CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of , 1999 by and between PFPC TRUST COMPANY, a
limited purpose trust company incorporated under the laws of Delaware ("PFPC
Trust"), and E*TRADE FUNDS, a Delaware business trust (the "Fund"), on behalf of
its series investment portfolios (each a "Portfolio") listed on Exhibit A
attached hereto and made a part hereof, as such Exhibit A may be amended from
time to time.
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; and
WHEREAS, the Fund wishes to retain PFPC Trust to provide custodian
services for the Portfolio, and PFPC Trust wishes to furnish custodian services
to the Portfolio, 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 and not previously defined:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(c) "1940 Act" means the Investment Company Act of 1940, as amended
(d) "Authorized Person" means any officer of the Fund and any other
person authorized by the Fund's Board of Trustees to give Oral
Instructions or Written Instructions on behalf of the Fund and
listed on the Authorized Persons Appendix attached hereto or any
amendment thereto as may be received by PFPC Trust. An Authorized
Person's scope of authority may be limited by the Fund by setting
forth such limitation in the Authorized Persons Appendix.
(e) "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.
(f) "CEA" means the Commodity Exchange Act, as amended.
(g) "Change of Control" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parent(s).
(h) "Oral Instructions" mean oral instructions received by PFPC Trust
from an Authorized Person or from a person reasonably believed by
PFPC Trust to be an Authorized Person.
(i) "PFPC Trust" means PFPC Trust Company or a subsidiary or affiliate
of PFPC Trust Company.
(j) "SEC" means the Securities and Exchange Commission.
(k) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940
Act and the CEA.
(l) "Shares" mean the shares of beneficial interest of any class of
the Portfolio.
(m) "Property" means:
(i) any and all securities and other investment items of the
Portfolio which the Fund may from time to time deposit, or
cause to be deposited, with PFPC Trust or which PFPC Trust may
from time to time hold for the Portfolio;
(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
Portfolio, which are received by PFPC Trust from time to time.
(n) "Written Instructions" mean (i) written instructions signed by two
Authorized Persons and received by PFPC Trust. The instructions may
be delivered electronically or by hand, mail, tested telegram,
cable, telex, facsimile, or electronic mail sending device.
2. Appointment and Representation. The Fund hereby appoints PFPC Trust to
provide custodian services to the Fund, on behalf of the Portfolio and
PFPC Trust accepts such appointment and agrees to furnish such services.
PFPC represents that it has, and will continue to have, at least the
minimum qualifications required by Section 17(f)(1) of the 1940 Act to act
as custodian of the portfolio securities and cash of the Portfolio.
3. Delivery of Documents. The Fund has provided or, where applicable, will
provide PFPC Trust with the following: (a) copies of the resolutions of
the Fund's Board of Trustees,
approving the appointment of PFPC Trust to provide services;
(b) a copy of the Fund's most recent effective registration
statement;
(c) a copy of the Portfolio's advisory agreements;
(d) a copy of the Portfolio's administration agreement if PFPC Trust is
not providing the Portfolio with such services;
(e) copies of any shareholder servicing agreements made with
respect to the Portfolio; and
(f) copies of any and all amendments or supplements to the
foregoing.
4. Compliance with Laws.
PFPC Trust undertakes to comply with material 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 PFPC Trust hereunder. Except as specifically set forth herein, PFPC
Trust assumes no responsibility for such compliance by the Fund or the
Portfolio.
5. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC Trust shall act
only upon Oral Instructions or Written Instructions.
(b) PFPC Trust shall be entitled to rely upon any Oral Instructions
or Written Instructions it receives from an Authorized Person (or
from a person reasonably believed by PFPC Trust to be an
Authorized Person) pursuant to this Agreement. PFPC Trust 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 Portfolio's shareholders, unless and until PFPC Trust
receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Trust Written Instructions
confirming Oral Instructions (except where such Oral Instructions
are given by PFPC Trust or its affiliates) so that PFPC Trust
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 PFPC
Trust 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, PFPC Trust shall incur no liability to the Fund in acting
upon such Oral Instructions or Written Instructions provided that
PFPC Trust's actions comply with the other provisions of this
Agreement.
6. Right to Receive Advice.
(a) Advice of the Fund. If PFPC Trust is in doubt as to any action it
should or should not take, PFPC Trust may request directions or
advice, including Oral Instructions or Written Instructions, from
the Fund.
(b) Advice of Counsel. If PFPC Trust shall be in doubt as to any
question of law pertaining to any action it should or should not
take, PFPC Trust may request advice at its own cost from such
counsel of its own choosing (who may be counsel for the Fund, the
Portfolio's investment adviser or PFPC Trust, at the option of PFPC
Trust).
(c) Conflicting Advice. In the event of a conflict between
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directions, advice or Oral Instructions or Written Instructions
PFPC Trust receives from the Fund and the advice it receives from
counsel, PFPC Trust may rely upon and follow the advice of
counsel if such counsel is also counsel to the Fund. In the
event PFPC Trust so relies on the advice of counsel, PFPC Trust
remains liable for any action or omission on the part of PFPC
Trust which constitutes willful misfeasance, bad faith,
negligence, or reckless disregard by PFPC Trust of any duties,
obligations or responsibilities set forth in this Agreement. If
PFPC Trust intends to rely on advice from counsel which conflicts
with Oral or Written Instructions from the Fund, PFPC shall
notify the Fund, as applicable, in writing prior to such reliance.
(d) Protection of PFPC Trust. PFPC Trust shall be protected in any
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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 PFPC Trust 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
PFPC Trust to seek such directions, advice or Oral Instructions
or Written Instructions. Nothing in this subsection shall
excuse PFPC Trust when an action or omission on the part of PFPC
Trust constitutes willful misfeasance, bad faith, negligence or
reckless disregard by PFPC Trust of any duties, obligations or
responsibilities set forth in this Agreement.
7. Records; Visits. The books and records pertaining to the Fund and the
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Portfolio, which are in the possession or under the control of PFPC
Trust, 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 PFPC Trust's normal business hours. Upon the reasonable
request of the Fund, copies of any such books and records shall be
provided by PFPC Trust to the Fund or to an authorized representative
of the Fund, at the Fund's expense.
8. Confidentiality. PFPC Trust agrees to keep confidential the records of
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the Fund and the Portfolio and information relating to the Fund, the
Portfolio 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 PFPC Trust may be exposed to civil or
criminal contempt proceedings or when PFPC Trust is required to divulge
such information or records to duly constituted authorities.
9. Cooperation with Accountants. PFPC Trust 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. PFPC Trust shall enter into and shall maintain in
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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, PFPC Trust shall, at no additional expense
to the Portfolio, take reasonable steps to minimize service
interruptions. PFPC Trust shall have no liability with respect to the
loss of data or service interruptions caused by equipment failure
provided such loss or interruption is not caused by PFPC Trust's own
willful misfeasance, bad faith, negligence or reckless disregard of its
duties or obligations under this Agreement.
11. Year 2000 Readiness Disclosure. PFPC Trust, with respect to services
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provided hereunder, (a) has reviewed its business and operations, (b)
has implemented a program to remediate or replace computer applications
and systems, and (c) has implemented a testing plan to test the
remediation or replacement of computer applications and systems, in
each case, to address on a timely basis the risk that certain computer
applications and systems used by PFPC may be unable to recognize and
perform properly date sensitive functions involving dates prior to,
including and after December 31, 1999, including dates such as February
29, 2000 (the "Year 2000 Challenge"). To the best of PFPC's knowledge
and belief, the reasonably foreseeable consequences of the Year 2000
Challenge will not adversely effect PFPC's ability to perform its
duties and obligations under this Agreement. If requested by the Fund
or its Board of Trustees, PFPC will provide written materials
describing PFPC's current status and plans with respect to the Year
2000 Challenge for use in the Fund's registration statement and/or in
materials presented to the Fund's Board of Trustees.
12. Compensation. As compensation for custody services rendered by PFPC Trust
during the term of this Agreement, the Fund, on behalf of the Portfolio,
will pay to PFPC Trust a fee or fees as may be agreed to in writing from
time to time by the Fund and PFPC Trust.
13. Indemnification. The Fund, on behalf of the Portfolio, agrees to
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indemnify and hold harmless PFPC Trust from all taxes, charges,
expenses, assessments, claims and liabilities including without
limitation liabilities arising under the Securities Laws and any state
or foreign securities or blue sky laws, and amendments thereto, and
reasonable expenses, including (without limitation) reasonable
attorneys' fees and disbursements, arising directly or indirectly from
any action or omission to act which PFPC Trust 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 PFPC Trust nor
any of its affiliates shall be indemnified against any liability (or
any expenses incident to such liability) arising out of PFPC Trust's or
its affiliates' own willful misfeasance, bad faith, negligence or
reckless disregard of its duties under this Agreement. Any amounts
payable by the Fund hereunder shall be satisfied only against the
Portfolio's assets and not against the assets of any other series of
the Fund or the Fund as a whole.
14. Responsibility of PFPC Trust.
(a) PFPC Trust shall be under no duty to take any action on behalf of
the Fund or Portfolio except as specifically set forth herein or
as may be specifically agreed to by PFPC Trust in writing. PFPC
Trust shall be obligated to exercise care and diligence in the
performance of its duties hereunder, to act in good faith and to
use its best efforts, within reasonable limits, in performing
services provided for under this Agreement. PFPC Trust shall be
liable for any damages arising out of PFPC Trust's failure to
perform its duties under this Agreement to the extent such
damages arise out of PFPC Trust's willful misfeasance, bad faith,
negligence or reckless disregard of such duties or a breach of
this Agreement.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PFPC Trust 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 PFPC Trust reasonably believes to be genuine;
or (B) subject to Section 10, delays, errors, or loss of data
occurring by reason of circumstances beyond PFPC Trust'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 PFPC Trust nor its affiliates shall be liable to the Fund
or to the Portfolio for any consequential or special losses or
damages which the Fund or the Portfolio may incur or suffer
including by or as a consequence of PFPC Trust's or its
affiliates' performance of the services provided hereunder,
whether or not the likelihood of such losses or damages was known
by PFPC Trust or its affiliates.
15. Description of Services.
(a) Delivery of the Property. The Fund will deliver, or arrange for
delivery to PFPC Trust of, all the Property owned by the Portfolio,
including cash received as a result of the distribution of Shares,
during the period that is set forth in this Agreement. PFPC Trust
will not be responsible for such Property until actual receipt.
(b) Receipt and Disbursement of Money. PFPC Trust, acting upon
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Written Instructions, shall open and maintain on its books
separate accounts in the Portfolio's name using all cash received
from or for the account of the Portfolio, subject to the terms of
this Agreement. In addition, upon Written Instructions, PFPC
Trust shall open and maintain on its books separate custodial
accounts for the Portfolio (collectively, the "Accounts") and
shall hold in the Accounts all cash received from or for the
Accounts of the Portfolio.
PFPC Trust shall make cash payments from or for the Accounts of
the Portfolio only for:
(i) purchases of securities in the name of the Portfolio, or in
PFPC Trust's nominee name as provided in sub-section (j) and
for which PFPC Trust has received a copy of the broker's or
dealer's confirmation or payee's invoice, as appropriate;
(ii) purchase or redemption of Shares of the Portfolio delivered to
PFPC Trust;
(iii) payment of, subject to Written Instructions, interest, taxes,
administration, accounting, distribution, advisory, management
fees or similar expenses which are to be borne by the
Portfolio;
(iv) payment to, subject to receipt of Written Instructions, the
Portfolio's transfer agent, as agent for the shareholders,
of an amount equal to the amount of dividends and
distributions stated in the Written Instructions to be
distributed in cash by the transfer agent to shareholders,
or, in lieu of paying the Portfolio's transfer agent, PFPC
Trust 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 (on behalf of the Portfolio), PFPC Trust and
the Portfolio's transfer agent;
(v) payments, upon receipt of Written Instructions, in connection
with the conversion, exchange or surrender of securities owned
or subscribed to by the Portfolio and held by or delivered to
PFPC Trust;
(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
Portfolio purposes.
PFPC Trust 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; Subcustodians.
(i) PFPC Trust 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. The ownership of Property in the Accounts, whether
securities or otherwise, and whether any Property is held
directly by PFPC Trust or through a sub-custodian or
Book-Entry System shall be clearly recorded on PFPC Trust's
books as belonging to the Portfolio. All such securities
shall be held or disposed of only upon Written Instructions
of the Fund pursuant to the terms of this Agreement.
Except as otherwise provided herein, no Property is, nor
shall any Property be, subject to any right, charge,
security interest, lien or claim of any kind in favor of
PFPC Trust, any sub-custodian, any Book-Entry System or any
creditors of them. PFPC Trust shall have no power or
authority to loan, encumber, assign, hypothecate, pledge or
otherwise dispose of any such securities or investment,
except upon the 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
Portfolio withdraw any securities. Beneficial ownership of
the Property shall be freely transferable without the
payment of money or value other than for safe custody or
administration.
At PFPC Trust's own expense and for its own convenience, PFPC
Trust may enter into sub-custodian agreements with a
subsidiary or affiliate of PFPC Trust to perform duties
described in this sub-section (c). Such subsidiary or
affiliate shall have an aggregate capital, surplus and
undivided profits, according to its last published report, of
at least twenty million dollars ($20,000,000). 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.
PFPC Trust shall remain responsible for the performance of all
of its duties as described in this Agreement and shall hold
the Fund and the 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 PFPC
Trust under the terms of this sub-section (c).
(d) Transactions Requiring Instructions. Upon receipt of Oral
Instructions or Written Instructions and not otherwise, PFPC
Trust, directly or through the use of the Book-Entry System,
shall:
(i) deliver any securities held for the 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 the 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 PFPC Trust;
(iv) deliver any securities held for the 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 the 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 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 Portfolio
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 Portfolio;
(vii) release securities belonging to the 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 the
Portfolio; provided, however, that securities shall be
released only upon payment to PFPC Trust 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 the Portfolio in
connection with any repurchase agreement entered into on
behalf of the Portfolio, but only on receipt of payment
therefor; and pay out moneys of the Portfolio in connection
with such repurchase agreements, but only upon the delivery of
the securities;
(ix) release and deliver or exchange securities owned by the
Portfolio in connection with any conversion of such
securities, pursuant to their terms, into other securities;
(x) release and deliver securities to a broker in connection with
the broker's custody of margin collateral relating to futures
and options transactions;
(xi) release and deliver securities owned by the Portfolio for the
purpose of redeeming in kind shares of the Portfolio upon
delivery thereof to PFPC Trust; and
(xii) release and deliver or exchange securities owned by the
Portfolio for other corporate purposes.
PFPC Trust 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 d(xi).
(e) Use of Book-Entry System. The Fund shall deliver to PFPC Trust
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certified resolutions of the Fund's Board of Trustees approving,
authorizing and instructing PFPC Trust on a continuous basis, to
deposit in the Book-Entry System all securities belonging to the
Portfolio 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
Portfolio, and deliveries and returns of securities loaned,
subject to repurchase agreements or used as collateral in
connection with borrowings. PFPC Trust shall continue to perform
such duties until it receives Written Instructions or Oral
Instructions authorizing contrary actions.
PFPC Trust shall administer the Book-Entry System as follows:
(i) With respect to securities of the Portfolio which are
maintained in the Book-Entry System, the records of PFPC Trust
shall identify by Book-Entry or otherwise those securities
belonging to the Portfolio. PFPC Trust shall furnish to the
Fund a detailed statement of the Property held for the
Portfolio under this Agreement at least monthly and upon
written request.
(ii) Securities and any cash of the Portfolio deposited in the
Book-Entry System will at all times be segregated from any
assets and cash controlled by PFPC Trust in other than a
fiduciary or custodian capacity but may be commingled with
other assets held in such capacities. PFPC Trust and its
sub-custodian, if any, will pay out cash only upon receipt
of securities and will deliver securities only upon the
receipt of cash.
(iii) All books and records maintained by PFPC Trust which relate to
the Portfolio's participation in the Book-Entry System will at
all times during PFPC Trust's regular business hours be open
to the inspection of Authorized Persons, and PFPC Trust will
furnish to the Fund all information in respect of the services
rendered as it may require.
PFPC Trust will also provide the Fund with such reports on its own
system of internal control as the Fund may reasonably request from
time to time.
(f) Registration of Securities. All Securities held for the
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Portfolio which are issued or issuable only in bearer form,
except such securities held in the Book-Entry System, shall be
held by PFPC Trust in bearer form; all other securities held for
the Portfolio may be registered in the name of the Fund on behalf
of the Portfolio, PFPC Trust, the Book-Entry System, a
sub-custodian, or any duly appointed nominees of the Fund, PFPC
Trust, Book-Entry System or sub-custodian. With respect to
securities held in the nominee name of PFPC Trust or any
sub-custodian, such name shall be assigned exclusively to be used
for the Property of the Portfolio or to be used in common for the
Property of the Portfolio together with the property of other
clients of PFPC Trust or sub-custodian (which nominee name shall
not in any event be used for assets of PFPC Trust or
sub-custodian other than as a fiduciary, custodian, or otherwise
for customers and in which assets neither PFPC Trust nor the
sub-custodian has any beneficial interest). PFPC Trust shall
inform the Portfolio of the name in which any Property held
hereunder is initially registered and of any changes in
registration (other than those changes pursuant to Written
Instructions or Oral Instructions). The specific Property held
by PFPC Trust or on its behalf hereunder shall be at all times
identifiable in its records. The Fund reserves the right to
instruct PFPC Trust as to the method of registration and
safekeeping of the securities of the Portfolio. The Fund agrees
to furnish to PFPC Trust appropriate instruments to enable PFPC
Trust 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 the Portfolio.
(g) Voting and Other Action. Neither PFPC Trust nor its nominee
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shall vote any of the securities held pursuant to this Agreement
by or for the account of the Portfolio, except in accordance with
Written Instructions. PFPC Trust, directly or through the use of
the Book-Entry System, shall execute in blank and promptly
deliver all notices, proxies and proxy soliciting materials
received by PFPC Trust as custodian of the Property to the
registered holder of such securities. If the registered holder
is not the Fund on behalf of the Portfolio, then Written
Instructions or Oral Instructions must designate the person who
owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, PFPC Trust is authorized to take
the following actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the Accounts of the 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 the Portfolio of such receipt and credit
such income, as collected, to the Portfolio's custodian
Accounts;
(B) endorse and deposit for collection, in the name of the
Portfolio, checks, drafts, or other orders for the
payment of money;
(C) receive and hold for the Accounts of the 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
the Portfolio and held by PFPC Trust hereunder;
(D) present for payment and collect the amount payable upon
all securities which may mature or be called, redeemed,
or retired, or otherwise become payable on the date such
securities become payable; and
(E) take any action which may be necessary and proper in
connection with the collection and receipt of such
income and other payments and the endorsement for
collection of checks, drafts, and other negotiable
instruments.
(ii) Miscellaneous Transactions.
(A) PFPC Trust is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(1) for examination by a broker or dealer selling for
the account of a Portfolio 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
Portfolio or PFPC Trust or a 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 PFPC Trust.
(B) Unless and until PFPC Trust receives Oral Instructions
or Written Instructions to the contrary, PFPC Trust
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 Accounts
of the Portfolio;
(2) collect interest and cash dividends received, with
notice to the Fund, to the Accounts of the
Portfolio;
(3) hold for the account of the Portfolio all stock
dividends, rights and similar securities issued
with respect to any securities held by PFPC Trust;
and
(4) execute as agent on behalf of the Portfolio 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 the Portfolio, on such certificate as
the owner of the securities covered thereby, to
the extent it may lawfully do so.
(i) Segregated Accounts.
(i) PFPC Trust shall upon receipt of Written Instructions or Oral
Instructions establish and maintain segregated accounts on its
records for and on behalf of the 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
corporate purposes.
(ii) PFPC Trust 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 with
such other procedures as are mutually agreed upon from time
to time by and among the Fund, PFPC Trust and the
Portfolio's transfer agent.
(j) Purchases of Securities. PFPC Trust shall settle upon receipt of
Oral Instructions or Written Instructions 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. PFPC Trust 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.
(k) Sales of Securities. PFPC Trust shall settle sold securities upon
receipt of Oral Instructions or Written Instructions 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 Portfolio upon such sale;
(vi) the name of the broker through whom or the person to whom the
sale was made;
(vii) the location to which the security must be delivered and
delivery deadline, if any; and
(viii) the Portfolio involved.
PFPC Trust 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. In addition to the other provisions hereof, provided PFPC
Trust has previously informed the Portfolio in writing of its intention to
do so (which notification may be by means of a standing notification and
need not be repeated with respect to each particular transaction), PFPC
Trust may also accept payment in such form as shall be satisfactory to it,
and deliver securities and arrange for payment in accordance with the
customs prevailing among dealers in securities. (l) Reports; Proxy
Materials.
(i) PFPC Trust 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 Accounts of the Portfolio, listing each
portfolio security belonging to the 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
the Portfolio including disbursements;
(C) the reports required to be furnished to the Fund
pursuant to Rule 17f-4, or any successor provision, of
the 1940 Act; and
(D) such other information as may be agreed upon from time
to time between the Fund and PFPC Trust.
(ii) PFPC Trust shall transmit promptly to the Fund any proxy
statement, proxy material, notice of a call or conversion or
similar communication received by it as custodian of the
Property. PFPC Trust shall be under no other obligation to
inform the Fund as to such actions or events.
(m) Collections. All collections of monies or other property in
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respect, or which are to become part, of the Property (but not
the safekeeping thereof upon receipt by PFPC Trust) shall be at
the sole risk of the Fund. If payment is not received by PFPC
Trust within a reasonable time after proper demands have been
made, PFPC Trust 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. PFPC Trust shall not be obliged to take legal action for
collection unless and until reasonably indemnified to its
satisfaction. PFPC Trust 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.
16. Duration and Termination. This Agreement shall continue until terminated
by the Fund or PFPC Trust on 120 days' prior written notice to the other
party. In the event this Agreement is terminated (pending appointment of a
successor to PFPC Trust or vote of the shareholders of the Fund to
dissolve or to function without a custodian of its cash, securities, or
other property), PFPC Trust shall not deliver cash, securities or other
property of the Portfolio to the Fund.
17. Notices. All notices and other communications, including Written
--------------
Instructions, shall be in writing or by confirming telegram, cable,
telex, facsimile, or electronic mail sending device. Notice shall be
addressed (a) if to PFPC Trust at 000 Xxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxx 00000, Attention: Xxx Xxxxxxxx; (b) if to the Fund, at
0000 Xxxxxxxx Xxxxx, Xxxxx Xxxx, XX 00000, Attention: Xxx Xxx
Xxxxxxxx; 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, facsimile, or electronic mail
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.
18. 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.
19. Delegation; Assignment. PFPC Trust may assign its rights and delegate
------------------------------
its duties hereunder to any majority-owned direct or indirect
subsidiary of PFPC Trust, provided that (i) PFPC Trust receives the
Fund's prior written consent to such assignment or delegation; (ii)
the assignee or delegate agrees to comply with the relevant provisions
of the 1940 Act; and (iii) PFPC Trust and such assignee or delegate
promptly provide such information as the Fund may reasonably request,
and respond to such questions as the Fund may reasonably ask, relative
to the assignment or delegation (including, without limitation, the
capabilities of the assignee or delegate). In the event of such
delegation PFPC Trust shall remain liable under this Agreement for the
acts of its delegate or assignee.
20. 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.
21. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
22. 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
or Oral Instructions.
(b) The parties agree that the Fund is executing this Agreement on
behalf of the Portfolio; that the Portfolio is acting solely on
its own behalf separately from each of the other series of the
Fund and not jointly or jointly and severally with any of the
other series of the Fund; that this Agreement shall constitute,
and shall for all purposes be construed to give effect to the
intention of the parties that it constitute, a separate Agreement
between PFPC Trust and the Fund on behalf of the Portfolio
separately, and that no other series of the Fund shall be liable
for the obligations of the Portfolio arising hereunder.
(c) A copy of the Certificate of Trust of the Fund is on file with
the Secretary of State of the State of Delaware and notice is
hereby given that this instrument is executed on behalf of the
Trustees of the Fund as trustees and not individually and that
the obligations of this instrument are not binding upon any of
the Trustees, officers, or shareholders of the Fund or the
Portfolio individually but are binding only upon the assets and
property of the Portfolio.
(d) 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.
(e) Governing Law. This Agreement shall be deemed to be a contract made
in Delaware and governed by Delaware law, without regard to
principles of conflicts of law.
(f) 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.
(g) 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.
(h) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by
such party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above
written.
PFPC TRUST COMPANY
By:
Name:
Title:
E*TRADE FUNDS, on behalf of
E*TRADE Technology Index Fund
By:
Name:
Title:
EXHIBIT A
This Exhibit A, dated as ____________, 1999, is Exhibit A to that certain
Custodian Services Agreement dated as of ______________, 1999 between PFPC Trust
Company and E*TRADE Funds.
PORTFOLIOS
E*TRADE Technology Index Fund
E*TRADE E-Commerce Index Fund
AUTHORIZED PERSONS APPENDIX
NAME (Type) SIGNATURE
