliance with Government Rules and Regulations. Provident
undertakes to comply with all applicable requirements of the 1933 Act, the 1934
Act, the 1940 Act, and the
-3-
4
CEA, and any laws, rules and regulations of governmental authorities having
jurisdiction with respect to all duties to be performed by Provident hereunder.
Except as specifically set forth herein, Provident assumes no responsibility for
such compliance by the Fund.
5. Instructions. Unless otherwise provided in this Agreement, Provident
shall act only upon oral and Written Instructions. Provident shall be entitled
to rely upon any Oral and Written Instructions it receives from an Authorized
Persons (or from a person reasonably believed by Provident to be an Authorized
Person) pursuant to this Agreement. Provident may assume that any oral or
Written Instructions received hereunder are not in any way inconsistent with the
provisions of organizational documents or this Agreement or of any vote,
resolution or proceeding of the Fund's Governing Board or of the Fund's
shareholders.
The Fund agrees to forward to Provident Written Instructions
confirming Oral Instructions so that Provident 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 Provident shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral Instructions.
The Fund further agrees that Provident shall incur no
liability to the Fund in acting upon Oral or Written Instructions provided
such instructions reasonably appear to have been received from an Authorized
Person.
6. Right to Receive Advice.
(a) Advice of the Fund. If Provident is in doubt as to any
action it should or should not take, Provident may request directions or advice,
including Oral or Written Instructions, from the Fund.
-4-
5
(b) Advice of Counsel. If Provident shall be in doubt as to
any questions of law pertaining to any action it should or should not take,
Provident may request advice at its own cost from such counsel of its own
choosing (who may be counsel for the Fund, the Fund's advisor or Provident, at
the option of Provident).
(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral or Written Instructions Provident receives from the
Fund, and the advice it receives from counsel, Provident shall be entitled to
rely upon and follow the advice of counsel.
(d) Protection of Provident. Provident shall be protected in
any action it takes or does not take in reliance upon directions, advice or Oral
or Written Instructions it receives from the Fund or from counsel to the Fund
and which Provident believes, in good faith, to be consistent with those
directions, advice or Oral or Written Instructions.
Nothing in this paragraph shall be construed so as to impose an
obligation upon Provident (i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions, advice or Oral
or Written Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of Provident's properly taking or not taking
such action.
7. Records. The books and records pertaining to the Fund, which are in
the possession of Provident, 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, or the Fund's
Authorized Persons, shall have access to such books and records at all time
during Provident's normal business hours. Upon the reasonable request of
-5-
6
the Fund, copies of any such books and records shall be provided by Provident to
the Fund or to an Authorized Person of the Fund, at the Fund's expense.
8. Confidentiality. Provident agrees to keep confidential all records
of the Fund and information relative to the Fund and its Shareholders (past,
present and potential), 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. The Fund further agrees that, should
Provident be required to provide such information or records to duly constituted
authorities (who may institute civil or criminal contempt proceedings for
failure to comply), Provident shall not be required to seek the Fund's consent
prior to disclosing such information.
9. Cooperation with Accountants. Provident shall cooperate with the
Fund's independent public accountants and shall take all reasonable action in
the performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the expression
of their opinion, as required by the Fund.
10. Disaster Recovery. Provident shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment failures,
Provident shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions but shall have no liability with respect thereto.
11. Compensation. As compensation for services rendered by Provident
during the term of this Agreement, the Fund will pay to Provident a fee or fees
as may be agreed to in writing by the Fund and Provident from time to time.
-6-
7
12. Indemnification. The Fund agrees to indemnify and hold harmless
Provident and its nominees from all taxes, charges, expenses, assessment, claims
and liabilities (including, without limitation, liabilities arising under the
1933 Act, the 1934 Act, the 1940 Act, the CEA, and any state and foreign
securities and blue sky laws, and amendments thereto), and expenses, including
(without limitation) reasonable attorneys' fees and disbursements, arising
directly or indirectly from any action which Provident takes or does not take
(i) at the request or on the direction of or in reliance on the advice of the
Fund or (ii) upon Oral or Written Instructions. Neither Provident, nor any of
its nominees, shall be indemnified against any liability to the Fund or to its
shareholders (or any expenses incident to such liability) arising out of
Provident's own willful misfeasance, bad faith, negligence or reckless disregard
of its duties and obligations under this Agreement.
13. Responsibility of Provident. Provident shall be under no duty to
take any action on behalf of the Fund except as specifically set forth herein or
as may be specifically agreed to by Provident, in writing. Provident shall be
obligated to exercise reasonable care and diligence in the performance of its
duties hereunder, to act in good faith and to use its best effort, within
reasonable limits, in performing Services provided for under this Agreement.
Provident shall be responsible for damages arising out of its failure to perform
its duties under this Agreement arising out of Provident's negligence.
Without limiting the generality of the foregoing or of any
other provision of this Agreement, Provident, in connection with its duties
under this Agreement, shall not be under any duty or obligation to inquire into
and shall not be liable for (a) the validity or invalidity or authority or lack
thereof of any Oral or Written Instruction, notice or other instrument which
-7-
8
conforms to the applicable requirements of this Agreement, and which Provident
reasonably believes to be genuine; or (b) delays or errors or loss of data
occurring by reason of circumstances beyond Provident's control, including acts
of civil or military authority, national emergencies, labor difficulties, fire,
flood or catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
14. Description of Services.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to Provident, all the property it owns, including cash received as a
result of the distribution of its shares, during the period that is set forth in
this Agreement. Provident will not be responsible for such property until actual
receipt.
(b) Receipt and Disbursement of Money. Provident, acting upon
Written Instructions, shall open and maintain separate account(s) in the name of
each Portfolio using all cash received from or for the account of such
Portfolio, subject to the terms of this Agreement. In addition, upon Written
Instructions, Provident shall open separate custodial accounts for each separate
series or class of the Portfolio and shall hold in such account(s) all cash
received from or for the accounts of the Portfolio specifically designated to
each separate series, portfolio or class.
Provident shall make cash payments from or for the account of the
Fund only for:
(i) purchases of securities in the name of each
Portfolio or Provident or Provident's nominee as
provided in sub-paragraph j and for which
Provident 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 each
Portfolio delivered to Provident;
-8-
9
(iii) payment of, subject to Written Instructions,
interest, taxes, administration, accounting,
distribution, advisory, management fees or
similar expenses which are to be borne by each
Portfolio;
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent, as agent
for the shareholders, 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,
Provident 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,
Provident and the Fund's transfer agent.
(v) payments, upon receipt Written Instructions in
connection with the conversion, exchange or
surrender of securities owned or subscribed to by
the each Portfolio and held by or delivered to
Provident;
(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-paragraph c of this Agreement;
and
(viii) payments, upon Written Instructions made for
other proper Fund purposes.
Provident is hereby authorized to endorse and collect all
check, drafts or other orders for the payment of money received as custodian for
the account of the Fund.
(c) Receipt of Securities.
(i) Provident shall hold all securities received by it
for or for the account of each Portfolio in a
separate account that physically segregates such
securities from those of any other persons, firms
or corporations. All such securities shall be held
or disposed of only upon Written Instructions of
the Fund pursuant to the terms of this Agreement.
Provident 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, accompanied by a certified
resolution of the Fund's Governing Board,
authorizing
-9-
10
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 Provident's own expense and for its
own convenience, Provident may enter into
sub-custodian agreements with other United States
banks or trust companies to perform duties
described in this sub-paragraph c. 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 Provident, or at least fifty million
dollars ($50,000,000) if such bank or trust
company is not a subsidiary or affiliate of
Provident. In addition, such bank or trust company
must agree to comply with the relevant provisions
of the 1940 Act and other applicable rules and
regulations.
Provident shall remain responsible for
the performance of all of its duties as described
in this Agreement and shall hold the Fund harmless
from its own acts or omissions, under the
standards of care provided for herein, or of any
sub-custodian chosen by Provident under the terms
of this sub-paragraph c.
d. Transactions Requiring Instructions. Upon receipt of Oral or
Written Instructions and not otherwise, Provident, directly or through the use
of the Book-Entry System, shall:
(i) deliver any securities held for each 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 or Written Instructions
proxies consents, authorizations, and any other
instruments whereby the authority of the Fund 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;
provided that, in any such case, the cash or other
consideration is to be delivered to Provident;
-10-
11
(iv) deliver any securities held for each 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 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 Fund and take such other steps as shall be
stated in said Oral or Written Instructions to be
for the purpose of effectuating a duly authorized
plan of liquidation, reorganization, merger,
consolidation or recapitalization of such
Portfolio;
(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
that Portfolio; provided, however, that securities
shall be released only upon payment to Provident
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 a Portfolio,
but only on receipt of payment therefor; and pay
out moneys of a Portfolio in connection- with such
repurchase agreements, but only upon the delivery
of the securities;
(ix) release and deliver or exchange securities owned
by a Portfolio in connection with any conversion
of such securities, pursuant to their terms, into
other securities;
(x) release and deliver securities owned by a
Portfolio for the purpose of redeeming in kind
shares of a Portfolio upon delivery thereof to
Provident; and
-11-
12
(xi) release and deliver or exchange securities owned
by a Portfolio for other corporate purposes.
Provident 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.
(xi) above.
e. Use of Book-Entry System. The Fund shall deliver to Provident
certified resolutions of the Fund's Governing Board approving, authorizing and
instructing Provident on a continuous and on-going basis, to deposit in the
Book-Entry System all securities belonging to each Portfolio 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 Fund,
and deliveries and returns of securities loaned, subject to repurchase
agreements or used as collateral in connection with borrowings. Provident shall
continue to perform such duties until it receives Written or Oral Instructions
authorizing contrary actions(s).
To administer the Book-Entry System properly, the following provisions
shall apply:
(i) With respect to securities of a Portfolio which
are maintained in the Book-Entry system,
established pursuant to this sub-paragraph e
hereof, the records of Provident shall identify by
Book-Entry or otherwise those securities belonging
to a Portfolio. Provident shall furnish the Fund a
detailed statement of the Property held for the
Fund under this Agreement at least monthly and
from time to time and upon written request.
(ii) Securities and any cash of a Portfolio deposited
in the Book-Entry System will at all times be
segregated from any assets and cash controlled by
Provident in other than a fiduciary or custodian
capacity but may be commingled with other assets
held in such capacities. Provident and its
sub-custodian, if any, will pay out
-12-
13
money only upon receipt of securities and will
deliver securities only upon the receipt of money.
(iii) All books and records maintained by Provident
which relate to the Fund's participation in the
Book-Entry System will at all times during
Provident's regular business hours be open to the
inspection of the Fund's duly authorized employees
or agents, and the Fund will be furnished with all
information in respect of the services rendered to
it as it may require.
(iv) Provident will provide the Fund with copies of any
report obtained by Provident on the system of
internal accounting control of the Book-Entry
System promptly after receipt of such a report by
Provident.
Provident will also 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 the Fund which
are issued or issuable only in bearer form, except such securities held in the
Book-Entry System, shall be held by Provident in bearer form; all other
securities held for the Fund may be registered in the name of the Fund;
Provident; the Book-Entry System; a sub-custodian; or any duly appointed
nominee(s) of the Fund, Provident, Book-Entry system or sub-custodian. The Fund
reserves the right to instruct Provident as to the method of registration and
safekeeping of the securities of each Portfolio. The Fund agrees to furnish to
Provident appropriate instruments to enable Provident to hold or deliver in
proper form for transfer, or to register its registered nominee or in the name
of the Book-Entry System, any securities which it may hold for the account of
each Portfolio and which may from time to time be registered in the name of the
-13-
14
Portfolio. Provident shall hold all such securities which are not held in the
Book-Entry System in a separate account for each Portfolio in the name of each
Portfolio physically segregated at all times from those of any other person or
persons.
g. Voting and Other Action. Neither Provident nor its nominee shall
vote any of the securities held pursuant to this Agreement by or for the account
of the Fund, except in accordance with Written Instructions. Provident, directly
or through the use of the Book-Entry System, shall execute in blank and promptly
deliver all notice, proxies, and proxy soliciting materials to the registered
holder of such securities. If the registered holder is not the Fund then Written
or Oral Instructions must designate the person(s) who owns such securities.
h. Transactions Not Requiring Instructions. In the absence of contrary
Written Instructions, Provident 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 the
Fund of such receipt and credit such income, as
collected, to the Fund's custodian account;
(B) endorse and deposit for collection, in the name
of the applicable Portfolio, checks, drafts, or
other orders f or the payment of money;
(C) receive and hold for the account of each
Portfolio all securities received as a
distribution on the Fund's portfolio 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 portfolio securities
belonging to a Portfolio held by Provident
hereunder;
(D) present for payment and collect the amount
payable upon all securities which may mature or
be called, redeemed, or
-14-
15
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) Provident 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 a Portfolio or Provident or nominee
of either, 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 Provident.
(B) Unless and until Provident receives oral or
Written Instructions to the contrary, Provident
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 a Portfolio;
(2) collect interest and cash dividends
received, with notice to the Fund, to
the account of a Portfolio;
(3) hold for the account of a Portfolio all
stock dividends, rights and similar
securities issued with respect to any
securities held by us; and
-15-
16
(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
such certificate- as the owner of the
securities covered thereby, to the
extent it may lawfully do so.
i. Segregated Accounts.
(i) Provident shall upon receipt of Written or Oral
Instructions establish and maintain a segregated
accounts(s) on its records for and on behalf of each
Portfolio. Such account(s) 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
proper corporate purposes.
(ii) Provident may enter into separate custodial agreements
with various futures commission merchants ("FCMs") that
the Fund uses ("FCM Agreement"). Pursuant to an FCM
Agreement, the Fund's margin deposits in any
transactions involving futures contracts and options on
futures contracts will be held by Provident in accounts
("FCM Account") subject to the disposition by the FCM
involved in such contracts and in accordance with the
customer contract between FCM and the Fund ("FCM
Contract"), SEC rules and the rules of the applicable
commodities exchange.
Such FCM Agreements shall only be entered into
upon receipt of Written Instructions from the Fund which
state that:
(A) a customer agreement between the FCM and the
Fund has been entered into; and
(B) the Fund is in compliance with all the rules and
regulations of the CFTC. Transfers of initial
margin shall be made into a
-16-
17
FCM Account only upon Written Instructions;
transfers of premium and variation margin may be
made into a FCM Account pursuant to Oral
Instructions.
Transfers of funds from a FCM Account to the FCM for
which Provident holds such an account may only occur
upon certification by the FCM to Provident that pursuant
to the FCM Agreement and the FCM Contract, all
conditions precedent to its right to give Provident such
instructions have been satisfied.
(iii) Provident shall arrange for the establishment of XXX
custodian accounts for such shareholders holding shares
through XXX accounts, in accordance with the Prospectus,
the Internal Revenue Code (including regulations), and
with such other procedures as are mutually agreed upon
from time to time by and among the Fund, Provident and
the Fund's transfer agent.
j. Purchases of Securities. Provident shall settle purchased securities
upon receipt of Oral or Written Instructions from the Fund or its investment
advisor(s) 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 name of the person from whom or the broker through
whom the purchase was made; and
(vii) the Portfolio to which such purchase applies. Provident
shall upon receipt of securities purchased by or for a
Portfolio pay out of the moneys held for the account of
a 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 or Written
Instructions.
-17-
18
k. Sales of securities. Provident shall sell securities upon
receipt of Oral Instructions from the Fund 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, settlement and sale;
(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; and
(vii) the location to which the security must be delivered and
delivery deadline, if any.
Provident shall deliver the securities upon receipt of the total amount
payable to the Fund upon such sale, provided that the total amount payable is
the same as was set forth in the Oral or Written Instructions. Subject to the
foregoing Provident 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.
(i) Provident shall furnish 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 the portfolio securities belonging to
each Portfolio with the adjusted
-18-
19
average cost of each issue and the market value
at the end of such month, and stating the cash
account of the Portfolio including disbursement;
(C) the reports to be furnished to the Fund pursuant
to Rule 17f-4; and
(D) such other information as may be agreed upon
from time to time between the Fund and
Provident.
(ii) Provident 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. Provident 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 Provident) shall be at the sole risk of the Fund. If payment is
not received by Provident within a reasonable time after proper demands have
been made, Provident shall notify the Fund in writing, including copies of all
demand letters, any written responses, memoranda of all oral responses and to
telephonic demands thereto, and await instructions from the Fund. Provident
shall not be obliged to take legal action for collection unless and until
reasonably indemnified to its satisfaction. Provident shall also notify the Fund
as soon as reasonably practicable whenever income due on securities is not
collected in due course.
15. Duration and Termination. This Agreement shall continue unless
sooner terminated by the Fund or by Provident for "cause" (as defined below) on
sixty (60) days prior written notice to the other party, for a period of four
years. For purposes of this Agreement, "cause" shall mean any circumstances
which materially impair the ability of either party to this Agreement to perform
all of its duties and obligations hereunder. In the event this Agreement is
terminated (pending appointment of a successor to Provident or vote of the
shareholders of a Portfolio of the Fund to dissolve or to function without a
custodian of its cash, securities or
-19-
20
other property) , Provident shall not deliver cash, securities or other property
of the applicable Portfolio to the Portfolio or Fund. It may deliver them to a
bank or trust company of Provident's, 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 such Portfolio of the
Fund to be held under terms similar to those of this Agreement. Provident shall
not be required to make any such delivery or payment until full payment shall
have been made to Provident of all of its fees, compensation, costs and
expenses. Provident shall have a security interest in and shall have a right of
setoff against Property in the Fund's or such Portfolio's possession as security
for the payment of such fees, compensation, costs and expenses.
16. 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 Provident at
Provident's address, Airport Business Center, International Court 2, 000 Xxxxxxx
Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, marked for the attention of the
Custodian Services Department (or its successor) (b) if to the Fund, at the
address of the Fund; or (c) if to neither of the foregoing, at such other
address as shall have been notified to the sender of any such Notice or other
Communication. 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.
17. 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.
18. Delegation. Provident may, with the prior written consent of the
Fund, which consent may not be unreasonably withheld, assign its rights and
delegate its duties hereunder to any wholly-owned direct or indirect subsidiary
of Provident National Bank or PNC Financial
-20-
21
Corp, provided that (i) Provident provides the Fund a minimum of thirty (30)
days in which to decide and to consent by written notice; (ii) the delegate
agrees with Provident to comply with all relevant provisions of this Agreement
and the 1940 Act; and (iii) Provident and such delegate promptly provide such
information as the Fund may request, and respond to such questions as the Fund
may ask, relative to the delegation, including (without limitation) the
capabilities of the delegate.
19. 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.
20. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. Miscellaneous. 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 more separate documents their agreement, if any, with respect
to delegated and/or Oral Instructions.
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.
A copy of the Declaration of Trust of the Fund is on file with the
Secretary of the Commonwealth of Massachusetts and notice is hereby given that
the Fund by the undersigned officer of the Fund in his/her capacity as an
officer of the Fund. The obligations of this Agreement shall only be binding
upon the assets and property of the Fund and shall not be binding upon any
Trustee, officer or shareholder of the Fund individually.
-21-
22
This Agreement shall be deemed to be a contract made in California and
governed by California law. 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. This Agreement shall be binding
and shall in the benefit of the parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
PROVIDENT NATIONAL BANK
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------
THE XXXXXXX XXXXXX FAMILY OF FUNDS
By: /s/ Xxx Xxx
---------------------------------
-22-
