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EXHIBIT 8.1
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of _______________, 1996 by and between
PNC BANK, NATIONAL ASSOCIATION, a national banking association ("PNC Bank"),
and PACIFIC INNOVATIONS TRUST, a Delaware business trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to retain PNC Bank to provide custodian
services to the portfolios listed on Exhibit A attached hereto and made a part
hereof, as such Exhibit A may be amended from time to time (each, a "Portfolio"
and collectively, the "Portfolios"), and PNC Bank wishes to furnish custodian
services, either directly or through an affiliate or affiliates, as more fully
described herein.
NOW, THEREFORE, In consideration of the premises and mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as
amended.
(b) "1934 Act" means the Securities Exchange Act of
1934, as amended.
(c) "Authorized Person" means any officer of the Fund
and any other person duly authorized by the Fund's Board of Trustees to give
Oral Instructions and Written Instructions on behalf of the Fund and listed on
the Authorized Persons Appendix attached hereto and made a part hereof or any
amendment thereto as may be received by PNC Bank. An Authorized Person's scope
of authority may be limited by the Fund by setting forth such limitation in the
Authorized Persons Appendix.
(d) "Book-Entry System" means Federal Reserve
Treasury book-entry system for United States and federal agency securities, its
successor or successors, and its nominee or nominees and any book-entry system
maintained by an exchange registered with the SEC under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as
amended.
(f) "Oral Instructions" mean oral instructions
received by PNC Bank from an Authorized Person or from a person reasonably
believed by PNC Bank to be an Authorized Person.
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(g) "PNC Bank" means PNC Bank, National Association
or a subsidiary or affiliate of PNC Bank, National Association.
(h) "SEC" means the Securities and Exchange
Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934
Act, the 1940 Act and the CEA.
(j) "Shares" mean the shares of beneficial interest
of any series or class of the Fund.
(k) "Property" means:
(i) any and all securities and other
investment items which the Fund may from
time to time deposit, or cause to be
deposited, with PNC Bank or which PNC
Bank may from time to time hold for the
Fund;
(ii) all income in respect of any of such
securities or other investment items;
(iii) all proceeds of the sale of any of such
securities or investment items; and
(iv) all proceeds of the sale of securities
issued by the Fund, which are received by
PNC Bank from time to time, from or on
behalf of the Fund.
(l) "Written Instructions" mean written instructions
signed by two Authorized Persons and received by PNC Bank. The instructions
may be delivered by hand, mail, tested telegram, cable, telex or facsimile
sending device.
2. APPOINTMENT. The Fund hereby appoints PNC Bank as
custodian of the Fund's Property, on behalf of each of its investment
portfolios (each, a "Portfolio"), and PNC Bank accepts such appointment and
agrees to furnish such custodial services as provided in this Agreement.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where
applicable, will provide PNC Bank with the following:
(a) certified or authenticated copies of the
resolutions of the Fund's Board of Trustees,
approving the appointment of PNC Bank or its
affiliates to provide services;
(b) a copy of the Fund's most recent effective
registration statement;
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(c) a copy of each Portfolio's advisory agreements;
(d) a copy of the distribution agreement with respect
to each class of Shares;
(e) a copy of each Portfolio's administration
agreement if PNC Bank is not providing the
Portfolio with such services;
(f) copies of any shareholder servicing agreements
made in respect of the Fund or a Portfolio; and
(g) certified or authenticated copies of any and all
amendments or supplements to the foregoing.
4. COMPLIANCE WITH LAWS.
PNC Bank undertakes to comply with all applicable
requirements of the Securities Laws and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to be
performed by PNC Bank hereunder. Except as specifically set forth herein, PNC
Bank assumes no responsibility for such compliance by the Fund or any
Portfolio.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PNC
Bank shall act only upon Oral Instructions and Written Instructions.
(b) PNC Bank shall be entitled to rely upon any Oral
Instructions and Written Instructions it receives from an Authorized Person (or
from a person reasonably believed by PNC Bank to be an Authorized Person)
pursuant to this Agreement. PNC Bank may assume that any Oral Instructions or
Written Instructions received hereunder are not in any way inconsistent with
the provisions of organizational documents of the Fund or of any vote,
resolution or proceeding of the Fund's Board of Trustees or of the Fund's
shareholders, unless and until PFPC receives Written Instructions to the
contrary.
(c) The Fund agrees to forward to PNC Bank Written
Instructions confirming Oral Instructions (except where such Oral Instructions
are given by PNC Bank or its affiliates) so that PNC Bank receives the Written
Instructions by the close of business on the same day that such Oral
Instructions are received. The fact that such confirming Written Instructions
are not received by PNC Bank shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral Instructions. Where
Oral Instructions or Written Instructions reasonably appear to have been
received from an Authorized Person, PNC Bank shall incur no liability to the
Fund in acting upon
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such Oral Instructions or Written Instructions provided that PNC Bank's actions
comply with the other provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) Advice of the Fund. If PNC Bank is in doubt as
to any action it should or should not take, PNC Bank may request directions or
advice, including Oral Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PNC Bank shall be in doubt
as to any question of law pertaining to any action it should or should not
take, PNC Bank may request advice at its own cost from such counsel of its own
choosing (who may be counsel for the Fund, the Fund's investment adviser or PNC
Bank, at the option of PNC Bank).
(c) Conflicting Advice. In the event of a conflict
between directions, advice or Oral Instructions or Written Instructions PNC
Bank receives from the Fund, and the advice it receives from counsel, PNC Bank
shall be entitled to rely upon and follow the advice of counsel. In the event
PNC Bank so relies on the advice of counsel, PNC Bank remains liable for any
action or omission on the part of PNC Bank which constitutes willful
misfeasance, bad faith, negligence or reckless disregard by PNC Bank of any
duties, obligations or responsibilities set forth in this Agreement.
(d) Protection of PNC Bank. PNC Bank shall be
protected in any action it takes or does not take in reliance upon directions,
advice or Oral Instructions or Written Instructions it receives from the Fund
or from counsel and which PNC Bank believes, in good faith, to be consistent
with those directions, advice or Oral Instructions or Written Instructions.
Nothing in this section shall be construed so as to impose an obligation upon
PNC Bank (i) to seek such directions, advice or Oral Instructions or Written
Instructions, or (ii) to act in accordance with such directions, advice or Oral
Instructions or Written Instructions unless, under the terms of other
provisions of this Agreement, the same is a condition of PNC Bank's properly
taking or not taking such action. Nothing in this subsection shall excuse PNC
Bank when an action or omission on the part of PNC Bank constitutes willful
misfeasance, bad faith, negligence or reckless disregard by PNC Bank of any
duties, obligations or responsibilities set forth in this Agreement.
7. RECORDS; VISITS. The books and records pertaining to the
Fund and any Portfolio, which are in the possession or under the control of PNC
Bank, shall be the property of the Fund. Such books and records shall be
prepared and maintained as required by the 1940 Act and other applicable
securities laws, rules and regulations. The Fund and Authorized Persons shall
have access to such books and records at all times during PNC Bank's normal
business hours. Upon the reasonable request of the Fund, copies of any such
books and records shall be provided by PNC Bank to the Fund or to an authorized
representative of the Fund, at the Fund's expense.
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8. CONFIDENTIALITY. PNC Bank agrees to keep confidential all
records of the Fund and information relating to the Fund and its shareholders,
unless the release of such records or information is otherwise consented to, in
writing, by the Fund. The Fund agrees that such consent shall not be
unreasonably withheld and may not be withheld where PNC Bank may be exposed to
civil or criminal contempt proceedings or when required to divulge such
information or records to duly constituted authorities.
9. COOPERATION WITH ACCOUNTANTS. PNC Bank shall cooperate
with the Fund's independent public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement to ensure
that the necessary information is made available to such accountants for the
expression of their opinion, as required by the Fund.
10. DISASTER RECOVERY. PNC Bank shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provisions for emergency use of electronic data processing equipment
to the extent appropriate equipment is available. In the event of equipment
failures, PNC Bank shall, at no additional expense to the Fund, take reasonable
steps to minimize service interruptions but shall have no liability with
respect thereto.
11. COMPENSATION. As compensation for custody services
rendered by PNC Bank during the term of this Agreement, the Fund, on behalf of
each of the Portfolios, will pay to PNC Bank a fee or fees as agreed to in
writing in the Custodian Services Fee Letter between PNC Bank and the Fund
dated ______, 1997, as the same may be amended from time to time.
12. INDEMNIFICATION. The Fund, on behalf of each Portfolio,
agrees to indemnify and hold harmless PNC Bank and its affiliates from all
taxes, charges, expenses, assessments, claims and liabilities (including,
without limitation, liabilities arising under the Securities Laws and any state
and foreign securities and blue sky laws, and amendments thereto), and
expenses, including (without limitation) attorneys' fees and disbursements,
arising directly or indirectly from any action or omission to act which PNC
Bank takes (i) at the request or on the direction of or in reliance on the
advice of the Fund or (ii) upon Oral Instructions or Written Instructions.
Neither PNC Bank, nor any of its affiliates, shall be indemnified against any
liability (or any expenses incident to such liability) arising out of PNC
Bank's or its affiliates' own willful misfeasance, bad faith, negligence or
reckless disregard of its duties under this Agreement.
13. RESPONSIBILITY OF PNC BANK.
(a) PNC Bank shall be under no duty to take any
action on behalf of the Fund or any Portfolio except as specifically set forth
herein or as may be specifically agreed to by PNC Bank in writing. PNC Bank
shall be obligated to exercise care and diligence in the performance of its
duties hereunder, to act in good faith and to use its
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best efforts, within reasonable limits, in performing services provided for
under this Agreement. PNC Bank shall be liable for any damages arising out of
PNC Bank's failure to perform its duties under this agreement to the extent
such damages arise out of PNC Bank's willful misfeasance, bad faith, negligence
or reckless disregard of its duties under this Agreement.
(b) Without limiting the generality of the foregoing
or of any other provision of this Agreement, (i) PNC Bank shall not be under
any duty or obligation to inquire into and shall not be liable for (A) the
validity or invalidity or authority or lack thereof of any Oral Instruction or
Written Instruction, notice or other instrument which conforms to the
applicable requirements of this Agreement, and which PNC Bank reasonably
believes to be genuine; or (B) subject to section 10, delays or errors or loss
of data occurring by reason of circumstances beyond PNC Bank's control,
including acts of civil or military authority, national emergencies, fire,
flood, catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
(c) Notwithstanding anything in this Agreement to the
contrary, neither PNC Bank nor its affiliates shall be liable to the Fund or to
any Portfolio for any consequential, special or indirect losses or damages
which the Fund may incur or suffer by or as a consequence of PNC Bank's or its
affiliates' performance of the services provided hereunder, whether or not the
likelihood of such losses or damages was known by PNC Bank or its affiliates.
14. DESCRIPTION OF SERVICES.
(a) Delivery of the Property. The Fund will deliver
or arrange for delivery to PNC Bank all the Property owned by the Portfolios,
including cash received as a result of the distribution of Shares, during the
period that is set forth in this Agreement. PNC Bank will not be responsible
for such Property until actual receipt.
(b) Receipt and Disbursement of Money. PNC Bank,
acting upon Written Instructions, shall open and maintain separate accounts in
the Fund's name using all cash received from or for the account of the Fund,
subject to the terms of this Agreement. In addition, upon Written
Instructions, PNC Bank shall open separate custodial accounts for each separate
series or Portfolio of the Fund (collectively, the "Accounts") and shall hold
in the Accounts all cash received from or for the Accounts of the Fund
specifically designated to each separate series or Portfolio.
PNC Bank shall make cash payments from or for the Accounts of a
Portfolio only for:
(i) purchases of securities in the name of a Portfolio or PNC
Bank or PNC Bank's nominee as provided in sub-section (j)
and for which PNC Bank has
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received a copy of the broker's or dealer's confirmation
or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Fund delivered to
PNC Bank;
(iii) payment of, subject to Written Instructions, interest,
taxes, administration, accounting, distribution, advisory,
management fees or similar expenses which are to be borne
by a Portfolio;
(iv) payment to, subject to receipt of Written Instructions,
the Fund's transfer agent, as agent for the
shareholders, an amount equal to the amount of dividends
and distributions stated in the Written Instructions to be
distributed in cash by the transfer agent to shareholders,
or, in lieu of paying the Fund's transfer agent, PNC
Bank may arrange for the direct payment of cash dividends
and distributions to shareholders in accordance with
procedures mutually agreed upon from time to time by and
among the Fund, PNC Bank and the Fund's transfer agent.
(v) payments, upon receipt Written Instructions, in connection
with the conversion, exchange or surrender of securities
owned or subscribed to by the Fund and held by or
delivered to PNC Bank;
(vi) payments of the amounts of dividends received with respect
to securities sold short;
(vii) payments made to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(viii) payments, upon Written Instructions, made for other proper
Fund purposes.
PNC Bank is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received as custodian for the
Accounts.
(c) Receipt of Securities.
PNC Bank shall hold all securities received by
it for the Accounts in a separate account that
physically segregates such securities from those
of any other persons, firms or corporations,
except for securities held in a Book-Entry
System. All such securities shall be held or
disposed of only upon Written Instructions of the
Fund pursuant to the terms of this Agreement.
PNC Bank shall have no power or authority to
assign, hypothecate, pledge or otherwise dispose
of any such securities or investment, except
upon the
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express terms of this Agreement and upon Written Instructions,
accompanied by a certified resolution of the Fund's Board of
Trustees authorizing the transaction. In no case may any member
of the Fund's Board of Trustees, or any officer, employee or agent
of the Fund withdraw any securities.
(d) Subcustodians; Domestic.
At PNC Bank's own expense and for its own
convenience, PNC Bank may enter into
sub-custodian agreements with other banks or
trust companies (other than for foreign
subcustodial services as described above) to
perform duties described in this sub-section (d).
Such bank or trust company shall have an
aggregate capital, surplus and undivided profits,
according to its last published report, of at
least one million dollars ($1,000,000), if it is
a subsidiary or affiliate of PNC Bank, or at
least twenty million dollars ($20,000,000) if
such bank or trust company is not a subsidiary or
affiliate of PNC Bank. In addition, such bank or
trust company must be qualified to act as
custodian and agree to comply with the relevant
provisions of the 1940 Act and other applicable
rules and regulations. Any such arrangement will
not be entered into without prior written notice
to the Fund and approval of the Fund's Board of
Trustees, although such notice and approval shall
be deemed granted with respect to the use of
Bankers Trust Company to maintain physical
securities, by virtue of the Fund Board's
approval of this Agreement.
PNC Bank shall remain responsible for the
performance of all of its duties as described in
this Agreement and shall hold the Fund and each
Portfolio harmless from its own acts or
omissions, under the standards of care provided
for herein, or the acts and omissions of any
sub-custodian chosen by PNC Bank under the terms
of this sub-section (d).
(e) Subcustodians; Foreign.
(i) PNC Bank may propose appointment of any
bank, trust company or other entity
meeting the requirements of an "eligible
foreign custodian" under the 1940 Act and
the rules and regulations thereunder or
by order of the SEC exempted therefrom to
act as subcustodian for the Fund, to
maintain securities, funds and other
property of the Fund which are maintained
outside the United States. Any such
bank, trust company or other entity
appointed pursuant to the provisions
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of this section 14(e) is herein referred to as a "Foreign
Subcustodian". The Fund shall approve in writing the appointment
of each Foreign Custodian and the subcustodian agreement to be
entered into between such Foreign Custodian and PNC Bank.
(ii) Upon the proposed appointment of a
Foreign Subcustodian, PNC Bank shall use
its best efforts to provide the Fund with
information of a type similar in kind and
scope to that generally provided in the
industry with respect to consideration of
a foreign subcustodian pursuant to Rule
17f-5 under the 1940 Act ("Rule 17f-5"),
but PNC Bank shall have no liability with
respect to such information (other than
to use its best efforts to see that such
information is provided).
(iii) PNC Bank shall use its best efforts to
provide annually to the Fund information
of a type similar in kind and scope to
that generally provided in the industry
with respect to consideration of a
foreign subcustodian pursuant to Rule
17f-5, but PNC Bank shall have no
liability with respect to such
information. In addition, PNC Bank will
inform the Fund in the event that PNC
Bank is made aware of a material adverse
change in the financial condition of a
Foreign Subcustodian or any material loss
of the assets of the Fund held by a
Foreign Subcustodian, or in the case of
any Foreign Subcustodian required
pursuant to Rule 17f-5 to have
shareholders' equity in excess of $200
million and not the subject of an
exemptive order from the Securities and
Exchange Commission if PNC Bank is
notified by such Foreign Subcustodian
that there appears to be a substantial
likelihood that its shareholders' equity
will decline below $200 million (U.S.
dollars or the equivalent thereof) or
that its shareholders' equity has
declined below $200 million.
Upon the request of the Fund, PNC Bank shall
provide to the Fund such other information as may
be reasonably requested by the Fund and agreed to
by PNC Bank to ensure compliance with Rule 17f-5.
(iv) Provided a Foreign Subcustodian has been
selected by PNC Bank in writing and PNC
Bank is a party to the subcustodian
agreement pursuant to which the Foreign
Subcustodian acts as a foreign
subcustodian for the Fund, in the event
of any loss to the Fund by reason of the
action or failure to act of
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said Foreign Subcustodian, PNC Bank shall be liable to the Fund
for the Fund's direct and foreseeable damages (but not any
consequential, special or indirect damages regardless of whether
PNC Bank was aware of the possibility of such damages) to the same
extent that the Foreign Custodian is liable to PNC Bank. To the
extent PNC Bank is liable to the Fund pursuant to this subsection
(iv), PNC Bank shall be subrogated to all rights of the Fund
against such Foreign Subcustodian. PNC Bank shall not be liable
for among other things any loss, damage, cost, expense, liability
or claim resulting from nationalization, expropriation, currency
restrictions, or acts of war or terrorism.
(f) Transactions Requiring Instructions. Upon
receipt of Oral Instructions or Written Instructions and not otherwise, PNC
Bank, directly or through the use of the Book-Entry System, shall:
(i) deliver any securities held for a
Portfolio against the receipt of payment
for the sale of such securities;
(ii) execute and deliver, to such persons as
may be designated in such Oral
Instructions or Written Instructions,
proxies, consents, authorizations, and
any other instruments whereby the
authority of a Portfolio as owner of any
securities may be exercised;
(iii) deliver any securities to the issuer
thereof, or its agent, when such
securities are called, redeemed, retired
or otherwise become payable; provided
that, in any such case, the cash or other
consideration is to be delivered to PNC
Bank;
(iv) deliver any securities held for a
Portfolio against receipt of other
securities or cash issued or paid in
connection with the liquidation,
reorganization, refinancing, tender
offer, merger, consolidation or
recapitalization of any corporation, or
the exercise of any conversion privilege;
(v) deliver any securities held for a
Portfolio 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
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other instruments or documents as may be
issued to it to evidence such delivery;
(vi) make such transfer or exchanges of the
assets of the Portfolios and take such
other steps as shall be stated in said
Oral Instructions or Written Instructions
to be for the purpose of effectuating a
duly authorized plan of liquidation,
reorganization, merger, consolidation or
recapitalization of the Fund;
(vii) release securities belonging to a
Portfolio to any bank or trust company
for the purpose of a pledge or
hypothecation to secure any loan incurred
by the Fund on behalf of that Portfolio;
provided, however, that securities shall
be released only upon payment to PNC Bank
of the monies borrowed, except that in
cases where additional collateral is
required to secure a borrowing already
made subject to proper prior
authorization, further securities may be
released for that purpose; and repay such
loan upon redelivery to it of the
securities pledged or hypothecated
therefor and upon surrender of the note
or notes evidencing the loan;
(viii) release and deliver securities owned by a
Portfolio 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;
(ix) release and deliver or exchange
securities owned by the Fund in
connection with any conversion of such
securities, pursuant to their terms, into
other securities;
(x) release and deliver securities owned by
the Fund for the purpose of redeeming in
kind shares of the Fund upon delivery
thereof to PNC Bank; and
(xi) release and deliver or exchange
securities owned by the Fund for other
corporate purposes. PNC Bank must also
receive a certified resolution describing
the nature of the corporate purpose and
the name and address of the person(s) to
whom delivery shall be made when such
action is pursuant to sub-paragraph xi.
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(g) Use of Book-Entry System. The Fund shall deliver
to PNC Bank certified resolutions of the Fund's Board of Trustees approving,
authorizing and instructing PNC Bank, on a continuous basis, to deposit in the
Book-Entry System all securities belonging to the Portfolios eligible for
deposit therein and to utilize the Book-Entry System to the extent possible in
connection with settlements of purchases and sales of securities by the
Portfolios, and deliveries and returns of securities loaned by the Portfolios,
subject to repurchase agreements or used as collateral in connection with
borrowings. PNC Bank shall continue to perform such duties until it receives
Written Instructions or Oral Instructions authorizing contrary actions. PNC
Bank shall administer the Book-Entry System as follows:
(i) With respect to securities of each
Portfolio which are maintained in the
Book-Entry System, the records of PNC
Bank shall identify by Book-Entry or
otherwise those securities belonging to
each Portfolio. PNC Bank shall furnish
to the Fund a detailed statement of the
Property held for each Portfolio under
this Agreement at least monthly and from
time to time and upon written request.
(ii) Securities and any cash of each Portfolio
deposited in the Book-Entry System will
at all times be segregated from any
assets and cash controlled by PNC Bank in
other than a fiduciary or custodian
capacity but may be commingled with other
assets held in such capacities. PNC Bank
and its sub-custodian, if any, will pay
out money only upon receipt of securities
and will deliver securities only upon the
receipt of money.
(iii) All books and records maintained by PNC
Bank which relate to the Fund's
participation in the Book-Entry System
will at all times during PNC Bank's
regular business hours be open to the
inspection of Authorized Persons, and PNC
Bank will furnish to the Fund all
information in respect of the services
rendered as it may require.
PNC Bank will also provide the Fund with such reports on its own
system of internal control as the Fund may reasonably request from time to
time.
(h) Registration of Securities. All Securities held
for a Portfolio which are issued or issuable only in bearer form, except such
securities held in the Book-Entry System, shall be held by PNC Bank in bearer
form; all other securities held for a Portfolio may be registered in the name
of the Fund on behalf of that Portfolio, PNC Bank, the Book-Entry System, a
sub-custodian, or any duly appointed nominees of the Fund, PNC Bank,
Book-Entry System or sub-custodian. The Fund reserves the right to
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instruct PNC Bank as to the method of registration and safekeeping of the
securities of the Fund. The Fund agrees to furnish to PNC Bank appropriate
instruments to enable PNC Bank to hold or deliver in proper form for transfer,
or to register in the name of its nominee or in the name of the Book-Entry
System, any securities which it may hold for the Accounts and which may from
time to time be registered in the name of the Fund on behalf of a Portfolio.
(i) Voting and Other Action. Neither PNC Bank nor
its nominee shall vote any of the securities held pursuant to this Agreement
by or for the account of a Portfolio, except in accordance with Written
Instructions. PNC Bank, directly or through the use of the Book-Entry System,
shall execute in blank and promptly deliver all notices, proxies and proxy
soliciting materials to the registered holder of such securities. If the
registered holder is not the Fund on behalf of a Portfolio, then Written
Instructions or Oral Instructions must designate the person who owns such
securities.
(j) Transactions Not Requiring Instructions. In the
absence of contrary Written Instructions, PNC Bank is authorized to take the
following actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the
account of each Portfolio all
income, dividends,
distributions, coupons, option
premiums, other payments and
similar items, included or to be
included in the Property, and,
in addition, promptly advise
each Portfolio of such receipt
and credit such income, as
collected, to each Portfolio's
custodian account;
(B) endorse and deposit for
collection, in the name of the
Fund, checks, drafts, or other
orders for the payment of money;
(C) receive and hold for the account
of each Portfolio all securities
received as a distribution on
the Portfolio's securities as a
result of a stock dividend,
share split-up or
reorganization,
recapitalization, readjustment
or other rearrangement or
distribution of rights or
similar securities issued with
respect to any securities
belonging to a Portfolio and
held by PNC Bank hereunder;
(D) present for payment and collect
the amount payable upon all
securities which may mature or
be called,
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redeemed, or retired, or otherwise become payable on the date such
securities become payable; and
(E) take any action which may be
necessary and proper in
connection with the collection
and receipt of such income and
other payments and the
endorsement for collection of
checks, drafts, and other
negotiable instruments.
(ii) Miscellaneous Transactions.
(A) deliver or cause to be delivered
Property against payment or
other consideration or written
receipt therefor in the
following cases:
(1) for examination by a broker or
dealer selling for the
account of a Portfolio in
accordance with street
delivery custom;
(2) for the exchange of interim
receipts or temporary
securities for definitive
securities; and
(3) for transfer of securities into
the name of the Fund on
behalf of a Portfolio or PNC
Bank or nominee of either,
or for exchange of securities
for a different number of
bonds, certificates, or other
evidence, representing the
same aggregate face amount or
number of units bearing the
same interest rate, maturity
date and call provisions, if
any; provided that, in any
such case, the new securities
are to be delivered to PNC
Bank.
(B) Unless and until PNC Bank
receives Oral Instructions or
Written Instructions to the
contrary, PNC Bank shall:
(1) pay all income items held by it
which call for payment upon
presentation and hold the
cash received by it upon such
payment for the account of
each Portfolio;
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(2) collect interest and cash
dividends received, with
notice to the Fund, to the
account of each Portfolio;
(3) hold for the account of each
Portfolio all stock
dividends, rights and
similar securities issued
with respect to any
securities held by PNC Bank;
and
(4) execute as agent on behalf of
the Fund all necessary
ownership certificates
required by the Internal
Revenue Code or the Income
Tax Regulations of the United
States Treasury Department or
under the laws of any state
now or hereafter in effect,
inserting the Fund's name, on
behalf of a Portfolio, on
such certificate as the owner
of the securities covered
thereby, to the extent it may
lawfully do so.
(k) Segregated Accounts.
(i) PNC Bank shall upon receipt of Written
Instructions or Oral Instructions
establish and maintain a segregated
account(s) on its records for and on
behalf of each Portfolio. Such accounts
may be used to transfer cash and
securities, including securities in the
Book-Entry System:
(A) for the purposes of compliance
by the Fund with the procedures
required by a securities or
option exchange, providing such
procedures comply with the 1940
Act and any releases of the SEC
relating to the maintenance of
segregated accounts by
registered investment companies;
and
(B) Upon receipt of Written Instructions, for other proper corporate
purposes.
(ii) PNC Bank shall arrange for the
establishment of XXX custodian accounts
for such shareholders holding Shares
through XXX accounts, in accordance with
the Fund's prospectuses, the Internal
Revenue Code of 1986, as amended
(including regulations promulgated
thereunder), and
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16
with such other procedures as are mutually
agreed upon from time to time by and among
the Fund, PNC Bank and the Fund's transfer
agent.
(l) Purchases of Securities. PNC Bank shall settle
purchased securities upon receipt of Oral Instructions or Written Instructions
from the Fund or its investment advisers that specify:
(i) the name of the issuer and the title of
the securities, including CUSIP number if
applicable;
(ii) the number of shares or the principal
amount purchased and accrued interest, if
any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such
purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the
broker through whom the purchase was
made. PNC Bank shall upon receipt of
securities purchased by or for a
Portfolio pay out of the moneys held for
the account of the Portfolio the total
amount payable to the person from whom or
the broker through whom the purchase was
made, provided that the same conforms to
the total amount payable as set forth in
such Oral Instructions or Written
Instructions.
(m) Sales of Securities. PNC Bank shall settle sold
securities upon receipt of Oral Instructions or Written Instructions from the
Fund that specify:
(i) the name of the issuer and the title of
the security, including CUSIP number if
applicable;
(ii) the number of shares or principal amount
sold, and accrued interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon
such sale;
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(vi) the name of the broker through whom or the
person to whom the sale was made; and
(vii) the location to which the security must be
delivered and delivery deadline, if any;
and
(viii) the Portfolio involved.
PNC Bank shall deliver the securities upon
receipt of the total amount payable to the
Portfolio upon such sale, provided that
the total amount payable is the same as
was set forth in the Oral Instructions or
Written Instructions. Subject to the
foregoing, PNC Bank may accept payment in
such form as shall be satisfactory to it,
and may deliver securities and arrange for
payment in accordance with the customs
prevailing among dealers in securities.
(n) Reports; Proxy Materials.
(i) PNC Bank shall furnish to the Fund the
following reports:
(A) such periodic and special reports
as the Fund may reasonably
request;
(B) a monthly statement summarizing
all transactions and entries for
the account of each Portfolio,
listing each Portfolio
securities belonging to each
Portfolio with the adjusted
average cost of each issue and
the market value at the end of
such month and stating the cash
account of each Portfolio
including disbursements;
(C) the reports required to be
furnished to the Fund pursuant to
Rule 17f-4; and
(D) such other information as may be
agreed upon from time to time
between the Fund and PNC Bank.
ii) PNC Bank shall transmit promptly to the
Fund any proxy statement, proxy material,
notice of a call or conversion, class
action notice or other corporate action
received by it as custodian of the
Property. PNC Bank shall be under no
other obligation to inform the Fund as
to such actions or events.
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(o) Collections. All collections of monies or other
property in respect, or which are to become part, of the Property (but not the
safekeeping thereof upon receipt by PNC Bank) shall be at the sole risk of the
Fund. If payment is not received by PNC Bank within a reasonable time after
proper demands have been made, PNC Bank shall notify the Fund in writing,
including copies of all demand letters, any written responses, and memoranda of
all oral responses, and shall await instructions from the Fund. PNC Bank shall
not be obliged to take legal action for collection unless and until reasonably
indemnified to its satisfaction. PNC Bank shall also notify the Fund as soon
as reasonably practicable whenever income due on securities is not collected in
due course and shall provide the Fund with periodic status reports of such
income collected after a reasonable time.
15. DURATION AND TERMINATION. This Agreement shall continue
until terminated without penalty by the Fund or by PNC Bank on sixty (60) days'
prior written notice to the other party. In the event this Agreement is
terminated and PNC Bank has not received Written Instructions regarding the
appointment of a successor to PNC Bank or vote of the shareholders of the Fund
to dissolve or to function without a custodian of its cash, securities or other
property, PNC Bank shall not deliver cash, securities or other property of the
Portfolios to the Fund; it may deliver them to a bank or trust company of PNC
Bank's choice, 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. At the termination of the Agreement and provided PNC
Bank has received Written Instructions regarding the appointment of a successor
custodian, PNC Bank shall deliver the Property to such successor custodian.
PNC Bank shall not be required to make any delivery or payment until full
payment shall have been made to PNC Bank of all of its fees, compensation,
costs and expenses. PNC Bank shall have a security interest in and shall have
a right of setoff against the Property as security for the payment of such
fees, compensation, costs and expenses.
16. NOTICES. All notices and other communications, including
Written Instructions, shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notice shall be addressed (a) if to PNC
Bank at Airport Business Center, International Court 2, 000 Xxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxx 00000, marked for the attention of the Custodian Services
Department (or its successor) (b) if to the Fund, at _______________________,
Attn:________________ or (c) if to neither of the foregoing, at such other
address as shall have been given by like notice to the sender of any such
notice or other communication by the other party. If notice is sent by
confirming telegram, cable, telex or facsimile sending device, it shall be
deemed to have been given immediately. If notice is sent by first-class mail,
it shall be deemed to have been given five days after it has been mailed. If
notice is sent by messenger, it shall be deemed to have been given on the day
it is delivered.
17. AMENDMENTS. This Agreement, or any term hereof, may be
changed or waived only by a written amendment, signed by the party against whom
enforcement of such change or waiver is sought.
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19
18. ASSIGNMENT. This Agreement shall extend to and shall be
binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Agreement shall not be assignable by the Fund
without written consent of PNC Bank, or by PNC Bank without written consent of
the Fund, authorized or approved by a resolution of the Fund's Board of
Trustees.
19. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. FURTHER ACTIONS. Each party agrees to perform such
further acts and execute such further documents as are necessary to effectuate
the purposes hereof.
21. MISCELLANEOUS.
(a) Entire Agreement. This Agreement embodies the
entire agreement and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their agreement,
if any, with respect to delegated duties and Oral Instructions.
(b) Captions. 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.
(c) Governing Law. This Agreement shall be deemed to
be a contract made in Pennsylvania and governed by Pennsylvania law, without
regard to principles of conflicts of law.
(d) Partial Invalidity. 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.
(e) Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of
any party to this Agreement shall constitute the valid and binding execution
hereof by such party.
(g) Responsibility of Trustees, etc.. The names
"Pacific Innovations Trust" and "Trustees of Pacific Innovations Trust" refer
respectively to the trust created and the trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated __________, which is hereby referred to and a copy of which is on
file at the principal office of the Fund. The trustees, officers, employees
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and agents of the Fund shall not personally be bound by or liable under any
written obligation, contract, instrument, certificate or other interest or
undertaking of the Fund made by the trustees or by an officer, employee or
agent of the Fund, in his or her capacity as such, nor shall resort be had to
their private property for the satisfaction of any obligation or claim
thereunder. All persons dealing with any class of shares of the Fund may
enforce claims against the Fund only against the assets belonging to such
class.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the day and year first above written.
PNC BANK, NATIONAL ASSOCIATION
By: ______________________________
Title: ___________________________
PACIFIC INNOVATIONS TRUST
By: ______________________________
Title: ___________________________
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AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
____________________ ____________________
____________________ ____________________
____________________ ____________________
____________________ ____________________
____________________ ____________________
____________________ ____________________
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