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Exhibit 7
AMENDED AND RESTATED CUSTODIAN AGREEMENT
THIS AGREEMENT is made this 28th day of July, 1988 by and between
MUNICIPAL FUND FOR CALIFORNIA INVESTORS, INC., a Maryland corporation (the
"Fund"), and PROVIDENT NATIONAL BANK, a national banking association
("Provident").
WITNESSETH:
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");
WHEREAS, the Fund entered into a custodian agreement made February 14,
1983 (the "Custodian Agreement") by and between the Fund and Provident for
certain custodial services for the Fund, which at such time offered shares in
only one portfolio: the Fund's California Money Fund portfolio (the "Cal Money
Portfolio");
WHEREAS, the Fund, as of the date hereof, now offers shares in two
portfolios: the Cal Money Portfolio and the Fund's California Intermediate
Municipal Bond portfolio (the "Cal Intermuni Portfolio") (the Cal Money
Portfolio and the Cal Intermuni Portfolio collectively referred to herein as the
"Portfolios" and each as a "Portfolio");
WHEREAS, the Fund offers three separate series of Class A Common Stock,
$.001 par value per share, and three separate
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series of Class B Common Stock, $.001 par value per share (such shares and all
shares of every class or series hereafter created by the Fund called "Shares",
and such classes or series of Shares and any class or series of Shares hereafter
created by the Fund herein called "Classes");
WHEREAS, the Fund desires to amend and restate in full the Custodian
Agreement to retain Provident to serve as the Fund's custodian with respect to
both the Cal Money Portfolio and the Cal Intermuni Portfolio and Provident 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 that the Custodian
Agreement is hereby amended and restated in full as follows:
1. Appointment. The Fund hereby appoints Provident to act as
custodian of the portfolio securities, cash and other property of the Fund for
the period and on the terms set forth in this Agreement. Provident 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. Provident agrees
to comply with all relevant provisions of the 1940 Act and applicable rules and
regulations thereunder.
2. Delivery of Documents. The Fund has furnished Provident with
copies properly certified or authenticated of each of the following:
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(a) Resolutions of the Fund's Board of Directors authorizing the
appointment of Provident as custodian of the portfolio securities, cash and
other property of the Fund and approving this Agreement;
(b) Incumbency and signature certificates identifying and
containing the signatures of the Fund's officers and/or other persons authorized
to sign Written Instructions, as hereinafter defined, on behalf of the Fund;
(c) The Fund's Articles of Incorporation filed with the Department
of Assessments and Taxation of the State of Maryland on September 20, 1982 and
all amendments thereto (such Articles of Incorporation, as currently in effect
and as they shall from time to time be amended, are herein called the
"Charter");
(d) The Fund's By-Laws and all amendments thereto (such By-Laws,
as currently in effect and as they shall from time to time be amended, are
herein called the "By-Laws");
(e) Resolutions of the Fund's Board of Directors appointing
Provident Institutional Management Corporation ("PIMC") as the Fund's investment
adviser and resolutions of the Fund's Board of Directors and Shareholders
approving a proposed Advisory Agreement between PIMC and the Fund (the "Advisory
Agreement");
(f) Resolutions of the Fund's Board of Directors appointing
Provident National Bank ("Provident") as the Fund's sub-investment adviser and
resolutions of the Fund's Board of
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Directors and Shareholders approving a proposed Sub-Advisory Agreement between
PIMC and Provident (the "Sub-Advisory Agreement");
(g) Resolutions of the Fund's Board of Directors appointing
Shearson/American Express Inc. ("Shearson") as the Fund's distributor and
approving a proposed Distribution Agreement between Shearson and the Fund (the
"Distribution Agreement");
(h) Resolutions of the Fund's Board of Directors appointing the
Boston Company Advisors, Inc. ("Boston Advisors") as the Fund's administrator
and approving a proposed Administration Agreement between Boston Advisors and
the Fund (the "Administration Agreement");
(i) Resolutions of the Fund's Board of Directors appointing
Provident Financial Processing Corporation ("PFPC") as the Fund's transfer agent
and approving a proposed Transfer Agency Agreement between the Fund and PFPC
(the "Transfer Agency Agreement");
(j) The Advisory Agreement, the Sub-Advisory Agreement, the
Distribution Agreement, the Administration Agreement, and the Transfer Agency
Agreement;
(k) The Fund's Notification of Registration filed pursuant to
Section 8(a) of the 1940 Act on Form N-8A with the Securities and Exchange
Commission ("SEC") on September 24, 1982;
(l) The Fund's Registration Statement on Form N-1 under the 1940
Act and the Securities Act of 1933, as amended
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(the "1933 Act"), as filed with the SEC on September 24, 1982 (File No. 2-78510)
relating to the Shares, and all amendments thereto; and
(m) The Fund's most recent prospectus relating to each Portfolio
of the Fund (such prospectuses as presently in effect and all amendments and
supplements thereto are herein called collectively the "Prospectuses", and each
a "Prospectus").
The Fund will furnish Provident from time to time with copies of all
amendments of or supplements to the foregoing, if any.
3. Definitions
(a) "Authorized Persons". As used in this Agreement, the term
"Authorized Person" means the Fund's President, Treasurer, and any other person,
whether or not any such person is an officer or employee of the Fund, duly
authorized by the Board of Directors 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 such other Certificate listing persons duly authorized to give
Oral and Written Instructions on behalf of the Fund an may be received by
Provident from time to time.
(b) "Oral Instructions". As used in this Agreement, the term "Oral
Instructions" means verbal instructions actually received by Provident from an
Authorized Person or from a person reasonably believed by Provident to be an
Authorized Person. The Fund agrees to deliver to Provident, at the time and
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in the manner specified in Paragraph 7(b) of this Agreement, Written
Instructions confirming Oral Instructions.
(c) "Property". The term "Property", as used in this Agreement,
means:
(i) any and all securities and other property which the
Fund may from time to time deposit, or cause to be deposited, with
Provident or which Provident may from time to time hold for the Fund;
(ii) all income in respect of any of such securities or
other 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 Provident from time to time from or on
behalf of the Fund.
(d) "Written Instructions". An used in this Agreement, the term
"Written Instructions" means written instructions delivered by mail, tested
telegram, cable, telex or facsimile sending device, and received by Provident,
signed by two Authorized Persons.
(e) "Book-Entry System". As used in this Agreement, the term
"Book-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
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agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934.
4. Delivery and Registration of the Property. The Fund will deliver
or cause to be delivered to Provident 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. Provident will not be responsible for such securities
and such moneys until actually received by it. All securities delivered to
Provident (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 Provident or any
nominee of Provident, which nominee shall be assigned exclusively to the Fund
(with or without indication of fiduciary status), or in the name of any
sub-custodian or any nominee of any such subcustodian appointed pursuant to
Paragraph 6 hereof, or shall be properly endorsed and in form for transfer
satisfactory to Provident.
5. Receipt and Disbursement of Money.
(a) Provident 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 Provident 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 the Fund. Provident 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 Xxxxxxxxx 00
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xxxxxx; (xx) for the redemption of Shares as provided in subparagraph (b) of
Paragraph 8 hereof; (iii) upon receipt of Written Instructions, for the payment
of interest, dividends, taxes, or custodial, transfer agency, administration,
distribution or advisory fees or expenses which are to be borne by the Fund
under the terms of this Agreement, the Transfer Agency Agreement, the Advisory
Agreement, the Sub-Advisory Agreement, the Administration Agreement and the
Distribution Agreement; (iv) 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 Provident; (v) to a
subcustodian pursuant to Paragraph 6 hereof; or (vi) upon receipt of Written
Instructions, for other proper Fund purposes.
(b) Provident 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 each Portfolio of the Fund.
6. Receipt of Securities.
(a) Except as provided in sub-Paragraph (c) below, Provident shall
hold and physically segregate in a separate account 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
Provident for the Fund pursuant to the
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terms of this Agreement. In the absence of Written Instructions accompanied by a
certified resolution of the Fund's Board of Directors authorizing the specific
transaction, Provident 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 director, officer, employee or agent of the Fund
withdraw any securities. In connection with its duties under this Paragraph 6,
Provident may at its own expense, enter into subcustodian agreements with other
banks or trust companies for the receipt of certain securities and cash to be
held by Provident 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
five hundred thousand dollars ($500,000) and that such bank or trust company
agrees with Provident to comply with all relevant provisions of the 1940 Act and
applicable rules and regulations thereunder. Provident 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 of any bank or trust company that it
might choose pursuant to this Paragraph 6.
(b) Promptly after the close of business each day, Provident shall
furnish the Fund with confirmation and a summary of all transfers to or from the
account of each Portfolio of the Fund during said day. Where securities are
transferred to
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an account of a Portfolio of the Fund established pursuant to sub-Paragraph (c)
hereof, Provident shall also by book-entry or otherwise identify as belonging to
the Fund the quantity of securities in a fungible bulk of securities registered
in the name of Provident (or its nominee) or shown in Provident's account on the
books of the Book-Entry System. At least monthly and from time to time,
Provident shall furnish the Fund with a detailed statement of the Property held
for each Portfolio of the Fund under this Agreement.
(c) The Fund shall deliver to Provident a certified resolution of
the Board of Directors of the Fund approving, authorizing and instructing
Provident on a continuous and on-going basis, until instructed to the contrary
by Oral or Written Instructions actually received by Provident, to deposit in
the Book-Entry System all securities of each Portfolio of 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 each
Portfolio of the Fund, and deliveries and returns of securities collateral in
connection with borrowings. Without limiting the generality of such use, it is
agreed that the following provisions shall apply thereto:
(i) Securities and any cash of each Portfolio of the Fund
deposited in the Book-Entry System will at all times be segregated from
any assets and cash controlled by Provident in other than a fiduciary
or custodian capacity but may be commingled with other assets
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held in such capacities. Provident will pay out money only upon receipt
of securities and will deliver securities only upon the receipt of
money.
(ii) All books and records maintained by Provident which
relates to the Fund's participation in the Book-Entry System will at
all times during Provident's regular business hours be open to the
inspection of the Fund's duly authorized employees or agents, and the
Fund will be furnished with all information in respect of the services
rendered to it as it may require.
(iii) Provident will provide the Fund with copies of any
report obtained by Provident on the system of internal accounting
control of the Book-Entry System promptly after receipt of such a
report by Provident. Provident will also provide the Fund with such
reports on its own system of internal control as the Fund may
reasonably request from time to time.
7. Instructions Consistent with Charter, etc.
(a) Unless otherwise provided in this Agreement, Provident shall
act only upon Oral and Written Instructions. Although Provident may take
cognizance of the provisions of the Charter and By-Laws of the Fund, Provident
may assume that any Oral or Written Instructions received hereunder are not in
any way inconsistent with any provisions of such Charter or By-Laws or any vote,
resolution or proceeding of the Shareholders, or of the Board of Directors, or
of any committee thereof.
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(b) Provident shall be entitled to rely upon any Oral Instructions
and any agrees to forward to Provident Written Instructions confirming Oral
Instructions in such manner that the Written Instructions are received by
Provident, whether by hand delivery, telex, facsimile sending device or
otherwise, by the close of business of the same day that such Oral Instructions
are given to Provident. The Fund agrees that the fact that such confirming
Written Instructions are not received by Provident 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 Provident shall incur
no liability to the Fund in acting upon Oral Instructions given to Provident
hereunder concerning such transactions provided such instructions reasonably
appear to have been received from an Authorized Person.
8. Transactions Not Requiring Instructions. Provident is authorized
to take the following action without Oral or Written Instructions:
(a) Deposits of Proceeds of Issuance of Shares. Provident shall
collect and receive for the account of each Portfolio of the Fund all payments
received in payment for Shares issued by the Fund.
(b) Redemptions. Upon receipt of notice by the Fund's transfer
agent stating that such transfer agent is required to redeem Shares and
specifying the number and Class of Shares which such transfer agent is required
to redeem and the
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date and time the request or requests for redemption were received by the Fund's
distributor, Provident shall either (i) pay to such transfer agent, for
distribution to the redeeming Shareholder, the amount payable to such
Shareholder upon the redemption of such Shares as determined in the manner
described in the then current Prospectus relating to such Shares, or (ii)
arrange for the direct payment of such redemption proceeds by Provident to the
redeeming Shareholder in accordance with such procedures and controls as are
mutually agreed upon from time to time by and among Provident, the Fund and the
Fund's transfer agent.
(c) Collection of Income and Other Payments. Provident shall:
(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, warrants 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 Portfolio's custodian account;
(ii) endorse and deposit for collection, in the name of the
Fund, or if with respect to a Portfolio, in the name of the Portfolio,
checks, drafts, 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
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distribution on the portfolio securities of the Portfolio 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 of the Portfolio held by Provident 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, payments and
other Property and the endorsement for collection of checks, drafts,
and other negotiable instruments.
(d) Miscellaneous Transactions. Provident is authorized to
deliver or 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 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 the
Portfolio or Provident or a nominee of either,
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or for exchange of securities for a different number of bonds,
certificates, or other evidence, representing the same aggregate face
amount or number of units bearing the same interest rate, maturity date
and call provisions, if any;
provided that, in any such case, the new securities are to be delivered to
Provident.
9. Transactions Requiring Instructions. Upon receipt of Oral or
Written Instructions and not otherwise, Provident 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
may be exercised;
(b) deliver any securities held for a Portfolio of the Fund in
exchange for other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets 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 liquidation, reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any corporation, and
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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 be for the purpose of effectuating any duly authorized plan of
liquidation, reorganization, merger, consolidation, recapitalization or sale of
assets of the Portfolio of the Fund; and
(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 the Portfolio of the Fund; provided, however, that securities
shall be released only upon payment to Provident of the monies borrowed, except
that in cases where additional collateral is required to secure a borrowing
already made, subject to proper prior authorization, further securities may be
released for that purpose; and pay such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon surrender of the note or
notes evidencing the loan.
10. Dividends and Distributions. The Fund shall furnish Provident with
appropriate evidence of action by the Fund's Board of Directors declaring and
authorizing the payment of any dividends and distributions to the Fund's
Shareholders. Upon receipt by Provident of Written Instructions with respect to
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dividends and distributions declared by the Fund's Board of Directors and
payable to the Fund's Shareholders, and in conformance with procedures mutually
agreed upon by Provident, the Fund, and the Fund's transfer agent, Provident
shall pay to the Fund's transfer agent, as agent for the Shareholders, an amount
equal to the amount indicated in said Written Instructions as payable by the
Fund to the Shareholders for distribution in cash by the transfer agent to the
Shareholders or for reinvestment by the transfer agent, with respect to those
Shareholders who have elected in proper manner to reinvest their dividends, in
additional Shares. In lieu of paying the Fund's transfer agent cash dividends
and distributions, Provident may arrange for the direct payment of cash
dividends and distributions to Shareholders by Provident in accordance with such
procedures and controls as are mutually agreed upon from time to time by and
among the Fund, Provident and the Fund's transfer agent.
11. Purchases of Securities. Promptly after each decision by PIMC to
purchase securities for a Portfolio of the Fund, the Fund, through PIMC, shall
deliver to Provident Oral Instructions specifying with respect to such purchase:
(a) the name of the issuer 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 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
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through whom the purchase was made; and (g) the Portfolio of the Fund to which
such purchase applies. Provident 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 Instructions.
12. Sales of Securities. Promptly after each decision by PIMC to sell
securities for a Portfolio of the Fund, the Fund, through PIMC, shall deliver to
Provident Oral Instructions, specifying with respect to each such sale: (a) the
name of the issuer 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; (d)
the sale price per unit; (e) the total amount payable to the Fund upon such
sale; (f) the name of broker through whom or the person to whom the sale was
made; and (g) the Portfolio of the Fund to which such sale applies. Provident
shall deliver the securities upon receipt of the total amount payable to the
Fund upon such sale, provided that the same conforms to the total amount payable
as set forth in such Oral Instructions. Subject to the foregoing, Provident may
accept payment in such form as shall be satisfactory to it, and may deliver
securities and arrange for payment in accordance with the customs prevailing
among dealers in securities.
13. Correspondence. Provident shall answer correspondence from
securities brokers and others relating to its
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duties hereunder and such other correspondence as may from time to time be
mutually agreed upon between Provident and the Fund.
14. Records. Provident shall keep and maintain the financial books and
records of account for each Portfolio of the Fund. The books and records
pertaining to each Portfolio of the Fund which are in the possession of
Provident shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the 1940 Act and other applicable
securities laws and rules and regulations. The Fund, or the Fund's authorized
representatives, shall have access to such books and records at all times during
Provident's normal business hours. Upon the reasonable request of the Fund,
copies of any such books and records shall be provided by Provident to the Fund
or the Fund's authorized representative at the Fund's expense.
15. Reports. Provident shall furnish to the Fund the following
reports:
(a) such periodic and special reports as the Fund may reasonably
request;
(b) a monthly statement summarizing all transactions and entries
for the account of each Portfolio of the Fund;
(c) a monthly report of portfolio securities belonging to each
Portfolio of the Fund showing the adjusted average cost of each issue and the
market value at the end of each month;
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(d) a monthly report of the cash account of each Portfolio of the
Fund showing disbursements; and
(e) such other information as may be agreed upon from time to time
between the Fund and Provident.
16. Cooperation with Accountants. Provident shall cooperate with the
Fund's independent certified 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 unqualified opinion, including but not limited to the
opinion included in the Fund's annual report on Form N-1R.
17. Confidentiality. Provident agrees on behalf of itself and its
employees to treat confidentially and as the proprietary information of the Fund
all records and other information relative to the Fund and its prior, present or
potential Shareholders and relative to Shearson and its prior, present or
potential customers, and not to use such records and information for any purpose
other than performance of its responsibilities and duties hereunder, except
after prior notification to and approval in writing by the Fund, which approval
shall not unreasonably be withheld and may not be withheld where Provident may
be exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge this information by duly constituted authorities, or when
so requested by the Fund.
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18. Equipment Failures. In the event of equipment failures beyond
Provident's control, Provident shall, at no additional expense to the Fund, take
reasonable steps to minimize service interruptions but shall have no liability
with respect thereto. Provident shall enter into and shall maintain in effect
with appropriate parties one or more agreements making reasonable provision for
emergency use of electronic data processing equipment to the extent appropriate
equipment is available.
19. Right to Receive Advice.
(a) Advice of Fund. If Provident shall be in doubt as to any
action to be 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 Provident shall be in doubt as to any
question of law involved in any action to be taken or omitted by Provident, it
may request advice at its own cost from counsel of its own choosing (who may be
counsel for PIMC, PFPC, Shearson, Boston Advisors, the Fund, or Provident, at
the option of Provident).
(c) Conflicting Advice. In case of conflict between directions or
advice (including Oral or Written Instructions) received by Provident pursuant
to subparagraph (a) of this paragraph and advice received by Provident pursuant
to subparagraph (b) of this paragraph, Provident shall be entitled to rely on
and follow the advice received pursuant to the latter provision alone.
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(d) Protection of Provident. Provident shall be protected in any
action or inaction which it takes in reliance on any directions or advice
(including Oral or Written Instructions) received pursuant to subparagraphs (a)
or (b) of this paragraph which Provident, after receipt of such directions or
advice, reasonably and in good faith believes to be consistent with such
directions or advice, as the case may be. However, nothing in this paragraph
shall be construed as imposing upon Provident any obligation (i) to seek such
directions or advice (including Oral or Written Instructions), or (ii) to act in
accordance with such directions or advice when received, unless, under the terms
of another provision of this Agreement, the same is a condition to Provident's
properly taking or omitting to take such action. Nothing in this subsection
shall excuse Provident when an action or omission on the part of Provident
constitutes willful misfeasance, bad faith, gross negligence or reckless
disregard by Provident of its duties under this Agreement.
20. Compliance with Governmental Rules and Regulations. The Fund
assumes full responsibility for insuring that the contents of each prospectus of
the Fund complies with all applicable requirements of the 1933 Act, the 1940
Act, and any laws, rules and regulations of governmental authorities having
jurisdiction.
21. Compensation. As compensation for the services rendered by
Provident during the term of this Agreement, the Fund will pay to Provident,
with respect to each Portfolio of the
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Fund, monthly fees equal to $.25 per year for each $1,000 of the Portfolio's
average gross assets for such year (based on the average of the assets included
in the net asset value of the Portfolio on each day in such month that such
value is calculated).
22. Indemnification. The Fund, as sole owner of the Property, agrees
to indemnify and hold harmless Provident and its nominees from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the 1983 Act, the Securities Exchange Act
of 1984, the 1940 Act, and any state and foreign securities and blue sky laws,
all as or to be amended from time to time) and expenses, including (without
limitation) attorneys' fees and disbursements, arising directly or indirectly
(a) from the fact that securities included in the Property are registered in the
name of any such nominee or (b) without limiting the generality of the foregoing
clause (a) from any action or thing which Provident takes or does or omits to
take or do (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, provided, that
neither Provident nor any of its nominees shall be indemnified against any
liability to the Fund or to its Shareholders (or any expenses incident to such
liability) arising out of (x) Provident's or such nominee's own willful
misfeasance, bad faith, gross negligence or reckless disregard of its duties
under this Agreement or (y) Provident's own negligent failure to perform its
duties under this Agreement.
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In the event of any advance of cash for any purpose made by Provident resulting
from orders or Oral or Written Instructions of the Fund, or in the event that
Provident 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 its 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.
23. Responsibility of Provident. Provident shall be under no duty to
take any action on behalf of the Fund except as specifically set forth herein or
as may be specifically agreed to by Provident in writing. In the performance of
its duties hereunder, Provident shall be obligated to exercise care and
diligence and to act in good faith and to use its best efforts within reasonable
limits to insure the accuracy of all services performed under this Agreement,
but Provident shall not be liable for any act or omission which does not
constitute willful misfeasance, bad faith or gross negligence on the part of
Provident or reckless disregard by Provident of its duties under this Agreement,
provided that Provident shall be responsible for its own negligent failure to
perform its duties under this Agreement. Without limiting the generality of the
foregoing or of any other provision of this Agreement, Provident in connection
with its duties under this Agreement shall not be under any duty or obligation
to inquire into and shall not be liable for or in
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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 Provident
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 Provident's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown except as provided in paragraph 18
hereof, flood or catastrophe, acts of God, insurrection, war, riots or failure
of the mails, transportation, communication or power supply, nor shall Provident
be under any duty or obligation to ascertain whether any Property at any time
delivered to or held by Provident may properly be held by or for the Fund.
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 Provident) shall be at the sole risk of the Fund. In any
case in which Provident does not receive any payment due the Fund within a
reasonable time after Provident has made proper demands for the same, it
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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. Provident shall not be
obliged to take legal action for collection unless and until reasonably
indemnified to its satisfaction. Provident shall also notify the Fund as soon as
reasonably practicable whenever income due on securities is not collected in due
course.
25. Duration and Termination. This Agreement shall continue until
termination by the Fund or Provident on sixty (60) days' written notice. Upon
any termination of this Agreement, pending appointment of a successor to
Provident or vote of the Shareholders of each Portfolio to dissolve or to
function without a custodian of its cash, securities or other property,
Provident shall not deliver cash, securities or other property 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 lose than twenty million dollars ($20,000,000) as a
custodian for each Portfolio of the Fund to be held under terms similar to those
of this Agreement; provided, however, that Provident shall not be required to
make any such delivery or payment until full payment shall have been made by the
Fund of all liabilities constituting a charge on or against the properties of
the Portfolios of the Fund then held by Provident or on or against Provident and
until full payment shall have been made to
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Provident of all of its fees, compensation, costs and expenses, subject to the
provisions of Paragraph 21 of this Agreement.
26. Notices. All notices and other communications, including Written
Instructions (collectively referred to as "Notice" or "Notices" in this
paragraph), hereunder shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to
Provident at Provident's address, 00xx xxx Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, marked for the attention of the Custodian Services
Department (or its successor); (b) if to the Fund, at the address of the Fund;
or (c) if to neither of the foregoing, at such other address as shall have been
notified to the sender of any such Notice or other communication. If 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 three days
after it is sent, or if sent by confirming telegram, cable, telex or facsimile
sending advice, 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 two 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
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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 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,
Provident may assign its rights and delegate its duties hereunder to any
wholly-owned subsidiary of it or PNC Financial Corp., provided that Provident
may delegate its duties only to a bank having the qualifications provided in
section 17(f) of the 1940 Act, and further provided that Provident and its
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. 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 Oral or Written Instructions.
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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, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding and shall inure to the benefit of the parties hereto
and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers designated below on the day and year first
above written.
[SEAL] MUNICIPAL FUND FOR CALIFORNIA
INVESTORS, INC.
Attest:/s/ Signature illegible By:/s/ Signature illegible
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[SEAL] PROVIDENT NATIONAL BANK
Attest:/s/ Signature illegible By:/s/ Signature illegible
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