CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of July 3, 1995 by and
between PNC BANK, NATIONAL ASSOCIATION, a national
banking association ("PNC Bank"), and THE BFM
INSTITUTIONAL TRUST INC., a Maryland corporation (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 its investment 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 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) "1933 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 Directors to give Oral 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.
(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.
(1) "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
to provide custodian services to the Fund, on behalf of
each of its investment portfolios (each, a "Portfolio"),
and PNC Bank accepts such appointment and agrees to
furnish such services.
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
Directors, approving the appointment of
PNC Bank or its affiliates to provide
services;
(b) a copy of the Fund's most recent
effective registration statement;
(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 and Written
Instructions.
(b) PNC Bank shall be entitled to rely upon
any Oral 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 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 Directors or of the
Fund's shareholders, unless and until PNC 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 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 such Oral 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 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 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, gross 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 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 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 or Written
Instructions, or (ii) to act in accordance with such
directions, advice or Oral 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, gross 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.
8. CONFIDENTIALITY. PNC Bank agrees on its own
behalf and that of its employees to keep confidential all
records of the Fund and information relating to the Fund
and its shareholders (past, present and future), 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. PNC Bank 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 covered by PNC Bank's own
willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties under this Agreement.
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 may be agreed to in
writing from time to time by the Fund and PNC Bank.
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 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, gross 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 best efforts, within reasonable limits, in
performing services provided under this Agreement. PNC
Bank shall liable for any damages arising out of the PNC
Bank's failure to perform its duties under this agreement
to the extent such damages arise out of the PNC Bank's
willful misfeasance, bad faith, gross 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 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, PNC Bank shall have no liability 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 performance
of the services provided hereunder, whether or not the
likelihood of such losses or damages was known by PNC
Bank.
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 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; Subcustodians.
(i) 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 express terms of this
Agreement and upon Written Instructions,
accompanied by a certified resolution of
the Fund's Board of Directors, authorizing
the transaction. In no case may any
member of the Fund's Board of Directors,
or any officer, employee or agent of the
Fund withdraw any securities.
At PNC Bank's own expense and for its own
convenience, PNC Bank may enter into
subcustodian agreements with other United
States banks or trust companies to perform
duties described in this sub-section (c).
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.
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 (c).
(d) Transactions Requiring Instructions. Upon
receipt of Oral 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 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 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 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 d.
(e) Use of Book-Entry System. The Fund shall
deliver to PNC Bank certified resolutions of the Fund's
Board of Directors 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, subject to repurchase agreements or used as
collateral in connection with borrowings. PNC Bank shall
continue to perform such duties until it receives Written
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.
(f) 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 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.
(g) 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 or Oral Instructions
must designate the person who owns such securities.
(h) 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 Portfolios
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 Portfolios 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, 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 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;
(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.
(i) Segregated Accounts.
(i) PNC Bank shall upon receipt of
Written or Oral Instructions
establish and maintain a segregated
accounts 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 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.
(j) Purchases of Securities. PNC Bank shall
settle purchased securities upon receipt of Oral 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 or Written Instructions.
(k) Sales of Securities. PNC Bank shall
settle sold securities upon receipt of Oral 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;
(ii) the date of trade and settlement;
(iii) the sale price per unit;
(iv) the total amount payable to the Fund
upon such sale;
(v) the name of the broker through whom
or the person to whom the sale was
made, and
(vi) the location to which the security
must be delivered and delivery
deadline, if any; and
(vii)(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 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.
(l) 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 or similar communication
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.
(m) 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, 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 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 (pending
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. PNC Bank shall not be
required to make any such delivery or payment until full
payment shall have been made to PNC Bank of all of its
fees, compensation, costs and reasonable 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 reasonable
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.
18. DELEGATION; ASSIGNMENT. PNC Bank may assign
its rights and delegate its duties hereunder to any
wholly-owned direct or indirect subsidiary of PNC Bank,
National Association or PNC Bank Corp., provided that (i)
PNC Bank gives the Fund thirty (30) days' prior written
notice; (ii) the delegate (or assignee) agrees with PNC
Bank and the Fund to comply with all relevant provisions
of the 1940 Act; and (iii) PNC Bank and such delegate (or
assignee) promptly provide such information as the Fund
may request, and respond to such questions as the Fund
may ask, relative to the delegation (or assignment),
including (without limitation) the capabilities of the
delegate (or assignee).
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.
EXHIBIT A
THIS EXHIBIT A, dated as of July 3, 1995, is Exhibit
A to that certain Custodian Services Agreement dated as
of July 3, 1995 between PNC Bank, National Association
and The BFM Institutional Trust Inc.
PORTFOLIOS
The Short Duration Portfolio
The Core Fixed Income Portfolio
The Multi-Sector Mortgage Securities Portfolio III
PNC BANK, NATIONAL ASSOCIATION
By:
Title:
THE BFM INSTITUTIONAL TRUST INC.
By:
Title:
AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
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:
THE BFM INSTITUTIONAL TRUST INC.
By:
Title:
July 3, 1995
THE BFM INSTITUTIONAL TRUST INC.
RE: ADMINISTRATIVE AND ACCOUNTING SERVICES,
TRANSFER AGENCY SERVICES AND CUSTODIAN
SERVICES FEES
Dear Sir/Madam:
This letter constitutes our agreement with
respect to compensation to be paid to (i) PFPC Inc.
("PFPC") under the terms of an Administrative and
Accounting Services Agreement dated July 3, 1995 between
The BFM Institutional Trust Inc. ("you" or the "Fund")
and PFPC; (ii) PFPC under the terms of a Transfer Agency
Services Agreement dated July 3, 1995 between the Fund
and PFPC; and (iii) PNC Bank, National Association ("PNC
Bank") under the terms of a Custodian Services Agreement
dated July 3, 1995 between the Fund and PNC Bank (each,
an "Agreement", and collectively, the "Agreements") with
respect to the portfolios listed on Exhibit A and
attached hereto, as such Exhibit A may be amended from
time to time (the "Portfolios"). Pursuant to Paragraph
11 of each Agreement, and in consideration of the
services to be provided to the Portfolios, the will pay
PFPC on behalf of the Portfolios the following:
1. With respect to The Multi-Sector Mortgage
Securities Portfolio III, an asset-based fee, which shall
be calculated daily and paid monthly, of .09% of the
Portfolio's average daily net assets, exclusive of out-
of-pocket expenses and transaction charges.
2. With respect to The Short Duration
Portfolio, an asset-based fee, which shall be calculated
daily and paid monthly, of .14% of the Portfolio's
average daily net assets, exclusive of out-of-pocket
expenses and transaction charges.
3. With respect to The Core Fixed Income
Portfolio, an asset-based fee, which shall be calculated
daily and paid monthly, of .14% of the Portfolio's
average daily net assets, exclusive of out-of-pocket
expenses and transaction charges.
If during the next three years, either
PFPC or PNC Bank is removed from the respective
Agreements referenced above, the Fund shall pay any costs
of time and material associated with the deconversion.
The fee for the period from the date
hereof until the end of that year shall be prorated
according to the proportion which such period bears to
the full annual period.
If the foregoing accurately sets forth
our agreement and you intend to be legally bound thereby,
please execute a copy of this letter and return it to us.
Very truly yours,
PFPC INC.
By:___________________________
Title:
PNC BANK, NATIONAL ASSOCIATION
By:___________________________
Title:
Accepted:
THE BFM INSTITUTIONAL TRUST INC.
By:______________________________
Title:
EXHIBIT A
The Short Duration Portfolio
The Core Fixed Income Portfolio
The Multi-Sector Mortgage Securities Portfolio III
