EX-99.B(8)
CUSTODIAN AGREEMENT
THIS AGREEMENT is made as of August 8, 1988 by and between
TOTAL RETURN U.S. TREASURY FUND, 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 ("▇▇▇
▇▇▇▇ ▇▇▇"); 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.
Provident agrees to comply with all relevant provisions of the 1940 Act and
applicable rules and regulations thereunder. The Fund may from time to time
issue separate series, classes or classify and reclassify shares of such series
or class. Provident shall identify to each such series or class Property
belonging to such series or class and in such reports, confirmations and notices
to the Fund called for under this Agreement shall identify the series or class
to which such report, confirmation or notice pertains.
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 issue Oral Instructions
and to sign Written Instructions, as hereinafter defined, on behalf of the Fund;
(c) The Fund's Articles of Incorporation filed with the
Secretary of the State of Maryland on June 3, 1988 and all amendments thereto;
(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 "By-Laws");
(e) The Investment Advisory Agreement between ▇.▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. (the "Advisor") and the Fund dated as of
_______________, 1988 (the "Advisory Agreement");
(f) The Distribution Agreement between the Fund and Alex.
▇▇▇▇▇ & Sons Incorporated dated as of ______________________ , 1988 (the "Flag
Investors Class Distribution Agreement");
(g) The Distribution Agreement among the Fund, Alex. ▇▇▇▇▇
& Sons Incorporated and ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. dated as of
______________, 1988 for distribution of the Fund's National Class of Shares
(the "▇.▇. ▇▇▇▇▇▇▇▇ Class Distribution Agreement");
(h) The Transfer Agency Agreement between Provident
Financial Processing Corporation and the Fund dated as of _______________, 1988
(the "Transfer Agency Agreement");
(i) 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 _____________, 1988;
(j) The Fund's most recent Registration Statement on Form
N-1A under the Securities Act of 1933, as amended ("▇▇▇ ▇▇▇▇ ▇▇▇") (File No.
33-12179) and under the 19410 Act as filed with the SEC on ____________, 1988
relating to shares of the Fund's Shares of Capital Stock ("Shares"), and all
amendments thereto; and
(k) 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.
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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 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 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.
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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)
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 Transfer Agency Agreement and the Distribution
Agreement; (iii) 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; (iv) to a
subcustodian pursuant to Paragraph 6 hereof; (v) for the redemption of Fund
Shares; 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
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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
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, and deliveries and returns of securities loaned, subject
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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 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 Articles of Incorporation 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 Articles of
Incorporation or By-Laws or any vote, resolution or proceeding of the
Shareholders, or of the Board of Directors, 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 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
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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 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:
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(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.
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 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;
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(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 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) release and deliver securities owned by the Fund
in connection with any repurchase agreement entered into on behalf of the Fund,
but only on receipt of payment therefor; and pay out moneys of the Fund in
connection with such repurchase agreements, but only upon the delivery of the
securities; and
(g) 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 are entitled to receive cash for fractional shares and those
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
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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 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.
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 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
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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.
(a) Provident shall furnish the Fund the following
reports:
(1) such periodic and special reports as the Fund may
reasonably request;
(2) a monthly statement summarizing all transactions
and entries for the account of the Fund;
(3) 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;
(4) a monthly report of the cash account of the Fund
showing disbursements;
(5) the reports to be furnished to the Fund pursuant
to Rule 17f-4; and
(6) such other information as may be agreed upon from
time to time between the Fund and Provident.
(b) Provident shall transmit promptly to the Fund any
proxy statement, proxy materials, notice of a call or conversation similar
communications received by it as Custodian of the Property.
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. Confidentiality. Provident agrees on behalf of itself and
its employees to treat confidentially all records and other information relative
to the Fund and its prior, present, or potential Shareholders, except, after
prior notification to and approval in writing by the Fund, which approval shall
not be reasonably withheld and may not be withheld where Provident may be
exposed to civil or criminal contempt proceedings for failure to comply, when
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requested to divulge such information by duly constituted authorities, or when
so requested by the Fund.
19. Right to Receive Advice.
(a) Advice of Fund. If Provident shall be in doubt as to
any action to be taken or omitted by it, it may request, and shall receive, from
the Fund directions or advice, including Oral or Written Instructions where
appropriate.
(b) Advice of Counsel. If Provident shall be in doubt as
to any question of law involved in any action to be taken or omitted by
Provident, it may request advice at its own cost from counsel of its own
choosing (who may be counsel for 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 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.
20. 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.
21. Compensation. During the term of this Agreement, the Fund
will pay to Provident no fees.
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22. Indemnification. The Fund, as sole owner of the Property,
agrees to indemnify and hold harmless Provident and its nominees from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the 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 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
Provident's or such nominee's own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties or responsibilities under this
Agreement. In the event of any advance of cash for any purpose made by Provident
resulting from 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 choice, its nominee's own
negligent action, negligent failure to act or willful misconduct, any Property
at any time held for the account of the Fund shall be security therefor.
23. Responsibility of Provident. Provident shall be under no
duty to take any action on behalf of the Fund except as specifically set forth
herein or as may be specifically agreed to by Provident in writing. In the
performance of its duties hereunder, Provident shall be obligated to exercise
care and diligence and to act in good faith and to use its best efforts within
reasonable limits to insure the accuracy 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 expressly 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
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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.
24. Collections. All collections of monies or other property
in respect, or which are to become part, of the Property (but not the
safekeeping thereof upon receipt by Provident) shall be at the sole risk of the
Fund. In any case in which Provident does not receive any payment due the Fund
within a reasonable time after Provident has made proper demands for the same,
it shall so notify the Fund in writing, including copies of all demand letters,
any written responses thereto, and memoranda of all oral responses thereto and
to telephonic demands, and await instructions from the Fund. Provident shall not
be obliged to take legal action for collection unless and until reasonably
indemnified to its satisfaction. Provident shall also notify the Fund as soon as
reasonably practicable whenever income due on securities is not collected in due
course.
25. Duration and Termination. This Agreement shall continue
until termination by the Fund or 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.
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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, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ marked for the attention of the Custodian Services Department (or its
successor); (b) if to the Fund, at the address of the Fund; or (c) if to neither
of the foregoing, at such other address as shall have been notified to the
sender of any such Notice or other communication. If the location of the sender
of a Notice and the address of the addressee thereof are, at the time of
sending, more than 100 miles apart, the Notice may be sent by first-class mail,
in which case it shall be deemed to have been given 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.
27. Further Actions. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
28. Amendments. This Agreement or any part hereof may be
changed or waived only by an instrument in writing signed by the party against
which enforcement of such change or waiver is sought.
29. Delegation. On thirty (30) days' prior written notice to
the Fund, Provident may assign its rights and delegate its duties hereunder to
any wholly-owned direct or indirect subsidiary of 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.
30. Miscellaneous. This Agreement embodies the entire
agreement and understanding between the parties hereto, and supersedes all
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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.
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] TOTAL RETURN U.S. TREASURY
FUND, INC.
Attest: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------- -----------------------
[SEAL] PROVIDENT NATIONAL BANK
Attest: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ APlambeck
------------------- ------------------------
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