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EXHIBIT 8.0
CUSTODIAN SERVICES AGREEMENT
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This Agreement is made as of August 8, 1995 by and between PNC BANK, NATIONAL
ASSOCIATION, a national banking association ("PNC Bank"), and TIME HORIZON
FUNDS, a Delaware business trust (the "Fund").
The Fund is registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "1940" Act). The Fund wishes
to retain PNC Bank to provide custodian services for the portfolios listed in
Appendix A, as attached hereto and as amended from time to time (each a
"Portfolio"), and PNC Bank wishes to furnish custodian services, either
directly or though an affiliate or affiliates, as more fully described herein.
In consideration of the premises and mutual covenants herein contained, the
parties agree as follows:
1. DEFINITIONS.
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(a) "AUTHORIZED PERSON". The term "Authorized Person" shall mean any
officer of the Fund and any other person who is duly authorized by the Fund's
Governing Board to give Oral and Written Instructions on behalf of the Fund and
who is listed on the Authorized Persons Appendix attached hereto and made a
part hereof, as such appendix may be amended in writing by the Fund's Governing
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Board from time to time. An Authorized Person's scope of authority may be
limited by the Fund by setting forth such limitation in the Authorized Persons
Appendix.
(b) "BOOK-ENTRY SYSTEM". The term "Book-Entry System" shall mean 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 an exchange registered with the SEC under the
1934 Act.
(c) "CFTC". The term "CFTC" shall mean the Commodities Futures Trading
Commission.
(d) "GOVERNING BOARD". The term "Governing Board" shall mean the Fund's
Board of Trustees, or, where duly authorized, a competent committee thereof.
(e) "ORAL INSTRUCTIONS". The term "Oral Instructions" shall mean oral
instructions received by PNC Bank from an Authorized Person or from a person
reasonably identified to PNC Bank as an Authorized Person.
(f) "PNC BANK". The term "PNC Bank" shall mean PNC Bank, National
Association or a subsidiary or affiliate of PNC Bank, National Association.
(g) "SEC". The term "SEC" shall mean the Securities and
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Exchange Commission.
(h) "SECURITIES AND COMMODITIES LAWS". The term "Securities and
Commodities Laws" shall mean the "1933 Act", which shall mean the Securities
Act of 1933, as amended, the "1934 Act", which shall mean the Securities
Exchange Act of 1934, as amended, the "1940 Act", which shall mean the
Investment Company Act of 1940, as amended and the "CEA", which shall mean the
Commodities Exchange Act, as amended.
(i) "SHARES". The term "Shares" shall mean the shares of any series or
class of units of beneficial interest of the Fund.
(j) "PROPERTY". The term "Property" shall mean:
(i) any and all securities and other investment items which the Fund
may from time to time deposit, or cause to be deposited, with
PNC Bank or which PNC Bank may from time to time hold for the
Fund;
(ii) All income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or investment
items; and
(iv) all proceeds of the sale of securities issued by the Fund, which
are received by PNC Bank from time to time, from or on behalf of
the Fund.
(k) "WRITTEN INSTRUCTIONS". The term "Written Instructions" shall mean
written instructions signed by one or more
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Authorized Persons as required by the Governing Board from time to time and
received by PNC Bank. The instructions may be delivered by hand, mail, tested
telegram, cable, telex or facsimile sending device.
2. APPOINTMENT. The Fund hereby appoints PNC Bank to provide custodian
services, and PNC Bank accepts such appointment and agrees to furnish such
services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PNC Bank with the following:
(a) certified or authenticated copies of the resolutions of the Fund's
Governing Board, approving the appointment of PNC Bank or its
affiliates to provide services;
(b) a copy of the Fund's most recent effective registration statement;
(c) a copy of the Fund's advisory agreement;
(d) a copy of the Fund's administration agreement;
(e) certified or authenticated copies of any and all amendments or
supplements to the foregoing; and
(f) copies of any shareholder servicing agreements made in respect of the
Fund or a Portfolio.
4. COMPLIANCE WITH GOVERNMENT RULES AND REGULATIONS. PNC Bank undertakes to
comply with all applicable requirements of the Securities and Commodities Laws
and any other laws, rules
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and regulations of state and federal governmental authorities having
jurisdiction with respect to all duties to be performed by PNC Bank hereunder.
Except as specifically set forth herein, PNC Bank assumes no responsibility for
such compliance by the Fund or any Portfolio.
5. INSTRUCTIONS. Unless otherwise provided in this Agreement or by
resolution of the Governing Board which has been submitted to PNC Bank, PNC
Bank shall act only upon Oral and Written Instructions. PNC Bank shall be
entitled to rely upon any Oral and Written Instructions it receives from an
Authorized Person (or from a person reasonably believed by PNC Bank to be an
Authorized Person) pursuant to this Agreement. PNC Bank may assume that any
Oral or Written Instructions received hereunder are not in any way inconsistent
with the provisions of organizational documents of the Fund or of any vote,
resolution or proceeding of the Fund's Governing Board or any committee thereof
or of the Fund's shareholders.
The Fund agrees to forward to PNC Bank Written Instructions confirming Oral
Instructions so that PNC Bank receives the Written Instructions by the close of
business on the same day that such Oral Instructions are received. The fact
that such confirming Written Instructions are not received by PNC Bank shall in
no way
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invalidate the transactions or enforceability of the transactions authorized by
the Oral Instructions.
The Fund further agrees that, where Oral or Written Instructions reasonably
appear to have been received from an Authorized Person, PNC Bank shall incur no
liability to the Fund in acting upon such Oral or Written Instructions,
provided that PNC Bank's actions comply with the other provisions of this
Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PNC Bank is in doubt as to any action it
should or should not take, PNC Bank may request directions or advice, including
Oral or Written Instructions, from the Fund.
(b) ADVICE OF COUNSEL. If PNC Bank shall be in doubt as to any question
of law pertaining to any action it should or should not take, PNC Bank may
request advice at its own cost from such counsel of its own choosing (who may
be counsel for the Fund, the Fund's investment adviser or PNC Bank, at the
option of PNC Bank).
(c) CONFLICTING ADVICE. In the event of a conflict between directions,
advice or Oral or Written Instructions PNC Bank receives from the Fund, and the
written advice it receives from counsel, PNC Bank shall be entitled to rely
upon and follow such advice of counsel after notice to the Fund.
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(d) PROTECTION OF PNC BANK. PNC Bank shall be protected in any action it
takes or does not take in reliance upon directions, advice or Oral or Written
Instructions it receives from the Fund or from counsel and which PNC Bank
believes, in good faith, to be consistent with those directions, advice or Oral
or Written Instructions.
Nothing in this paragraph shall be construed so as to impose an obligation
upon PNC Bank (i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions, advice or Oral
or Written Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PNC Bank's properly taking or not taking
such action.
Nothing in this subsection shall excuse PNC Bank when an action or omission
on the part of PNC Bank constitutes willful misfeasance, bad faith, negligence
or reckless disregard by PNC Bank of any duties or obligations under this
Agreement.
7. RECORDS. The books and records pertaining to the Fund and any Portfolio,
which are in the possession of PNC Bank, shall be the property of the Fund.
Such books and records shall be prepared and maintained as required by the 1940
Act and other applicable securities laws, rules and regulations and shall, to
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extent practicable, be maintained separately for each Portfolio of the Fund.
The Fund, or the Fund's authorized representatives, shall have access to such
books and records at all times during PNC Bank's normal business hours. Upon
the reasonable request of the Fund, copies of any such books and records shall
be provided by PNC Bank to the Fund or to an authorized representative of the
Fund, at the Fund's expense.
8. CONFIDENTIALITY. PNC Bank agrees to keep confidential and to treat as
proprietary information of the Fund all records of the Fund and information
relative to the Fund and its shareholders (past, present and potential), unless
the release of such records or information is otherwise authorized by the
Governing Board. The Fund further agrees that, should PNC Bank be required to
provide such information or records to duly constituted authorities (who may
institute civil or criminal contempt proceedings for failure to comply), PNC
Bank shall not be required to seek the Fund's consent prior to disclosing such
information; provided that PNC Bank gives the Fund prior written notice of the
provision of such information and records.
9. COOPERATION WITH ACCOUNTANTS. PNC Bank shall cooperate with the Fund's
independent public accountants and shall take all reasonable action in the
performance of its obligations under this
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Agreement to ensure that the necessary information is made available to such
accountants for the expression of their opinion, as required by the Fund.
10. DISASTER RECOVERY. PNC Bank shall at its expense enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing equipment
to the extent appropriate equipment is available. In the event of equipment
failures, PNC Bank shall, at no additional expense to the Fund, take reasonable
steps to minimize service interruptions but shall have no liability with
respect to the loss of data or service interruptions caused by equipment
failure provided such loss or interruption is not caused by PNC Bank's own
willful misfeasance, bad faith, negligence or reckless disregard of its duties
or obligations under this Agreement.
11. COMPENSATION. As compensation for custody services rendered by PNC Bank
during the term of this Agreement, the Fund, on behalf of each of the
Portfolios, will pay to PNC Bank a fee or fees as may be agreed to in writing
from time to time by the Fund and PNC Bank.
12. INDEMNIFICATION. The Fund, on behalf of each Portfolio, agrees to
indemnify and hold harmless PNC Bank and its affiliates
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from all taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, liabilities arising under the Securities and
Commodities Laws, and any state and foreign securities and blue sky laws, and
amendments thereto), and expenses, including (without limitation) reasonable
attorneys' fees and disbursements, arising directly or indirectly from any
action which PNC Bank takes or does not take (i) at the request or on the
direction of or in reliance on the advice of the Fund or (ii) upon Oral or
Written Instructions provided that neither PNC Bank, nor any of its affiliates,
shall be indemnified against any liability to the Fund or to its shareholders
(or any expenses incident to such liability) arising out of PNC Bank's or its
affiliates' own willful misfeasance, bad faith, negligence or reckless
disregard of its duties and obligations under this Agreement.
13. RESPONSIBILITY OF PNC BANK. PNC Bank shall be under no duty to
take any action on behalf of the Fund or any Portfolio except as specifically
set forth herein or as may be specifically agreed to by PNC Bank in writing.
PNC Bank shall be obligated to exercise care and diligence in the performance
of its duties hereunder and shall be responsible for its own or its affiliates'
and nominees' own willful misfeasance, bad faith, negligence or reckless
disregard of its duties and obligations under this
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Agreement. Without limiting the generality of the foregoing or of any other
provision of this Agreement, PNC Bank, in connection with its duties under this
Agreement, shall not be under any duty or obligation to inquire into and shall
not be liable for (a) the validity or invalidity or authority or lack thereof
of any Oral or Written Instruction, notice or other instrument which conforms
to the applicable requirements of this Agreement, and which PNC Bank reasonably
believes to be genuine; or (b) delays or errors or loss of data occurring by
reason of circumstances beyond PNC Bank's control, including acts of civil or
military authority, national emergencies, fire, flood or catastrophe, acts of
God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
Notwithstanding anything in this Agreement to the contrary, PNC Bank shall
have no liability to the Fund or to any Portfolio for any consequential,
special or indirect losses or damages which the Fund may incur or suffer by or
as a consequence of PNC Bank's performance of the services provided hereunder,
whether or not the likelihood of such losses or damages was known by PNC Bank.
14. DESCRIPTION OF SERVICES.
(a) DELIVERY OF THE PROPERTY. The Fund will deliver or arrange for
delivery to PNC Bank, all (except as otherwise
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determined by the Governing Board) of the Property owned by the Portfolios,
including cash received as a result of the distribution of its Shares, during
the period that is set forth in this Agreement. PNC Bank will not be
responsible for such Property until actual receipt.
(b) RECEIPT AND DISBURSEMENT OF MONEY. PNC Bank, acting upon
Written Instructions, shall open and maintain separate account(s) in the Fund's
name using all cash received from or for the account of the Fund, subject to
the terms of this Agreement. In addition, upon Written Instructions, PNC Bank
shall open and maintain separate custodial accounts for each separate series,
Portfolio or class of the Fund and shall hold in such account(s) all cash
received from or for the accounts of the Fund specifically designated to each
separate series, Portfolio or class.
PNC Bank shall make cash payments from or for the account of each
Portfolio of the Fund only for:
(i) purchases of securities in the name of a Portfolio of the Fund or
PNC Bank or PNC Bank's nominee as provided in sub-paragraph
(j) and for which PNC Bank has received a copy of the broker's or
dealer's confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund delivered to PNC Bank;
(iii) payment of, subject to Written Instructions,
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interest, taxes, administration, accounting, distribution,
advisory, management fees or similar expenses which are to
be borne by a Portfolio;
(iv) payment to, subject to receipt of Written Instructions, the Fund's
transfer agent, as agent for the Fund's shareholders, of an amount
equal to the amount of dividends and distributions stated in the
Written Instructions to be distributed in cash by the transfer
agent to shareholders of the applicable Portfolio, or, in lieu of
paying the Fund's transfer agent, PNC Bank may arrange for the
direct payment of cash dividends and distributions to shareholders
in accordance with procedures mutually agreed upon from time to
time by and among the Fund, PNC Bank and the Fund's transfer agent;
(v) payments, upon receipt of Written Instructions, in connection with
the conversion, exchange or surrender of securities owned or
subscribed to by the Fund and held by or delivered to PNC Bank;
(vi) payments of the amounts of dividends received with respect to
securities sold short;
(vii) payments made to a sub-custodian pursuant to provisions in
sub-paragraph (c) of this Paragraph 14; and
(viii) payments, upon receipt of Written Instructions, for other proper
Fund purposes.
PNC Bank is hereby authorized to endorse and collect all checks, drafts or
other orders for the payment of money received as
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custodian for the account of the Fund.
(c) RECEIPT AND WITHDRAWAL OF SECURITIES.
(i) PNC Bank shall hold all securities received by it for the
account of each Portfolio of the Fund in a separate account that
physically segregates such securities from those of any other
persons, firms or corporations. All such securities shall be
held or disposed of only upon Written Instructions of the Fund
pursuant to the terms of this Agreement. PNC Bank shall have no
power or authority to assign, hypothecate, pledge or otherwise
dispose of any such securities or investment items, except upon
the express terms of this Agreement and upon Written
Instructions authorizing the transaction. In no case may any
member of the Governing Board, or any officer, employee or
agent of the Fund withdraw any securities.
At PNC Bank's own expense and for its own convenience, PNC Bank
may enter into sub-custodian agreements with other United States
banks or trust companies to perform duties described in this
sub-paragraph (c). Such bank or trust company shall have an
aggregate capital, surplus and undivided profits, according to
its last published report, of at least one million dollars
($1,000,000), if it is a subsidiary or affiliate of PNC Bank, or
at least twenty million dollars ($20,000,000) if such bank or
trust company is not a subsidiary or affiliate of PNC Bank. In
addition, such bank or trust company must be qualified to act as
custodian and agree to comply with the relevant provisions of the
1940 Act and other applicable rules and regulations. Any such
arrangement will not be entered into without prior written
notice to the Fund.
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PNC Bank shall remain responsible for the performance of all of
its duties as described in this Agreement and shall hold the Fund
and each Portfolio harmless from its own acts or omissions, under
the standards of care provided for herein, or the acts and
omissions of any sub-custodian chosen by PNC Bank under the terms
of this sub-paragraph (c).
(d) TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Oral or Written
Instructions and not otherwise, PNC Bank, directly or through the use of the
Book-Entry System, shall:
(i) deliver any securities held for a Portfolio of the Fund against
the receipt of payment for the sale of such securities;
(ii) execute and deliver to such persons as may be designated
in such Oral or Written Instructions, proxies,
consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of
any securities on behalf of a Portfolio may be exercised;
(iii) deliver any securities held for a Portfolio of the Fund to the
issuer thereof, or its agent, when such securities are called,
redeemed, retired or otherwise become payable; provided that, in
any such case, the cash or other consideration is to be delivered
to PNC Bank;
(iv) deliver any securities held for a Portfolio of the Fund against
receipt of other securities or cash issued or paid in connection
with the liquidation, reorganization, refinancing, tender offer,
merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege;
(v) deliver any securities held for a Portfolio of
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the Fund to any protective committee, reorganization committee or
other person in connection with the reorganization, refinancing,
merger, consolidation, recapitalization or sale of assets of any
corporation, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or other
instruments or documents as may be issued to it to evidence
such delivery;
(vi) make such transfer or exchanges of the assets of 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 a
duly authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Fund;
(vii) release securities belonging to a Portfolio of the Fund to any
bank or trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by a Portfolio of the
Fund; provided, however, that securities shall be released only
upon payment to PNC Bank of the monies borrowed, except that in
cases where additional collateral is required to secure a
borrowing already made subject to proper prior authorization,
further securities may be released for that purpose; and repay
such loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes
evidencing the loan;
(viii) release and deliver securities owned by a Portfolio of the Fund
in connection with any repurchase agreement entered into on
behalf of a Portfolio of the Fund, but only on receipt of payment
therefor; and pay out moneys of a Portfolio of the Fund in
connection with such repurchase agreements, but only upon the
delivery of the securities;
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(ix) release and deliver or exchange securities owned by a Portfolio
of the Fund in connection with any conversion of such securities,
pursuant to their terms, into other securities;
(x) release and deliver securities owned by a Portfolio of the Fund
for the purpose of redeeming in kind shares of the Fund upon
delivery thereof to PNC Bank; and
(xi) release and deliver or exchange securities owned by a Portfolio
of the Fund for other corporate purposes.
(e) USE OF BOOK-ENTRY SYSTEM. The Fund shall deliver to PNC Bank
certified resolutions of the Fund's Governing Board approving, authorizing and
instructing PNC Bank on a continuous and on-going basis, to deposit in the
Book-Entry System all securities belonging to 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 loaned,
subject to repurchase agreements or used as collateral in connection with
borrowings. PNC Bank shall continue to perform such duties until it receives
Written or Oral Instructions authorizing contrary actions(s).
To administer the Book-Entry System properly, the following provisions shall
apply:
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(i) With respect to securities of each Portfolio which are maintained in
the Book-Entry System, established pursuant to this sub-paragraph (e)
hereof, the records of PNC Bank shall identify by Book-Entry or
otherwise those securities belonging to the applicable Portfolio of
the Fund. PNC Bank shall furnish the Fund a detailed statement of
the Property held for each Portfolio of the Fund under this
Agreement at least monthly and from time to time and upon written
request;
(ii) Securities and any cash of each Portfolio deposited in the
Book-Entry System will at all times be segregated from any assets and
cash controlled by PNC Bank in other than a fiduciary or custodian
capacity but may be commingled with other assets held in such
capacities. PNC Bank and its sub-custodian, if any, will pay out
money only upon receipt of securities and will deliver securities only
upon the receipt of money;
(iii) All books and records maintained by PNC Bank which relate to the
Fund's participation in the Book-Entry System will at all times
during PNC Bank's regular business hours be open to the inspection of
the Fund's duly authorized employees or agents, and the Fund will be
furnished with all information in respect of the services
rendered to it as it may require; and
(iv) PNC Bank will provide the Fund with copies of any report obtained by
PNC Bank on the system of internal accounting control of the
Book-Entry System promptly after receipt of such are port by PNC Bank.
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PNC Bank will also provide the Fund with such reports on its own system of
internal control as the Fund may reasonably request from time to time.
(f) REGISTRATION OF SECURITIES. All securities held for a Portfolio which
are issued or issuable only in bearer form, except such securities held in the
Book-Entry System, shall be held by PNC Bank in bearer form; all other
securities held for a Portfolio may be registered on behalf of that Portfolio,
PNC Bank, the Book-Entry System, a sub-custodian, or any duly appointed
nominee(s) of the Fund, PNC Bank, the Book-Entry System or any sub-custodian.
The Fund reserves the right to instruct PNC Bank as to the method of
registration and safekeeping of the securities of the Fund. The Fund agrees to
furnish to PNC Bank appropriate instruments to enable PNC Bank to hold or
deliver in proper form for transfer, or to register in the name of its
registered nominee or the Book-Entry System, any securities which it may hold
for the account of the Fund and which may from time to time be registered in
the name of the Fund on behalf of a Portfolio. PNC Bank shall hold all such
securities which are not held in the Book-Entry System in a separate account
for each Portfolio of the Fund in the name of the applicable Portfolio of the
Fund physically segregated at all times from those of any other person or
persons.
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(g) VOTING AND OTHER ACTION. Neither PNC Bank nor its nominee shall vote
any of the securities held pursuant to this Agreement by or for the account of
a Portfolio of the Fund, except in accordance with Written Instructions. PNC
Bank, directly or through the use of the Book-Entry System, shall execute in
blank and promptly deliver all notices, proxies, and proxy soliciting materials
to the registered holder of such securities. If the registered holder is not
the Fund on behalf of a Portfolio, then Written or Oral Instructions must
designate the person(s) who owns such securities.
(h) TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of contrary
Written Instructions, PNC Bank is authorized to take the following actions:
(i) COLLECTION OF INCOME AND OTHER PAYMENTS.
(A) collect and receive for the account of each Portfolio of the Fund,
all income, dividends, distributions, coupons, option premiums,
other payments and similar items, included or to be included in the
Property, and, in addition, promptly advise the Fund of such
receipt and credit such income, as collected, to the applicable
Portfolio's custodian account;
(B) endorse and deposit for collection, in the name of the applicable
Portfolio of the Fund, checks, drafts, or other orders for the
payment of money on the
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same day as received;
(C) receive and hold for the account of each Portfolio of the
Fund all securities received as a distribution on the Portfolio's
securities as a result of a stock dividend, share split-up or
reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities
issued with respect to any portfolio securities belonging to the
Portfolio held by PNC Bank hereunder;
(D) present for payment and collect the amount payable upon all
securities which may mature or be called, redeemed, or
retired, or otherwise become payable on the date such
securities become payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of such
income and other payments and the endorsement for collection
of checks, drafts, and other negotiable instruments.
(ii) MISCELLANEOUS TRANSACTIONS.
(A) PNC Bank is authorized to deliver or cause to be
delivered Property against payment or other consideration or
written receipt therefor in the following cases:
(1) for examination by a broker or dealer selling for the
account of a Portfolio of the Fund in accordance with
street delivery custom;
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(2) for the exchange of interim receipts or temporary
securities for definitive securities; and
(3) for transfer of securities into the name of a Portfolio
of the Fund or PNC Bank or nominee of either, or for
exchange of securities for a different number of bonds,
certificates, or other evidence, representing the same
aggregate face amount or number of units bearing the
same interest rate, maturity date and call provisions, if
any; provided that, in any such case, the new securities
are to be delivered to PNC Bank.
(B) Unless and until PNC Bank receives Oral or Written Instructions to
the contrary, PNC Bank shall:
(1) pay all income items held by it which call for payment
upon presentation and hold the cash received by it upon
such payment for the account of the applicable Portfolio
of the Fund;
(2) collect interest and cash dividends received, with
notice to the Fund, to the account of the applicable
Portfolio of the Fund;
(3) hold for the account of the applicable Portfolio of the
Fund all stock dividends, rights and similar securities
issued with respect to any securities held by PNC Bank; and
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(4) execute as agent on behalf of the applicable Portfolio of
the Fund all necessary ownership certificates required by
the Internal Revenue Code or the Income Tax Regulations of
the United States Treasury Department or under the laws of
any State now or hereafter in effect, inserting the
Portfolio's name on such certificate as the owner of the
securities covered thereby to the extent it may lawfully
do so.
(i) SEGREGATED ACCOUNTS.
(i) PNC Bank shall upon receipt of Written or Oral Instructions
establish and maintain a segregated accounts(s) on its records for
and on behalf of each Portfolio of the Fund. Such account(s) may be
used to transfer cash and securities, including securities in the
Book-Entry System:
(A) for the purposes of compliance by the Fund with the procedures
required by a securities or option exchange, providing such
procedures comply with the 1940 Act and any regulations of the
SEC relating to the maintenance of segregated accounts by
registered investment companies; and
(B) Upon receipt of Written Instructions, for other proper corporate
purposes.
(ii) PNC Bank shall arrange for the establishment of XXX custodian
accounts for such shareholders holding shares through XXX
accounts, in accordance with the Prospectus, the Internal Revenue
Code (including
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regulations), and with such other procedures as are mutually agreed
upon from time to time by and among the Fund, PNC Bank and the
Fund's transfer agent.
(iii) PNC Bank may enter into separate custodial agreements with
various futures commission merchants ("FCMs") that the Fund uses
(each an "FCM Agreement"), pursuant to which the Fund's margin
deposits in any transactions involving futures contracts and
options on futures contracts will be held by PNC Bank in accounts
(each an "FCM Account") subject to the disposition by the FCM
involved in such contracts in accordance with the customer
contact between FCM and the Fund ("FCM Contract"), SEC rules
governing such segregated accounts, CFTC rules and the rules of
the applicable commodities exchange. Such FCM Agreements shall
only be entered into upon receipt of Written Instructions from
the Fund which state that (i) a customer agreement between the
FCM and the Fund has been entered into; and (ii) the Fund is in
compliance with all the rules and regulations of the CFTC.
Except as otherwise determined by the Governing Board, transfers
of initial margin shall be made into an FCM Account only upon
Written Instructions; transfers of premium and variation margin
may be made into an FCM Account pursuant to Oral Instructions.
Transfers of funds from an FCM Account to the FCM for which PNC
Bank holds such an account may only occur upon certification by
the FCM to PNC Bank that pursuant to the FCM Agreement and the
FCM Contract, all conditions precedent to its right to give PNC
Bank such instruction have been satisfied.
(j) PURCHASES OF SECURITIES. PNC Bank shall settle purchased securities
upon receipt of Oral or Written Instructions
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that specify:
(i) the name of the issuer and the title of the securities, including
CUSIP number if applicable;
(ii) the number of shares or the principal amount purchased and
accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the name of the person from whom or the broker through whom the
purchase was made; and
(vii) the Portfolio of the Fund to which such purchase applies. PNC
Bank shall upon receipt of securities purchased by or for a
Portfolio of the Fund pay out of the moneys held for the account
of such Portfolio the total amount payable to the person from
whom or the broker through whom the purchase was made, provided
that the same conforms to the total amount payable as set forth
in such Oral or Written Instructions.
(k) SALES OF SECURITIES. PNC Bank shall sell securities upon receipt of
Oral Instructions from the Fund that specify:
(i) the name of the issuer and the title of the security, including
CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and accrued
interest, if any;
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(iii) the date of trade, settlement and sale;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom the sale
was made;
(vii) the location to which the security must be delivered and delivery
deadline, if any; and
(viii) the Portfolio of the Fund to which such sale applies.
PNC Bank shall deliver the securities upon receipt of the total amount
payable to the Portfolio upon such sale, provided that the total amount payable
is the same as was set forth in the Oral or Written Instructions. Subject to
the foregoing, PNC Bank may accept payment in such form as shall be
satisfactory to it, and may deliver securities and arrange for payment in
accordance with the customs prevailing among dealers in securities.
(l) REPORTS; PROXY MATERIALS.
(i) PNC Bank shall furnish the Fund the following reports:
(A) such periodic and special reports as the Fund may
reasonably request;
(B) a monthly statement summarizing all transactions and
entries for the account of each Portfolio of the Fund,
listing the portfolio securities
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belonging to each Portfolio of the Fund with the adjusted
average cost of each issue and the market value at the end
of such month, and stating the cash account of each
Portfolio of the Fund including disbursement;
(C) the reports to be furnished to the Fund pursuant to
Rule 17f-4; and
(D) such other information as may be agreed upon from time to
time between the Fund and PNC Bank.
(ii) PNC Bank shall transmit promptly to the Fund any proxy statement,
proxy material, notice of a call or conversion or similar
communication received by it as custodian of the Property. PNC
Bank shall be under no other obligation to inform the Fund as to
such actions or events.
(m) COLLECTIONS. All collections of monies or other property in respect,
or which are to become part, of the Property (but not the safekeeping thereof
upon receipt by PNC Bank) shall be at the sole risk of the Fund. If payment is
not received by PNC Bank within a reasonable time after proper demands have
been made, PNC Bank shall notify the Fund in writing, including copies of all
demand letters, any written responses, memoranda of all oral responses and to
telephonic demands thereto, and await instructions from the Fund. PNC Bank
shall not be obliged to take legal action for collection unless and until
reasonably indemnified to its satisfaction. PNC Bank shall also notify the
Fund as soon as
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reasonably practicable whenever income due on securities is not collected in
due course.
15. DURATION AND TERMINATION. This Agreement shall continue until
terminated by the Fund or by PNC Bank on one hundred eighty (180) days' prior
written notice to the other party. In the event this Agreement is terminated
(pending appointment of a successor to PNC Bank or vote of the shareholders of
the Fund to dissolve or to function without a custodian of its cash, securities
or other property), PNC Bank shall not deliver cash, securities or other
property of the Fund to the Fund. It may deliver them to a bank or trust
company of PNC Bank's 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. PNC Bank shall not be required
to make any such delivery or payment until full payment shall have been made to
PNC Bank of all of its fees, compensation, costs and expenses.
16. NOTICES. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be addressed (a) if to PNC Bank, at
Airport Business Center,
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International Court 2, 000 Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxx 00000, marked
for the attention of the Custodian Services Department (or its successor); (b)
if to the Fund, at the address of the Fund until September 5, 1995, at 0000
Xxxx Xxxxxx-Xxxxxxxxx Xxxx, Xxxxxxxx, XX 00000 (with a copy to Xxxxx X.
X'Xxxxx, Vedder, Price, Xxxxxxx & Kammholz, 222 North La Salle, Chicago, IL
60601); or if to the Fund after September 5, 1995, at 0000 Xxxxxxx Xxxx,
Xxxxxxxx XX 00000 (with a copy to Xxxxx X. X'Xxxxx, Vedder, Price, Xxxxxxx &
Kammholz, 222 North La Salle, Chicago, IL 60601); or (c) if to neither of the
foregoing, at such other address as shall have been notified to the sender of
any such Notice or other communication. If notice is sent by confirming
telegram, cable, telex or facsimile sending device, it shall be deemed to have
been given immediately. If notice is sent by first-class mail, it shall be
deemed to have been given five days after it has been mailed. If notice is
sent by messenger, it shall be deemed to have been given on the day it is
delivered.
17. AMENDMENTS. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
18. DELEGATION; ASSIGNMENT. PNC Bank may assign its rights and
delegate its duties hereunder to any wholly-owned direct or
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indirect subsidiary of PNC Bank, National Association or PNC Bank Corp.,
provided that (i) PNC Bank gives the Fund thirty (30) days' prior written
notice; (ii) the delegate (or assignee) agrees with PNC Bank and the Fund to
comply with all relevant provisions of the 1940 Act; and (iii) PNC Bank and
such delegate (or assignee) promptly provide such information as the Fund may
request, and respond to such questions as the Fund may ask, relative to the
delegation (or assignment), including (without limitation) the capabilities of
the delegate (or assignee).
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody in one more separate documents their agreement, if any, with respect
to delegated duties and/or Oral Instructions.
The names "Time Horizon Funds" and "Trustees of Time Horizon
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Funds" refer respectively to the trust created and the trustees, as trustees
but not individually or personally, acting from time to time under a
Declaration of Trust dated April 12, 1995, which is hereby referred to and a
copy of which is on file at the principal office of the Fund. The trustees,
officers, employees and agents of the Fund shall not personally be bound by or
liable under any written obligation, contract, instrument, certificate or other
interest or undertaking of the Fund made by the trustees or by an officer,
employee or agent of the Fund, in his or her capacity as such, nor shall resort
be had to their private property for the satisfaction of any obligation or
claim thereunder. All persons dealing with any class of shares of the Fund may
enforce claims against the Fund only against the assets belonging to such
class.
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 governed by Pennsylvania law
(except for the second paragraph of this Paragraph 21, which shall be governed
by Delaware law). If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be binding upon
and
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shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
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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.
PNC BANK, NATIONAL ASSOCIATION
By:__________________________
Title:
TIME HORIZON FUNDS
By:__________________________
Title:
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APPENDIX A
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Portfolios
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Time Horizon 1
Time Horizon 2
Time Horizon 3
This Appendix A is dated as of August 8, 1995
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AUTHORIZED PERSONS APPENDIX
---------------------------
NAME (TYPE) SIGNATURE
_____________________ _____________________
_____________________ _____________________
_____________________ _____________________
_____________________ _____________________
_____________________ _____________________
_____________________ _____________________
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