EXHIBIT 8(e)
SUB-CUSTODIAN AGREEMENT
-----------------------
AGREEMENT dated as of April 27, 1992 among THE CHASE
MANHATTAN BANK, N.A. ("Bank"), THE PNC(R) FUND ("Fund") and PROVIDENT NATIONAL
BANK ("Company").
W I T N E S S E T H:
WHEREAS, Company has entered into a Custodian Agreement with the Fund,
a Massachusetts business trust, to provide certain custody services; and
WHEREAS, the company and the Fund wish to retain Bank to provide
certain Sub-custodian services to the Company and the Fund for the benefit of
the Fund, and Bank is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Custody Account. The bank agrees to establish and maintain (a) a
---------------
separate custody account for each investment portfolio of the Fund ("Custody
Account") for any and all stocks, shares, bonds, debentures, notes, mortgages or
other obligations for the payment of money and any certificates, receipts,
warrants or other instruments representing rights to receive, purchase or
subscribe for the same or evidencing or representing any other rights or
interests therein and other similar property (hereinafter called "Securities")
from time to time received by the Bank or any sub-custodian (as defined in the
second paragraph of Section 3 hereof) for the account of the particular
investment portfolio of the Fund; and (b) a separate deposit account or
2
accounts in the name of each investment portfolio of the Fund ("Deposit
Account") for any and all cash equivalents in any currency received by the Bank
or any sub-custodian for the account of the particular investment portfolio of
the Fund, which cash shall not be subject to withdrawal by draft or check. The
term "Property" as used herein shall mean all securities, cash, cash equivalents
and other assets of the Fund.
2. Maintenance of Property Abroad. Securities in a Custody Account
------------------------------
shall be held in the country or other jurisdiction as shall be specified from
time to time in Instructions (as defined in section 9 hereof), provided that
such country or other jurisdiction shall be one in which the principal trading
market for such Securities is located or the country or other jurisdiction in
which such Securities are to be presented for payment or are acquired for the
Custody Account, and cash in a Deposit Account shall be credited to an account
in such country on other jurisdiction in which such cash may be legally
deposited or is the legal currency for the payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or non-interest
bearing accounts as may be available for the particular currency. To the extent
Instructions are issued and the Bank can comply with such Instructions, the Bank
is authorized to maintain cash balances on deposit for the Fund with itself or
one of its affiliates at such reasonable rates of interest as may from time to
time be paid on such accounts, or in non-interest bearing accounts as the Fund
may direct, if acceptable to the Bank.
3
3. Eligible Foreign Custodians and Securities Depositories.
-------------------------------------------------------
The Board of Trustees of the Fund authorizes the Bank to hold the Securities in
the Custody Account(s) and the cash in the Deposit Account(s) in custody and
deposit accounts, respectively, which have been established by the bank with one
of its branches, a branch of a qualified U.S. bank, an eligible foreign
custodian or an eligible foreign securities depository; provided, however, that
the Board of Trustees of the Fund has approved the use of, and the Bank's
contract with, such eligible foreign custodian or eligible foreign securities
depository by resolution, and Instructions to such effect have been provided to
the Bank. Furthermore, if a Bank's branch, a branch of a qualified U.S. bank or
an eligible foreign custodian is selected to act as the Bank's sub-custodian to
hold any Property, such entity is authorized to hold such Property in its
account with any eligible foreign securities depository in which it participates
so long as such foreign securities depository has been approved by the Board of
Trustees of the Fund. For purposes of this Agreement (a) "qualified U.S. bank"
shall mean a qualified U.S. bank as defined in Rule 17f-5 under the Investment
Company Act of 1940, as amended ("Rule 17f-5"); (b) "eligible foreign custodian"
shall seen (i) a banking institution or trust company incorporated or organized
under the laws of a country other than the United States that is regulated as
such by that country's government or an agency thereof and that has
shareholders' equity in excess of $200 million in U.S. currency or a foreign
currency equivalent thereto) or (ii) a
4
majority-owned direct or indirect subsidiary of a qualified U.S. bank or bank
holding company that is incorporated or organized under the laws of a country
other than the United States and that has shareholders' equity in excess of $100
million in U.S. currency (or a foreign currency equivalent thereto), and (c)
"eligible foreign securities depository" shall mean a securities depository or
clearing agency, incorporated or organized under the laws of a country other
than the United States, which operates (i) the central system for handling of
securities or equivalent book-entries in that country or (ii) a transnational
system for the central handling of securities or equivalent book--entries.
Hereinafter the term "sub-custodian" will refer to any Bank branch,
any branch of a qualified U.S. bank, any eligible foreign custodian or any
eligible foreign securities depository with which the Bank has entered into an
agreement of the type contemplated hereunder regarding Securities and/or cash
held in or to be acquired for a Custody Account or a Deposit Account.
If, after the initial approval of the sub-custodians by the Board of
Trustees of the Fund in connection with this Agreement, the Bank wishes to
appoint other sub-custodians to hold the Fund's Property, it will so notify the
Company and the Fund and will provide them with information reasonably necessary
to determine any such new sub-custodian's eligibility under Rule 17f-5,
including a copy of the proposed agreement with such-custodian. The Fund shall
within 30 days after receipt of
5
such notice give a written approval or disapproval of the proposed action.
If the Bank intends to remove any sub-custodian previously approved,
it shall so notify the Fund and the Company and shall move the Property
deposited with such sub-custodian to another sub-custodian previously approved
or to a new sub-custodian, provided that the appointment of any new sub-
custodian will be subject to the requirements set forth in the preceding
paragraph. The Bank shall take steps as may be required to remove any sub-
custodian which has ceased to meet the requirements of Rule 17f-5.
4. Use of Sub-Custodians. With respect to Property which is
---------------------
maintained by the Bank in the physical custody of a sub-custodian pursuant to
Section 3:
(a) The Bank will identify on its books as belonging to the
particular investment portfolio of the Fund any Property held by such sub-
custodian.
(b) In the event that a sub-custodian permits any of the Securities
placed in its care to be held in an eligible foreign securities depository, such
sub-custodian will be required by its agreement with the Bank to identify on its
books such Securities as being held for the account of the Bank as a custodian
for its customers.
(c) Any Securities in a Custody Account held by a sub-custodian of
the Bank will be subject only to the instructions of the Bank or its agents; and
any Securities held in an eligible
6
foreign securities depository for the account of a sub-custodian will be subject
only to the instructions of such sub-custodian.
(d) The Bank will only deposit Property in an account with a sub-
custodian which includes exclusively the assets held by the Bank for its
customers, and the Bank will cause such account to be designated by such sub-
custodian as a special custody account for the exclusive benefit of customers of
the Bank.
(e) Any agreement the Bank shall enter into with a sub-custodian with
respect to the holding of property shall require that (i) the Property is not
subject to any right, charge, security interest, lien or claim of any kind in
favor of such sub-custodian or its creditors except for a claim of payment for
its safe custody or administration and (ii) beneficial ownership of such
Property is freely transferable without the payment of money or value other than
for safe custody or administration; provided, however, that the foregoing shall
not apply to the extent that any of the above-mentioned rights, charges, etc.
result from any compensation or other expenses arising with respect to the
safekeeping of Property pursuant to such agreement.
(f) The Bank shall allow independent public accountants of the Fund
such reasonable access to the records of the Bank relating to Property held in a
Custody Account and a Deposit Account as required by such accountants in
connection with their examination of the books and records pertaining to the
affairs of the Fund. The Bank shall, subject to restrictions
7
under applicable law, also obtain from any sub-custodian with which the Bank
maintains the physical possession of any Property an undertaking to permit
independent public accountants of the Fund such reasonable access to the records
of such sub-custodian as may be required in connection with their examination of
the books and records pertaining to the affairs of the Fund or to supply a
verifiable confirmation of the contents of such records. The Bank shall furnish
the Fund and the Company such reports (or portions thereof) of the Bank's
external auditors as relate directly to the Bank's system of internal accounting
controls applicable to the Bank's duties under this Agreement.
(g) The Bank will supply to the Fund, care of its investment adviser,
and the Company at least monthly a statement in respect to any Property in a
Custody and a Deposit Account held by each sub-custodian, including an
identification of the entity having possession of such Property, and the Bank
will send to the Fund and the Company an advice or notification of any transfers
of Property to or from the Custody Account and Deposit Account, indicating, as
to Property acquired for an investment portfolio of the Fund, the identity of
the entity having physical possession of such Property. In the absence of the
filing in writing with the Bank by the Fund of exceptions or objections to any
such statement within sixty (60) days of the Fund's receipt of such statement,
or within sixty (60) days after the date that a material defect is reasonably
discoverable, the Fund shall be deemed to have approved such statement; and in
such case or upon written approval of the Fund of any such statement the Bank
8
shall, to the extent permitted by law and provided the Bank has met the standard
of care in Section 12 hereof, be released, relieved and discharged with respect
to all matters and things set forth in such statement as though such statement
has been settled by the decree of a court of competent jurisdiction in an action
in which the Fund and all persons having any equity interest in the Fund were
parties.
(h) The Bank hereby warrants to the Fund and the Company that in its
opinion, after due inquiry, the established procedures to be followed by each of
its branches, each branch of a qualified U.S. bank, each eligible foreign
custodian and each eligible foreign securities depository holding Property of
the Fund pursuant to this Agreement afford protection for such Property at least
equal to that afforded by the Bank's established procedures with respect to
similar Property held by the Bank (and its securities depositories) in New York.
(i) The Bank hereby warrants to the Fund and the Company that as of
the date of this Agreement it is maintaining a Bankers Blanket Bond and hereby
agrees to notify the Fund and the Company in the event its Bankers Blanket Bond
is cancelled or otherwise lapses.
5. Deposit Account Payments. Subject to the provisions of Section 7,
------------------------
the Bank shall make, or cause its sub-custodian to make, payments of cash
credited to a Deposit Account only:
(a) in connection with the purchase of Securities for the particular
investment portfolio of the Fund involved and the
9
delivery of such Securities to, or the crediting of such Securities to the
particular Custody Account of, the Bank or its sub-custodian, each such payment
to be made at prices as confirmed by Instructions from Authorized Xxxxxxx (as
defined in Section 10 hereof);
(b) for the purchase or redemption of shares of the capital stock of
the particular investment portfolio of the Fund involved and the delivery to, or
crediting to the account of, the Bank or its sub-custodian of such shares to be
so purchased or redeemed;
(c) for the payment for the account of the particular investment
portfolio of the Fund involved of dividends, interest, taxes, management or
supervisory fees, capital distributions or operating expenses;
(d) for the payments to be made in connection with the conversion,
exchange or surrender of Securities held in a Custody Account;
(e) for other proper corporate purposes of the particular investment
portfolio of the Fund involved; or
(f) upon the termination of this Custody Agreement as hereinafter set
forth.
All payments of cash for a purpose permitted by subsection (a), (b),
(c) or (d) of this Section 5 will be made only upon receipt by the Bank of
Instructions from Authorized Persons which shall specify the purpose for which
the payment is to be made and the applicable subsection of this Section 5. In
the case of any payment to be made for the purpose permitted by
10
subsection (e) of this Section 5, the Bank must first receive a certified copy
of a resolution or the Board of Trustees of the Fund adequately describing such
payment, declaring such purpose to be a proper corporate purpose, and naming the
person or persons to whom such payment shall be made. Any payment pursuant to
subsection (f) of this Section 5 will be made in accordance with Section 17
hereof.
In the event that any payment for an investment portfolio of the Fund
made under this Section 5 exceeds the funds available in that investment
portfolio's Deposit Account, the Bank may, in its discretion, advance the Fund
on behalf of tax investment portfolio an amount equal to such excess and such
advance shall be deemed a loan from the Bank to that investment portfolio
payable on demand, bearing interest at the rate of interest customarily charged
by the Bank on similar loans. If the Bank causes a Deposit Account to be
credited on the payable date for interest, dividends or redemptions, the
particular investment portfolio of the Fund involved will promptly return to the
Bank any such amount or property so credited upon oral or written notification
that neither the Bank nor its sub-custodian can collect such amount or property
in the ordinary course of business. The Bank or its sub-custodian, as the case
may be, shall have no duty or obligation to institute legal proceedings, file a
claim or proof of claim in any insolvency proceeding or take any other action
with respect to the collection of such amount or property beyond its ordinary
collection procedures.
11
6. Custody Account Transactions. Subject to the provisions of
----------------------------
Section 7, Securities in a Custody Account will be transferred, exchanged or
delivered by the Bank or its sub-custodians only:
(a) upon sale of such Securities for the particular
investment portfolio of the Fund involved and receipt by the Bank or its sub-
custodian of payment therefor, each such payment to be
in the amount confirmed by Instructions from Authorized Persons;
(b) when such Securities are called, redeemed or
retired, or otherwise become payable;
(c) in exchange for or upon conversion into other
Securities alone or other Securities and cash pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment;
(d) upon conversion of such Securities pursuant to their terms into
other Securities;
(e) upon exercise of subscription, purchase or other similar rights
represented by such Securities;
(f) for the purpose of exchanging interim receipts or temporary
Securities for definitive Securities;
(g) For the purpose of redeeming in kind shares of the capital stack
of the particular investment portfolio of the Fund involved against delivery to
the Bank or its sub-custodian of such shares to be redeemed;
(h) for other proper corporate purposes of the particular investment
portfolio of the Fund involved; or
12
(i) upon the termination of this Custody Agreement as hereinafter set
forth.
All transfers, exchanges or deliveries of Securities in a Custody Account for a
purpose permitted by either subsection (a), (b), (c), (d), (e) of (f) of this
Section 6 will be made, except an provided in Section 8 hereof, only upon
receipt by the Bank of Instructions from Authorized Persons which shall specify
the purpose of the transfer, exchange or delivery to be made and the applicable
subsection of this Section 6. In the case of any transfer or delivery to be
made for the purpose permitted by subsection (g) of this Section 6, the Bank
must first receive Instructions from Authorized Persons specifying the shares
held by the Bank or its sub-custodian to be so transferred or delivered and
naming the person or persons to whom transfers or delivery of such shares shall
be made. In the case of any transfer, exchange or delivery to be made for the
purpose permitted by subsection (h) of this Section 6, the Bank must first
receive a certified copy of a resolution of the Board of Trustees of the Fund
adequately describing such transfer, exchange or delivery of declaring such
purpose to be a proper corporate purpose, and naming the person or persons to
whom delivery, of such Securities shall be made. Any transfer or delivery
pursuant to subsection (i) of this Section 6 will be made in accordance with
Section 17 hereof.
7. Custody Account Procedures. With respect to any transaction
--------------------------
involving Securities held in or to be acquired for a Custody Account, the Bank
in its discretion may cause the Deposit
13
Account for the particular investment portfolio of the Fund involved to be
credited on the contractual settlement date with the proceeds of any sale or
exchange of Securities from the particular Custody Account and to be debited on
the contractual settlement date for the cost of Securities purchased or acquired
for the particular Custody Account. The Bank may reverse any such credit or
debit if the transaction with respect to which such credit or debit was made
fails to settle within a reasonable period, determined by the Bank in its
discretion, after the contractual settlement date, except that if any Securities
delivered pursuant to this Section 7 are returned by the recipient thereof, the
Bank may cause any such credits and debits to be reversed at any time. With
respect to any transactions as to which the Bank does not determine so to credit
or debit the particular Deposit Account, the proceeds from the sale or exchange
or Securities will be credited and the cost of such Securities purchased or
acquired will be debited to the particular Deposit Account on the date such
proceeds or Securities are received by the Bank.
Notwithstanding the preceding paragraph, settlement and payment for
Securities received for, and delivery of Securities out of, a Custody Account
may be effected in accordance with the customary or established securities
trading or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without limitation,
delivering Securities to the purchaser thereof or to a dealer therefor (or an
agent for such purchaser or dealer) against a
14
receipt with the expectation of receiving later payment for such Securities from
such purchaser or dealer.
8. Actions of the Bank. Until the Bank receives Instructions from
-------------------
Authorized Persons to the contrary, the Bank will, or will instruct its sub-
custodian, to:
(a) present for payment any Securities in a Custody Account which are
called, redeemed or retired or otherwise become payable and all coupons and
other income items which call for payment upon presentation to the extent that
the Bank or sub-custodian is aware of such opportunities for payment, and hold
cash received upon presentation of such Securities in accordance with the
provisions of Sections 2, 3 and 4 hereof;
(b) in respect of Securities in a Custody Account, execute in the name
of the Fund on behalf of the particular investment portfolio involved such
ownership and other certificates as may be required to obtain payments in
respect thereof;
(c) exchange interim receipts or temporary Securities in a Custody
Account for definitive Securities;
(d) (if applicable) convert monies received with respect to
Securities of foreign issue into United States dollars or any other currency
necessary to effect any transaction involving the Securities whenever it is
practicable to do so through customary banking channels, using any method or
agency available, including, but not limited to, the facilities of the Bank, its
subsidiaries, affiliates or sub-custodians;
15
(e) (if applicable) appoint brokers and agents for any transaction
involving the Securities in a Custody Account, including, without limitation,
affiliates of the Bank or any sub-custodian; and
(f) reclaim taxes withheld by foreign issuers where
reclaim is possible, provided that Bank has been provided with all documentation
it may require.
9. Instructions. As used in this Agreement, the term
------------
"Instructions" means instructions of the Fund or the Company received by the
Bank via telephone, telex, TWX, facsimile transmission, bank wire or other
teleprocess or electronic instruction system acceptable to the Bank which the
Bank believes in good faith to have been given by Authorized Persons or which
are transmitted with proper testing or authentication pursuant to terms and
conditions which the Bank may specify.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the particular investment
portfolio of the Fund involved and the Company will hold the Bank harmless for
the Company's or the Fund's (i) failure to send such confirmation in writing, or
(ii) the failure of such confirmation to conform to the telephone Instructions
received. Unless otherwise expressly provided, all Instructions shall continue
in full force and effect until cancelled or superseded. If the Bank requires
test arrangements, authentication methods or other security devices to be used
with respect to Instructions, any
16
Instructions given by the Fund or the Company thereafter shall be given and
processed in accordance with such terms and conditions for the use of such
arrangements, methods or devices as the Bank may put into effect and modify from
time to time. The Fund and the Company shall safeguard any testkeys,
identification codes or other security devices which the Bank shall make
available to them. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions, with respect to a Custody
Account.
10. Authorized Persons. As used in this Agreement, the term
------------------
"Authorized Xxxxxxx" means such officers or such agents of the Fund or the
Company as have been designated by a resolution of the Board of Trustees of the
Fund, a certified copy of which has been provided to the Bank, to act on behalf
of the Fund in the performance of any acts which Authorized Persons may do under
this Agreement. Such persons shall continue to be Authorized Persons until such
time as the Bank receives Instructions from Authorized Persons that any such
officer or agent is no longer an Authorized Person.
11. Nominees. Securities in a Custody Account which are ordinarily
--------
in registered form may be registered in the name of the Bank's nominee or, as to
any Securities in the possession of an entity other than the Bank, in the name
of such entity's nominee. The particular investment portfolio of the Fund
involved agrees to hold any such nominee harmless from any liability as a holder
of record of such Securities, but not if such liability is a result of such
nominee's negligence. The
17
Bank may without notice to the Company or the Fund cause any such Securities to
cease to be registered in the name of any such nominee and to be registered in
the name of the Fund. In the event that any Securities registered in the name
of the Bank's nominee or held by one of its sub-custodians and registered in the
name of such sub-custodian's nominee are called for partial redemption by the
issuer of such Security, the Bank may allot, or cause to be allotted, the called
portion to the respective beneficial holders of such class of security in any
manner the Bank deems to be fair and equitable.
12. Standard of Care.
----------------
(a) The Bank shall be obligated to perform only such
duties as are set forth in this Agreement or expressly contained in instructions
given to Bank which are consistent with the provisions of this Agreement.
(i) The Bank will use reasonable care with respect to its
obligations under this Agreement and the safekeeping of
Property. The Bank shall be liable to the Fund and the
Company for any loss which shall occur as the result of the
failure of a sub-custodian or an eligible foreign securities
depository to exercise reasonable care with respect to the
safekeeping of such Property to the same extent that the Bank
would be liable to the Fund and the Company if the Bank were
holding such Property is New York. In the event of any loss
to the Fund or the Company by reason of the failure of the
Bank or its sub-custodian or an eligible foreign securities
depository to exercise reasonable care, the Bank shall be
liable to the Fund or the Company only to the extent of the
Fund's or Company's direct damages and expenses to be
determined based on, but not limited to, the market value of
the Property which is the subject of the loss at the date of
discovery of such loss and without reference to any special
conditions or circumstances.
18
(ii) The Bank will not be responsible for any act, omission,
default or for the solvency of any broker or agent (other than
as provided herein) which it or a sub-custodian appoints and
uses unless such appointment and use were made or done
negligently or in bad faith.
(iii) The Bank shall be indemnified by, and without liability to
the particular investment portfolio of the Fund involved and
the Company for any action taken or omitted by the Bank
whether pursuant to Instructions or otherwise within the scope
of this Agreement if such act or omission was in good faith
and without negligence. In performing its obligations under
this Agreement, the Bank may rely on the genuineness of any
document which it believes in good faith and without
negligence to have been validly executed.
(iv) The Fund, on behalf of the particular investment portfolio
of the Fund involved, agrees to cause such investment
portfolio to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment
of any taxes or other governmental charges, and any related
expenses with respect to income from or Property in such
investment portfolio's Custody Account and Deposit Account.
(v) The Bank shall be entitled to rely, and may act upon the
advice of counsel (who may be counsel for the Fund or the
Company) on all matters and shall be without liability for any
action reasonably taken or omitted in good faith and without
negligence pursuant to such advice.
(vi) The Bank need not maintain any insurance for the exclusive
benefit of the Fund or Company.
(vii) Without limiting the forgoing, the Bank shall not be
liable for any loss which results from:
1) the general risk of investing, or
2) subject to Section 12(a)(i) hereof, investing or holding
Property in a particular country including, but not
limited to, losses resulting from nationalization,
expropriation or other governmental actions; regulation of
the banking or securities industry; currency restrictions,
devaluations or fluctuations; and market conditions which
prevent the
19
orderly execution of securities transactions or affect the
value of Property.
(viii) No party shall be liable to the other for any loss due to
forces beyond its control including but not limited to strikes
or work stoppages, acts of war or terrorism, insurrection,
revolution, nuclear fusion, fission or radiation, or acts of
God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no duty or
responsibility to:
(i) Question Instructions or make any suggestions to the Fund,
Company or an Authorized Person regarding such Instructions;
(ii) Supervise or make recommendations with respect to
investments or the retention of Securities;
(iii) Subject to Section 12(a)(ii) hereof, evaluate or report to
the Fund, Company or an Authorized Person regarding the
financial condition of any broker, agent or other party to
which Securities are delivered of payments are made pursuant
to this Agreement; or
(iv) Review or reconcile trade confirmations received from
brokers.
(c) The Bank shall provide to the Fund, on an annual basis, a report
confirming that the arrangements hereunder remain in compliance with the rules
of the Securities and Exchange Commission governing such arrangements.
13. Compliance with Securities and Exchange Commission Rules and
------------------------------------------------------------
Orders. Except to the extent the Bank has specifically
------
agreed pursuant to this Agreement or in an exemptive order to comply with a
condition of Rule 17f-5 or any interpretation or exemptive order promulgated
thereunder by or under the authority of the Securities and Exchange Commission,
the Fund shall be
20
solely responsible to assure that the maintenance of Securities and cash under
this Agreement complies with such Rule 17f-5.
14. Corporate Action. Whenever the Bank or its sub-custodian
----------------
receives information concerning the Securities which requires discretionary
action by the beneficial owner of the Securities (other than a proxy), such as
subscription rights, bonus issues, stock repurchase plans and rights offerings,
or legal notices or other material intended to be transmitted to securities
holders ("Corporate Actions"), the Bank will give the Company notice of such
Corporate Actions to the extent that the Bank's central corporate actions
department has actual knowledge of a Corporate Action in time to notify its
customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank or its sub-custodians will
endeavor to obtain Instructions from the Fund, Company or its Authorized Person,
but if Instructions are not received in time for the Bank to take timely action,
or actual notice of such Corporate Action was received too late to seek
Instructions, the Bank is authorized to sell such rights entitlement or
fractional interest and to credit the applicable Deposit Account with the
proceeds and to take any other action it deems, in good faith, to be appropriate
in which case, provided it has set the standard of care in Section 12 hereof, it
shall be held harmless by the particular investment portfolio of the Fund
involved for any such action.
21
The Bank will deliver proxies to the Company or its designated agent
pursuant to special arrangements which may have been agreed to in writing
between the parties hereto. Such proxies shall be executed in the appropriate
nominee name relating to Securities in a Custody Account registered in the name
of such nominee but without indicating the manner in which such proxies are to
be voted; and where bearer Securities are involved, proxies will be delivered in
accordance with instructions from Authorized Persons.
15. Fees and Expenses. The Fund agrees to pay to the Bank from time
-----------------
to time such compensation for its services pursuant to this Agreement as may be
mutually agreed upon in writing from time to time and the Bank's out-of-pocket
or incidental expenses, including (but without limitation) reasonable legal
fees. The Fund hereby agrees on behalf of its respective investment portfolios
to cause the particular investment portfolio of the Fund involved to hold the
Bank harmless from any liability or loss resulting from any taxes or other
governmental charges, and any expenses related thereto, which may be imposed, or
assessed with respect to such investment portfolio's Custody Account and also
agrees on behalf of its respective investment portfolios to cause the particular
investment portfolio of the Fund involved to hold the Bank, its sub-custodians,
and their respective nominees harmless from any liability as a record holder of
Securities in such investment portfolio's Custody Account. The Bank is
authorized to charge any account for the particular investment portfolio of the
Fund
22
involved for such items and the Bank shall have a lien on Securities in such
investment portfolio's Custody Account and on cash in such investment
portfolio's Deposit Account for any amount owing to the Bank in connection with
such investment portfolio from time to time under this Agreement.
16. Effectiveness. This Agreement shall be effective on the date
-------------
first noted above.
17. Termination. This Agreement may be terminated by the Fund, the
-----------
Company or the Bank by 60 days' written notice to the other, sent by registered
mail, provided that any termination by the Company shall be authorized by a
resolution of the Board of Trustees of the Fund, a certified copy of which shall
accompany such notice of termination, and provided further, that such resolution
shall specify the names of persons to whom the Bank shall deliver the Securities
in each Custody Account and to whom the cash in each Deposit Account shall be
paid. If notice of termination is given by the Bank, the Fund or the Company
shall, within 60 days following the giving of such notice, deliver to the Bank a
certified copy of a resolution of the Board of Trustees of the Fund specifying
the names of the persons to whom the Bank shall deliver such Securities and
cash, after deducting therefrom any amounts which the Bank determines to be owed
to it under Section 15 hereof. If within 60 days following the giving of a
notice of termination by the Bank, the Bank does not receive from the Fund or
the Company a certified copy of a resolution of the Board of Trustees of the
Fund specifying the names of the persons to whom the cash in each Deposit
Account
23
shall be paid and to whom the Securities in each Custody Account shall be
delivered, the Bank, at its election, may deliver such Securities and pay such
cash to a bank or trust company doing business in the State of New York and
qualified as a custodian under the Investment Company Act of 1940 to be held and
disposed of pursuant to the provisions of this Agreement, or to Authorized
Persons, or may continue to hold such Securities and cash until a certified copy
of one or more resolutions as aforesaid is delivered to the Bank. The
obligations of the parties hereto regarding the use of reasonable care,
indemnities and payment of fees and expenses shall survive the termination of
this Agreement, and the obligations of each investment portfolio of the Fund to
indemnify and/or hold harmless other persons or entities under this Agreement
shall be the several (and not the joint or joint and several) obligation of each
investment portfolio of the Fund.
18. Notices. Any notice or other communication from the Fund or the
-------
Company to the Bank is to be sent to the office of the Bank at 1211 Avenue of
the Americas (33rd floor), New York, New York, 10036, Attention: Global Custody
Division, or such other address as may hereafter be given to the Fund or the
Company in accordance with the notice provisions hereunder, and any notice from
the Bank to the Fund on the Company is to be mailed postage prepaid, addressed
to the Fund and to the Company at the addresses appearing below, or as the same
may hereafter be changed on the Bank's records in accordance with notice
hereunder from the Fund or the Company.
24
19. Governing Law and Successors and Assigns. This Agreement shall
----------------------------------------
be governed by the law of the State of New York and shall not be assignable by
any party, but shall bind the successors and assigns of the Fund, the Company
and the Bank.
20. Headings. The headings of the paragraphs hereof are included for
--------
convenience of reference only and do not form a part of this Agreement.
21. Counterpart Execution. This Agreement may be executed in any
---------------------
number of counterparts with the same effect as if all parties hereto had signed
the same document. All counterparts shall be construed together and shall
constitute one agreement.
22. Confidentiality. Bank agrees an behalf of itself and its
---------------
employees to treat confidentially all records and other information relative to
the Fund and its prior, present, or potential shareholders, and relative to the
Company and its prior, present, or potential customers, except, after prior
notification to and approval in writing by the Fund or the Company, which
approval shall not be unreasonably withheld and may not be withheld where Bank
way be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Fund or the Company.
25
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:____________________________
Address for record:
Airport Business Center
000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
THE CHASE MANHATTAN BANK, N.A.
By:_____________________________
Address for record:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
THE PNC(R) FUND
By:_____________________________
Address for record:
Bellevue Park Corporate Center
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
