FORM OF CUSTODIAN SERVICES AGREEMENT
This Agreement is made as of
[ ] by and between XXXXX XXXXXX EQUITY FUNDS, a
Massachusetts business trust (the "Fund") and
PNC BANK, NATIONAL
ASSOCIATION, a national banking association ("PNC Bank").
The Fund is registered as an open-end
investment
company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund wishes to retain PNC
Bank to provide custodian services and PNC Bank wishes
to furnish such services, either directly or through an
affiliate or affiliates, as more fully described
herein. In
consideration of the premises 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, as
such Appendix may be amended in writing by the Fund's
Governing
Board from time to time.
(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.
(e) "Oral Instructions". The term
"Oral
Instructions" shall mean oral instructions received by
PNC Bank from an Authorized Person or from a person
reasonably
believed by PNC Bank to be an Authorized Person.
(f) "SEC". The term "SEC" shall mean
the
Securities and Exchange Commission.
(g) "Securities and Commodities Laws". The
term
"Securities and Commodities Laws" shall mean the "1933
Act"
which shall mean the Securities Act of 1933, the "1934
Act"
which shall mean the Securities Exchange Act of 1934,
the 1940 Act, and the "CEA" which shall mean the
Commodities
Exchange Act, as amended.
(h) "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.
(i) "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 PNC
Bank or which PNC Bank 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 PNC Bank from time to time,
from or on behalf of the Fund.
(j) "Written Instructions". The term
"Written Instructions" shall mean written instructions
signed by one Authorized Person and received by
PNC Bank. The
instructions may be delivered by hand, mail,
tested
telegram, cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints PNC Bank
to
provide custodian services to the Fund, and PNC Bank
accepts such appointment and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided
or,
where applicable, will provide PNC Bank with the following:
(a) certified or authenticated copies of
the
resolutions of the Fund's Governing Board, approving
the
appointment of PNC Bank 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 PNC Bank 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.
PNC Bank undertakes to comply with all
applicable
requirements of the Securities and Commodities Laws and
any laws, rules and regulations of governmental
authorities
having jurisdiction with respect to all duties to
be
performed by PNC Bank hereunder. Except as specifically
set forth herein, PNC Bank assumes no responsibility for
such compliance by the Fund.
5. Instructions. Unless otherwise provided in
this
Agreement, PNC Bank shall act only upon Oral and
Written
Instructions. PNC Bank shall be entitled to rely upon
any
Oral and Written Instructions it receives from an
Authorized Person (or from a person reasonably believed by
PNC Bank to
be an Authorized Person) pursuant to this Agreement.
PNC
Bank 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 PNC Bank
Written
Instructions confirming Oral Instructions so that PNC
Bank 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 PNC Bank shall in no way invalidate the
transactions or enforceability of the
transactions
authorized by the Oral Instructions.
The Fund further agrees that PNC Bank 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 PNC Bank is in
doubt
as to any action it should or should not take, PNC Bank
may request directions or advice, including Oral or
Written
Instructions, from the Fund.
(b) Advice of Counsel. If PNC Bank shall be
in
doubt as to any questions of law pertaining to any action
it should or should not take, PNC Bank 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 PNC Bank, at
the option of PNC Bank).
(c) Conflicting Advice. In the event
of a
conflict between directions, advice or Oral or
Written
Instructions PNC Bank receives from the Fund, and the
advice it receives from counsel, PNC Bank shall be entitled
to rely upon and follow the advice of counsel.
(d) Protection of PNC Bank. PNC Bank 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
and
which PNC Bank 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 PNC Bank (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
PNC Bank's properly taking or not taking such action.
7. Records. The books and records pertaining to
the
Fund which are in the possession of PNC 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, rules and
regulations.
The Fund, or the Fund's Authorized Persons, shall
have
access to such books and records at all time during
PNC
Bank's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records
shall be provided by PNC Bank to the Fund or to an
Authorized Person
of the Fund, at the Fund's expense.
8. Confidentiality. PNC Bank 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 and may not be withheld where PNC
Bank may be exposed to civil or criminal contempt
proceedings or when required to divulge. The Fund
further agrees that, should PNC Bank be required to
provide such information or
records to duly constituted authorities (who may
institute civil or criminal contempt proceedings
for failure to
comply), PNC Bank shall not be required to seek the
Fund's
consent prior to disclosing such information.
9. Cooperation with Accountants. PNC Bank
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. PNC Bank 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, PNC Bank 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
custody
services rendered by PNC Bank during the
term of this
Agreement, the Fund will pay to PNC Bank a fee or fees
as
may be agreed to in writing from time to time by the
Fund and PNC Bank.
12. Indemnification. The Fund agrees to indemnify
and
hold harmless PNC Bank and its nominees from all
taxes,
charges, expenses, assessment, claims and
liabilities
(including, without limitation, liabilities arising
under
the Securities and Commodities Laws and any
state and
foreign securities and blue sky laws, and
amendments
thereto, and expenses, including (without
limitation)
attorneys' fees and disbursements, arising directly
or
indirectly from any action which PNC Bank 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 PNC Bank, 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 PNC Bank's own
willful
misfeasance, bad faith, negligence or reckless disregard
of
its duties and obligations under this Agreement.
13. Responsibility of PNC Bank. PNC 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 PNC Bank, in writing.
PNC Bank
shall be obligated to exercise care and diligence in
the performance of its duties hereunder, to act in good
faith
and to use its best effort, within reasonable limits,
in
performing services provided for under this Agreement.
PNC
Bank shall be responsible for its own negligent failure
to
perform its duties under this Agreement. Notwithstanding
the
foregoing, PNC Bank shall not be responsible for
losses
beyond its control, provided that PNC Bank has acted
in
accordance with the standard of care set forth above;
and provided further that PNC Bank shall only be
responsible for that portion of losses or damages suffered
by the Fund that are attributable to the negligence of PNC
Bank.
Without limiting the generality of the foregoing or
of
any other provision of this Agreement, PNC
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 (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, and which
PNC Bank reasonably believes to be genuine; or (b)
delays or
errors or loss of data occurring by reason of
circumstances beyond PNC Bank'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.
Notwithstanding anything in this Agreement to
the
contrary, PNC Bank shall have no liability to the Fund
for any consequential, special or indirect losses or
damages
which the Fund may incur or suffer by or as a consequence
of
PNC Bank's performance of the services provided
hereunder, whether or not the likelihood of such losses or
damages was known by PNC Bank.
14. Description of Services.
(a) Delivery of the Property. The Fund
will
deliver or arrange for delivery to PNC Bank, all
the
property owned by the Fund, including cash received as
a result of the distribution of its Shares, during
the period
that is set forth in this Agreement. PNC Bank will not
be
responsible for such property until actual receipt.
(b) Receipt and Disbursement of Money. PNC
Bank,
acting upon Written Instructions, shall open and
maintain separate account(s) in the Fund's name
using all cash
received from or for the account of the Fund, subject to
the terms of this Agreement. In addition,
upon Written
Instructions, PNC Bank shall open separate
custodial
accounts for each separate series, class or portfolio of
the Fund and shall hold in such account(s) all cash
received from or for the accounts of the Fund specifically
designated to each separate series, class or portfolio. PNC
Bank shall make cash payments from or for the account of
the Fund only
for:
(i) purchases of
securities
in the name of the Fund or PNC Bank
or
PNC Bank's nominee as provided
in
sub-paragraph j and for which PNC
Bank
has received a copy of the broker's
or
dealer's confirmation or
payee's
invoice, as appropriate;
(ii) purchase or redemption
of
Shares of the Fund delivered to PNC Bank; (iii)
payment of, subject to Written
Instructions, interest, taxes,
administration, accounting, distribution,
advisory, management fees or similar expenses
which are to be borne by the Fund;
(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, PNC Bank
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,
PNC Bank and the Fund's transfer agent;
(v) payments, upon receipt
of
Written Instructions, in connection with
the conversion, exchange or surrender
of
securities owned or subscribed to by the
Fund and held by or delivered to
PNC
Bank;
(vi) payments of the amounts
of
dividends received with respect
to
securities sold short; payments made to
a
sub-custodian pursuant to provisions
in
sub-paragraph c of this Paragraph; and
(viii) payments, upon Written
Instructions made for other proper Fund
purposes. PNC Bank is hereby authorized
to
endorse and collect all checks, drafts
or
other orders for the payment of money
received as custodian for the account of the
Fund.
(c) Receipt of Securities.
(i) PNC Bank shall hold all
securities received by it for the
account of the Fund in a
separate
account that physically segregates such
securities from those of any other
persons, firms or corporations, except
for securities held in a Book-Entry
System. All such securities shall
be
held or disposed of only upon Written
Instructions of the Fund pursuant
to
the terms of this Agreement. PNC
Bank
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 the transaction.
In
no case may any member of the Fund's
Governing Board, or any
officer,
employee or agent of the Fund withdraw
any securities. At PNC Bank's own
expense and for its own convenience, PNC
Bank may enter into sub-custodian
agreements with other 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 PNC Bank, or at least
twenty million dollars ($20,000,000)
if
such bank or trust company is
not a
subsidiary or affiliate of PNC Bank.
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.
PNC
Bank shall remain responsible for
the
performance of all of its duties
as
described in this Agreement and shall
hold the Fund harmless from PNC Bank's
own (or any sub-custodian chosen by PNC
Bank under the terms of
this
sub-paragraph c) acts or omissions,
under the standards of care provided for
herein.
(d) Transactions Requiring Instructions. Upon
receipt of Oral or Written Instructions and not otherwise,
PNC Bank, directly or through the use of the Book-Entry
System, shall:
(i) deliver any securities
held for the Fund 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 PNC Bank; (iv)
deliver any securities held
for 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;
(v) deliver any securities
held for 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;
(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
the
Fund;
(vii) release securities belonging
to the Fund to any bank or trust company for
the purpose of a pledge or hypothecation
to
secure any loan incurred by the Fund;
provided, however, that securities shall
be
released only upon payment to PNC 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;
(viii) release and deliver securities
owned by the Fund in connection with
any
repurchase agreement entered into on behalf
of the Fund, but only on receipt of payment
therefor; and pay out moneys of the Fund
in
connection with such repurchase agreements,
but only upon the delivery of the securities; (ix)
release and deliver or
exchange securities owned by the Fund
in
connection with any conversion of
such
securities, pursuant to their terms, into
other securities;
(x) release and
deliver
securities owned by the Fund for
the
purpose of redeeming in kind shares
of
the Fund upon delivery thereof to
PNC
Bank; and
(xi) release and deliver
or
exchange securities owned by the Fund
for
other corporate purposes. PNC Bank 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 above.
(e) Use of Book-Entry System. The Fund shall deliver
to PNC Bank certified resolutions of the Fund's Governing
Board approving, authorizing and instructing PNC Bank on a
continuous and on-going basis, to deposit in the Book-Entry
System all securities belonging to the Fund 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. PNC Bank 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 the Fund which
are
maintained in the Book-Entry system,
established pursuant to this
sub-paragraph e hereof, the records
of
PNC Bank shall identify by Book-Entry
or
otherwise those securities belonging
to
the Fund. PNC Bank 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 the
Fund deposited in the Book-Entry System will
at all times be segregated from any assets
and cash controlled by PNC Bank in other than
a fiduciary or custodian capacity but may be
commingled with other assets held in such
capacities. PNC 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.
(iii) All books and records
maintained by PNC Bank which relate to the
Fund's participation in the Book-Entry System
will at all times during PNC 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.
(iv) PNC Bank will provide the Fund
with copies of any report obtained by
PNC
Bank on the system of internal accounting
control of the Book-Entry System promptly
after receipt of such a report by PNC Bank.
PNC 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.
(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 PNC Bank in bearer form; all other
securities held for the Fund may be registered in the
name
of the Fund; PNC Bank; the Book-Entry System;
a
sub-custodian; or any duly appointed nominee(s) of the Fund,
PNC Bank, Book-Entry system or sub-custodian. The
Fund
reserves the right to instruct PNC Bank as to the method
of
registration and safekeeping of the securities of the Fund.
The Fund agrees to furnish to PNC Bank appropriate
instruments to enable PNC Bank 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 the Fund and which may
from
time to time be registered in the name of the Fund.
PNC
Bank shall hold all such securities which are not held
in
the Book-Entry System in a separate account for the Fund
in
the name of the Fund physically segregated at all times from
those of any other person or persons.
(g) Voting and Other Action. Neither PNC
Bank
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.
PNC
Bank, 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, PNC Bank
is
authorized to take the following actions:
(i) Collection of Income
and
Other Payments.
(A) collect and
receive for the account of the
Fund, 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 Fund, checks, drafts, or
other orders for the payment of
money;
(C) receive and
hold for the account of the Fund
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 the Fund held by PNC
Bank hereunder;
(D) 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
(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) PNC Bank 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 the Fund in accordance with
street delivery custom;
(2) for
the exchange of interim
receipts or temporary
securities for definitive
securities; and
(3) for
transfer of securities into
the name of the Fund or PNC
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 PNC
Bank.
(B) Unless and
until PNC Bank receives Oral or
Written Instructions to the
contrary, PNC Bank 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 the
Fund;
(2)
collect interest and cash
dividends received, with
notice to the Fund, to the
Fund's account;
(3) hold
for the account of the Fund
all stock dividends, rights
and similar securities issued
with respect to any securities
held by PNC Bank; and
(4)
execute as agent on behalf of
the Fund all necessary
ownership certificates
required by the Internal
Revenue Code or the Income Tax
Regulations of the United
States Treasury Department or
under the laws of any State
now or hereafter in effect,
inserting the Fund's name, on
such certificate as the owner
of the securities covered
thereby, to the extent it may
lawfully do so.
(i) Segregated Accounts.
(i) PNC Bank shall upon
receipt of Written or Oral Instructions
establish and maintain segregated
account(s) on its records for and on
behalf of the Fund. 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) PNC Bank 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 PNC Bank 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 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 PNC Bank holds such an
account may only occur upon
certification by the FCM to PNC
Bank that pursuant to the FCM
Agreement and the FCM Contract, all
conditions precedent to its right
to give PNC Bank such instructions
have been satisfied.
(iii) PNC Bank shall arrange for the
establishment of XXX custodian accounts for
such share- holders holding Shares through
XXX accounts, in accordance with the Fund's
prospectuses, 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, PNC Bank
and the Fund's transfer agent.
(j) Purchases of Securities. PNC Bank 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; and
(vi) the name of the person from
whom or the broker through whom the purchase
was made. PNC Bank shall upon receipt of
securities purchased by or for the Fund pay
out of the moneys held for the account 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 or Written Instructions.
(k) Sales of Securities. PNC Bank shall settle
sold securities upon receipt of Oral or Written 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. PNC Bank 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, PNC
Bank 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) PNC Bank 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 the Fund, listing the
portfolio securities belonging
to
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 the
Fund 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 PNC Bank.
(ii) PNC Bank 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. PNC Bank
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 PNC Bank) shall be at the sole risk of the Fund.
If
payment is not received by PNC Bank within a reasonable time
after proper demands have been made, PNC Bank shall
notify
the Fund in writing, including copies of all demand letters,
any written responses, memoranda of all oral responses
and
telephonic demands thereto, and await instructions from the
Fund. PNC Bank shall not be obliged to take legal
action
for collection unless and until reasonably indemnified
to
its satisfaction. PNC Bank 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 until terminated by the Fund or by PNC
Bank on
sixty (60) days' prior written notice to the other
party.
In the event this Agreement is terminated
(pending
appointment of a successor to PNC Bank or vote of
the
shareholders of the Fund to dissolve or to function without
a custodian of its cash, securities or other property), PNC
Bank shall not deliver cash, securities or other property of
the Fund to the Fund. It may deliver them to a bank or
trust company of PNC Bank's choice, having an aggregate
capital, surplus and undivided profits, as shown by
its last
published report, of not less than twenty million dollars
($20,000,000), as a custodian for the Fund to be held under
terms similar to those of this Agreement. PNC Bank shall
not be required to make any such delivery or payment
until
full payment shall have been made to PNC Bank of all of its
fees, compensation, costs and expenses. PNC Bank shall have
a security interest in and shall have a right of
setoff
against Property in the Fund'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 PNC Bank at PNC
Bank's address: Airport Business Center, International
Court
2, 000 Xxxxxxx Xxxxx, Xxxxxx, 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. PNC
Bank may
assign its rights and delegate its duties hereunder to any
wholly-owned direct or indirect subsidiary of PNC
Bank,
National Association or PNC Bank Corp., provided that (i)
PNC Bank gives the Fund thirty (30) days prior
written
notice; (ii) the delegate agrees with PNC Bank to
comply
with all relevant provisions of the 1940 Act; and (iii)
PNC
Bank 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 assignment, 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 or more separate documents their agreement, if
any, with respect to delegated duties 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.
This Agreement shall be deemed to be a contract made in
Pennsylvania and governed by Pennsylvania law, without
regard to principles of conflicts of 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 upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted
assigns.
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.
PNC BANK, NATIONAL ASSOCIATION
By:
Title:
XXXXX XXXXXX EQUITY FUNDS
By:
Title:
