EXHIBIT 8(a)
CUSTODIAN AGREEMENT
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THIS AGREEMENT is made as of October 4, 1989 by and between THE PNC(R)
FUND, a Massachusetts business trust (the "Fund", and PROVIDENT NATIONAL BANK, a
national banking association ("Bank").
W I T N E S S E T H
WHEREAS, the Fund is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain Bank to serve as the Fund's
custodian and Bank is willing to serve as the Fund's custodian;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints Bank to act as custodian of
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the securities, cash and other property belonging to each investment portfolio
(a "portfolio") of the Fund for the period and on the terms set forth in this
Agreement. Bank accepts such appointment and agrees to furnish the services
herein set forth in return for the compensation as provided in Paragraph 21 of
this Agreement. Bank agrees to comply with all relevant provisions of the 1940
Act and applicable rules and regulations thereunder. The Fund's shares, $.001
par value per share (the "Shares"), have been classified into seven different
classes, i.e., Classes A-l, B-1, C-l, D, E, F and G. The Fund may from time to
time issue additional classes of Shares or classify and reclassify shares of
each such class. Bank shall identify to each such class property belonging to
such class and in such reports, confirmations and notices to the Fund called for
under this Agreement shall identify the class to which such report, confirmation
or notice pertains.
2. Delivery of Documents. The Fund has furnished Bank with copies,
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properly certified or authenticated, of each of the following:
(a) Resolutions of the Fund's Board of Trustees authorizing the
appointment of Bank as custodian of the portfolio securities, cash and
other property belonging to the Fund and approving this Agreement;
(b) Appendix A identifying and containing the signatures of the
Fund's officers and/or other persons authorized to issue Oral Instructions
and to sign Written Instructions, as hereinafter defined, on behalf of the
Fund;
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(c) The Fund's Declaration of Trust as filed with the State
Secretary of the Commonwealth of Massachusetts and the Boston City Clerk on
December 22, 1988;
(d) The Fund's Code of Regulations;
(e) The Investment Advisory Agreement between Provident
Institutional Management Corporation (Adviser) and the Fund (the "Advisory
Agreement");
(f) The Sub-Advisory Agreements between Adviser and Provident
National Bank (relating to the Money Market and Government Money Market
Portfolios and the Total Return Portfolio), Adviser and The Central Trust
Company, N.A. (relating to the Tax-Free Money Market, Capital Appreciation
and Managed Income Portfolios) and Adviser and Provident Capital
Management, Inc. (relating to the International Portfolio);
(g) The Administration Agreement between The Boston Company
Advisors, Inc. and the Fund (the "Administration Agreement");
(h) The Administration and Accounting Services Agreement between
Provident Financial Processing Corporation ("PFPC") and the Fund
(collectively with the Administration Agreement, the "Administration
Agreements";
(i) The Distribution Agreement between TBC Funds Distributor,
Inc. and the Fund;
(j) The Transfer Agency Agreement between PFPC (in its capacity
as transfer agent, the "Transfer Agent") and the Fund (the "Transfer Agency
Agreement");
(k) The Fund's Notification of Registration on Form N-8A under
the 1940 Act as filed with the Securities and Exchange Commission ("SEC")
on December 23, 1998;
(l) The Fund's Registration Statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 (the "1933 Act")
and the 1940 Act, as filed with the SEC on December 23, 1988, and all
amendments thereto;
(m) The Fund's non-12b-1 Shareholder Services Plan and the
Fund's form of shareholder servicing agreement;
(n) The Fund's 12b-1 Plan and the Fund's form of dealer
agreement and shareholder servicing agreement;
(o) The Fund's most recent Prospectuses and Statements of
Additional Information and all amendments and supplements thereto
(collectively, the "Prospectuses"); and
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(p) Before any portfolio engages in any transactions
regulated by the Commodity Futures Trading Commission ("CFTC"),
a copy of either (i) a filed notice of eligibility to claim the
exclusion from the definition of "commodity pool operator"
contained in Section 2(a)(1)(A) of the Commodity Exchange
Account ("CEA") that is provided in Rule 4.5 under the CEA,
together with all supplements as are required by the CFTC, or
(ii) a letter which has been granted the Fund by the CFTC which
states that the Fund will not be treated as a "pool" as defined
in Section 4.10(d) of the CFTC's General Regulations, or (iii) a
letter which has been granted the Fund by the CFTC which states
that the CFTC will not take any enforcement action if the Fund
does not register as a commodity pool operator."
The Fund will furnish Bank from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Definitions.
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(a) "Authorized Person." As used in this Agreement, the term
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"Authorized Person" means any of the officers of the Fund and any other person,
whether or not any such person is an officer or employee of the Fund, duly
authorized by the Board of Trustees of the Fund to give Oral and Written
Instructions on behalf of the Fund and listed on the Certificate annexed hereto
as Appendix A or any amendment thereto as may be received by Bank from time to
time.
(b) "Book-Entry System." As used in this Agreement, the term "Book-
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Entry System" means the 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 a clearing agency
registered with the SEC under Section 17A of the Securities Exchange Act of 1934
(the "1934 Act").
(c) "Oral Instructions." As used in this Agreement, the term "Oral
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Instructions" means oral instructions actually received by Bank from an
Authorized Person or from a person reasonably believed by Bank to be an
Authorized Person. The Fund agrees to deliver to Bank, at the time and in the
manner specified in Paragraph 8(b) of this Agreement, Written Instructions
confirming Oral Instructions.
(d) "Property." The term "Property," as used in this Agreement,
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means:
(i) any and all securities and other property which the Fund
may from time to time deposit, or cause to be deposited, with Bank or
which Bank may from time to time hold for the Fund;
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(ii) all income in respect of any of such securities or other
property;
(iii) all proceeds of the sale of any of such securities or
other property; and
(iv) all proceeds of the sale of securities issued by the Fund,
which are received by Bank from time to time from or on behalf of the Fund.
(e) "Written Instructions." As used in this Agreement, the term
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"Written Instructions" means written instructions delivered by hand, mail,
tested telegram, cable, telex or facsimile sending device, and received by Bank
and signed by an Authorized Person.
4. Delivery and Registration of the Property. The Fund will deliver
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or cause to be delivered to Bank all securities and all moneys owned by it,
including cash received for the issuance of its Shares, at any time during the
period of this Agreement. Bank will not be responsible for such securities and
such moneys until actually received by it. All securities delivered to Bank
(other than in bearer form) shall be registered in the name of the Fund or in
the name of a nominee of the Fund or in the name of any nominee of Bank (with or
without indication of fiduciary status), or in the name of any sub-custodian or
any nominee of any such sub-custodian appointed pursuant to Paragraph 6 hereof
or shall be properly endorsed and in form for transfer satisfactory to Bank.
5. Receipt and Disbursement of Money.
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(a) Bank shall open and maintain a separate custodial account or
accounts in the name of each portfolio of the Fund, subject only to draft or
order by Bank acting pursuant to the terms of this Agreement, and shall hold in
such account or accounts, subject to the provisions hereof, all cash received by
it from or for the account of such portfolios. Bank shall make payments of cash
to, or for the account of, each portfolio of the Fund from such cash only (i)
for the purchase of securities for the Fund's portfolios as provided in
Paragraph 13 hereof; (ii) upon receipt of written Instructions, for the payment
of interest, dividends, taxes, administration, accounting, distribution,
advisory or management fees or expenses which are to be borne by the Fund under
the terms of this Agreement, the Advisory Agreement, the Administration
Agreements, the Transfer Agency Agreement and the Distribution and Service plan;
(iii) upon receipt of Written Instructions, for payments in connection with the
conversion, exchange or surrender of securities owned or subscribed to by the
Fund and held by or to be delivered to Bank; (iv) to a sub-custodian pursuant to
Paragraph 6 hereof; (v) for the redemption of Shares; (vi) for payment of the
amount of dividends received in respect of securities sold short; or (vii) upon
receipt of Written Instructions, for other proper Fund
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purposes. No payment pursuant to (i) above shall be made unless Bank has
received a copy of the broker's or dealer's confirmation or the payee's invoice,
as appropriate.
(b) Bank is hereby authorized to endorse and collect all checks,
drafts, negotiable instruments or other orders for the payment of money received
as custodian for the account of the Fund.
6. Receipt of Securities.
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(a) Except as provided by Paragraph 7 hereof, Bank shall hold and
physically segregate in separate accounts, identifiable at all times from those
of any other persons, firms, or corporations, all securities and non-cash
property received by it for the account of each portfolio of the Fund. All such
securities and non-cash property are to be held or disposed of by Bank for each
portfolio of the Fund pursuant to the terms of this Agreement. In the absence
of Written Instructions accompanied by a certified resolution of the Fund's
Board of Trustees authorizing the transaction, Bank shall have no power or
authority to withdraw, deliver, assign, hypothecate, pledge or otherwise dispose
of any such securities and investments except in accordance with the express
terms provided for in this Agreement. In no case may any trustee, officer,
employee or agent of the Fund withdraw any securities. In connection with its
duties under this Xxxxxxxxx 0, Xxxx may, at its own expense, enter into sub-
custodian agreements with other banks or trust companies for the receipt of
certain securities and cash to be held by Bank for the account of the Fund
pursuant to this Agreement; provided that each such bank or trust company has an
aggregate capital, surplus and undivided profits, as shown by its last published
report, of not less than one million dollars ($1,000,000) for a Bank subsidiary
or affiliate, or of not less than twenty million dollars ($20,000,000) if such
bank or trust company is not a Bank subsidiary or affiliate and that in either
case such bank or trust company agrees with Bank to comply with all relevant
provisions of the 1940 Act and applicable rules and regulations thereunder.
Bank shall remain responsible for the performance of all of its duties under
this Agreement and shall hold the Fund harmless from the acts and omissions,
under the standards of care provided for herein, of any bank or trust company
that it might choose pursuant to this Paragraph 6 except to the extent that the
Fund has entered into a separate sub-custody agreement with respect to the
custody of any foreign securities owned by the Fund.
(b) Where securities pre transferred to an account of the Fund
established pursuant to Paragraph 7 hereof, Bank shall also by book-entry or
otherwise identify as belonging to the applicable portfolio of Fund the quantity
of securities in a fungible bulk of securities registered in the name of Bank
(or its nominee) or shown in Bank's account on the books of the Book-Entry
System. At least monthly and from time to time, Bank
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shall furnish the Fund with a detailed statement of the Property held for each
portfolio of the Fund under this Agreement.
7. Use of Book-Entry System. The Fund shall deliver to Bank
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certified resolutions of the Board of Trustees of the Fund approving,
authorizing and instructing Bank on a continuous and on-going basis until
instructed to the contrary by Oral or Written Instructions actually received by
Bank (a) to deposit in the Book-Entry System all securities belonging to each
portfolio of the Fund eligible for deposit therein and (b) to utilize the Book-
Entry System to the extent possible in connection with settlements of purchases
and sales of securities by each portfolio of the Fund, and deliveries and
returns of securities loaned, subject to repurchase agreements or used as
collateral in connection with borrowings. Without limiting the generality of
such use, it is agreed that the following provisions shall apply thereto:
(a) Securities and any cash of a portfolio of the Fund deposited in
the Book-Entry System will at all times be segregated from any assets and cash
controlled by Bank in other than a fiduciary or custodian capacity but may be
commingled with other assets held in such capacities. Bank and its sub-
custodian, if any, will pay out money only upon receipt of securities and will
deliver securities only upon the receipt of money.
(b) All books and records maintained by Bank which relate to the
Fund's participation in the Book-Entry, System will at all times during Bank'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.
(c) Bank will provide the Fund with copies of any report obtained by
Bank on the system of internal accounting control of the Book-Entry System
promptly after receipt of such a report by Bank. Bank 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.
8. Instructions Consistent with Declaration of Trust and Code of
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Regulations.
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(a) Unless otherwise provided in this Agreement, Bank shall act only
upon Oral and Written Instructions. Although Bank may know of the provisions of
the Declaration of Trust and Code of Regulations (collectively, the
"Organization Documents") of the Fund, Bank may assume that any Oral or Written
Instructions received hereunder are not in any way inconsistent with any
provisions of the Organization Documents or any vote, resolution or proceeding
of the Fund's shareholders (the "Shareholders"), or of the Board of Trustees, or
of any committee thereof.
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(b) Bank shall be entitled to rely upon any Oral Instructions and any
Written Instructions actually received by Bank pursuant to this Agreement. The
Fund agrees to forward to Bank Written Instructions confirming Oral Instructions
in such manner that the Written Instructions are received by Bank by the close
of business of the same day that such Oral Instructions are given to Bank. The
Fund agrees that the fact that such confirming Written Instructions are not
received by Bank shall in no way affect the validity of the transactions or
enforceability of the transactions authorized by the Fund by giving Oral
Instructions. The Fund agrees that Bank shall incur no liability to the Fund in
acting upon Oral Instructions given to Bank hereunder concerning such
transactions provided such instructions reasonably appear to have been received
from an Authorized Person.
9. Transactions Not Requiring Instructions. In the absence of
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contrary Written Instructions, Bank is authorized to take the following actions:
(a) Collection of Income and Other Payments. Bank shall:
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(i) collect and receive for the account of each portfolio of the
Fund, all income and other payments and distributions, including (without
limitation) stock dividends, rights, bond coupons, option premiums and
similar items, included or to be included in the Property, and promptly
advise the Fund of such receipt and shall credit such income, as collected,
to the applicable portfolio's custodian account;
(ii) endorse and deposit for collection, in the name of the
applicable portfolio of the Fund, checks, drafts, negotiable instruments,
or other orders for the payment of money on the same day as received;
(iii) receive and hold for the account of each portfolio of the
Fund all securities received as a distribution on the portfolio's
securities as a result of a stock dividend, share split-up or
reorganization, recapitalization, readjustment or other rearrangement or
distribution of rights or similar securities issued with respect to any
securities belonging to the portfolio held by Bank hereunder;
(iv) present for payment and collect the amount payable upon all
securities which may mature or be called, redeemed, or retired, or
otherwise become payable on the date such securities become payable; and
(v) 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
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of checks, drafts, and other negotiable instruments as described in
Paragraph 24 of this Agreement.
(b) Miscellaneous Transactions. Bank is authorized to deliver or
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cause to be delivered Property against payment or other consideration or written
receipt therefor in the following cases:
(i) for examination by a broker selling for the account of a
portfolio of the Fund in accordance with street delivery custom;
(ii) for the exchange of interim receipts or temporary
securities for definitive securities; and
(iii) for transfer of securities into the name of a portfolio of
the Fund or Bank 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 Bank.
10. Transactions Requiring Instructions. Upon receipt of Oral or
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Written Instructions and not otherwise, Bank, directly or through the use of the
Book-Entry System, shall:
(a) 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 on behalf of a portfolio may be exercised;
(b) deliver any securities held for a portfolio of the Fund
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;
(c) deliver any securities held for a portfolio of the Fund 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;
(d) make such transfers or exchanges of the assets of a
portfolio of the Fund and take such other steps as shall be stated in said
Oral or Written Instructions to
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be for the purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Fund;
(e) release securities belonging to a portfolio of the Fund to
any bank or trust company for the purpose of pledge or hypothecation to
secure any loan incurred by a portfolio of the Fund; provided, however,
that securities shall be released only upon payment to Bank 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;
(f) release and deliver securities owned by a portfolio of the
Fund in connection with any repurchase agreement entered into on behalf of
a portfolio of the Fund, but only on receipt of payment therefor; and pay
out moneys of a portfolio of the Fund in connection with such repurchase
agreements, but only upon the delivery of the securities; and
(g) otherwise transfer, exchange or deliver securities in
accordance with Oral or Written Instructions.
11. Segregated Accounts.
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(a) Bank shall upon receipt of Written or Oral Instructions establish
and maintain a segregated account or accounts on its records for and on behalf
of each portfolio of the Fund, into which account or accounts may be transferred
cash and/or securities, including securities in the Book-Entry System (i) 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 Release No. 10666 or any subsequent release or releases of the SEC
relating to the maintenance of segregated accounts by registered investment
companies, and (ii) for other proper corporate purposes, but only, in the case
of clause (ii), upon receipt of Written Instructions.
(b) Bank may enter into separate custodial agreements with various
futures commission merchants ("FCMs") that the Fund uses (each an "FCM
Agreement"), pursuant to which the Fund's margin deposits in any transactions
involving futures contracts and options on futures contracts will be held by
Bank in accounts (each an "FCM Account") subject to the disposition by the FCM
involved in such contracts in accordance with the customer contract between FCM
and the Fund ("FCM Contract"), SEC rules governing such segregated accounts,
CFTC rules and the rules of the applicable commodities exchange. Such FCM
Agreements shall
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only be entered into upon receipt of Written Instructions from the Fund which
state that (i) a customer agreement between the FCM and the Fund has been
entered into; and (ii) the Fund is in compliance with all the rules and
regulations of the CFTC. Transfers of initial margin shall be made into an FCM
Account only upon Written Instructions; transfers of premium and variation
margin may be made into an FCM Account pursuant to Oral Instructions. Transfers
of funds from an FCM Account to the FCM for which Bank holds such an account may
only occur upon certification by the FCM to Bank that pursuant to the FCM
Agreement and the FCM Contract, all conditions precedent to its right to give
Bank such instruction have been satisfied.
12. Dividends and Distributions. The Fund shall furnish Bank with
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appropriate evidence of action by the Fund's Board of Trustees declaring and
authorizing the payment of any dividends and distributions. With respect to
each portfolio of the Fund, upon receipt by Bank of Written Instructions with
respect to dividends and distributions declared by the Fund's Board of Trustees
and payable to Shareholders who have elected in the proper manner to receive
their distributions or dividends in cash, and in conformance with procedures
mutually agreed upon by Bank, the Fund, and the Transfer Agent, Bank shall pay
to the Transfer Agent, as agent for the Shareholders, an amount equal to the
amount indicated in said Written Instructions as payable by each portfolio of
the Fund to such Shareholders for distribution in cash by the Transfer Agent to
such Shareholders. In lieu of paying the Transfer Agent cash dividends and
distributions, Bank may arrange for the direct payment of cash dividends and
distributions to Shareholders by Bank in accordance with such procedures and
controls as are mutually agreed upon from time to time by and among the Fund,
Bank and the Transfer Agent.
In accordance with the applicable Prospectus, the Internal Revenue
Code and regulations promulgated thereunder, and with such procedures and
controls as are mutually agreed upon from time to time by and among the Fund,
Bank and the Transfer Agent, Bank shall arrange for the establishment of XXX
custodian accounts for such Shareholders holding Shares through XXX accounts.
13. Purchases of Securities. Promptly after each decision to
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purchase securities by the Adviser, the Fund, through the Adviser, shall deliver
to Bank Oral Instructions specifying with respect to each such purchase: (a)
the name of the issuer (including CUSIP number, if assigned) and the title of
the securities, (b) the number of shares or the principal amount purchased and
accrued interest, if any, (c) the date of purchase and date and location of
settlement, (d) the purchase price per unit, (e) the total amount payable upon
such purchase, (f) the name of the person from whom or the broker through whom
the purchase was made, and (g) the portfolio of the Fund to which such purchase
applies. Bank shall upon receipt of (a) securities purchased by or for a
portfolio of the Fund or (b) a copy of the
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broker's or dealer's confirmation or the payee's invoice, as appropriate, pay
out of the moneys held for the account of such portfolio of the Fund the total
amount payable to the person from whom or the broker through whom the purchase
was made, provided that the same conforms to the total amount payable as set
forth in such Oral Instructions.
14. Sales of Securities. Promptly after each decision to sell
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securities by the Adviser or exercise of an option written by the Fund, the
Fund, through the Adviser, shall deliver to Bank Oral Instructions, specifying
with respect to each such sale: (a) the name of the issuer (including CUSIP
number, if assigned) and the title of the security, (b) the number of shares or
principal amount sold, and accrued interest, if any, (c) the date of sale and
date and location of settlement, (d) the sale price per unit, (e) the total
amount payable to the Fund upon such sale, (f) the name of the broker through
whom or the person to whom the sale was made, and (g) the portfolio of the Fund
to which such sale applies. Bank shall deliver the securities upon receipt of
the total amount payable to the Fund upon such sale in accordance with the
customs prevailing among dealers in securities.
15. Records. The books and records pertaining to the Fund which are
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in the possession of Bank 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 and regulations and shall, to the extent practicable,
be maintained separately for each portfolio of the Fund. The Fund, or the
Fund's authorized representatives, shall have access to such books and records
at all times during Bank's normal business hours. Upon the reasonable request
of the Fund, copies of any such books and records shall be provided by Bank to
the Fund or the Funds authorized representative at the Fund's expense.
16. Reports.
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(a) Bank shall furnish the Fund the following reports:
(1) such periodic and special reports as the Fund may reasonably
request;
(2) a monthly statement summarizing all transactions and entries
for the account of each portfolio of the Fund, listing the portfolio
securities belonging to each portfolio of the Fund with the adjusted
average cost of each issue and the market value at the end of such month,
and stating the cash account of each portfolio of the Fund including
disbursements;
(3) the reports to be furnished to the Fund pursuant to Rule
17f-4; and
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(4) such other information as may be agreed upon from time to
time between the Fund and Bank.
(b) Bank shall transmit promptly to the Fund any proxy statement,
proxy materials, notice of a call or conversion or similar communications
received by it as Custodian of the Property.
17. Cooperation with Accountants. Bank shall cooperate with the
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Fund's independent public accountants and shall take all reasonable action in
the performance of its obligations under this Agreement to assure that the
necessary information is made available to such accountants for the expression
of their opinion, as such may be required from time to time by the Fund.
18. Confidentiality. Bank agrees on behalf of itself and its
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employees to treat confidentially all records and other information relative to
the Fund, any portfolio of the Fund and the Fund's prior, current, or potential
Shareholders, except, after prior notification to and approval in writing by the
Fund, which approval shall not be unreasonably withheld and may not be withheld
where Bank may 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.
19. Right to Receive Advice.
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(a) Advice of Fund. If Bank shall be in doubt as to any action to be
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taken or omitted by it, it may request, and shall receive, from the Fund
directions or advice, including Oral or Written Instructions where appropriate.
(b) Advice of Counsel. If Bank shall be in doubt as to any question
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of law involved in any action to be taken or omitted by Bank, it may request
advice at its own cost from counsel of its own choosing (who may be counsel for
the Adviser, the Fund or Bank, at the option of Bank).
(c) Conflicting Advice. In case of conflict between directions,
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advice or Oral or Written Instructions received by Bank pursuant to subparagraph
(a) of this Paragraph and advice received by Bank pursuant to subparagraph (b)
of this Paragraph, Bank shall be entitled to rely on and follow the advice
received pursuant to the latter provision alone.
(d) Protection of Bank. Bank shall be protected in any action or
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inaction which it takes in reliance on any directions, advice or Oral or Written
Instructions received pursuant to subparagraphs (a) or (b) of this Paragraph
which Bank, after receipt of any such directions, advice or Oral or Written
Instructions, in good faith believes to be consistent with such directions,
advice or Oral or Written Instructions, as
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the case may be. However, nothing in this Paragraph shall be construed as
imposing upon Bank any obligation (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 when received, unless, under the terms of
another provision of this Agreement, the same is a condition to Bank's properly
taking or omitting to take such action. Nothing in this subparagraph shall
excuse Bank when an action or omission on the part of Bank constitutes willful
misfeasance, bad faith, negligence or reckless disregard by Bank of any duties
or obligations under this Agreement.
20. Compliance with Governmental Rules and Regulations. Bank assumes
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no responsibility for ensuring that the Fund complies with all applicable
requirements of the 1933 Act, the 1934 Act, the 1940 Act, the CEA, and any laws,
rules and regulations of governmental authorities having jurisdiction.
21. Compensation. (a) As compensation for the services rendered by
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Bank during the term of this Agreement, the Fund will pay to Bank, with respect
to each portfolio of the Fund, monthly fees that shall be agreed upon from time
to time in writing by Bank and the Fund. The fee attributable to each portfolio
of the Fund shall be the several (and not joint or joint and several) obligation
of each such portfolio.
(b) Notwithstanding anything to the contrary in Paragraph 6 of this
Agreement, in connection with any foreign custody arrangements entered into by
the Fund, or by the Bank on behalf of the Fund, the Fund shall pay each foreign
sub-custodian appointed pursuant to any such arrangement fees and expenses
according to the schedule approved from time to time by the Board of Trustees of
the Fund. The fees and expenses so payable shall be in addition to any fees and
expense reimbursements payable by the Fund to the Bank pursuant to this
Paragraph.
22. Indemnification. The Fund, on behalf of each portfolio of the
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Fund, agrees that each portfolio of the Fund shall indemnify and hold harmless
the Bank and its nominees from all taxes, charges, expenses, assessments, 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, all as or to be amended from time to time) and
expenses, including attorneys' fees and disbursements (as long as such attorney
has been retained with the consent of the Fund, which consent shall not be
unreasonably withheld), arising directly or indirectly from any action or thing
which the Bank or its nominees takes or does or omits to take or do for a
portfolio of the Fund at the request or on the direction of or in reliance on
the advice of the Fund, provided, that neither the Bank nor any of its nominees
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shall be indemnified against any liability to the Fund, any portfolio of the
Fund or to the Shareholders (or any expenses incident to such
14
liability) arising out of the Bank's or any of its nominees' willful
misfeasance, bad faith, negligence or reckless disregard of its duties and
obligations under this Agreement. In the event of any advance of cash for any
purpose made by the Bank resulting from Oral or Written Instructions of the Fund
or in the event that the Bank or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Agreement, except such as may arise from it or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any Property at any time held for the account of the Fund shall be security
therefor. The obligations of each portfolio of the Fund under this Paragraph 22
shall be the several (and not joint or joint and several) obligation of each
portfolio of the Fund.
23. Responsibility of Bank. Bank 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 Bank in writing. In the performance of its duties
hereunder, Bank shall be obligated to exercise care and diligence and to act in
good faith and to use its best efforts within reasonable limits to ensure the
accuracy and completeness of all services performed under this Agreement. Bank
shall be responsible for its own negligent failure to perform its duties under
this Agreement, but to the extent that duties, obligations and responsibilities
are not expressly set forth in this Agreement, Bank shall not be liable for any
act or omission which does not constitute willful misfeasance, bad faith or
gross negligence on the part of Bank or reckless disregard of such duties,
obligations and responsibilities. Without limiting the generality of the
foregoing or of any other provision of this Agreement, Bank 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 or in respect of (a) the validity or
invalidity or authority or lack thereof of any Oral or Written Instruction,
notice or other instrument which conforms to the applicable requirements of this
Agreement, if any, and which Bank reasonably believes to be genuine; (b) the
validity or invalidity of the issuance of any securities included or to be
included in the Property, the legality or illegality of the purchase of such
securities, or the propriety or impropriety of the amount paid therefor; (c) the
legality or illegality of the sale (or exchange) of any Property or the
propriety or impropriety of the amount for which such Property is sold (or
exchanged); or (d) delays or errors or loss of data occurring by reason of
circumstances beyond Bank's control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, mechanical breakdown,
flood or catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply, nor shall Bank be under
any duty or obligation to ascertain whether any Property at any time delivered
to or held by Bank may properly be held by or for the Fund. Notwithstanding the
foregoing, the Bank shall use its best efforts to mitigate the effects of the
events enumerated
15
in (d) of this Paragraph, although such efforts shall not impute any liability
thereto. Bank expressly disclaims all responsibility for consequential damages,
including but not limited to any that may result from performance or non-
performance of any duty or obligation whether express or implied in this
Agreement and also expressly disclaims any express or implied warranty of
products or services provided in connection with this Agreement.
24. 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 Bank) shall be at the sole risk of the Fund. In any
case in which Bank does not receive any payment due the Fund within a reasonable
time after Bank has made proper demands for the same, it shall so notify the
Fund in writing, including copies of all demand letters, any written responses
thereto, and memoranda of all oral responses thereto and to telephonic demands,
and await instructions from the Fund. Bank shall not be obliged to take legal
action for collection unless and until reasonably indemnified to its
satisfaction. Bank shall also notify the Fund as soon as reasonably practicable
whenever income due on securities is not collected in due course.
25. Duration and Termination. This Agreement shall continue as to
------------------------
each portfolio of the Fund until terminated by the Fund on behalf of a portfolio
or by Bank, in either case on sixty (60) days' written notice. Upon any
termination of this Agreement, pending appointment of a successor to Bank or
vote of the shareholders of the applicable portfolio of the Fund to dissolve or
to function without a custodian of its cash, securities or other property, Bank
shall not deliver cash, securities or other property of the applicable portfolio
of the Fund to the Fund, but may deliver them to a bank or trust company of its
own selection, 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 to be held under terms similar
to those of this Agreement, provided, however, that Bank shall not be required
to make any such delivery or payment until full payment shall have been made by
such portfolio of the Fund of all liabilities constituting a charge on or
against the properties of such portfolio of the Fund then held by Bank or on or
against Bank and until full payment shall have been made to Bank of all of its
fees, compensation, costs and expenses.
26. Notices. All notices and other communications, including Written
-------
Instructions (collectively referred to as "Notice" or "Notices" in this
Paragraph 26), hereunder shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to Bank at
Airport Business Center, International Court II, 000 Xxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxx 00000, marked for the attention of the Mutual Fund Custodian
Services Department (or its successor);
16
(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 the location of the sender of a
Notice and the address of the addressee thereof are, at the time of sending,
more than 100 miles apart, the Notice may be sent by first-class mail, in which
case it shall be deemed to have been given five business days after it is sent,
or if sent by confirming telegram, cable, telex or facsimile sending device, it
shall be deemed to have been given immediately, and, if the location of the
sender of a Notice and the address of the addressee thereof are, at the time of
sending, not more than 100 miles apart, the Notice may be sent by first-class
mail, in which case it shall be deemed to have been given three business days
after it is sent, or if sent by messenger, it shall be deemed to have been given
on the day it is delivered, or if sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately.
All postage, cable, telegram, telex and facsimile sending device charges arising
from the sending of a Notice hereunder shall be paid by the sender.
27. Further Actions. Each party agrees to perform such further acts
---------------
and execute such further documents as are necessary to effectuate the purposes
hereof.
28. Amendments. This Agreement or any part hereof may be changed or
----------
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
29. Delegation. On thirty (30) days' prior written notice to the
----------
Fund, Bank may assign its rights and delegate its duties hereunder to any
wholly-owned direct or indirect subsidiary of Bank, provided that (i) the
delegate agrees with Bank to comply with all relevant provisions of the 1940
Act; and (ii) Bank and such delegate shall 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.
30. Release. The names "The PNC Fund" and "Trustees of The PNC Fund"
-------
refer respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated December 22, 1998 which is hereby referred to and a copy of which is
on file at the office of the State Secretary of the Commonwealth of
Massachusetts and at the principal office of the Trust. The obligations of "The
PNC Fund" entered into in the name or on behalf thereof by any of the Trustees,
officers, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, Shareholders,
officers, representatives or agents of the Trust personally, but bind only the
Trust Property (as defined in the Declaration of Trust), and all persons dealing
with any class of shares of the Trust must
17
look solely to the Trust Property belonging to such class for the enforcement of
any claims against the Trust
31. 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.
32. Miscellaneous. This Agreement embodies the entire agreement and
-------------
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof, provided that the
parties hereto may embody in one or more separate documents their agreement, if
any, with respect to delegated and/or Written 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. This Agreement shall be deemed to be a contract made in
Pennsylvania and governed by Pennsylvania law. If any provision of this
Agreement shall be held or made invalid by a court decision, stature, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding on, and shall insure to the benefit of, the parties
hereto and their respective successors, permitted assigns and permitted
delegates.
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.
Attest: THE PNC FUND
By:
------------------------- --------------------------
its: its:
Attest: PROVIDENT NATIONAL BANK
(Corporate Seal)
By:
------------------------- --------------------------
its: its:
18
APPENDIX A
----------
Authorized Persons
-------------------------------------- ---------------------------------------
(name) (signature)
-------------------------------------- --------------------------------------
(name) (signature)
-------------------------------------- --------------------------------------
(name) (signature)
-------------------------------------- --------------------------------------
(name) (signature)
-------------------------------------- --------------------------------------
(name) (signature)
-------------------------------------- --------------------------------------
(name) (signature)
-------------------------------------- --------------------------------------
(name) (signature)
