EXHIBIT (g)(1)
CUSTODIAN SERVICES AGREEMENT
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THIS AGREEMENT (the "Agreement") is made and entered into effective as of
September 24, 2001 by and among PACIFIC FUNDS, a Delaware business trust having
its principal office and place of business at 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000 ("Trust"), and PFPC TRUST COMPANY, a Delaware limited
purpose trust company having an office and place of business at 0000 Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx, XX 00000 ("PFPC" or "Custodian").
WITNESSETH:
WHEREAS, Trust initially established the funds identified on the attached
Exhibit A, as such Exhibit A may be amended from time to time by the parties to
identify such other funds with respect to which Trust and Custodian have agreed
that Custodian will serve as custodian hereunder (the "Funds"); and
WHEREAS, Trust desires to appoint PFPC as custodian of the securities and
monies for the investment portfolios of the Funds; and
WHEREAS, PFPC is willing to accept such appointment;
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, mutually covenant and
agree as follows:
I. APPOINTMENT OF CUSTODIAN. Trust hereby appoints PFPC as its custodian with
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respect to each Fund of Trust, and PFPC accepts such appointment:
Custodian will provide for the safekeeping of the Funds' securities, other
investments, monies and other property ("Assets"). Custodian agrees that
it shall hold all Assets received from each Fund in a separate account
(each such account hereinafter called the "Account") at Custodian or as
otherwise provided in this Agreement; provided, however, that Custodian
shall be the legal situs of the Accounts.
II. DELIVERY OF CORPORATE DOCUMENTS. Trust has delivered or will deliver to
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Custodian prior to the effective date of the Agreement, copies of the
following documents and all amendments or supplements thereto, properly
certified or authenticated:
A. Upon request by Custodian, resolutions of the Board of Trustees of
Trust (the "Board") appointing Custodian as custodian for the Funds
hereunder and approving the form of this Agreement; and
B. Resolutions of the Board designating certain persons to give
instructions on behalf of Trust to Custodian.
III. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
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A. Delivery of Assets
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Trust will deliver or cause to be delivered to Custodian on the
effective date of this Agreement, or as soon thereafter as practicable,
and from time to time thereafter, all portfolio securities acquired by
it with respect to each Fund and monies then owned by it except as
permitted by the Investment Company Act of 1940, as amended, (the "1940
Act") or from time to time coming into its possession during the time
this Agreement shall continue in effect. Custodian shall have no
responsibility or liability whatsoever for or on account of securities
or monies not so delivered. All securities so delivered to Custodian
(other than bearer securities) shall be registered in the name of Trust
and the appropriate Fund, or of a nominee of Custodian, or shall be
properly endorsed and in form for transfer satisfactory to Custodian.
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B. Delivery of Accounts
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Trust shall turn over to Custodian all of Trust's relevant accounts.
Custodian shall be entitled to rely conclusively on the completeness
and correctness of the accounts turned over to it by Trust, and Trust
shall indemnify and hold Custodian harmless of and from any and all
expenses, damages and losses whatsoever arising out of or in connection
with any such accounts or in the failure of Trust to provide any
portion of such or to provide any information needed by Custodian to
knowledgeably perform its function hereunder.
C. Delivery of Assets to Third Parties
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1. Custodian will receive delivery and keep safely the assets of the
Funds delivered to it from time to time segregated in the accounts.
Custodian will not deliver, assign, pledge or hypothecate any such
assets to any person except as permitted by the provisions of this
Agreement.
2. Notwithstanding any other provision of the Agreement, Custodian is
hereby authorized to deposit or arrange for the deposit of
securities of Trust eligible for book entry deposit in Federal
Reserve Banks under book entry to the extent acceptable under
applicable regulations of the Department of the Treasury of the
United States and the Federal Reserve Bank involved.
3. Notwithstanding any other provision of this Agreement, Custodian is
authorized in its capacity as custodian for Trust to use the
facilities and services of the Depository Trust Company, or any
other system for the central handling of securities with which
securities may be deposited under the provisions of section 17(f)
of the 1940 Act.
D. Registration of Securities and Bearer Form Securities
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1. Custodian will hold stocks and other registrable portfolio
securities of the Funds registered in the name of the Funds or in
the name of any nominee of Custodian for whose fidelity and
liability Custodian will be fully responsible. Unless otherwise
instructed, Custodian will register all such portfolio securities
in the name of its authorized nominee or the nominee of a
depository that has been registered with or approved by the
Securities and Exchange Commission. All securities, and the
ownership thereof by Trust, which are held by Custodian, its sub-
custodian, nominee, correspondent, depository or the Federal
Reserve Book Entry System hereunder, will be reflected in the
records of Custodian and, where applicable, its sub-custodian.
2. All securities issued in bearer form shall be maintained in that
form and not be subject to re-registration in definitive form; that
is, bearer form securities shall not be reregistered in the name of
a nominee of Custodian, sub-custodian, or any depository, except
upon specific instructions from Trust as to a given security.
Bearer form securities shall be retained by Custodian or sub-
custodian, unless deposited with a depository authorized by the
Securities and Exchange Commission.
3. At least quarterly, Custodian shall provide Trust an updated list
of all securities held by Custodian including securities held by a
sub-custodian, or re-deposited by Custodian (or sub-custodian) with
a depository, Federal Reserve Bank, or correspondent bank.
4. Trust will hold Custodian and its nominees harmless from any
liability as a holder of record of any Assets.
E. Release of Securities
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Upon receipt of instructions as defined herein in Section V.A.,
Custodian will exchange, or cause to be exchanged, portfolio securities
held by it for the account of the applicable Fund for other securities
or
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cash issued or paid in connection with any reorganization,
recapitalization, merger, consolidation, split-up of shares, conversion
or otherwise, and will deposit any such securities in accordance with
the terms of any reorganization or protective or similar plan. Without
instructions, Custodian is authorized to exchange securities held by it
in temporary form for securities in definitive form, to transfer
securities in connection with re-registration of the securities, to
transfer Assets for examination by a broker or dealer in accordance
with street delivery custom, and to effect an exchange of shares when
the par value of the stock is changed. Upon receiving payment
therefore, with the understanding that notwithstanding the foregoing
Custodian may deliver or cause to be delivered securities for payment
in accordance with the customs prevailing among dealers in securities,
Custodian is authorized to surrender bonds or other securities held by
it at maturity or when advised of earlier call for redemption with the
understanding that notwithstanding the foregoing Custodian may deliver
or cause to be delivered securities for payment in accordance with the
customs prevailing among dealers in securities, except that Custodian
shall receive instructions prior to surrendering any convertible
security. In addition to the foregoing, on receipt of instructions
Custodian may also release securities in the following circumstances:
for purposes of effectuating a duly authorized plan of merger,
liquidation, reorganization, consolidation or recapitalization of a
Fund; in connection with any repurchase agreement entered into with
respect to a Fund (cash of such Fund may also be released in connection
with such repurchase agreement); in connection with a broker's custody
of margin collateral relating to futures and options transactions; for
the purpose of redeeming in kind shares of a Fund; and in connection
with other purposes which are set forth in the instructions.
F. Purchases of Investments of Trust - Other Than Options and Futures
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Trust will, on each business day on which a purchase of securities or
foreign exchange for a Fund shall be made by it, deliver to Custodian
instructions which shall specify with respect to each such purchase:
1. The name of the issuer and description of the security and industry
standard identification number;
2. The number of shares or the principal amount purchased, and accrued
interest, if any;
3. The trade date;
4. The settlement date;
5. The purchase price per unit and the brokerage commission, taxes and
other expenses payable in connection with the purchase;
6. The total amount payable by the Fund upon such purchase;
7. The name of the broker or dealer through whom the purchase was made
and if applicable, the corresponding broker code;
8. The name of the Fund and custody account number with respect to
which purchase was made; and
9. Settlement/Delivery instructions for U.S. domestic locations and
international local market codes.
In accordance with such instructions, Custodian will deliver or cause
to be delivered the securities thus designated as sold for the account
of the applicable Fund to the broker or other person specified in the
instructions relating to such sale, such delivery to be made only upon
receipt of payment therefor in such form as is satisfactory to
Custodian, with the understanding that Custodian may deliver or cause
to be delivered securities for payment in accordance with the customs
prevailing among dealers in securities.
G. Sales and Deliveries of Investments of Trust - Other Than Options and
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Futures
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Trust will, on each business day on which a sale of investment
securities or foreign exchange of a Fund has been made, deliver to
Custodian instructions specifying with respect to each such sale:
1. The name of the issuer and description of the securities and
industry standard identification number;
2. The number of shares or principal amount sold, and the accrued
interest, if any;
3. The date on which the securities sold were purchased or other
information identifying the securities sold and to be delivered;
4. The trade date;
5. The settlement date;
6. The sale price per unit and the brokerage commission, taxes or
other information identifying the securities sold and to be
delivered;
7. The total amount to be received by the Fund upon such sale;
8. The name of the broker or dealer through whom the purchase was made
and if applicable, the corresponding broker code;
9. The name of the Fund and custody account number with respect to
which the sale was made; and
10. Settlement/Delivery instructions for U.S. domestic locations and
international local market codes.
In accordance with such instructions, Custodian will deliver or cause
to be delivered the securities thus designated as sold for the account
of the applicable Fund to the broker or other person specified in the
instructions relating to such sale, such delivery to be made only upon
receipt of payment therefor in such form as is satisfactory to
Custodian, with the understanding that notwithstanding the foregoing
Custodian may deliver or cause to be delivered securities in accordance
with the customs prevailing among dealers in securities.
H. Purchases or Sales (or Exercise or Closing) of Security Options,
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Options on Indices, Security Index Futures Contracts, Interest Rate
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Futures Contracts or Foreign Currency Futures Contracts or Options on
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Index Futures Contracts
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Trust will, on each business day on which a purchase or sale or
exercise or closing of the following options and/or futures shall be
made by it, deliver to Custodian instructions which shall specify with
respect to each such purchase or sale or exercise or closing the
information set forth below. With respect to purchases of such options
and/or futures in accordance with such instructions Custodian will pay
for such Assets out of monies held for the Account of the applicable
Fund and receive the portfolio Assets so purchased by or for the
Account of the applicable Fund; such payment will be made only upon
receipt by Custodian of the Assets so purchased in form for transfer
satisfactory to Custodian or otherwise in accordance with prevailing
market practice.
With respect to the sale, exercise or closing of such options and/or
futures, in accordance with such instructions Custodian will delivery
or causes to be delivered the futures and/or options so designated in
such instructions to the broker or other person specified in the
instructions, such delivery to be made only upon receipt of payment
therefor in such form as is satisfactory to Custodian, with the
understanding that notwithstanding the foregoing, Custodian may deliver
or cause to be delivered futures and/or options in accordance with
customs prevailing with respect to futures or options.
1. Security Options
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a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising, expiring or
closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. The name of the broker or dealer through whom the purchase was
made and if applicable, the corresponding broker code;
j. The name of the Fund and custody account number with respect to
which the purchase or sale was made; and
k. Trade Date and Settlement Date.
2. Options on Indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. Number of contracts;
e. Trade date and settlement date;
f. The expiration date;
g. Whether the transaction is an opening, exercising, expiring or
closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased;
j. The name of the broker or dealer through whom the sale or
purchase was made and if applicable, the corresponding broker
code, and other applicable settlement instructions; and
k. The name of the Fund and custody account number with respect to
which the purchase or sale was made.
3. Security Index Futures Contracts, Interest Rate Futures Contracts
or Foreign Currency Futures Contracts
a. The last trading date specified in the contract and, when
available, the closing level, thereof;
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b. The index level, or value of the underlying security or
currency on the date the contract is entered into;
c. The multiple;
d. Any margin requirements identifying the securities pledged as
collateral;
e. The name and address of the futures commission merchant and
applicable broker code through whom the sale or purchase was
made, and other applicable settlement instructions;
f. The name of the Fund and custody account number for which the
purchase or sale was made;
g. Trade date and settlement date;
h. Expiration of the contract;
i. Number of contracts;
j. Information regarding the position of the contract being "long"
or "short"; and
k. Whether the transaction involves an opening, exercising,
expiring or closing transaction.
4. Options on Index Futures Contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. The market on which the option is traded;
j. The name of the Fund and custody account number for which the
option is traded;
k. Trade date and settlement date;
l. The name of the broker or dealer through whom the sale or
purchase was made and if applicable, the corresponding broker
code, and other applicable settlement instructions.
I. Securities Pledged or Loaned
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1. Upon receipt of instructions, Custodian will release or cause to be
released securities held in custody to the pledgee designated in
such instructions by way of pledge or hypothecation to secure any
loan incurred by a Fund; provided, however, that the securities
shall be released only upon
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payment to Custodian of the monies borrowed, except that in cases
where additional collateral is required to secure a borrowing
already made, further securities may be released or caused to be
released for that purpose upon receipt of instructions; Custodian
will pay, but only from funds available for such purpose, any such
loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or notes
evidencing such loan.
2. Custodian will release securities held in custody to a borrower in
accordance with a securities lending agreement agreed to by Trust.
J. Routine Matters
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Custodian will, in general, attend to all routine and mechanical
matters agreed to by Custodian in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with securities or
other property of the Funds except as may be otherwise provided in this
Agreement or directed from time to time by the Board. For clarity,
Custodian shall not be under any duty to take any action on behalf of
Trust except as specifically set forth herein.
K. Cash and Deposits
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All monies received by Custodian from or for the Account of a Fund
shall be credited to said Account, barring events not in control of
Custodian including strikes, lockouts or labor disputes, riots, war or
equipment or transmission failure or damages, fire, flood, earthquake
or other natural disaster, action or inaction of governmental authority
or other causes beyond its control, at 8:00 a.m., Eastern time, on the
next business day after deposit of any check into such Account, and
will be available for withdrawal by Trust in the form of Federal Funds.
Custodian may open and maintain an account in such other banks or trust
companies as may be designated by Custodian, such account, however, to
be in the name of the applicable Fund and subject only to the
Custodian's draft or order. Any cash maintained by Trust with Custodian
under this Agreement with respect to a particular Fund, wherein there
is deposited cash, interest, dividends or the proceeds of security
sales, shall be deemed to be a part of the Account for such Fund and
shall be subject to all of the other terms and provisions of the
Agreement.
L. Sweep Accounts
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PFPC Trust will sweep any net excess cash balances daily into an
investment vehicle or other instrument designated in writing by the
Fund (from which PFPC Trust may receive compensation), so long as the
vehicle or instrument is acceptable to PFPC Trust.
M. Income and Other Payments to Trust
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Dividends from equity securities, interest payments and final principal
redemptions shall generally be credited to applicable Fund on their
payable dates; provided that with respect to domestic securities such
amounts will not be so credited with respect to securities or other
assets in default, and that with respect to foreign assets such amounts
will only be so credited to the extent that the applicable foreign sub-
custodian so credits such amounts.
Custodian will:
1. Claim, collect and receive and deposit for the Account of each Fund
of Trust all income and other payments (including stock dividend,
rights and other similar items) which become due and payable on or
after the effective date of this Agreement with respect to the
securities deposited under this Agreement, and credit the Account
of each Fund of Trust with such income;
2. Take such other action as may be necessary or proper connection
with:
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a. the collection, receipt and deposit of such income and other
payments, including but not limited to the presentation for
payment of:
(1) all coupons and other income items requiring presentation;
and
(2) all other securities which may mature or be called,
redeemed, retired or otherwise become payable and
regarding which Custodian has actual knowledge, or notice;
and
b. the endorsement for collection, in the name of each Fund of
Trust, of all checks, drafts or other negotiable instruments.
If Custodian in its sole discretion credits an Account with respect to
(a) income, dividends, distributions, coupons, option premiums, other
payments or similar items on a contractual payment date or otherwise in
advance of Custodian's actual receipt of the amount due, (b) the
proceeds of any sale or other disposition of assets on the contractual
settlement date or otherwise in advance of Custodian's actual receipt
of the amount due or (c) provisional crediting of any amounts due, and
(i) Custodian is subsequently unable to collect full and final payment
for the amounts so credited within a reasonable time period using
reasonable efforts or (ii) pursuant to standard industry practice, law
or regulation Custodian is required to repay to a third party such
amounts so credited, or if any property has been incorrectly credited,
Custodian shall have the absolute right in its sole discretion without
demand to reverse any such credit or payment, to debit or deduct the
amount of such credit or payment from the Account, and to otherwise
pursue recovery of any such amounts so credited from Trust. Trust
hereby grants a first priority contractual possessory security interest
in and a right of set off against the assets maintained in an Account
hereunder in the amount necessary to secure the return and payment to
Custodian of any credit made by Custodian (including charges related
thereto) to such Account.
All collections of monies or other property in respect, or which are to
be come part, of the Assets maintained hereunder shall be at the sole
risk of Trust. If payment is not received by Custodian within a
reasonable time after proper demands have been made, Custodian shall
notify Trust in writing, including copies of all demand letters, any
written responses and memoranda of all oral responses and shall await
instructions from Trust. Custodian shall not be obliged to take legal
action for collection unless and until reasonably indemnified to its
satisfaction. Custodian shall also notify Trust as soon as reasonably
practicable whenever income due on securities is not collected in due
course and shall provide Trust with periodic status reports of such
income collected after a reasonable time.
N. Payment of Dividends and other Distributions
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Upon receipt of instructions, Custodian will pay to Trust's transfer
agent, as agent for the shareholders, an amount equal to the amount of
dividends and distributions stated in the instructions to be
distributed in cash by the transfer agent to shareholders, or, in lieu
of paying Trust's transfer agent, Custodian 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 Trust, Custodian and Trust's transfer agent.
O. Proxies and Notices
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Custodian or its nominee will promptly deliver or mail or have
delivered or mailed to Trust all proxies (properly signed to the extent
Custodian is the registered owner of the security to which the proxy
relates), all notices of meetings, all proxy statements and other
notices, requests or announcements affecting or relating to securities
held by Custodian for a Fund, provided the same have first been
received by Custodian in its capacity as custodian for the Fund.
Neither Custodian nor its nominee shall vote any proxy. Neither
Custodian nor its nominee shall take any voluntary corporate action,
except in accordance with instructions and provided that such
instructions are received by Custodian within such time frames as
Custodian shall required. Custodian shall carry out mandatory corporate
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actions in accordance with its standard operating procedures. Responses
to class actions are the responsibility of Trust.
P. Disbursements
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Custodian will pay or cause to be paid bills, statements and other
obligations, or other amounts on behalf of, Trust or a Fund (including
but not limited to obligations in connection with the conversion,
exchange or surrender of securities owned by a Fund, interest charges,
dividend disbursements, taxes, management fees, custodian fees, legal
fees, auditors' fees, transfer agents' fees, brokerage commissions,
compensation to personnel, and other operating expenses of Trust or a
Fund) pursuant to instructions of Trust setting forth the name of the
person to whom payment is to be made, the amount of the payment, the
Fund to be charged, and the purpose of the payment. Notwithstanding the
foregoing, Custodian shall be entitled to deduct its fees and expenses
in accordance with the arrangement agreed in the fee letter between
Custodian and Trust.
Q. Daily Statement of Accounts.
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Custodian will, within a reasonable time, render to Trust as of the
close of business on each day, a detailed statement of the amounts
received or paid and of securities received or delivered for the
account of each Fund of Trust during said day. Custodian will, from
time to time, upon reasonable request by Trust, render a detailed
statement of the securities and monies held for one or more of the
Funds under this Agreement, and Custodian will maintain such books and
records as are necessary to enable it to do so and will permit such
persons as are authorized by Trust, and if demanded, federal and state
regulatory agencies to examine the securities, accounts, books and
records of Trust. In any requested review by a regulatory authority of
Trust's accounts and records maintained by Custodian, Custodian will
furnish any information or reports regarding accounts and records of
Trust which may be requested in order to ascertain whether the
operations of Trust are being conducted in a manner consistent with
applicable laws and regulations. Upon the instructions of Trust or as
demanded by federal or state regulatory agencies, Custodian will
instruct a sub-custodian to permit such persons as are authorized by
Trust and if demanded, federal and state regulatory agencies to examine
the books, records and securities held by sub-custodian which relate to
Trust.
Custodian acknowledges and understands that Trust engages in securities
lending and overnight investing (often through repurchase
transactions). In connection therewith and upon the reasonable request
of the Trust, Custodian agrees to provide to Trust, to any portfolio
manager of Trust, to the Adviser of Trust, or to any third party
authorized by Trust, securities holdings, and sale transaction
information, on a real time basis or at such times as may be required
in order for such parties to conduct securities lending and overnight
investment programs. Custodian agrees to use reasonable efforts to
cooperate with Trust, its Adviser, its portfolio managers, and
authorized third party lending agents and overnight investment agents
to facilitate communications, and to use reasonable efforts to help
facilitate on-line access and appropriate interfaces to facilitate
computer and personal access to such information as is necessary to
effect securities lending and overnight investment programs.
R. Appointment of Sub-Custodian
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1. Notwithstanding any other provisions of this Agreement, all or any
of the monies or securities of Trust may be held in Custodian's own
custody or one or more other banks or trust companies acting as
sub-custodians as may be selected by Custodian. For clarification,
references herein to a "sub-custodian" include a foreign sub-
custodian. Any such sub-custodian must have the qualifications
required for custodian under the 1940 Act. The sub-custodian may
participate directly or indirectly in the Depository Trust Company,
any other depository, or the Treasury/Federal Reserve Book Entry
System (as such entity is defined at 17 CFR Sec. 270.17f-4(b)). The
sub-custodian may also participate directly or indirectly in any
foreign securities depository or clearing or settlement system. Use
of any depository, clearing or settlement system
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or book-entry system will subject Trust to the rules, regulations
and practices applicable to that depository, clearing or settlement
system or book-entry system.
2. Monitoring Responsibilities. Custodian shall furnish annually to
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Trust, upon the request of Trust, industry standard information
concerning any sub-custodian and any foreign sub-custodians
utilized to maintain Trust Assets.
S. Accounts and Records
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1. Custodian shall allow, upon not more than 48 hours' notice and
during the course of Custodian's regular business hours, any
insurance or banking authority authorized by Trust to inspect the
securities held by Custodian and all of Custodian's records
pertaining to Trust's securities held by Custodian.
2. Custodian relies upon Trust to furnish, in writing, accurate and
timely information to complete Trust's records and perform
Custodian's other duties contemplated herein.
3. Custodian shall incur no liability and Trust shall indemnify and
hold harmless Custodian from and against any liability arising from
any failure of Trust to furnish such information in a timely and
accurate manner, even if Trust subsequently provides accurate but
untimely information.
T. Accounts and Records Property of Trust
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Custodian acknowledges that all of the accounts and records maintained
by Custodian pursuant to this Agreement are the property of Trust, and
will be made available to Trust for inspection or reproduction within a
reasonable period of time, upon demand. Custodian will assist Trust's
independent auditors, or upon approval of Trust, or upon demand, any
regulatory body, in any requested review of Trust's accounts and
records but shall be reimbursed for all expenses and employee time
invested in any such review outside of routine and normal periodic
reviews. Upon reasonable request for information from the Trust,
Custodian will supply necessary requested data in Custodian's
possession for Trust's completion of any necessary tax returns,
questionnaires, periodic reports to regulatory authorities and
Shareholders and such other reports and information requests as Trust
and Custodian shall agree upon from time to time.
U. Adoption of Procedures
----------------------
Custodian may conclusively assume that no procedure approved by Trust,
or directed by Trust, conflicts with or violates any requirements of
its prospectus, Declaration of Trust, Bylaws, or any rule or
regulation, or any regulatory body or governmental agency. Trust will
be responsible to notify Custodian of any changes in state statutes,
regulations, rules or policies which might necessitate changes in
Custodian's responsibilities.
V. Advances
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In the event that a payment necessary to settle a transaction or to
otherwise meet a payment obligation authorized by instructions or by
this Agreement would exceed the monies available for such payment,
Custodian may in its absolute discretion (but shall not be obligated
to) advance or arrange for the advancement of such excess amount, which
advance shall be considered a loan payable upon demand and shall bear
interest at the rate customarily charged by the provider of the advance
for similar transactions. Trust hereby grants a first priority
contractual possessory security interest in and a right of set off
against the assets maintained hereunder with respect to a particular
Fund in the amount necessary to secure the return and payment to
Custodian of any advance made by Custodian (including charges related
thereto) with respect to such Fund.
W. Tax Reclaims.
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1. Custodian shall perform tax reclaim services with respect to
taxation levied by the revenue authorities in each country in which
Trust invests, provided such country has a tax reclaim procedure. In
connection therewith and subject to the provisions of this Section
T, Custodian shall apply for and use reasonable efforts to obtain a
reduction of withholding tax and any refund of any tax paid or tax
credits which apply in each applicable market where Custodian makes
such service available in respect of income payments on the Assets
for Trust's benefit which Custodian is aware may be available to
Trust.
2. The provision of tax reclaim services by Custodian is conditional
upon Custodian's receiving from Trust or, to the extent the Assets
are beneficially owned by others, from each beneficial owner, (a)
such information as is required by applicable law and (b) such other
information as Custodian may request. Trust acknowledges that, if
Custodian does not receive such information Custodian shall be
unable to provide tax reclaim services.
3. Custodian shall have no responsibility with regard to Trust's tax
position or tax status in any jurisdiction.
4. Trust confirms that Custodian is authorized to disclose any
information requested by any revenue authority or any governmental
body in relation to Trust or the securities and/or cash held for
Trust.
IV. DUTIES OF CUSTODIAN WITH RESPECT TO PROPERTY OF TRUST HELD OUTSIDE OF THE
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UNITED STATES.
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A. Assets to be Held. Trust shall limit the securities and other assets
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maintained in the custody of the foreign sub-custodians to those assets
referenced in Rule 17f-5 under the 1940 Act or other applicable rule or
regulation. Assets of the Trust may also be maintained in foreign
securities depositories.
B. Identification of Securities. Custodian shall identify on its books as
-----------------------------
belonging to the Funds, the foreign securities of the Funds held by
each foreign sub-custodian and each foreign securities depository. Each
agreement pursuant to which Custodian employs a sub-custodian shall, to
the extent consistent with relevant laws, rules and practices, require
that such institution establish a custody account for Custodian or
Trust or the respective Funds. In the event that such sub-custodian
deposits the Funds' securities in a foreign securities depository, the
sub-custodian shall, to the extent consistent with relevant laws, rules
and practices, identify on its books as belonging to Custodian as agent
for its customers, the securities so deposited.
C. Branches of U.S. Banks. The provisions of this Section IV. shall not
-----------------------
apply where the custody of Trust assets is maintained in a foreign
branch of a banking institution which is a "bank" as defined by Section
2(a) (5) of the 1940 Act which meets the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a sub-
custodian shall be governed by Subsection III.U.1. of this Agreement.
C. Foreign Exchange. Custodian or sub-custodians may enter into or arrange
-----------------
foreign exchange transactions in order to facilitate transactions in
Assets with respect to the Funds, and such entities and/or their
affiliates may receive compensation in connection with such foreign
exchange transactions.
D. Additional Matters with Respect to Property of the Funds Held Outside
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the United States.
------------------
1. Shareholder Rights. With respect to the foreign securities held
-------------------
pursuant to this Agreement, Custodian will use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder
rights, subject always to the limitations on Custodian's
responsibilities set forth in Section III. R. above and to the laws,
regulations and practical constraints that may exist in the country
where such securities are issued or maintained. Trust acknowledges
that local conditions,
11
including lack of regulations, onerous procedural obligations, lack
of notice and other factors may have the effect of severely limiting
the ability of Trust to exercise shareholder rights.
2. Tax Law. Custodian shall have no responsibility or liability for any
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obligations now or hereafter imposed on Trust, the Funds or
Custodian as custodian of the Funds by the tax law of the United
States or of any state or political subdivision thereof. It shall be
the responsibility of Trust to notify Custodian of the obligations
imposed on Trust with respect to the Funds or Custodian as custodian
of the Funds by the tax law of countries other than those mentioned
in the above sentence, including responsibility for withholding and
other taxes, assessments or other governmental charges,
certifications and governmental reporting. The sole responsibility
of Custodian with regard to such tax law shall be to as set forth in
Section III. A.
V. INSTRUCTIONS. The term "instructions", as used herein, means written
-------------
instructions to Custodian from a designated representative of Trust or a
person reasonably believed by Custodian to be such a representative.
Certified copies of Resolutions of the Board naming one or more designated
representatives to give instructions in the name and on behalf of Trust,
may be received and accepted from time to time by Custodian as conclusive
evidence of the authority of any designated representative to act for Trust
and may be considered to be in full force and effect (and Custodian will be
fully protected in acting in reliance thereon) until receipt by Custodian
of notice to the contrary. Unless the Resolution delegating authority to
any person to give instructions specifically requires that the approval of
anyone else will first have been obtained, Custodian will be under no
obligation to inquire into the right of the person giving such instructions
to do so. Notwithstanding any of the foregoing provisions of this Section
V., no authorizations or instructions received by Custodian from Trust,
will be deemed to authorize or permit any trustee, officer, employee, or
agent of Trust to withdraw any of the securities or similar investments of
Trust upon the mere receipt of such authorization or instructions from such
trustee, officer, employee or agent.
Notwithstanding any other provision of this Agreement, Custodian, upon
receipt (and acknowledgment if required at the sole discretion of
Custodian) of the instructions will use reasonable efforts to undertake to
deliver for a Fund's account monies, (provided such monies are on hand or
available) in connection with the Fund's transactions and to wire transfer
such monies to such broker, dealer, sub-custodian, bank or other agent
specified in such instructions.
VI. STANDARDS OF CARE AND LIABILITY OF CUSTODIAN:
--------------------------------------------
A. Custodian shall be liable to Trust for any failure to meet any standard
of care described below and as otherwise described below.
1. Custodian's Standard of Care for Services. In connection with all
------------------------------------------
the duties and responsibilities of Custodian under this Agreement,
Custodian shall exercise the standard of reasonable care, prudence
and diligence that a professional custodian engaged in the custody
of mutual funds and having professional expertise in financial and
securities processing transactions and custody for mutual funds
would observe. Custodian shall be liable for any loss incurred by
Trust as the result of the action or omission of a sub-custodian
only to the extent that such loss is the result of the sub-
custodian's negligence or willful misconduct (such negligence or
willful misconduct to be measured against industry standards in the
jurisdiction to which the particular transaction relates);
Custodian's liability for any loss of assets resulting from such
negligence or willful misconduct will not exceed the fair market
value of such assets, at the time of such negligence or willful
misconduct. Notwithstanding anything herein to the contrary,
Custodian shall not be liable for any action or omission of any
depository, clearing or settlement system, book-entry system,
transfer agent or registrar of uncertificated securities, or other
similar entity, and no depository, clearing or settlement system,
book-entry system, transfer agent or registrar of uncertificated
securities, or other similar entity will be considered an agent of
Custodian.
12
2. Indemnification of Custodian. Custodian shall be held to the
-----------------------------
standards provided in this Section VI.A. in carrying out this
Agreement, and provided such standards are met, shall be indemnified
by, and shall be without liability to, Trust for any action taken or
omitted by Custodian in good faith without negligence or willful
misconduct.
3. Subrogation to Claims against Foreign Sub-Custodian. At Trust's
----------------------------------------------------
election, the Funds shall be entitled to be subrogated to the rights
of Custodian with respect to any claims against a foreign sub-
custodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Funds have not been
made whole for any such loss, damage, cost, expense, liability or
claim.
4. Custodian may request and obtain the advice and opinion of counsel
(reasonably selected by Custodian) with respect to questions or
matters of law, and it shall be without liability to Trust for any
action taken or omitted by it in good faith, in conformity with such
advice or opinion.
B. Custodian may rely upon statements of Trust's independent certified
public accountants and any representative of Trust authorized to give
instructions, and Custodian shall not be liable for any actions taken,
in good faith, upon such statements.
C. If Trust requires Custodian in any capacity to take, with respect to
any securities, any action which involves the payment of money by it,
or which in Custodian's opinion might make it or its nominee liable for
payment of monies or in any other way, Custodian, upon request to Trust
shall be and be kept indemnified by Trust in an amount and form
satisfactory to Custodian against any liability on account of such
action.
D. Custodian shall be protected in acting or not acting as custodian
hereunder upon any instructions, advice, opinion notice, request,
consent, certificate or other instrument or paper received from counsel
(as provided in Section VI.A.10 above) or received from a person
authorized by Trust (or from a person reasonably believed by Custodian
to be such a person). Nothing in this Agreement shall require Custodian
to seek or to follow any such instructions, advise, opinion, notice,
request, consent, certificate or other instrument or paper.
E. Without limiting the generality of the foregoing, Custodian shall be
under no duty or obligation to inquire into, and shall not be liable
for:
1. The legality of the purchase of any security by or for a Fund or
evidence of ownership required by Trust to be received by Custodian,
or the propriety of the decision to purchase or amount paid
therefore;
2. The legality of the sale of any securities by or for a Fund, or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any beneficial interest of
Trust, or the sufficiency of the amount to be received therefore;
4. The legality of the repurchase or redemption of any shares of
beneficial interest of, or the propriety of the amount to be paid
therefore;
5. The legality of the declaration of any dividend of a Fund by Trust,
or the legality of the issue of any shares of beneficial interest of
a Fund of Trust in payment of any stock dividend; or
13
6. The general risk of investing (including without limit the risks
relating to investing or maintaining Assets in any particular
jurisdiction).
F. Notwithstanding anything in this Agreement to the contrary, neither
Custodian nor any of its affiliates or nominees will be liable for (i)
any consequential, special or indirect losses or damages (whether or
not the likelihood of such losses or damages was known by Custodian or
its affiliates or nominees) or (ii) any losses or damages beyond
Custodian's or its affiliates' or nominees' or sub-custodian's
reasonable control.
G. Custodian agrees to comply with the requirements of the 1940 Act and
the requirements of material laws, rules and regulations of
governmental authorities having jurisdiction over Custodian with
respect to the duties to be performed by Custodian herein. Custodian
assumes no responsibility for compliance by Trust or any other entity.
VII. COMPENSATION. Trust will pay to Custodian such compensation as may be
------------
agreed to in writing by the parties from time to time.
VIII. TERMINATION. The initial term of this Agreement shall be one year, and
------------
thereafter either party to this Agreement may terminate the same by notice
in writing, delivered or mailed, postage prepaid, to the other party
hereto and received not less than sixty (60) days prior to the date upon
which such termination will take effect. Subject to the foregoing and the
other terms hereof, Trust may terminate this Agreement without payment of
any penalty, forfeiture, compulsory buyout amount or performance of any
other obligation which would deter termination. Upon termination of this
Agreement, Trust will pay to Custodian such compensation and such
reimbursable disbursements, fees, costs and expenses paid or incurred to
such date and Trust will use its best efforts to obtain a successor
custodian. Unless the holders of a majority of the outstanding shares of
beneficial interest vote to have the securities, funds, records and other
properties held under this Agreement delivered and paid over to some other
person, firm or corporation specified in the vote, having not less than
two million dollars ($2,000,000) aggregate capital, surplus and undivided
profits, as shown by its last published report, and meeting such other
qualifications for Custodian as set forth in the Bylaws of Trust or under
applicable law, the Board will, forthwith upon giving or receiving notice
of termination of this Agreement, appoint as successor custodian a bank or
trust company having such qualifications. Custodian will, upon termination
of this Agreement and (at Custodian's discretion) upon deduction of its
accrued and estimated fees and expenses, deliver to the successor
custodian so specified or appointed, at Custodian's office, all securities
then held by Custodian hereunder, duly endorsed and in form for transfer,
all funds, records and other properties of Trust deposited with or held by
Custodian hereunder, or will cooperate in effecting changes in book-
entries at the Depository Trust Company or in the Treasury/Federal Reserve
Book Entry System pursuant to 31 CFR Sect. 306.118. In the event no such
vote has been adopted by the holder of shares of beneficial interest of
Trust and no written order designating a successor custodian has been
delivered to Custodian on or before the date when such termination becomes
effective, then Custodian will deliver the securities, funds, records and
properties of Trust to a bank or trust company at the selection of
Custodian and meeting the qualifications for Custodian, if any, set forth
in the Bylaws of Trust and having not less than two million dollars
($2,000,000) aggregate capital, surplus and undivided profits, as shown by
its last published report. Upon either such delivery to a successor
custodian, Custodian will have no further duties under this Agreement,
although any liabilities and indemnities pursuant to Section VI. of this
Agreement will survive termination of this Agreement. Thereafter such bank
or trust company will be entitled to reasonable compensation for its
services. In the event that no such successor custodian can be found,
Trust will submit to its shareholders, before permitting delivery of the
cash and securities owned by Trust to anyone other than a successor
custodian, the question of whether Trust will be liquidated or function
without a custodian. Notwithstanding the foregoing requirement as to
delivery upon termination of this Agreement, Custodian may make any other
delivery of the securities, funds, records and property of the Funds which
is permitted by the 1940 Act, Trust's Declaration of Trust and Bylaws then
in effect or apply to a court of competent jurisdiction for the
appointment of a successor custodian. Custodian shall have a security
interest in and shall have a right of setoff against Trust's Assets as
security for the payment of its fees, compensation, costs and expenses.
14
IX. NOTICES. Notices, requests, instructions and other writings received by
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Trust at 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx XX, Attn: Xxxxx X. Xxxxx
or at such other address as Trust may have designated to Custodian in
writing, will be deemed to have been properly given to Trust hereunder; and
notices, requests, instructions and other writings received by Custodian as
its offices at PFPC Trust Company, 0000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx, XX
00000 Attention: Mutual Fund Custody Department or to such other address as
it may have been designated to Trust in writing, will be deemed to have
been properly given to Custodian hereunder.
X. CONFIDENTIALITY. Custodian, sub-custodian, or any agent thereof shall not
----------------
disclose or use any records or information obtained pursuant to this
Agreement in any manner whatsoever except as expressly authorized in the
Agreement, will keep confidential any information obtained pursuant to the
arrangements under this Agreement and will disclose such information only
if Trust has authorized such disclosure. The foregoing obligations shall
not apply to information which (a) is already known to the receiving party
at the time it is obtained; (b) is or becomes publicly known or available
through no wrongful act of the receiving party; (c) is rightfully received
from a third party who, to the best of the receiving party's knowledge, is
not under a duty of confidentiality; (d) is released by the protected party
to a third party without restriction; (e) is required to be disclosed by
the receiving party pursuant to a required of a court order, subpoena,
governmental or regulatory agency or law; (f) is relevant to the defense of
any claim or cause of action asserted against the receiving party; or (g)
has been or is independently developed or obtained by the receiving party.
XI. RESERVATION OF AUTHORITY. Notwithstanding any other provision of this
-------------------------
Agreement, it is understood and agreed that Trust shall at all times retain
the ultimate responsibility for direction and control of all services
provided pursuant to this Agreement, and retain the right to direct,
approve, or disapprove any action hereunder, which responsibility and right
shall be reasonably exercised; provided that Custodian shall not be under
any duty to take any action on behalf of Trust except as specifically set
forth herein.
XII. MISCELLANEOUS.
--------------
A. This Agreement is executed and delivered in the State of Delaware and
shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective successor
and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. 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 of effect.
E. This Agreement shall become effective at the close of business on 24th
day of September, 2001.
F. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument.
G. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
H. This Agreement may not be assigned by either party without prior
written consent of the other party, provided that (upon 30 days prior
written notice to Trust) Custodian may assign this Agreement to an
affiliate of Custodian.
15
I. If any provision of the Agreement, either in its present form or as
amended from time to time, limits, qualifies or conflicts with the 1940
Act and the rules and regulations promulgated thereunder, such
statutes, rules and regulations shall be deemed to control and
supersede such provision without nullifying or terminating the
remainder of the provisions of this Agreement.
J. A copy of the Declaration of Trust is on file with the Secretary of the
State of Delaware. The Declaration of Trust has been executed on behalf
of Trust by a Trustee of Trust is her capacity as Trustee of Trust and
not individually. The obligations of this Custody Agreement shall be
binding upon the assets and property of Trust and shall not be binding
upon any Trustee, Officer or shareholder of Trust individually.
K. Custodian shall retain title to and ownership of any and all of its
data bases, computer programs, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade
secrets (which are disclosed to the Trust as such), and other related
legal rights and derivative works thereof, utilized by Custodian in
connection with the services provided by Custodian to Trust.
Notwithstanding the above, Custodian agrees that Trust and/or its
employees and agents, shall be free to use and employ their general
know-how, skills, and expertise, and to use, disclose, and employ any
generalized ideas, concepts, know-how, methods, techniques or skills
gained or learned during the course of any services performed
hereunder, subject to their obligations with respect to confidentiality
set forth in this Agreement and also subject to PFPC's intellectual
property rights.
L. Except as expressly provided in this Agreement, Custodian hereby
disclaims all representations and warranties, express or implied, made
to Trust or any other person, including, without limitation, any
warranties regarding quality, suitability, merchantability, fitness for
a particular purpose or otherwise (irrespective of any course of
dealing, custom or usage of trade), of any services or any goods
provided incidental to services provided under this Agreement.
Custodian disclaims any warranty of title or non-infringement except as
otherwise set forth in this Agreement.
Custodian represents that it does meet all requirements of a custodian of
Section 17(f) of the 1940 Act and any Rules thereunder and agrees to
immediately notify Trust in the event that Custodian, for any reason, no
longer meets such requirements.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
by their duly authorized officers to be effective as of the date first above
written.
PFPC Trust Company Pacific Funds
By: _______________________________ By_______________________________
Name: ______________________________ Name: Xxxxx X. Xxxxxx
Title: _______________________________ Title: Vice President & Assistant
Secretary
16
EXHIBIT 1
Funds
PF AIM Blue Chip Fund
PF AIM Aggressive Growth Fund
PF INVESCO Health Sciences Fund
PF INVESCO Technology Fund
XX Xxxxx Strategic Value Fund
XX Xxxxx Growth LT Fund
XX Xxxxxx International Value Fund
PF MFS Mid-Cap Growth Fund
PF MFS Global Growth Fund
PF PIMCO Managed Bond Fund
PF Pacific Life Money Market Fund
XX Xxxxxxx Brothers Large-Cap Value Fund
17
