CUSTODIAN AGREEMENT
AGREEMENT dated as of June 5, 1998 between BANKERS TRUST COMPANY (the
"Custodian") and FLAG INVESTORS EQUITY PARTNERS FUND, INC. (the "Customer").
WHEREAS, the Customer desires to appoint the Custodian as custodian
on behalf of the Customer under the terms and conditions set forth in this
Agreement, and the Custodian has agreed to so act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment of Custodian. The Customer hereby employs the Custodian
as custodian of all assets of the Customer which are delivered to and accepted
by the Custodian or any Subcustodian (as that term is defined in Section 4)
("Property") pursuant to the terms and conditions set forth herein. For
purposes of this Agreement, "delivery" of Property shall include the
acquisition of a security entitlement (as that term is defined in the New York
Uniform Commercial Code ("UCC")) with respect thereto. Without limitation,
such Property shall include stocks and other equity interests of every type,
evidences of indebtedness, other instruments representing same or rights or
obligations to receive, purchase, deliver or sell same and other non-cash
investment property of the Customer ("Securities") and cash from any source
and in any currency ("Cash"), provided that the Custodian shall have the
right, in its sole discretion, to refuse to accept as Property any property of
a Customer that the Custodian considers not to be appropriate or in proper
form for deposit for any reason. The Custodian shall not be responsible for
any property of the Customer held or received by the Customer or others and
not delivered to the Custodian or any Subcustodian.
2. Maintenance of Property at Custodian and Subcustodian Locations.
Pursuant to Instructions, the Customer shall direct the Custodian to (a)
settle Securities transactions and maintain cash in the country or other
jurisdiction in which the principal trading market for such Securities is
located, where such Securities are to be presented for payment or where such
Securities are acquired and (b) maintain Cash and Cash equivalents in such
countries in amounts reasonably necessary to effect the Customer's
transactions in such Securities. Instructions to settle Securities
transactions in any country shall be deemed to authorize the holding of such
Property in that country.
3. Custody Account. The Custodian agrees to establish and maintain a
custody account or accounts on its books in the name of the Customer (the
"Account") for any and all Property received and accepted by the Custodian or
any Subcustodian for the account of the Customer. The Customer acknowledges
its responsibility as a principal for all of its obligations to the Custodian
arising under or in connection with this Agreement, warrants its authority to
deposit in the Account any Property received therefor by the Custodian or a
Subcustodian and to give, and authorize others to give, instructions relative
thereto. The Custodian may deliver securities of the same class in place of
those deposited in the Account.
The Custodian shall hold, keep safe and protect as custodian for
Account, on behalf of the Customer, all Property in such Account and, to the
extent such Property constitutes financial assets for purposes of the New York
UCC, shall maintain those financial assets in such Account as security
entitlements in favor of the Customer. All transactions, including, but not
limited to, foreign exchange transactions, involving the Property shall be
executed or settled solely in accordance with Instructions, except that until
the Custodian
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receives Instructions to the contrary, the Custodian will:
(a) collect all interest and dividends and all other income and
payments, whether paid in cash or in kind, on the Property,
as the same become payable and credit the same to the
Account;
(b) present for payment all Securities held in the Account which
are called, redeemed or retired or otherwise become payable
and all coupons and other income items which call for
payment upon presentation to the extent that the Custodian
or Subcustodian is actually aware of such opportunities and
hold the cash received in the Account pursuant to this
Agreement;
(c) (i) exchange Securities where the exchange is purely
ministerial (including, without limitation, the exchange of
temporary securities for those in definitive form and the
exchange of warrants, or other documents of entitlement to
securities, for the Securities themselves) and (ii) when
notification of a tender or exchange offer (other than
ministerial exchanges described in (i) above) is received
for the Account, endeavor to receive Instructions, provided
that if such Instructions are not received in time for the
Custodian to take timely action, no action shall be taken
with respect thereto;
(d) whenever notification of a rights entitlement or a
fractional interest resulting from a rights issue, stock
dividend or stock split is received for the Account and such
rights entitlement or fractional interest bears an
expiration date, if after endeavoring to obtain Instructions
such Instructions are not received in time for the Custodian
to take timely action or if actual notice of such actions
was received too late to seek Instructions, sell in the
discretion of the Custodian (which sale the Customer hereby
authorizes the Custodian to make) such rights entitlement or
fractional interest and credit the Account with the net
proceeds of such sale;
(e) execute in the Customer's name for the Account, whenever the
Custodian deems it appropriate, such ownership and other
certificates as may be required to obtain the payment of
income from the Property in the Account;
(f) pay for the Account, any and all taxes and levies in the
nature of taxes imposed on interest, dividends or other
similar income on the Property in the Account by any
governmental authority. In the event there is insufficient
Cash available in the Account to pay such taxes and levies,
the Custodian shall notify the Customer of the amount of the
shortfall and the Customer, at its option, may deposit
additional Cash in the Account or take steps to have
sufficient Cash available. The Customer agrees, when and if
requested by the Custodian and required in connection with
the payment of any such taxes to cooperate with the
Custodian in furnishing information, executing documents or
otherwise; and
(g) appoint brokers and agents for any of the ministerial
transactions involving the Securities described in (a) -
(f), including, without limitation, affiliates of the
Custodian or any Subcustodian.
4. Subcustodians and Securities Systems. The Customer authorizes and
instructs the Custodian to maintain the Property in the Account directly in
one of its U.S. branches or indirectly through custody
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accounts which have been established by the Custodian with the following other
securities intermediaries: (a) one of its U.S. branches or another U.S. bank
or trust company or branch thereof located in the U.S. which is itself
qualified under the Investment Company Act of 1940, as amended ("1940 Act"),
to act as custodian (individually, a "U.S. Subcustodian"), or a U.S.
securities depository or clearing agency or system in which the Custodian or a
U.S. Subcustodian participates (individually, a "U.S. Securities System") or
(b) one of its non-U.S. branches or majority-owned non-U.S. subsidiaries, a
non-U.S. branch or majority-owned subsidiary of a U.S. bank or a non-U.S. bank
or trust company, acting as custodian (individually, a "non-U.S.
Subcustodian"; U.S. Subcustodians and non-U.S. Subcustodians, collectively,
"Subcustodians"), or a non- U.S. depository or clearing agency or system in
which the Custodian or any Subcustodian participates (individually, a
"non-U.S. Securities System"; U.S. Securities System and non-U.S. Securities
System, collectively, "Securities System"), provided that in each case in
which a U.S. Subcustodian or U.S. Securities System is employed, each such
Subcustodian or Securities System shall have been approved by Instructions;
provided further that in each case in which a non-U.S. Subcustodian or
non-U.S. Securities System is employed, (a) such Subcustodian or Securities
System either is (i) a "qualified U.S. bank" as defined by Rule 17f-5 under
the 1940 Act ("Rule 17f-5") or (ii) an "eligible foreign custodian" within the
meaning of Rule 17f-5 or such Subcustodian or Securities System is the subject
of an order granted by the U.S. Securities and Exchange Commission ("SEC")
exempting such agent or the subcustody arrangements thereto from all or part
of the provisions of Rule 17f-5 and (b) the agreement between the Custodian
and such non-U.S. Subcustodian has been approved by Instructions; it being
understood that the Custodian shall have no liability or responsibility for
determining whether the approval of any Subcustodian or Securities System has
been proper under the 1940 Act or any rule or regulation thereunder.
Upon receipt of Instructions, the Custodian agrees to cease the
employment of any Subcustodian or Securities System with respect to the
Customer, and if desirable and practicable, appoint a replacement subcustodian
or securities system in accordance with the provisions of this Section. In
addition, the Custodian may, at any time in its discretion, upon written
notification to the Customer, terminate the employment of any Subcustodian or
Securities System.
Upon request of the Customer, the Custodian shall deliver to the
Customer annually a certificate stating: (a) the identity of each non-U.S.
Subcustodian and non-U.S. Securities System then acting on behalf of the
Custodian and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such non-U.S Subcustodian
and non-U.S. Securities System; (b) the countries in which each non-U.S.
Subcustodian or non-U.S. Securities System is located; and (c) so long as Rule
17f-5 requires the Customer's Board of Directors to directly approve its
foreign custody arrangements, such other information relating to such non-U.S.
Subcustodians and non-U.S. Securities Systems as may reasonably be requested
by the Customer to ensure compliance with Rule 17f-5. So long as Rule 17f-5
requires the Customer's Board of Directors to directly approve its foreign
custody arrangements, the Custodian also shall furnish annually to the
Customer information concerning such non-U.S. Subcustodians and non-U.S.
Securities Systems similar in kind and scope as that furnished to the Customer
in connection with the initial approval of this Agreement. Custodian agrees to
promptly notify the Customer if, in the normal course of its custodial
activities, the Custodian has reason to believe that any non-U.S. Subcustodian
or non-U.S. Securities System has ceased to be a qualified U.S. bank or an
eligible foreign custodian each within the meaning of Rule 17f-5 or has ceased
to be subject to an exemptive order from the SEC.
5. Use of Subcustodian. With respect to Property in the Account which
is maintained by the Custodian through a Subcustodian employed pursuant to
Section 4:
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(a) The Custodian will identify on its books as belonging to the
Customer, any Property maintained through such Subcustodian.
(b) Any Property in the Account held by a Subcustodian will be
subject only to the instructions of the Custodian or its
agents.
(c) Property deposited with a Subcustodian will be maintained in
an account holding only assets for customers of the
Custodian.
(d) Any agreement the Custodian shall enter into with a
Subcustodian with respect to maintaining Property shall
require that (i) the Account will be adequately indemnified
or its losses adequately insured; (ii) the Securities so
maintained will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of
such Subcustodian or its creditors except a claim for
payment in accordance with such agreement for their safe
custody or administration and expenses related thereto,
(iii) beneficial ownership of such Securities will be freely
transferable without the payment of money or value other
than for safe custody or administration and expenses related
thereto; and (iv) adequate records will be maintained
identifying the Property maintained pursuant to such
agreement as belonging to the Custodian, on behalf of its
customers and (v) to the extent permitted by applicable law,
officers of or auditors employed by, or other
representatives of or designated by, the Custodian,
including the independent public accountants of or
designated by, the Customer be given access to the books and
records of such Subcustodian relating to its actions under
its agreement pertaining to any Property held by it
thereunder or confirmation of or pertinent information
contained in such books and records be furnished to such
persons designated by the Custodian.
6. Use of Securities System. With respect to Property in the Account
which is maintained by the Custodian or any Subcustodian through a Securities
System employed pursuant to Section 4:
(a) The Custodian shall, and the Subcustodian shall be required
by its agreement with the Custodian to, identify on its
books such Property as being maintained for the account of
the Custodian or Subcustodian for its customers.
(b) Any Property maintained through a Securities System for the
account of the Custodian or a Subcustodian will be subject
only to the instructions of the Custodian or such
Subcustodian, as the case may be.
(c) Property deposited with a Securities System will be
maintained in an account holding only assets for customers
of the Custodian or Subcustodian, as the case may be, unless
precluded by applicable law, rule, or regulation.
(d) The Custodian shall provide the Customer with any report
obtained by the Custodian on the Securities System's
accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System.
7. Agents. The Custodian may at any time or times in its sole
discretion appoint (or remove) any
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other U.S. bank or trust company which is itself qualified under the 1940 Act
to act as custodian, as its agent to carry out such of the provisions of this
Agreement as the Custodian may from time to time direct; provided, however,
that the appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
8. Records, Ownership of Property, Statements, Opinions of Independent
Certified Public Accountants.
(a) The ownership of the Property whether maintained directly by the
Custodian or indirectly through a Subcustodian or a Securities System as
authorized herein, shall be clearly recorded on the Custodian's books as
belonging to the Account and not for the Custodian's own interest. The
Custodian shall keep accurate and detailed accounts of all investments,
receipts, disbursements and other transactions for the Account. All accounts,
books and records of the Custodian relating thereto shall be open to
inspection and audit at all reasonable times during normal business hours by
any person designated by the Customer. All such accounts shall be maintained
and preserved in the form reasonably requested by the Customer. The Custodian
will supply to the Customer from time to time, as mutually agreed upon, a
statement in respect to any Property in the Account maintained by the
Custodian or by a Subcustodian. In the absence of the filing in writing with
the Custodian by the Customer of exceptions or objections to any such
statement within sixty (60) days of the mailing thereof, the Customer shall be
deemed to have approved such statement and in such case or upon written
approval of the Customer of any such statement, such statement shall be
presumed to be for all purposes correct with respect to all information set
forth therein.
(b) The Custodian shall take all reasonable action as the Customer
may request to obtain from year to year favorable opinions from the Customer's
independent certified public accountants with respect to the Custodian's
activities hereunder in connection with the preparation of the Customer's Form
N-1A and the Customer's Form N-SAR or other periodic reports to the SEC and
with respect to any other requirements of the SEC.
(c) At the request of the Customer, the Custodian shall deliver to
the Customer a written report prepared by the Custodian's independent
certified public accountants with respect to the services provided by the
Custodian under this Agreement, including, without limitation, the Custodian's
accounting system, internal accounting control and procedures for safeguarding
Property, including Property deposited and/or maintained in a securities
system or with a Subcustodian. Such report shall be of sufficient scope and in
sufficient detail as may reasonably be required by the Customer and as may
reasonably be obtained by the Custodian.
(d) The Customer may elect to participate in any of the electronic
on-line service and communications systems offered by the Custodian which can
provide the Customer, on a daily basis, with the ability to view on-line or to
print on a hard copy various reports of Account activity and of Property being
held in the Account. To the extent that such service shall include market
values of Securities in the Account, the Customer hereby acknowledges that the
Custodian now obtains and may in the future obtain information on such values
from outside sources that the Custodian considers to be reliable and the
Customer agrees that the Custodian (i) does not verify or represent or warrant
either the reliability of such service nor the accuracy or completeness of any
such information furnished or obtained by or through such service and (ii)
shall be without liability in selecting and utilizing such service or
furnishing any information derived therefrom.
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9. Holding of Securities, Nominees, etc. Securities in the Account
which are maintained by the Custodian or any Subcustodian may be held directly
by such entity in the name of the Customer or in bearer form or maintained in
the Custodian's or Subcustodian's name, or in the name of the Custodian's or
Subcustodian's nominee. Securities that are maintained through a Subcustodian
or which are eligible for deposit in a Securities System as provided above may
be maintained with the Subcustodian or the Securities System in an account for
the Custodian's or Subcustodian's customers, unless prohibited by law, rule,
or regulation. The Custodian or Subcustodian, as the case may be, may combine
certificates representing Securities held in the Account with certificates of
the same issue held by it as fiduciary or as a custodian. In the event that
any Securities in the name of the Custodian or its nominee or held by a
Subcustodian and registered in the name of such Subcustodian or its nominee
are called for partial redemption by the issuer of such Security, the
Custodian may, subject to the rules or regulations pertaining to allocation of
any Securities System in which such Securities have been deposited, allot, or
cause to be allotted, the called portion of the respective beneficial holders
of such class of Security in any manner the Custodian deems to be fair and
equitable. Securities maintained with a Securities System shall be maintained
subject to the rules of that Securities System governing the rights and
obligations among the Securities System and its participants.
10. Proxies, etc. With respect to any proxies, notices, reports or
other communications relative to any of the Securities in the Account, the
Custodian shall perform such services and only such services relative thereto
as are (i) set forth in Section 3 of this Agreement, (ii) described in Exhibit
A attached hereto (as such service therein described may be in effect from
time to time) (the "Proxy Service") or (iii) as may otherwise be agreed upon
between the Custodian and the Customer. The liability and responsibility of
the Custodian in connection with the Proxy Service referred to in (ii) of the
immediately preceding sentence and in connection with any additional services
which the Custodian and the Customer may agree upon as provided in (iii) of
the immediately preceding sentence shall be as set forth in the description of
the Proxy Service and as may be agreed upon by the Custodian and the Customer
in connection with the furnishing of any such additional service and shall not
be affected by any other term of this Agreement. Neither the Custodian nor its
nominees or agents shall vote upon or in respect of any of the Securities in
the Account, execute any form of proxy to vote thereon, or give any consent or
take any action (except as provided in Section 3) with respect thereto except
upon the receipt of Instructions relative thereto.
11. Segregated Account. To assist the Customer in complying with the
requirements of the 1940 Act and the rules and regulations thereunder, the
Custodian shall, upon receipt of Instructions, establish and maintain a
segregated account or accounts on its books for and on behalf of the Customer.
12. Settlement Procedures. Securities will be transferred, exchanged
or delivered by the Custodian or a Subcustodian upon receipt by the Custodian
of Instructions which include all information required by the Custodian.
Settlement and payment for Securities received for the Account and delivery of
Securities out of the Account may be effected in accordance with the customary
or established securities trading or securities processing practices and
procedures in the jurisdiction or market in which the transaction occurs,
including, without limitation, delivering Securities to the purchaser thereof
or to a dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such Securities
from such purchaser or dealer, as such practices and procedures may be
modified or supplemented in accordance with the standard operating procedures
of the Custodian in effect from time to time for that jurisdiction or market.
The Custodian shall not be liable for any loss which results from effecting
transactions in accordance with the customary or established securities
trading or securities
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processing practices and procedures in the applicable jurisdiction or market.
Notwithstanding that the Custodian may settle purchases and sales
against, or credit income to, the Account, on a contractual basis, as outlined
in the applicable Service Standards as defined below and provided to the
Customer by the Custodian, the Custodian may, at its sole option, reverse such
credits or debits to the Account in the event that the transaction does not
settle, or the income is not received in a timely manner, and the Customer
agrees to hold the Custodian harmless from any losses which may result
therefrom.
The applicable Service Standards shall be defined as the Global
Guide, the Policies and Standards Manual, and any other documents issued by
the Custodian from time to time specifying the procedures for communicating
with the Customer, the terms of any additional services to be provided to the
Customer, and such other matters as may be agreed between the Customer and the
Custodian from time to time.
13. Conditional Credits.
(a) Notwithstanding any other provision of this Agreement, the
Custodian shall not be required to comply with any Instructions to settle the
purchase of any securities for the Account, unless there are sufficient
immediately available funds in the relevant currency in the Account, provided
that, if, after all expenses, debits and withdrawals of Cash in the relevant
currency ("Debits") applicable to the Account have been made and if after all
Conditional Credits, as defined below, applicable to the Account have been
made final entries as set forth in (c) below, the amount of immediately
available funds in the relevant currency in such Account is at least equal to
the aggregate purchase price of all Securities for which the Custodian has
received Instructions to settle on that date ("Settlement Date"), the
Custodian, upon settlement, shall credit the Securities to the Account by
making a final entry on its books and records.
(b) Notwithstanding the foregoing, if after all Debits applicable to
the Account have been made, there remains outstanding any Conditional Credit
(as defined below) applicable to the Account or the amount of immediately
available funds in a given currency in such Account are less than the
aggregate purchase price in such currency of all securities for which the
Custodian has received Instructions to settle on the Settlement Date, the
Custodian, upon settlement, may provisionally credit the Securities to the
Account by making a conditional entry on its books and records ("Conditional
Credit"), pending receipt of sufficient immediately available funds in the
relevant currency in the Account.
(c) If, within a reasonable time after the posting of a Conditional
Credit and after all Debits applicable to the Account have been made,
immediately available funds in the relevant currency at least equal to the
aggregate purchase price in such currency of all securities subject to a
Conditional Credit on a Settlement Date are deposited into the Account, the
Custodian shall make the Conditional Credit a final entry on its books and
records. In such case, the Customer shall be liable to the Custodian only for
late charges at a rate which the Custodian customarily charges for similar
extensions of credit.
(d) If (i) within a reasonable time from the posting of a Conditional
Credit, immediately available funds at least equal to the resultant Debit on a
Settlement Date are not on deposit in the Account, or (ii) any Proceeding
shall occur, the Custodian may sell such of the Securities subject to the
Conditional Credit as it selects in its sole discretion and shall apply the
net proceeds of such sale to cover such Debit, including related late charges,
and any remaining proceeds shall be credited to the Account. If such proceeds
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are insufficient to satisfy such debt in full, the Customer shall continue to
be liable to the Custodian for any shortfall. The Custodian shall make the
Conditional Credit a final entry on its books as to the Securities not
required to be sold to satisfy such Debit. Pending payment in full by the
Customer of the purchase price for Securities subject to a Conditional Credit,
and the Custodian's making a Conditional Credit a final entry on its books,
and unless consented to by the Custodian, the Customer shall have no right to
give further Instructions in respect of Securities subject to a Conditional
Credit. The Custodian shall have the sole discretion to determine which
Securities shall be deemed to have been paid for by the Customer out of funds
available in the Account. Any such Conditional Credit may be reversed (and any
corresponding Debit shall be canceled) by the Custodian unless and until the
Custodian makes a final entry on its books crediting such Securities to the
Account. The term "Proceeding" shall mean any insolvency, bankruptcy,
receivership, reorganization or similar proceeding relating to the Customer,
whether voluntary or involuntary.
(e) The Customer agrees that it will not intentionally use the
Account to facilitate the purchase of securities without sufficient funds in
the Account (which funds shall not include the expected proceeds of the sale
of the purchased securities).
14. Permitted Transactions. The Customer agrees that it will cause
transactions to be made pursuant to this Agreement only upon Instructions in
accordance Section 15 and only for the purposes listed below.
(a) In connection with the purchase or sale of Securities at prices
as confirmed by Instructions.
(b) When Securities are called, redeemed or retired, or otherwise
become payable.
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment.
(d) Upon conversion of Securities pursuant to their terms into other
securities.
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities.
(f) For the payment of interest, taxes, management or supervisory
fees, distributions or operating expenses.
(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed or in order
to satisfy requirements for additional or substitute collateral.
(h) In connection with any loans, but only against receipt of
collateral as specified in Instructions which shall reflect any restrictions
applicable to the Customer.
(i) For the purpose of redeeming shares of the capital stock of the
Customer against delivery of the shares to be redeemed to the Custodian, a
Subcustodian or the Customer's transfer agent.
(j) For the purpose of redeeming in kind shares of the Customer
against delivery of the shares to be redeemed to the Custodian, a Subcustodian
or the Customer's transfer agent.
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(k) For delivery in accordance with the provisions of any agreement
among the Customer, the Portfolio's investment advisor and a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc., relating to compliance with
the rules of The Options Clearing Corporation, the Commodities Futures Trading
Commission or of any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or other arrangements
in connection with transactions by the Customer.
(l) For release of Securities to designated brokers under covered
call options, provided, however, that such Securities shall be released only
upon payment to the Custodian of monies for the premium due and a receipt for
the Securities which are to be held in escrow. Upon exercise of the option, or
at expiration, the Custodian will receive the Securities previously deposited
from broker. The Custodian will act strictly in accordance with Instructions
in the delivery of Securities to be held in escrow and will have no
responsibility or liability for any such Securities which are not returned
promptly when due other than to make proper request for such return.
(m) For spot or forward foreign exchange transactions to facilitate
security trading or receipt of income from Securities related transactions.
(n) Upon the termination of this Agreement as set forth in Section 21.
(o) For other proper purposes.
The Customer agrees that the Custodian shall have no obligation to
verify the purpose for which a transaction is being effected.
15. Instructions. The term "Instructions" means instructions from the
Customer in respect of any of the Custodian's duties hereunder which have been
received by the Custodian in accordance with Section 22 below (i) in writing
(including, without limitation, facsimile transmission) or by tested telex
signed or given by such one or more person or persons as the Customer shall
have from time to time authorized in writing to give the particular class of
Instructions in question and whose name and (if applicable) signature and
office address have been filed with the Custodian, or (ii) which have been
transmitted electronically through an electronic on-line service and
communications system offered by the Custodian or other electronic instruction
system acceptable to the Custodian, or (iii) a telephonic or oral
communication by one or more persons as the Customer shall have from time to
time authorized to give the particular class of Instructions in question and
whose name has been filed with the Custodian; or (iv) upon receipt of such
other form of instructions as the Customer may from time to time authorize in
writing and which the Custodian has agreed in writing to accept. Instructions
in the form of oral communications shall be confirmed by the Customer by
tested telex or writing in the manner set forth in clause (i) above, but the
lack of such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions prior to the Custodian's
receipt of such confirmation. Instructions may relate to specific transactions
or to types or classes of transactions, and may be in the form of standing
instructions.
The Custodian shall have the right to assume in the absence of notice
to the contrary from the Customer that any person whose name is on file with
the Custodian pursuant to this Section has been authorized by the Customer to
give the Instructions in question and that such authorization has not been
revoked. The Custodian may act upon and conclusively rely on, without any
liability to the Customer or any
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other person or entity for any losses resulting therefrom, any Instructions
reasonably believed by it to be furnished by the proper person or persons as
provided above.
16. Standard of Care. The Custodian shall be responsible for the
performance of only such duties as are set forth herein or contained in
Instructions given to the Custodian which are not contrary to the provisions
of this Agreement. The Custodian will use reasonable care with respect to the
safekeeping of Property in the Account and, except as otherwise expressly
provided herein, in carrying out its obligations under this Agreement. So long
as and to the extent that it has exercised reasonable care, the Custodian
shall not be responsible for the title, validity or genuineness of any
Property or other property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in
acting upon, and may conclusively rely on, without liability for any loss
resulting therefrom, any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and to be signed or
furnished by the proper party or parties, including, without limitation,
Instructions, and shall be indemnified by the Customer for any losses,
damages, costs and expenses (including, without limitation, the fees and
expenses of counsel) incurred by the Custodian and arising out of action taken
or omitted with reasonable care by the Custodian hereunder or under any
Instructions. The Custodian shall be liable to the Customer for any act or
omission to act of any Subcustodian to the same extent as if the Custodian
committed such act itself. With respect to a Securities System, the Custodian
shall only be responsible or liable for losses arising from employment of such
Securities System caused by the Custodian's own failure to exercise reasonable
care. In the event of any loss to the Customer by reason of the failure of the
Custodian or a Subcustodian to utilize reasonable care, the Custodian shall be
liable to the Customer to the extent of the Customer's actual damages at the
time such loss was discovered without reference to any special conditions or
circumstances. In no event shall the Custodian be liable for any consequential
or special damages. The Custodian shall be entitled to rely, and may act, on
advice of counsel (who may be counsel for the Customer) on all matters and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
In the event the Customer subscribes to an electronic on-line service
and communications system offered by the Custodian, the Customer shall be
fully responsible for the security of the Customer's connecting terminal,
access thereto and the proper and authorized use thereof and the initiation
and application of continuing effective safeguards with respect thereto and
agree to defend and indemnify the Custodian and hold the Custodian harmless
from and against any and all losses, damages, costs and expenses (including
the fees and expenses of counsel) incurred by the Custodian as a result of any
improper or unauthorized use of such terminal by the Customer or by any
others.
All collections of funds or other property paid or distributed in
respect of Securities in the Account, including funds involved in third-party
foreign exchange transactions, shall be made at the risk of the Customer.
Subject to the exercise of reasonable care, the Custodian shall have
no liability for any loss occasioned by delay in the actual receipt of notice
by the Custodian or by a Subcustodian of any payment, redemption or other
transaction regarding Securities in the Account in respect of which the
Custodian has agreed to take action as provided in Section 3 hereof. The
Custodian shall not be liable for any loss resulting from, or caused by, or
resulting from acts of governmental authorities (whether de jure or de facto),
including, without limitation, nationalization, expropriation, and the
imposition of currency restrictions; devaluations of or fluctuations in the
value of currencies; changes in laws and regulations applicable to the banking
or securities industry; market conditions that prevent the orderly execution
of securities transactions
- 10 -
or affect the value of Property; acts of war, terrorism, insurrection or
revolution; strikes or work stoppages; the inability of a local clearing and
settlement system to settle transactions for reasons beyond the control of the
Custodian or hurricane, cyclone, earthquake, volcanic eruption, nuclear
fusion, fission or radioactivity, or other acts of God.
The Custodian shall have no liability in respect of any loss, damage
or expense suffered by the Customer, insofar as such loss, damage or expense
arises from the performance of the Custodian's duties hereunder by reason of
the Custodian's reliance upon records that were maintained for the Customer by
entities other than the Custodian prior to the Custodian's employment under
this Agreement.
The provisions of this Section shall survive termination of this
Agreement.
17. Investment Limitations and Legal or Contractual Restrictions or
Regulations. The Custodian shall not be liable to the Customer and the
Customer agrees to indemnify the Custodian and its nominees, for any loss,
damage or expense suffered or incurred by the Custodian or its nominees
arising out of any violation of any investment restriction or other
restriction or limitation applicable to the Customer pursuant to any contract
or any law or regulation. The provisions of this Section shall survive
termination of this Agreement.
18. Fees and Expenses. The Customer agrees to pay to the Custodian
such compensation for its services pursuant to this Agreement as may be
mutually agreed upon in writing from time to time and the Custodian's
reasonable out-of-pocket or incidental expenses in connection with the
performance of this Agreement, including (but without limitation) legal fees
as described herein and/or deemed necessary in the judgment of the Custodian
to keep safe or protect the Property in the Account. The initial fee schedule
is attached hereto as Exhibit B. Such fees will not be abated by, nor shall
the Custodian be required to account for, any profits or commissions received
by the Custodian in connection with its provision of custody services under
this Agreement. The Customer hereby agrees to hold the Custodian harmless from
any liability or loss resulting from any taxes or other governmental charges,
and any expense related thereto, which may be imposed, or assessed with
respect to any Property in the Account and also agrees to hold the Custodian,
its Subcustodians, and their respective nominees harmless from any liability
as a record holder of Property in the Account. The Custodian is authorized to
charge the Account for such items and the Custodian shall have a lien on the
Property in the Account for any amount payable to the Custodian under this
Agreement, including but not limited to amounts payable pursuant to Section 13
and pursuant to indemnities granted by the Customer under this Agreement. The
provisions of this Section shall survive the termination of this Agreement.
19. Tax Reclaims. With respect to withholding taxes deducted and
which may be deducted from any income received from any Property in the
Account, the Custodian shall perform such services with respect thereto as are
described in Exhibit C attached hereto and shall in connection therewith be
subject to the standard of care set forth in such Exhibit C. Such standard of
care shall not be affected by any other term of this Agreement.
20. Amendment, Modifications, etc. No provision of this Agreement may
be amended, modified or waived except in a writing signed by the parties
hereto. No waiver of any provision hereto shall be deemed a continuing waiver
unless it is so designated. No failure or delay on the part of either party in
exercising any power or right under this Agreement operates as a waiver, nor
does any single or partial
- 11 -
exercise of any power or right preclude any other or further exercise thereof
or the exercise of any other power or right.
21. Termination. This Agreement may be terminated by the Customer or
the Custodian by ninety (90) days' written notice to the other; provided that
notice by the Customer shall specify the names of the persons to whom the
Custodian shall deliver the Securities in the Account and to whom the Cash in
the Account shall be paid. If notice of termination is given by the Custodian,
the Customer shall, within ninety (90) days following the giving of such
notice, deliver to the Custodian a written notice specifying the names of the
persons to whom the Custodian shall deliver the Securities in the Account and
to whom the Cash in the Account shall be paid. In either case, the Custodian
will deliver such Property to the persons so specified, after deducting
therefrom any amounts which the Custodian determines to be owed to it
hereunder. In addition, the Custodian may in its discretion withhold from such
delivery such Property as may be necessary to settle transactions pending at
the time of such delivery. The Customer grants to the Custodian a lien and
right of setoff against the Account and all Property held therein from time to
time in the full amount of the foregoing obligations. If within ninety (90)
days following the giving of a notice of termination by the Custodian, the
Custodian does not receive from the Customer a written notice specifying the
names of the persons to whom the Custodian shall deliver the Securities in the
Account and to whom the Cash in the Account shall be paid, the Custodian, at
its election, may deliver such Securities and pay such Cash to a bank or trust
company doing business in the State of New York to be held and disposed of
pursuant to the provisions of this Agreement, or may continue to hold such
Securities and Cash until a written notice as aforesaid is delivered to the
Custodian, provided that the Custodian's obligations shall be limited to
safekeeping.
22. Notices. Except as otherwise provided in this Agreement, all
requests, demands or other communications between the parties or notices in
connection herewith (a) shall be in writing, hand delivered or sent by
registered mail, telex or facsimile addressed to such other address as shall
have been furnished by the receiving party pursuant to the provisions hereof
and (b) shall be deemed effective when received, or, in the case of a telex,
when sent to the proper number and acknowledged by a proper answerback.
23. Security for Payment. To secure payment of all obligations due
hereunder, the Customer hereby grants to the Custodian a continuing security
interest in and right of setoff against the Account and all Property held
therein from time to time in the full amount of such obligations. Should the
Customer fail to pay promptly any amounts owed hereunder, the Custodian shall
be entitled to use available Cash in the Account, and to dispose of Securities
in the Account as is necessary. In any such case and without limiting the
foregoing, the Custodian shall be entitled to take such other actions or
exercise such other options, powers and rights as the Custodian now or
hereafter has as a secured creditor under the New York UCC or any other
applicable law.
24. Representations and Warranties.
(a) The Customer hereby represents and warrants to the Custodian that:
(i) the employment of the Custodian and the allocation of
fees, expenses and other charges to the Account as herein provided, is not
prohibited by law or any governing documents or contracts to which it is
subject;
- 12 -
(ii) the terms of this Agreement do not violate any
obligation by which it is bound, whether arising by contract, operation of law
or otherwise;
(iii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon it in accordance
with its terms; and
(iv) it will deliver to the Custodian a duly executed
Secretary's Certificate in the form of Exhibit D attached hereto or such other
evidence of such authorization as the Custodian may reasonably require,
whether by way of a certified resolution or otherwise.
(b) The Custodian hereby represents and warrants to the Customer that:
(i) the terms of this Agreement do not violate any
obligation by which it is bound, whether arising by contract, operation of law
or otherwise;
(ii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon it in accordance
with its terms;
(iii) it will deliver to the Customer such evidence of such
authorization as the Customer may reasonably require, whether by way of a
certified resolution or otherwise; and
(iv) Custodian is qualified as a custodian under Section
26(a) of the 1940 Act and warrants that it will remain so qualified or upon
ceasing to be so qualified shall promptly notify the Customer in writing.
25. Governing Law and Successors and Assigns. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and
the Custodian.
26. Publicity. Customer shall furnish to Custodian in accordance with
Section 22 above, prior to any distribution thereof, copies of any material
prepared for distribution to any persons who are not parties hereto that refer
in any way to the Custodian. Customer shall not distribute or permit the
distribution of such materials if Custodian reasonably objects in writing
within ten (10) business days of receipt thereof (or such other time as may be
mutually agreed) after receipt thereof. The provisions of this Section shall
survive the termination of this Agreement.
27. Submission to Jurisdiction. Any suit, action or proceeding
arising out of this Agreement may be instituted in any State or Federal court
sitting in the City of Xxx Xxxx, Xxxxx xx Xxx Xxxx, Xxxxxx Xxxxxx of America,
and the Customer irrevocably submits to the non-exclusive jurisdiction of any
such court in any such suit, action or proceeding and waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to
the laying of venue of any such suit, action or proceeding brought in such a
court and any claim that such suit, action or proceeding was brought in an
inconvenient forum.
28. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered
by each of the parties hereto.
- 13 -
29. Confidentiality. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall
not be disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any information that
is publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required or
requested to be disclosed by any bank or other regulatory examiner of the
Custodian, Customer, or any Subcustodian, any auditor of the parties hereto,
by judicial or administrative process or otherwise by applicable law or
regulation. The provisions of this Section shall survive the termination of
this Agreement.
30. Severability. If any provision of this Agreement is determined to
be invalid or unenforceable, such determination shall not affect the validity
or enforceability of any other provision of this Agreement.
31. Entire Agreement. This Agreement together with any Exhibits
attached hereto, contains the entire agreement between the parties relating to
the subject matter hereof and supersedes any oral statements and prior
writings with respect thereto.
32. Headings. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.
33. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered
by each of the parties hereto.
- 14 -
IN WITNESS WHEREOF, each of the parties has caused its duly
authorized signatories to execute this Agreement as of the date first written
above.
FLAG INVESTORS EQUITY PARTNERS
FUND, INC.
By: /s/ Xxx X. Xxxxxx
--------------------
Name: Xxx X. Xxxxxx
Title: Secretary
BANKERS TRUST COMPANY
By: /s/Xxxxxxx Xxxxxxx
--------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
- 15 -
EXHIBIT A
To Custodian Agreement dated as of June 5, 1998 between Bankers Trust
Company and Flag Investors Equity Partners Fund, Inc..
PROXY SERVICE
The following is a description of the Proxy Service referred to in
Section 10 of the above referred to Custodian Agreement. Terms used herein as
defined terms shall have the meanings ascribed to them therein unless
otherwise defined below.
The Custodian provides a service, described below, for the
transmission of corporate communications in connection with shareholder
meetings relating to Securities held in the countries specified in the
applicable Service Standards. For the United States and Canada, the term
"corporate communications" means the proxy statements or meeting agenda, proxy
cards, annual reports and any other meeting materials received by the
Custodian. For countries other than the United States and Canada, the term
"corporate communications" means the meeting agenda only and does not include
any meeting circulars, proxy statements or any other corporate communications
furnished by the issuer in connection with such meeting. Non-meeting related
corporate communications are not included in the transmission service to be
provided by the Custodian except upon request as provided below.
The Custodian's process for transmitting and translating meeting
agendas will be as follows:
1) If the meeting agenda is not provided by the issuer in the
English language, and if the language of such agenda is in
the official language of the country in which the related
security is held, the Custodian will as soon as practicable
after receipt of the original meeting agenda by a
Subcustodian provide an English translation prepared by that
Subcustodian.
2) If an English translation of the meeting agenda is
furnished, the local language agenda will not be furnished
unless requested.
Translations will be free translations and neither the Custodian nor
any Subcustodian will be liable or held responsible for the accuracy thereof
or any direct or indirect consequences arising therefrom, including without
limitation arising out of any action taken or omitted to be taken based
thereon.
If requested, the Custodian will, on a reasonable efforts basis,
endeavor to obtain any additional corporate communication such as annual or
interim reports, proxy statements, meeting circulars, or local language
agendas, and provide them in the form obtained.
Timing in the voting process is important and, in that regard, upon
receipt by the Custodian of notice from a Subcustodian, the Custodian will
provide a notice to the Customer indicating the deadline for receipt of its
instructions to enable the voting process to take place effectively and
efficiently. As voting procedures will vary from market to market, attention
to any required procedures will be very important. Upon timely
receipt of voting instructions, the Custodian will promptly forward such
instructions to the applicable Subcustodian. If voting instructions are not
timely received, the Custodian shall have no liability or obligation to take
any action.
For Securities held in markets other than those set forth in the
first paragraph, the Custodian will not furnish the material described above
or seek voting instructions. However, if requested to exercise voting rights
at a specific meeting, the Custodian will endeavor to do so on a reasonable
efforts basis without any assurance that such rights will be so exercised at
such meeting.
If the Custodian or any Subcustodian incurs extraordinary expenses in
exercising voting rights related to any Securities pursuant to appropriate
instructions or direction (e.g., by way of illustration only and not by way of
limitation, physical presence is required at a meeting and/or travel expenses
are incurred), such expenses will be reimbursed out of the Account unless
other arrangements have been made for such reimbursement.
It is the intent of the Custodian to expand the Proxy Service to
include jurisdictions which are not currently included as set forth in the
applicable Service Standards. The Custodian will notify the Customer as to the
inclusion of additional countries or deletion of existing countries after
their inclusion or deletion and this Exhibit A will be deemed to be
automatically amended to include or delete such countries as the case may be.
- 2 -
EXHIBIT B
To Custodian Agreement dated as of June 5, 1998 between Bankers Trust
Company and Flag Investors Equity Partners Fund, Inc.
BANKERS TRUST CUSTODY FEE SCHEDULE
FOR
BT ALEC. XXXXX MUTUAL FUNDS
(FLAG INVESTORS FUNDS AND ISI FUNDS)
Effective October 1, 1997
CUSTODY FEES
1. DOMESTIC SAFEKEEPING FEES
ANNUAL ASSET FEE (BY FUND- EXCEPT CASH RESERVE)
Market Value Basis Point
$0 - $100 million 1.00
Over $100 million 0.75
ANNUAL ASSET FEE (CASH RESERVE FUND)
Market Value Basis Point
$0 - $1 billion 1.00
$1 billion - $3 billion 0.75
Over $3 billion 0.50
2. DOMESTIC TRANSACTION FEES
TRANSACTION TYPE $USD
AUTOMATED DEPOSITORY: DTC/PTC/FED 10.00
MANUAL DEPOSITORY: DTC/PTC/ FED 15.00
PHYSICAL AUTOMATED 15.00
PHYSICAL MANUAL 20.00
P&I PAYMENTS 5.00
REDEMPTIONS 10.00
REORGANIZATIONS Included in safekeeping charge
3. GLOBAL SAFEKEEPING AND ASSET FEES
Receive and
Annual Deliver
Country Asset Fee Transactions
------- --------- ------------
Argentina 35 Basis $100
Points
Australia 3 Basis Points $50
Austria 5 Basis Points $75
Bangladesh 40 Basis $150
Points
Belgium 4 Basis Points $60
Botswana 50 Basis $150
Points
Brazil 30 Basis $70
Points
Canada 2 Basis Points $20
Cedel/Euroclear 3 Basis Points $20
Chile 30 Basis $80
Points
China 30 Basis $75
Points
Columbia 35 Basis $100
Points
Czech Republic 20 Basis $70
Points
Denmark 4 Basis Points $50
Ecuador 45 Basis $100
Points
Egypt 45 Basis $80
Points
Finland 10 Basis $75
Points
France 5 Basis Points $50
Germany 3 Basis Points $30
Ghana 50 Basis $150
Points
Greece 35 Basis $120
Points
Hong Kong 5 Basis Points $30
Hungary 45 Basis $150
Points
India (Physical) 60 Basis $200
Points
India (Dematerialized) 25 Basis $140
Points
- 2 -
Indonesia 8 Basis Points $35
Ireland 5 Basis Points $50
Israel 40 Basis $50
Points
Italy 3 Basis Points $50
Japan 3 Basis Points $35
Jordan 30 Basis $100
Points
Kenya 50 Basis $150
Points
Luxembourg 4 Basis Points $60
Malaysia 7 Basis Points $50
Mauritius 50 Basis $140
Points
Mexico 5 Basis Points $30
Morocco 30 Basis $130
Points
Xxxxxxxxxxx 0 Xxxxx Xxxxxx $45
New Zealand 4 Basis Points $50
Norway 5 Basis Points $50
Pakistan 30 Basis $150
Points
Xxxx 00 Basis $100
Points
Philippines 8 Basis Points $30
Poland 45 Basis $100
Points
Portugal 4 Basis Points $75
Russia 50 Basis $300
Points
Singapore 7 Basis Points $50
Xxxxxxxx 00 Basis $100
Points
South Africa 5 Basis Points $30
South Korea 15 Basis $50
Points
Spain 6 Basis Points $50
Sri Lanka 12 Basis $60
Points
Sweden 4 Basis Points $50
Switzerland 3 Basis Points $50
Taiwan 15 Basis $100
Points
Thailand 7 Basis Points $100
- 3 -
Tunisia 45 Basis $50
Points
Turkey 15 Basis $50
Points
United Kingdom 2 Basis Points $15
Venezuela 35 Basis $100
Points
Zambia 50 Basis $150
Points
Zimbabwe 50 Basis $150
Points
4. DDA RELATED CHARGES
Cash Connector Services $25 per month per account
(MTC, MTD, EBR, BTC Reporting)
Statement Rendition (CDS) Services
Account Maintenance $50 per month per account
Debit Postings $0.35 per posting
Credit Postings $0.35 per posting
Money Transfer Charges*
Outgoing Payments $6.00
Incoming Payments No Charge
Book to Book Transfers No Charge
*Above Money Transfer Charges assume electronic instruction via bank-provided
software. Manual instructions received via facsimile, etc. will incur a charge
of $25 per transaction.
Overdraft Rate: Prime + 1.00%
NOTES
o Market Values will be provided by the Fund Accountant at
month-end to determine monthly assets for billing purposes.
o A manual transaction is an instruction that is received in
writing, i.e. facsimile
o The standard Global Custody Service includes: asset
safekeeping, trade settlement, income collection, corporate
action processing including proxy voting and tax reclaims where
appropriate.
- 4 -
o Third party FX transactions and other cash movements with no
associated security transaction (e.g. free payments/receipts)
are charged at $10 per U.S. wire and $25 per non-U.S. wire. No
fee is levied for FX transactions executed with Bankers Trust.
o Fees are billed monthly in arrears.
This Exhibit B shall be amended upon delivery by the Custodian of a new
Exhibit B to the Customer and acceptance thereof by the Customer and shall be
effective as of the date of acceptance by the Customer or a date agreed upon
between the Custodian and the Customer.
- 5 -
EXHIBIT C
To Custodian Agreement dated as of June 5, 1998 between Bankers Trust
Company and Flag Investors Equity Partners Fund, Inc.
TAX RECLAIMS
Pursuant to Section 18 of the above referred to Custodian Agreement,
the Custodian shall perform the following services with respect to withholding
taxes imposed or which may be imposed on income from Property in the Account
in the countries specified in the applicable Service Standards. Terms used
herein as defined terms shall unless otherwise defined have the meanings
ascribed to them in the above referred to Custodian Agreement.
When withholding tax has been deducted with respect to income from
any Property in an Account, the Custodian will actively pursue on a reasonable
efforts basis the reclaim process, provided that the Custodian shall not be
required to institute any legal or administrative proceeding against any
Subcustodian or other person. The Custodian will provide fully detailed
advices/vouchers to support reclaims submitted to the local authorities by the
Custodian or its designee. In all cases of withholding, the Custodian will
provide full details to the Customer. If exemption from withholding at the
source can be obtained in the future, the Custodian will notify the Customer
and advise what documentation, if any, is required to obtain the exemption.
Upon receipt of such documentation from the Customer, the Custodian will file
for exemption on the Customer's behalf and notify the Customer when it has
been obtained.
In connection with providing the foregoing service, the Custodian
shall be entitled to apply categorical treatment of the Customer according to
the Customer's nationality, the particulars of its organization and other
relevant details that shall be supplied by the Customer. It shall be the duty
of the Customer to inform the Custodian of any change in the organization,
domicile or other relevant fact concerning tax treatment of the Customer and
further to inform the Custodian if the Customer is or becomes the beneficiary
of any special ruling or treatment not applicable to the general nationality
and category or entity of which the Customer is a part under general laws and
treaty provisions. The Custodian may rely on any such information provided by
the Customer.
In connection with providing the foregoing service, the Custodian may
also rely on professional tax services published by a major international
accounting firm and/or advice received from a Subcustodian in the
jurisdictions in question. In addition, the Custodian may seek the advice of
counsel or other professional tax advisers in such jurisdictions. The
Custodian is entitled to rely, and may act, on information set forth in such
services and on advice received from a Subcustodian, counsel or other
professional tax advisers and shall be without liability to the Customer for
any action reasonably taken or omitted pursuant to information contained in
such services or such advice.
EXHIBIT D
[Name of Entity]
Certificate of the Secretary
I, _____________________ [Name of Secretary], hereby certify
that I am the Secretary of [Name of Entity], a ________________ [type of entity]
organized under the laws of ________________________[jurisdiction] (the
"Customer"), and as such I am duly authorized to, and do hereby, certify that:
1. Good Standing. The Customer's organizational documents,
and all amendments thereto, have been filed with the appropriate governmental
officials of _____________________[jurisdiction], the Customer continues to be
in existence and is in good standing, and no action has been taken to repeal
such organizational documents, the same being in full force and effect on the
date hereof.
2. Organizational Documents. The Customer's [name of
organizational documents - i.e., Bylaws, Articles of Incorporation, etc.] have
been duly adopted and no action has been taken to repeal such [name of
organizational documents], the same being in full force and effect.
3. Resolutions. Resolutions have been duly adopted on behalf
of the Customer, which resolutions (i) have not in any way been revoked or
rescinded, (ii) have been in full force and effect since their adoption, to
and including the date hereof, and are now in full force and effect, and (iii)
are the only corporate proceedings of the Customer now in force relating to or
affecting the matters referred to therein, including, without limitation,
confirming that the Customer is duly authorized to appoint Bankers Trust
Company as Custodian of assets delivered to it by the Customer and enter into
a certain custody agreement with Bankers Trust Company (the "Agreement")
setting forth the terms and conditions of such appointment, and that certain
designated officers, including those identified in paragraph 4 of this
Certificate, are authorized to (a) execute said Agreement in such form as the
officers executing the same have approved, such approval to be conclusively
evidenced by their execution and delivery thereof, and (b) execute any
instructions in connection with the Agreement, in conformity with the
requirements of the Customer's [name of organizational documents], and other
pertinent documents to which the Customer may be bound.
4. Incumbency. The following named individuals are duly
elected (or appointed), qualified and acting officers of the Customer holding
those offices set forth opposite their respective names as of the date hereof,
each having full authority, acting individually, to bind the Customer, as a
legal matter, with respect to all matters pertaining to the Agreement, and to
execute and deliver said Agreement on behalf of the Customer, and the
signatures set forth opposite the respective names and titles of said officers
are their true, authentic signatures:
Name Title Signature
---- ----- ---------
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
- 2 -
IN WITNESS WHEREOF, I have hereunto set my hand this ____
day of _______________[Date], 1997.
By: __________________________________
Name: __________________________________
Title: Secretary
I, __________________________[Name of Confirming Officer],
__________________[Title] of the Customer, hereby certify that on this ___ day
of _______________[Date], 19__, _____________________[NAME OF SECRETARY] is
the duly elected Secretary of the Customer and that the signature above is
his/her genuine signature.
By: _________________________________
Name: _________________________________
Title: _________________________________
- 3 -
EXHIBIT E
CASH MANAGEMENT ADDENDUM (this "Addendum") to the CUSTODIAN
AGREEMENT (the "Agreement") between BANKERS TRUST COMPANY (the "Custodian")
and FLAG INVESTORS EQUITY PARTNERS FUND, INC. (the "Customer").
WHEREAS, the Custodian will provide cash management services
to the Customer, and the Custodian and the Customer desire to confirm their
understanding with respect to such services;
NOW, THEREFORE, the Custodian and the Customer agree as
follows:
1. Until the Custodian receives Instructions to the
contrary, the Custodian will hold all Cash received for the Account in deposit
accounts maintained with Subcustodians for the benefit of the Custodian's
clients, will credit to the Account interest on such Cash at rates and times
the Custodian shall from time to time determine and will receive compensation
therefor out of any amounts paid by Subcustodians in respect of such Cash.
2. To the extent the Custodian may from time to time inform
the Customer with respect to one or more currencies, the Custodian will sweep
Cash in such currencies to deposit accounts maintained with one or more
Subcustodians until the Custodian notifies the Customer otherwise or receives
Instructions to the contrary.
3. The Customer acknowledges that it has received and
reviewed the current policies of the Custodian regarding cash management
services, which are attached to this Addendum.
4. Capitalized terms used but not defined in this Addendum
are used with the respective meanings assigned to them in the Agreement.
IN WITNESS WHEREOF, this Addendum has been executed as of
the date of the Agreement.
BANKERS TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
FLAG INVESTORS EQUITY PARTNERS FUND, INC.
By: /s/ Xxx X. Xxxxxx
------------------------------------
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Global Custody Cash Management Program
In the Global Custody cash management program, currencies on
which Bankers Trust pays interest are divided into two categories: (1)
currencies on which we pay interest based on a market benchmark rate for
overnight deposits, and (2) currencies on which we pay interest based on a
rate paid by the London branch of Bankers Trust Company or the local
subcustodian.
Currencies on which we pay interest based on a market
benchmark rate for overnight deposits (which we call "Benchmark Rate
Currencies"):
o For each of these currencies, the interest rate we pay is based
on a specific market benchmark (such as Effective Fed Funds)
and is calculated by taking an average of the benchmark rate
and subtracting a spread. (See Schedule A)
o Currently, the only Benchmark Rate Currency is the U.S. Dollar.
Over time we will be considering additional currencies to
include in this category.
o Operationally, most balances in Benchmark Rate Currencies are
swept overnight into deposits at the London branch of Bankers
Trust Company. Where you have selected a short-term investment
fund, your U.S. Dollar balances in the U.S. will be swept
overnight in accordance with your instructions.
Currencies on which we pay interest based on a rate paid by
the London branch of Bankers Trust Company or the local subcustodian (which we
call "Base Rate Currencies"):
o For each of these currencies, the interest rate we pay is based
on the rate paid by the London branch or the local subcustodian
on overnight deposits in the currency. In either case, interest
is calculated by using the overnight rate (which will be the
actual overnight, a weekly average, or monthly average rate,
depending on the currency) and subtracting a spread. (See
Schedule A)
o Currencies that are part of the sweep program will earn
interest based on the base rate, which will be the higher of
the rate offered by the London branch of Bankers Trust Company
or the local subcustodian.
o Currencies that are not part of the sweep program will
generally earn interest based on the rate paid by the local
subcustodian. We may at times be able to sweep certain currency
balances into deposits of Bankers Trust Company's London branch
in order to be able to earn a higher rate for you. On those
days, any such currency will be treated as part of the sweep
program, and you will earn interest on all of your balances in
that currency at the higher rate for that day.
o Currently, there are 39 Base Rate Currencies, 21 of which are
included in our sweep program to the London branch.
o Operationally, most balances in Base Rate Currencies that are
part of our sweep program are swept overnight into deposits at
the London branch, while balances in Base Rate Currencies that
are not part of our sweep program remain with the local
subcustodian.
For each currency on which we pay interest:
o We will notify you periodically in writing of changes in
spreads and updates to the cash management program. These
program updates also will be available through Global Custody
Flash Notices.
o You earn interest at the calculated rate on your entire
contractual balance without any action on your part and without
any minimum balance requirements. This is the case regardless
of whether we are able to invest your balances at or near the
applicable benchmark or base rate and regardless of whether
your contractual balance may exceed your actual balance.
o Our program generally requires that overnight balances in each
currency remain with (or are swept to) a subcustodian we
designate for that currency. Nevertheless, we pay our stated
rate of interest on any balances that, because of transactions
in your account, are held overnight with an alternate
subcustodian if we receive interest on that currency from that
subcustodian. If the alternate subcustodian does not pay
interest, however, these balances are excluded from our
program.
o The minimum rate paid is 0.50%, except for the Japanese Yen
(for which it is 0.05%) and the Singapore Dollar (for which it
is 0.25%). Please note that this is also subject to change as
appropriate for any currency.
o You will have continuous access through Globe*View, BTWorld, or
Globe*Link or other agreed electronic on-line system to the
interest rate earned during the previous "rate averaging
period". Because we may use weekly or monthly average rates to
calculate the interest you earn, we do not know the actual
interest rate until the weekly or monthly period is completed.
o For swept currencies, from time to time we may not be able to
sweep the full amount of your balances to the London branch
because of operational constraints or because your balance on a
contractual basis temporarily exceeds your actual balance. You
will, however, always receive credit for interest based on your
entire contractual balance. To the extent you would have earned
a lower rate on balances not swept, we will make up the
difference. To the extent that actual balances are higher than
contractually posted balances due to purchase fails or
otherwise, we will retain the interest earned as compensation.
o The effective rate we pay on overnight balances will generally
differ from the effective rate we receive (whether from the
London branch or the local subcustodian). Any difference
between the effective rate we receive and the effective rate we
pay (which may be positive or negative, but is generally
positive) is kept by us and covers our fee for running the cash
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management program and the related costs we absorb.
Obviously, there will be currencies on which we will not pay
interest because of local regulations, insufficient scale, or other reasons.
However, we hope to identify additional currencies where we can begin paying
interest and we will announce those to you as soon as practical.
Although currently most cash balances in our overnight sweep
program are swept into deposits at the London branch of Bankers Trust Company,
we reserve the right to utilize other branches or affiliates for the overnight
sweep program.
As you know, overdrafts are not permitted in the normal
course of business in any currency. Should they occur in any currency, your
account will be charged a fee to settle transactions in advance of receipt of
funds. If the overdraft is not promptly cured (and in any event upon the
expiration of 30 days) after the investment manager has been notified of the
outstanding overdraft, the account's home currency will be used to cure the
overdraft and the associated foreign exchange will be done by Bankers Trust at
market rates. (Other currencies may be utilized to the extent the home
currency is insufficient.) Investment managers that have not cured overdrafts
within such period will be deemed to have directed such foreign exchange
transaction. Accounts subject to ERISA will be deemed to have engaged in the
transaction under the authority of the class exemptions available to qualified
professional asset managers and in-house investment managers. To the extent
that the overdraft is less than the U.S. dollar equivalent of $50,000, Bankers
Trust's foreign exchange desk will bundle the transaction with other small
amounts for other clients.
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Schedule A
New Cash Management Program - Global Custody
Overnight Uninvested Cash Balances
(* - Denotes currencies in sweep program)
Currencies Rates
---------- -----
Argentine Peso Base Rate less 100
Australian Dollar* Base Rate less 130
Austrian Xxxxxxxxx* Base Rate less 000
Xxxxxxx Xxxxx* Base Rate less 225
British Pound Sterling* Base Rate less 165
Canadian Dollar* Base Rate less 150
Czech Koruna Base Rate less 75
Danish Krone* Base Rate less 100
Deutsche Xxxx* Base Rate less 150
Dutch Guilder* Base Rate less 175
European Currency Unit* Base Rate less 125
Finnish Markka* Base Rate less 000
Xxxxxx Xxxxx* Base Rate less 110
Greek Drachma Base Rate less 75
Hong Kong Dollar* Base Rate less 225
Hungarian Forint Base Rate less 75
Indonesian Rupiah Base Rate less 100
Irish Punt* Base Rate less 100
Israeli Shekel Base Rate less 75
Italian Lira* Base Rate less 125
Japanese Yen Base Rate less 75
Jordanian Dinar Base Rate less 150
Korean Won Base Rate less 75
Malaysian Ringgit Base Rate less 150
Mexican Peso Base Rate less 150
New Taiwan Dollar Base Rate less 75
New Zealand Dollar* Base Rate less 100
Norwegian Krone* Base Rate less 150
Philippine Peso Base Rate less 100
Polish Zloty Base Rate less 150
Portuguese Escudo* Base Rate less 000
Xxxxxxxxx Dollar Base Rate less 000
Xxxxxx Koruna Base Rate less 100
South African Rand* Base Rate less 200
Spanish Peseta* Base Rate less 000
- 0 -
Xxxxxxx Xxxxx* Base Rate less 200
Swiss Franc* Base Rate less 100
Thai Baht Base Rate less 150
Turkish Lira Base Rate less 75
U.S. Dollar* Effective Fed Funds less 100(1)
We reserve the right, in our sole discretion, to adjust the base rates and
benchmark rates used and the spreads charged at any time and for any reason.
We will notify you periodically in writing of changes in spreads and updates
to the cash management program. These program updates also will be available
through Global Custody Flash Notices.
(1) Not applicable if U.S. Dollars are swept to a short-term investment fund.
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