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EXHIBIT (8)(b)
CUSTODIAN AGREEMENT
THIS AGREEMENT is made as of June 1, 1989 by and between TRUST FOR
FEDERAL SECURITIES, a Pennsylvania business trust (the "Company"), and
PROVIDENT NATIONAL BANK, a national banking association ("Provident").
W I T N E S S E T H :
WHEREAS, the Company is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Company currently offers shares of series
representing interest in six separate investment portfolios, known as FedFund,
T-Fund, Treasury Trust Fund, Short Government Fund, Intermediate Government
Fund and Long Government Fund (each a "Fund"), and classes of shares in each
such Fund; and
WHEREAS, Provident has served as the Company's Custodian
pursuant to an Amended and Restated Custodian and Services Agreement dated as
of November 19, 1979, as amended on January 16, 1981, November 30, 1981, March
22, 1982, July 2, 1982, January 12, 1984, November 1, 1984 and May 9, 1986; and
WHEREAS, the Company desires to continue to retain Provident
to serve as the Company's custodian and Provident is willing to serve as the
Company s custodian;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
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1. Appointment. The Company hereby appoints Provident to act as
custodian of the portfolio securities, cash and other property belonging to the
Company 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. The Company has, and may from time
to time continue to issue additional Funds or classes of such Funds, or classify
and reclassify shares of such current or future Funds or classes. Provident
shall identify to each such Fund or class property belonging to such Fund or
class in such reports, confirmations and notices to the Company called for under
this Agreement. In the event that the Company establishes additional Funds or
classes, the Company shall notify Provident in writing. If Provident is willing
to render such services, it shall notify the Company in writing, whereupon such
Fund or class shall become a Fund or class hereunder, and the compensation
payable by such new Fund or class to Provident will be agreed in writing at the
time, pursuant to Paragraph 21 hereof.
2. Delivery of Documents. The Company has furnished Provident with
copies properly certified or authenticated of each of the following:
(a) Resolutions of the Company's Board of Trustees authorizing
the appointment of Provident as custodian of
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the portfolio securities, cash and other property belonging to the Company and
approving this Agreement;
(b) Appendix A identifying and containing the signatures of the
Company's President and Treasurer and/or other persons authorized to issue Oral
Instructions and to sign Written Instructions, as hereinafter defined, on behalf
of the Company;
(c) The Company's Amended and Restated Declaration of Trust
established on February 28, 1980, as amended on June 20, 1980, and March 2, 1987
and all further amendments thereto (such Declaration of Trust, as presently in
effect and as it shall from time to time be amended, is herein called the
"Declaration");
(d) The Company's Code of Regulations ("By-Laws") compiled on
December 1, 1982 and amended on January 28, 1988 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 "By-Laws");
(e) The Investment Advisory Agreement between Provident
Institutional Management Corporation (the "Advisor") and the Company dated as of
March 11, 1987 and relating to the Company with all addenda (such Advisory
Agreement as presently in effect and with any existing and future addenda is
herein called, the "Advisory Agreement");
(f) The Sub-Advisory Agreement between Provident and the Advisor
dated as of March 11, 1987 with all addenda (such Sub-Advisory Agreement as
presently in effect and with any
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existing and future addenda, is herein called, the "Management Agreement");
(g) The Distribution Agreement between the Company and Shearson
Xxxxxx Xxxxxx Inc. ("Shearson") dated September 7, 1988 (the "Underwriting
Agreement");
(h) The Transfer Agency Agreement between Provident Financial
Processing Corporation (the "Transfer Agent") and the Company dated as of June
1, 1989 (the "Transfer Agency Agreement);
(i) The Administration Agreement between The Boston Company
Advisors, Inc. and the Company with all addenda (such Administration Agreement
as presently in effect and with any existing and future addenda is herein called
the "Administration Agreement");
(j) The Company's most recent Post-Effective Amendment to its
Registration Statement on Form N-IA under the Securities Act of 1933, as amended
("xxx 0000 Xxx") (File No. 2-53808) and under the 1940 Act as filed with the SEC
on August 30, 1988 relating to shares of the Company, no par value ("Shares"),
and all Amendments thereto, as well as such prior Registration Statements or
Amendments as Provident may request; and
(k) The Company's most recent prospectuses (prospectus herein is
deemed to include the Statement of Additional Information) relating to Shares
(such prospectuses, as presently in effect and all amendments and supplements
thereto are herein called the "Prospectus").
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The Company 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 the President and Treasurer of the Company and any
other person, whether or not any such person is an officer or employee of the
Company, duly authorized by the Board of Trustees of the Company to give Oral
and Written Instructions on behalf of the Company and listed on the Certificate
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 Company 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.
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(d) Property The term "Property," as used in this Agreement,
means:
(i) any and all securities and other property which the
Company may from time to time deposit, or cause to be deposited,
with Provident or which Provident may from time to time hold for
the Company, including securities and property deposited on
behalf of the Company with the Book-Entry System;
(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
Company, which are received by Provident from time to time from
or on behalf of the Company.
(e) "Written Instructions." As used in this Agreement, the term
"Written 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 Company will
deliveror 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
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securities delivered to Provident (other than in bearer form) shall be
registered in the name of the Company or in the name of a nominee of the
Company or in the name of Provident or in the name of any nominee of Provident
(with or without indication of fiduciary status), or in the name of any
sub-custodian or any nominee of any such sub-custodian appointed pursuant to
Paragraph 6 hereof or shall be properly endorsed and in form for transfer
satisfactory to Provident.
5. Receipt and Disbursement of Money.
(a) Provident shall open and maintain a separate custodial
account or accounts in the name of the Company, 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 Company. Provident shall make payments of cash
to, or for the account of, the Company from such cash only (i) for the purchase
of securities for the Company's portfolio as provided in Paragraph 13 hereof;
(ii) upon receipt of Written Instructions, for the payment of interest,
dividends, taxes, administration, accounting, distribution, advisory or
management fees or expenses which are to be borne by the Company under the terms
of this Agreement, the Advisory Agreement, the Administration Agreement, the
Transfer Agency Agreement and the Distribution Agreement, as well as fees borne
by the Company under its agreements with institutional investors with respect to
the provision of support services to their customers who
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beneficially own from time to time Shares of a Fund which has entered into such
agreements; (iii) upon receipt of Written Instructions, for payments in
connection with the conversion, exchange or surrender of securities owned or
subscribed to by the Company and held by or to be delivered to Provident; (iv)
to a sub-custodian pursuant to Paragraph 6 hereof; (v) for the redemption of
Company Shares; (vi) for payment of the amount of dividends received in respect
of securities sold short; (vii) for payment against receipt of securities
loaned pursuant to a specified agreement for loaning the Company's securities;
or (viii) upon receipt of Written Instructions, for other proper Company
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 payees invoice,
as appropriate.
(b) Provident is hereby authorized to endorse and collect all
checks, drafts and other negotiable instruments or other orders for the payment
of money received as custodian for the account of the Company.
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 Company. All such
securities and non-cash property are to be held or disposed of by Provident for
the Company pursuant to the terms of this
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Agreement. In the absence of Written Instructions accompanied by a certified
resolution of the Company's Board of Trustees 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 trustee, officer, employee or agent of the Company withdraw any
securities. In connection with its duties under this Paragraph 6, Provident
may, at its own expense, enter into sub-custodian agreements with other banks
or trust companies for the receipt of certain securities and cash to be held by
Provident for the account of the Company pursuant to this Agreement; provided
that each such bank or trust company has an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than one
million dollars ($1,000,000) for a 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 Company harmless from the acts and omissions,
under the standards of care provided for herein, of any bank or trust company
that it might choose pursuant to this Paragraph 6.
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(b) Where securities are transferred to an account of the
Company established pursuant to Paragraph 7 hereof, Provident shall also by
book-entry or otherwise identify as belonging to the Company 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
Company with a detailed statement of the Property held for the Company under
this Agreement.
7. Use of Book-Entry System. The Company shall deliver to Provident
certified resolutions of the Board of Trustees of the Company 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 a Book-Entry System all securities belonging to the
Company 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 Company, and deliveries and returns of securities loaned,
subject to repurchase or reverse 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 Company deposited in the
Book-Entry System will at all times be segregated from any assets and cash
controlled by Provident in
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other than a fiduciary or custodian capacity but may be commingled with other
assets held in such capacities. Provident and its sub-custodian, if any, will
pay out money only upon receipt of securities and will deliver securities only
upon the receipt of money.
(b) All books and records maintained by Provident which relate
to the Company's participation in the Book-Entry System will at all times during
Provident's regular business hours be open to the inspection of the Company's
duly authorized employees or agents, and the Company will be furnished with all
information in respect of the services rendered to it as it may require.
(c) Provident will provide the Company 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 Company with such reports on its own system of
internal control as the Company may reasonably request from time to time.
8. Instructions Consistent with Declaration etc.
(a) Unless otherwise provided in this Agreement, Provident shall
act only upon Oral and Written Instructions. Although Provident may know of the
provisions of the Declaration and By-Laws of the Company, Provident may assume
that any Oral or Written Instructions received hereunder are not in any way
inconsistent with any provisions of such Declaration or By-Laws
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or any vote, resolution or proceeding of the Shareholders, or of the Board of
Trustees, or 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 Company 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 Company 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 Company by giving Oral Instructions. The Company
agrees that Provident shall incur no liability to the Company in acting upon
Oral Instructions given to Provident hereunder concerning such transactions
provided Provident reasonably believes such instructions 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 Company,
all income and other payments and distributions, including
(without limitation) stock
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dividends, rights, bond coupons, option premiums and similar
items, included or to be included in the Property, and promptly
advise the Company of such receipt and shall credit such income,
as collected, to the Company's custodian account;
(ii) endorse and deposit for collection, in the name of
the Company, checks, drafts, and other negotiable instruments or
other orders for the payment of money on the same day as
received;
(iii) receive and hold for the account of the Company all
securities received as a distribution on the Company'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
Company 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 as described in
Paragraph 24 of this Agreement.
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(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 Company 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
Company 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.
10. Transactions Requiring 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 Company as owner
of any securities may be exercised;
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(b) deliver any securities held for the Company against receipt
of other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, tender offer, merger,
consolidation or recapitalization of any corporation, or the exercise
of any conversion privilege;
(c) deliver any securities held for the Company 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 Company
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 Company;
(e) release securities belonging to the Company to any bank or
trust company for the purpose of pledge or hypothecation to secure any
loan incurred by the Company; 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
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already made, subject to proper prior authorization, further
securities may be released for that purpose; and repay such loan upon
redelivery to it of the securities pledged or hypothecated therefor
and upon surrender of the note or notes evidencing the loan;
(f) release and deliver securities owned by the Company in
connection with any reverse repurchase agreement entered into on behalf
of the Company, but only on receipt of payment therefor; and pay out
moneys of the Company in connection with such reverse repurchase
agreements, but only upon the delivery of the securities;
(g) pay out moneys of the Company in connection with any
repurchase agreement entered into on behalf of the Company, but only
upon the delivery of the subject securities; and release and deliver
such securities in connection with such repurchase agreements, but only
on receipt of payment therefor; and
(h) 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 Company, 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 Company with the procedures
required by a securities or option exchange, providing
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such procedures comply with the 1940 Act and Release No. 10666 or any
subsequent release or releases of the SEC relating to the maintenance of
segregated accounts by registered investment companies, and (ii) for other
proper corporate purposes, but only, in the case of clause (ii), upon receipt
of Written Instructions.
12. Dividends and Distributions. The Company shall furnish Provident
with appropriate evidence of action by the Company's Board of Trustees 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 Company's Board of Trustees and payable to Shareholders who have
elected in the proper manner to receive their distributions or dividends in
cash, and in conformance with procedures mutually agreed upon by Provident, the
Company, and the Company's Transfer Agent, Provident shall pay to the Company's
Transfer Agent, as agent for the Shareholders, an amount equal to the amount
indicated in said Written Instructions as payable by the Company to such
Shareholders for distribution in cash by the Transfer Agent to such
Shareholders. In lieu of paying the Company'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 Company, Provident and the Company's Transfer Agent.
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13. Purchases of Securities. Promptly after each decision to purchase
securities by the Advisor, the Company, 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 Company pay out of the moneys held for the
account of the Company 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 Company, the
Company, through the Advisor, 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 Company 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
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Company 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 Company which
are in the possession of Provident shall be the property of the Company. Such
books and records shall be prepared and maintained as required by the 1940 Act
and other applicable securities laws and regulations. The Company, or the
Company'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 Company, copies of any such books and records shall
be provided by Provident to the Company or the Company's authorized
representative at the Company's expense.
16. Reports.
(a) Provident shall furnish the Company the following reports:
(1) such periodic and special reports as the Company may
reasonably request;
(2) a monthly statement summarizing all transactions and
entries for the account of the Company, listing the portfolio
securities belonging to the Company with the adjusted average
cost of each
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issue and the market value at the end of such month, and stating
the cash account of the Company including disbursements;
(3) the reports to be furnished to the Company pursuant
to Rule 17f-4; and
(4) such other information as may be agreed upon from
time to time between the Company and Provident.
(b) Provident shall transmit promptly to the Company any proxy
statement, proxy materials, notice of a call or conversion or similar
communications received by it as Custodian of the Property.
17. Cooperation with Accountants. Provident shall cooperate with the
Company'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 Company.
18. Confidentiality. Provident agrees on behalf of itself and its
employees to treat confidentially all records and other information relative to
the Company and its prior, present, or potential Shareholders, except, after
prior notification to and approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be withheld where Provident may
be exposed to civil or criminal contempt proceedings for
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failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Company.
19. Right to Receive Advice.
(a) Advice of Company. 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
Company 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 Company 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 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
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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.
20. Compliance with Governmental Rules and Regulations. The Company
assumes full responsibility for ensuring that the Company 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
except insofar as Provident has assumed a specific responsibility for compliance
hereunder.
21. Compensation. As compensation for the services rendered by
Provident during the term of this Agreement, the Company will pay to Provident
monthly fees that shall be agreed upon from time to time in writing by Provident
and the Company.
22. Indemnification. The Company, as sole owner of the Property,
agrees to indemnify and hold harmless Provident and its nominees from all taxes,
charges, expenses, assessments,
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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 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 Company or (ii) upon Oral
or Written Instructions, provided, that neither Provident nor any of its
nominees shall be indemnified against any liability to the Company or to its
Shareholders (or any expenses incident to such liability) arising out of
Provident's or such nominee's own willful misfeasance, bad faith, negligence or
reckless disregard of its duties or responsibilities specifically described in
this Agreement. In the event of any advance of cash for any purpose made by
Provident resulting from Oral or Written Instructions of the Company, 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 Company shall be security
therefor.
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23. Responsibility of Provident. Provident shall be under no duty to
take any action on behalf of the Company 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 Agreement, but to the extent that duties,
obligations and responsibilities are not specifically set forth in this
Agreement, 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 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
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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 Company.
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 Company. In
any case in which Provident does not receive any payment due the Company within
a reasonable time after Provident has made proper demands for the same, it shall
so notify the Company 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 Company. Provident shall not
be obliged to take legal action for collection unless and until reasonably
indemnified to its satisfaction. Provident shall also notify the Company as soon
as reasonably practicable whenever income due on securities is not collected in
due course.
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25. Duration and Termination. This Agreement shall continue until
termination by the Company 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 Company 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 Company to
the Company, 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 Company to be held under terms similar to
those 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, 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 Company, at
the address of the Company; 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
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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 received 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 received 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
received three days after it is sent, or if sent by messenger, it shall be
deemed to have been received on the day it is delivered. 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 only
by an instrument in writing signed by the party against which enforcement of
such change is sought.
29. Delegation. On thirty (30) days prior written notice to the
Company, Provident may assign its rights and delegate its duties hereunder to
any wholly-owned direct or indirect subsidiary of Provident National Bank or PNC
Financial Corp, provided that (i) the delegate agrees with Provident to comply
with all relevant provisions of the 1940 Act; and (ii) Provident and such
delegate shall promptly provide such
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information as the Company may request, and respond to such questions as the
Company may ask, relative to the delegation, including (without limitation) the
capabilities of the delegate. Such delegate shall be bound by the terms of this
Agreement as though an original party hereto. Provident shall unconditionally
guarantee the performance of the delegate under the terms and conditions of
this Agreement.
30. 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.
31. Miscellaneous.
(a) Provident hereby acknowledges that the Company is a business
trust and that it must look solely to the Company's Property for the enforcement
of any claims against the Company, as neither the Trustees, officers, agents or
Shareholders of the Company assume any personal liabilities in connection with
the business or assume any personal liability for obligations entered into on
its behalf.
(b) 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 and compensation. The
captions in this Agreement are included for convenience of
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29
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] TRUST FOR FEDERAL SECURITIES
Attest: By
---------------------------- ----------------------------------
Vice President & Treasurer
[SEAL] PROVIDENT NATIONAL BANK
Attest: By
---------------------------- ----------------------------------
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INDEX
Paragraph Page
--------- ----
1. Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Delivery of Documents. . . . . . . . . . . . . . . . . . . . . . . . 2
3. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Delivery and Registration of the Property. . . . . . . . . . . . . . 6
5. Receipt and Disbursement of Money. . . . . . . . . . . . . . . . . . 7
6. Receipt of Securities. . . . . . . . . . . . . . . . . . . . . . . . 8
7. Use of Book-Entry System. . . . . . . . . . . . . . . . . . . . . . 10
8. Instructions Consistent with Declaration etc. . . . . . . . . . . . 11
9. Transactions Not Requiring Instructions. . . . . . . . . . . . . . . 12
10. Transactions Requiring Instructions. . . . . . . . . . . . . . . . . 14
11. Segregated Accounts. . . . . . . . . . . . . . . . . . . . . . . . . 17
12. Dividends and Distributions. . . . . . . . . . . . . . . . . . . . . 17
13. Purchase of Securities. . . . . . . . . . . . . . . . . . . . . . . 18
14. Sales of Securities. . . . . . . . . . . . . . . . . . . . . . . . . 18
15. Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
16. Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
17. Cooperation with Accountants. . . . . . . . . . . . . . . . . . . . 20
18. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
19. Right to Receive Advice. . . . . . . . . . . . . . . . . . . . . . . 21
20. Compliance with Governmental Rules and Regulations. . . . . . . . . 22
21. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
22. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
23. Responsibility of Provident. . . . . . . . . . . . . . . . . . . . . 24
24. Collections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
25. Duration and Termination. . . . . . . . . . . . . . . . . . . . . . 26
26. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
27. Further Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
28. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
29. Delegation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
30. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
31. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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