CUSTODIAN AGREEMENT
THIS AGREEMENT is made as of September 8, 1986, by and between ADDISON
CAPITAL SHARES, INC., a Maryland corporation (the "Fund"), and PROVIDENT
NATIONAL BANK, a national banking association ("Provident").
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 ("xxx
0000 Xxx"); and
WHEREAS, the Fund desires to retain Provident to serve as the Fund's
custodian and Provident 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 Provident to act as custodian
of the portfolio securities, cash and other property belonging to 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 20 of this Agreement. Provident agrees
to comply with all relevant provisions of the 1940 Act and applicable rules and
regulations thereunder.
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2. Delivery of Documents. The Fund has furnished Provident with copies
properly certified or authenticated of each of the following:
(a) Resolutions of the Fund's Board of Directors authorizing
the appointment of Provident 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 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 June 4, 1986
and all amendments thereto (such Articles of Incorporation, as presently 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 presently in effect and as they shall from time to time be amended,
are herein called the "ByLaws");
(e) The Investment Advisory Agreement between Addison Capital
Management Company (the "Advisor") and the Fund dated as of September 6, 1986
(the "Advisory Agreement");
(f) The Services Agreement between Xxxxx Xxxxxxxxxx Xxxxx Inc.
("Xxxxx") and the Fund dated as of 1986 (the "Management Agreement");
(g) The Underwriting Agreement between the Fund and Xxxxxx
dated September 8, 1986 (the "Underwriting Agreement");
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(h) The Transfer Agency Agreement between PFPC and the Fund
dated as of September 8, 1986 (the "Transfer Agency Agreement");
(i) The Administration and Accounting Services Agreement
between Provident Institutional Management Corporation and the Fund dated as of
September 8, 1986 (the "Administration Agreement");
(j) The Fund's Notification of Registration filed pursuant to
Section 8(a) of the 1940 Act on Form N-8A under the 1940 Act as filed with the
Securities and Exchange Commission ("SEC") on June 10, 1986;
(k) The Fund's most recent Pre-Effective Amendment to its
Registration Statement on Form N-lA under the Securities Act of 1933, as amended
("xxx 0000 Xxx") (File No. 33-6364) and under the 1940 Act as filed with the SEC
on September 9, 1986 relating to shares of the Fund's Capital Stock, par value
per share $0.001 ("Shares"), and all amendments thereto; and
(l) The Fund's most recent prospectus (such prospectus, as
presently in effect and all amendments and supplements thereto are herein called
the "Prospectus").
The Fund will furnish Provident from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term
"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 Directors of the Fund to give Oral and Written
Instructions on behalf of the Fund and listed on the Certificate
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annexed hereto as Appendix A or any amendment thereto as may be received by
Provident from time to time.
(b) "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 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- Instructions" means oral 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 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, 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.
(e) "Written Instructions". As used in this Agreement, the
term "Written
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Instructions" means written instructions delivered by hand, mail, tested
telegram, cable, telex or facsimile sending device, and received by Provident
and signed by an Authorized Person.
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 any nominee of
Provident (with or without indication of fiduciary status), or in the name of
any subcustodian 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 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, the Fund from such cash only (i) for the purchase of
securities for the Fund's portfolio, as provided in Paragraph 13 hereof; (ii)
for the redemption of Fund Shares; (iii) upon receipt of Written Instructions,
for the payment of interest, dividends, taxes, administration, 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 Management Agreement,
the Administration Agreement, the Transfer Agency Agreement and the Underwriting
Agreement;
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(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. No payment pursuant to (i) above shall be made unless
Provident has received a copy of the broker's or dealer's confirmation or the
payee's invoice, as appropriate.
(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 the Fund.
6. Receipt of Securities.
(a) Except as provided by Paragraph 7 hereof, 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 the Fund. All such
securities and non-cash property are to be held or disposed of by Provident for
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
Directors authorizing the 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
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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 Provident
subsidiary or affiliate, or of not less than twenty million dollars
($20,000,000) if such bank or trust company is not a Provident subsidiary or
affiliate and that in either case 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 confirmations and a summary of all transfers to or
from the account of the Fund during said day. Where securities are transferred
to an account of the Fund established pursuant to Paragraph 7 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 the Fund
under this Agreement.
7. Use of Book-Entry System. The Fund shall deliver to Provident
certified resolutions 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 (a) to deposit in the Book-Entry System all securities belonging to
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 the Fund,
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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 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 held in such capacities. Provident 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 Provident which relate
to the Fund's participation in the Book-Entry System will at all times during
Provident's regular business hours be open to the inspection of the Fund's duly
authorized employees or agents, and the Fund will be furnished with all
information in respect of the services rendered to it as it may require.
(c) 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.
8. 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 ByLaws or any vote,
resolution or proceeding of the Shareholders, or of the Board of Directors, or
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of any committee thereof.
(b) Provident shall be entitled to rely upon any Oral
Instructions and any Written Instructions actually received by Provident
pursuant to this Agreement. The Fund agrees to forward to Provident Written
Instructions confirming Oral Instructions in such manner that the Written
Instructions are received by Provident 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.
9. Transactions Not Requiring Instructions. In the absence of contrary
Written Instructions, Provident is authorized to take the following actions:
(a) Collection of Income and Other Payments. Provident shall:
(i) collect and receive for the account of the Fund,
all income and other payments and distributions, including (without limitation)
stock dividends, rights, 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 Fund's custodian account;
(ii) endorse and deposit for collection, in the name
of the Fund, checks, drafts, or other orders for the payment of money on the
same day as received;
(iii) receive and hold for the account of the Fund
all securities received
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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 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 and other payments
and the endorsement for collection of checks, drafts, and other negotiable
instruments.
(b) 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 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 the
Fund or Provident or nominee of either, or for exchange of securities for a
different number of bonds, certificates, or other evidence, representing the
same aggregate face amount or number of units bearing the same interest rate,
maturity date and call provisions, if any; provided that, in any such case, the
new securities are to be delivered to Provident.
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10. Transactions Recruiting Instructions. Upon receipt of Oral or
Written Instructions and not otherwise, Provident, 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
may be exercised;
(b) deliver any securities held for the Fund against receipt
of other securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(c) 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;
(d) make such transfers 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 any duly authorized plan of
liquidation, reorganization, merger, consolidation or recapitalization of the
Fund;
(e) release securities belonging to the Fund to any bank or
trust company for the purpose of pledge or hypothecation to secure any loan
incurred by 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
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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; and
(f) otherwise transfer, exchange or deliver securities in
accordance with Oral or Written Instructions.
11. Segregated Accounts. Provident shall upon receipt of Written or
Oral Instructions establish and maintain a segregated account or accounts on its
records for and on behalf 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 complies with the
Investment Company Act and Release No. 10666 or any subsequent release or
releases of the Securities and Exchange Commission 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.
12. 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. Upon receipt by
Provident of Written Instructions with respect to dividends and distributions
declared by the Fund's Board of Directors and payable to shareholders who have
elected in the proper manner to receive their distributions on dividends in
cash, 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 such shareholders for
distribution in cash by the transfer agent to such shareholders. In lieu of
paying
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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.
In accordance with the Prospectus, the Internal Revenue Code and
regulations promulgated and thereunder with such procedures and controls as are
mutually agreed up on from time to time by and among the Fund, Provident and the
Fund's Transfer Agent, Provident shall arrange for the establishment of XXX
custodian accounts for such Shareholders holding Shares through XXX accounts,
and for the segregation of Shares (and dividends paid on such Shares) obtained
through the Letter of Intent Program.
13. Purchases of Securities. Promptly after each decision to purchase
securities by the Advisor, the Fund, through the Advisor, shall deliver to
Provident Oral Instructions specifying with respect to each 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 and (f) the name of the person from whom or the
broker through whom the purchase was made. 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.
14. Sales of Securities. Promptly after each decision to sell
securities by the Advisor or exercise of an option written by the Fund, the
Fund, through the Advisor, shall deliver to
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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
and (f) the name of the broker through whom or the person to whom the sale was
made. 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.
15. Records. The books and records pertaining to the Fund which are in
the possession of Provident shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws 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.
16. Reports. Provident shall furnish the Fund the following reports:
(a) such periodic and special reports as the Fund may
reasonably request;
(b) a monthly statement summarizing all transactions and
entries for the account of the Fund;
(c) a monthly report of portfolio securities belonging to the
Fund showing the adjusted average cost of each issue and the market value at the
end of such month;
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(d) a monthly report of the cash account of the Fund showing
disbursements;
(e) the reports to be furnished to the Fund pursuant to Rule
17f-4; and
(f) such other information as may be agreed upon from time to
time between the Fund and Provident.
17. Cooperation With Accountants. Provident shall cooperate with the
Fund's independent public accountants and shall take all reasonable action in
the performance of its obligations under this Agreement to 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. 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 the Advisor, the Fund or Provident, at the option of Provident).
(c) Conflicting Advice. In case of conflict between
directions, advice or 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.
(d) Protection of Provident. Provident 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 Provident, 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 the case may be. However, nothing in
this paragraph shall be construed as imposing upon Provident 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 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 any duties or obligations
under this Agreement.
19. Compliance with Governmental Rules and Regulations. The Fund
assumes full responsibility for insuring that the Fund complies with all
applicable requirements of the 1933 Act, the 1934 Act, the 1940 Act, and any
laws, rules and regulations of governmental authorities having jurisdiction.
20. Compensation. As compensation for the services rendered by
Provident during the term of this Agreement, the Fund will pay to Provident
monthly fees that shall be agreed upon from time to time in writing by Provident
and the Fund.
21. 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 1933 Act, the 1934 Act, the 1940 Act, and any
state and foreign securities and blue sky laws, all as or to be amended from
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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 or responsibilities under this
Agreement or (y) Provident's or such nominee's own negligent failure to perform
its duties expressly provided for in this Agreement or otherwise agreed to by
Provident in writing. 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.
22. 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 and completeness of all services performed under
this Agreement, Provident shall be responsible for its own negligent failure to
perform its duties under this
-17-
Agreement, but to the extent that duties, obligations and responsibilities are
not expressly set forth in this Agreement, Provident shall not be Liable or any
act or omission which does not constitute willful misfeasance, bad faith or
gross negligence on the part of Provident or reckless disregard of such duties,
obligations and responsibilities. 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 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,
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.
23. 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
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Fund within a reasonable time after Provident 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.
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.
24. Duration and Termination. This Agreement shall continue until
termination by the Fund or by Provident in either case 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 the Fund 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 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, 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 Fund
then held by Provident or on or against Provident and until full payment shall
have been made to Provident of all of its fees, compensation, costs and
expenses, subject to the provisions of Paragraph 19 of this Agreement.
25. 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)
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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,
attention: Xxxxxxx X. Xxxxxx; 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 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 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.
26. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
27. 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.
28. 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 direct or indirect
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subsidiary of Provident National Bank, Provident National Corporation or PNC
Financial Corp, provided that Provident 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.
29. 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 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, 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.
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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] ADDISON CAPITAL SHARES, INC.
Attest: /s/ Xxxxxxxxx Xxxxxxx By: /s/ Xxx X. Xxxxxx
------------------------------- ---------------------------
Secretary President
[SEAL] PROVIDENT NATIONAL BANK
Attest /s/ Xxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
------------------------------- ---------------------------
Assistant Secretary Vice President
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Appendix A
ADDISON CAPITAL SHARES, INC.
Name Signature
---- ---------
Xxx X. Xxxxxx /s/ Xxx X. Xxxxxx
------------------------------
Xxxxxxxxx Xxxxxxx /s/ Xxxxxxxxx Xxxxxxx
------------------------------
Xxxx X. Xxxx /s/ Xxxx X. Xxxx
------------------------------
Xxxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxxx Xxxxxx /s/ Xxxxxxx Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Xxxxxx X. Xxxx /s/ Xxxxxx X. Xxxx
------------------------------
Xxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
------------------------------
