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EXHIBIT (c)(1)
DEPOSITARY AGREEMENT
Dated: as of June 30, 1998
PNC Bank, N.A.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
The New South Africa Fund Inc., a Maryland corporation (the "Fund"), is making
a tender offer (hereinafter referred to, together with any amendment or
extensions thereof, as the "Tender Offer") to purchase outstanding shares of its
Common Stock, par value of $0.001 per share (the "Shares"), upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated July 1, 1998
(the "Offer to Purchase"), and in the related Letter of Transmittal ("Letter of
Transmittal"), including the instructions set forth therein. Definitive copies
of each document being distributed by the Fund to its stockholders in connection
with the Tender Offer have been or will be delivered to you.
The Tender Offer is being made on July 1, 1998 and will expire at 12:00
midnight, New York City time, on July 29, 1998, unless extended by the Fund as
provided in the Tender Offer (the last date to which the Tender Offer is
extended and on which it expires is herein referred to as the "Expiration
Date").
This will confirm our agreement with you to act as the Depositary in
connection with the Tender Offer as provided herein. In such capacity you will
receive and make payment for, on behalf of the Fund, Shares tendered pursuant to
the terms of the Tender Offer. In carrying out your duties as the Depositary in
connection with the Tender Offer, you are to act in accordance with the
following instructions:
1. You shall take steps to establish and, subsequent to such establishment,
maintain an account at The Depository Trust Company (hereinafter referred to
as "DTC") for book-
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entry transfers of Shares, as set forth in the Letter of Transmittal and
Section 2 of the Offer to Purchase.
2. You shall examine the Letters of Transmittal, the certificates for Shares
and the other documents delivered or mailed to you in connection with
tenders of Shares to ascertain whether they are completed and executed in
accordance with the instructions set forth in the Letters of Transmittal.
In the event any Letter of Transmittal has not been completed or executed
in accordance with the instructions set forth in such Letter of Transmittal,
or the certificates for Shares accompanying such Letter of Transmittal
are not in proper form for transfer (as required by the aforesaid
instructions), you shall endeavor to cause such action to be taken as is
necessary to correct such irregularity or you shall seek written
instructions from the Fund with respect to the validity or invalidity of such
attempted tender of Shares. All questions as to the validity, form,
eligibility (including timeliness of receipt) and acceptance of any
Shares tendered or delivered shall be determined by you on behalf of the
Fund in the first instance, but final decisions on all such matters shall
be made by the Fund. The Fund will reserve in the Tender Offer the absolute
right to reject any or all tenders of any particular Shares not in
appropriate form or the acceptance of which would, in the opinion of the
Fund's counsel, be unlawful and to waive any of the conditions of the
Tender Offer or any defect or irregularity in the tender of any Shares,
and the Fund's interpretation of the terms and conditions of the Tender
Offer will be final. Tendering shareholders are required to tender all
Shares actually and constructively owned as of the date of purchase of
Shares by the Fund pursuant to the Tender Offer ("complete position
tender"). Tenders that are not complete position tenders shall be
considered invalid and, if not corrected by the Expiration Date, shall be
rejected.
3. All Shares must be tendered in accordance with the terms and conditions
set forth in the Tender Offer. Payment for Shares tendered and purchased
pursuant to the Tender Offer shall be made only after deposit with you of
the certificates therefor, the Letter of Transmittal and any other
documents required by the Offer to Purchase or the Letter of Transmittal.
4. A tendering stockholder may withdraw Shares tendered as set forth in
Section 3 of the Offer to Purchase, in which event you shall, as promptly as
possible after notification of
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of such withdrawal, return such Shares to, or in accordance with the
instruction of, such stockholder and such Shares shall no longer be
considered properly tendered. All questions as to the form and validity
of notices of withdrawal, including timeliness of receipt, shall be
determined by the Fund, whose determination shall be final and binding.
5. On each business day up to the Expiration Date, you shall advise by
facsimile transmission, not later than 5:00 p.m., Wilmington time, and on
the Expiration Date, you shall advise by facsimile transmission not later
than 1:00 a.m. Wilmington time on the morning of the day following the
Expiration Date, the Fund and such other persons as the Fund may direct,
of the number of Shares which have been duly tendered on such day up until
4:00 p.m. Wilmington time and on the Expiration Date up until 12:00 midnight
Wilmington time, stating separately (i) the number of Shares tendered by
Notices of Guaranteed Delivery pursuant to Section 2 of the Offer to
Purchase, (ii) the number of Shares tendered about which you have questions
concerning validity and (iii) the cumulative number of Shares tendered. You
shall also inform, and cooperate in making available to, the Fund, and such
other persons as may be designated by the Fund, upon reasonable request made
from time to time, of such other information maintained by and accessible
to you in accordance with your standard operating procedure, as the Fund
may reasonably request, including, without limitation, the names and
addresses of registered holders of tendered Shares. Such cooperation
shall include, without limitation, the granting by you to the Fund and such
other persons as the Fund may request, of reasonable access to those
persons on your staff who are responsible for receiving tenders of
Shares, in order to ensure that immediately prior to the Expiration Date,
the Fund shall have received such information in sufficient detail as the
Fund may reasonably require.
6. Letters of Transmittal and telegrams, telexes, facsimile transmissions and
letters submitted in lieu thereof pursuant to Section 2 of the Offer to
Purchase shall be stamped by you as of the date and time of receipt thereof
and preserved by you as permanent records for seven years, or until you are
otherwise instructed by the Fund, whichever is shorter . You are to match
Notices of Guaranteed Delivery submitted pursuant to Section 2 of the
Offer to Purchase with the Share(s) tendered pursuant thereto. If so
instructed by the Fund, you shall telephone Eligible Institutions (as
defined in Section 2 of the Offer to
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Purchase) which have tendered a significant number of Shares by means of
the aforementioned procedures to ascertain information in connection
therewith.
7. The Fund will notify you of, and confirm in writing, any extension or
amendment of the Tender Offer.
8. You shall follow and act upon any amendments, modifications or supplements
to these instructions, and upon any further instructions in connection
with the Tender Offer, any of which may be given to you by the Fund in
writing or such other persons as it may authorize, but none of
which will increase your responsibilities without your consent.
9. The Fund will from time to time deposit or cause to be deposited with you
within a reasonable time after the Fund's acceptance for purchase of
tendered Shares, an amount equal to the aggregate purchase price of all
Shares to be purchased which you then hold. The Fund will deposit with
you or cause to be deposited with you an amount equal to the total stock
transfer taxes, if any, payable by the Fund pursuant to the provisions
of Instruction 6 of the Letter of Transmittal in respect of the transfer
of all the Shares to be purchased which you hold. You shall thereupon,
as promptly as possible, (a) purchase and affix appropriate stock
transfer tax stamps if required, (b) cause the tendered Shares which
have been thus paid for to be transferred and delivered to the Fund by
you, and (c) send a check for the purchase price (less the amount, if
any, of any stock transfer taxes which under Instruction 6 of the Letter
of Transmittal are to be deducted from the purchase price and, if
applicable, adjusted in accordance with the provisions of the Tender
Offer) of the Shares purchased to, or in accordance with the instruction
of, each of the stockholders who has tendered Shares deposited with you.
10. If, pursuant to the provisions of Instruction 4 of the Letter of
Transmittal, fewer than all the Shares evidenced by any certificate
submitted to you are purchased pursuant to the Tender Offer, you shall,
promptly after the Expiration Date, return or cause to be returned a new
certificate for the remainder of Shares not being tendered to, or in
accordance with the instruction of, each of such stockholders who has
made a partial tender of Shares deposited with you.
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11. If, pursuant to the Tender Offer, the Fund does not accept the receipt
of instructions and/or Shares from a tendering stockholder, you shall
return the certificates for such Shares to, or in accordance with the
instructions of, the persons who deposited the same, together with a letter
of notice, in form satisfactory to the Fund, explaining why the deposited
Shares are being returned, and return to the Fund any surplus funds
deposited by the Fund with you.
12. You hereby agree to perform the services as provided for herein and in the
Offer to Purchase and the Letter of Transmittal, including, but not
limited to, making proration computations and returning to stockholders
Shares tendered but not accepted for purchase.
13. As Depositary you:
a. shall have no obligation to make payment for any tendered Shares
unless the Fund shall have provided the necessary funds to pay in full
all amounts due and payable with respect thereto;
b. shall have no duties or obligations other than those specifically set
forth herein or as may subsequently be agreed to between you and the
Fund with respect to the Tender Offer;
c. will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness
of any stock certificates or the Shares represented thereby deposited
with you pursuant to the Tender Offer and will not be required and
will make no representations as to the validity, value or genuineness
of the Tender Offer;
d. shall not initiate any legal action hereunder without written approval
of the Fund and then only upon such reasonable indemnity as you may
request;
e. may rely on and shall be protected and indemnified by the Fund in
acting upon any certificate, instrument, opinion, notice, letter,
facsimile transmission, telegram or
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other document, or any security delivered to you, and reasonably
believed by you to be genuine and to have been signed by the proper
party or parties;
f. may rely on and shall be protected and indemnified by the Fund as
provided for herein in acting upon written or oral instructions with
respect to any matter relating to your acting as Depositary pursuant
to this Depositary Agreement;
g. shall carry insurance protecting the Fund and yourself against any
liability arising out of the loss, destruction or non-delivery of
checks or certificates for any cause; and
h. shall not at any time advise any person as to the wisdom of making
any tender pursuant to the Tender Offer, the value of the Shares or
as to any other financial or legal aspect of the Tender Offer or any
transaction related thereto.
14. It is understood and agreed that the securities, money, assets or
property (the "Property") to be deposited with or received by you as
Depositary from the Fund constitute a special, segregated account, held
solely for the benefit of the Fund and stockholders tendering
Shares, as their interests may appear, and the Property shall not be
commingled with the securities, money, assets or properties of you or any
other person, firm or corporation. You hereby waive any and all rights
of lien, attachment or set-off whatsoever, if any, against the Property
so to be deposited, whether such rights arise by reason of statutory or
common law, by contract or otherwise.
15. For services rendered as Depositary hereunder, you shall be entitled
to payment of a $15,000 flat fee, which does not include out of pocket
expenses, such as, but not limited to postage, form cost, printing, and
envelopes. Out of pocket expenses will be billed to the Fund as incurred.
16. The Fund covenants and agrees to indemnify and to hold you and PFPC Inc.
harmless against any costs, expenses (including reasonable fees of your
legal counsel), losses or damages, which may be paid, incurred or
suffered by or to which you may become subject, arising from or out of,
directly or indirectly, any claims or liability resulting from
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your actions or omission as Depositary pursuant hereto; PROVIDED that such
covenant and agreement does not extend to, and you shall not be indemnified
with respect to, such costs, expenses, losses and damages incurred or
suffered by you as a result of, or arising out of, your negligence, bad
faith, or willful failure to perform any of your obligations hereunder. In
no case will the Fund be liable under this indemnity with respect to any
claim against you unless, promptly after you have received any written
assertion of a claim or have been served with summons or other first legal
process giving information as to the nature and basis of the claim, you
notify the Fund, by letter or by cable or telex confirmed by letter, of the
written assertion of such claim against you or of any action commenced
against you or of the service of any summons on you, or other first legal
process giving information as to nature and basis of the claim provided
however, that failure by you to furnish such notification shall not impair
your right or indemnity unless such failure prejudices the Fund's ability
to defend such claim in any manner. The Fund will be entitled to
participate at its own expense in the defense of any such claim. In the
event the Fund determines to assume the defense of any such suit, the Fund
may select counsel of its own choosing (reasonably satisfactory to you) for
such purpose and the Fund will not be liable for the fees and expenses of
any additional counsel thereafter retained by you. The Fund shall not
settle or make any compromise of any claim without your consent, which
consent shall not be unreasonably withheld.
17. This Depositary Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware and shall inure to the benefit of
and the obligations created hereby shall be binding upon the successors and
assigns of the parties hereto. Nothing in this Agreement shall confer any
rights upon any person or entity other than the parties hereto and their
respective heirs, successors and permitted assigns.
18. This Depositary Agreement may be executed in separate counterparts, each
of which when executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
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If the foregoing is acceptable to you, please acknowledge receipt of this
letter and confirm the arrangements herein provided by signing and returning
the enclosed copy.
Very truly yours,
The New South Africa Fund Inc.
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: President and Chairman
ACCEPTANCE AS OF THE DATE HEREOF:
PNC Bank, N.A., as Depositary
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
