EX-99.B(8)
CUSTODIAN SERVICES AGREEMENT TERMS AND CONDITIONS
This Agreement is made as of _________, 1994 by and between FLAG INVESTORS
EQUITY PARTNERS FUND, INC. (the "Fund"), a Maryland corporation, and PNC BANK,
NATIONAL ASSOCIATION ("PNC Bank"), a national banking association.
The Fund is registered as an open-end investment company under the
Investment Company Act of 1940 (the "1940 Act"), as amended. The Fund wishes to
retain PNC Bank to provide custodian services, and PNC Bank wishes to furnish
custodian services, either directly or though an affiliate or affiliates, as
more fully described herein.
In consideration of the promises and mutual covenants herein contained, the
parties agree as follows:
1. Definitions.
a. "Authorized Person". The term "Authorized Person" shall mean any
officer of the Fund and any other person, who is duly authorized by the Fund's
Governing Board, to give Oral and Written Instructions on behalf of the Fund.
Such persons are listed in the Certificate attached hereto as the Authorized
Persons Appendix as such appendix may be amended in writing by the Fund's
Governing Board from time to time.
b. "Book-Entry System". The term "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.
c. "CFTC". The term "CFTC" shall mean the Commodities Futures
Trading Commission.
d. "Governing Board". The term "Governing Board" shall mean the
Fund's Board of Directors if the Fund is a corporation or the Fund's Board of
Trustees if the Fund is a trust, or, where duly authorized, a competent
committee thereof.
e. "Oral Instructions". The term "Oral Instructions" shall 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.
f. "Property". The term "Property" shall mean:
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.
g. "PNC Bank". The term "PNC Bank" shall mean PNC Bank, National
Association or a subsidiary or affiliate of PNC Bank.
h. "SEC". The term "SEC" shall mean the Securities and Exchange
Commission.
i. "Securities and Commodities Laws". The term shall mean the
"1933 Act", the Securities Act of 1933, as amended, the "1934 Act", the
Securities Exchange Act of 1934, as amended, and the "CEA", the Commodities
Exchange Act, as amended.
j. "Shares". The term "Shares" shall mean the shares of stock of
any series or class of the Fund, or, where appropriate, units of beneficial
interest in a trust where the Fund is organized as a Trust.
k. "Written Instructions". The term "Written Instructions" shall
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, 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 Governing Board, 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 the Fund's advisory agreement or agreements;
d. a copy of the Fund's distribution agreement or agreements;
e. a copy of the Fund's administration agreements if PNC Bank is
not providing the Fund with such services;
f. copies of any shareholder servicing agreements made in respect
of the Fund; and
g. certified or authenticated copies of any and all amendments
or supplements to the foregoing.
4. Compliance with Government Rules and Regulations.
PNC Bank undertakes to comply with all applicable requirements of the
1933 Act, the 1934 Act, the 1940 Act, and the CEA, and any laws, rules and
regulations of governmental authorities having jurisdiction with respect to all
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.
5. Instructions. Unless otherwise provided in this Agreement, PNC Bank
shall act only upon Oral and Written Instructions. 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 Governing Board or of the Fund's shareholders.
The Fund agrees to forward to PNC Bank Written Instructions confirming Oral
Instructions 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.
The Fund further agrees that PNC Bank shall incur no liability to the Fund
in acting upon Oral or Written Instructions provided such instructions
reasonably appear to have been received from an Authorized Person.
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
questions 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 advisor 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.
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 paragraph 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.
7. Records. The books and records pertaining to the Fund, which are in the
possession 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, or the Fund's
authorized representatives, 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 to keep confidential all records of the
Fund and information relative to the Fund and its shareholders (past, present
and potential), unless the release of such records or information is otherwise
consented to, in writing, by the Fund. The Fund further agrees that, should PNC
Bank be required to provide such information or records to duly constituted
authorities (who may institute civil or criminal contempt proceedings for
failure to comply), PNC Bank shall not be required to seek the Fund's consent
prior to disclosing such information; provided that PNC Bank gives the Fund
prior written notice of the provision of such information and records.
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
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment failures,
PNC Bank shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions but shall have no liability with respect thereto.
11. Compensation. As compensation for custody services rendered by PNC
Bank during the term of this Agreement, the Fund 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 agrees to indemnify and hold harmless PNC
Bank and its nominees from all taxes, charges, expenses, assessment, claims and
liabilities (including, without limitation, liabilities arising under the 1933
Act, the 1934 Act, the 1940 Act, the CEA, 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 which PNC Bank takes or does not take (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 nominees, shall be
indemnified against any liability to the Fund or to its shareholders (or any
expenses incident to such liability) arising out of PNC Bank's or its nominees'
own willful misfeasance, bad faith, gross negligence or reckless disregard of
its duties and obligations under this Agreement or PNC Bank's own grossly
negligent failure to perform its duties under this Agreement.
13. Responsibility of PNC Bank. PNC Bank shall be under no duty to take any
action on behalf of the Fund 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 for under this Agreement. PNC Bank shall be
responsible for its own or its nominees' own willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties and obligations under this
Agreement or PNC Bank's own negligent failure to perform its duties under this
Agreement.
Without limiting the generality of the foregoing or of any other provision
of this Agreement, PNC Bank, in connection with its duties under this Agreement,
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) 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 or catastrophe, acts of
God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
Notwithstanding anything in this Agreement to the contrary, PNC Bank shall
have no liability to the Fund 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 it owns, including cash received as a
result of the distribution of its 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 account(s) 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, portfolio or class of
the Fund and shall hold in such account(s) all cash received from or for the
accounts of the Fund specifically designated to each separate series, portfolio
or class.
PNC Bank shall make cash payments from or for the account of the Fund only
for:
i. purchases of securities in the name of the Fund or PNC
Bank or PNC Bank's nominee as provided in sub-paragraph
(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 the Fund;
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 of 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-paragraph (c) of this Paragraph 14; 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 account of
the Fund.
c. Receipt of Securities.
i. PNC Bank shall hold all securities received by it for
the account of the Fund in a separate account that
physically segregates such securities from those of
any other persons, firms or corporations. 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 Governing Board, authorizing
the transaction. In no case may any member of the
Fund's Governing Board, 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 sub-custodian agreements with other
United States banks or trust companies to perform duties
described in this sub-paragraph (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 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-paragraph (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 the Fund 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 the Fund 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 the Fund against receipt
of other securities or cash issued or paid in connection
with the liquidation, reorganization, refinancing, tender
offer, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
v. deliver any securities held for the Fund 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 Fund
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 the Fund to any bank or
trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by the Fund;
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 the Fund in
connection with any repurchase agreement entered into on
behalf of the Fund, but only on receipt of payment
herefor; 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 Governing Board approving, authorizing and
instructing PNC Bank on a continuous and on-going basis, to deposit in the
Book-Entry System all securities belonging to the Fund 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 Fund,
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(s).
To administer the Book-Entry System properly, the following provisions
shall apply:
i. With respect to securities of the Fund which are
maintained in the Book-Entry system, established
pursuant to this sub-paragraph (e) hereof, the records
of PNC Bank shall identify by Book-Entry or otherwise
those securities belonging to the Fund. PNC Bank shall
furnish the Fund a detailed statement of the Property
held for the Fund under this Agreement at least monthly
and from time to time and upon written request.
ii. Securities and any cash of the Fund 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 the Fund's duly authorized
employees or agents, and the Fund will be furnished with
all information in respect of the services rendered to it
as it may require.
iv. PNC Bank will provide the Fund with copies of any report
obtained by PNC Bank on the system of internal accounting
control of the Book-Entry System promptly after receipt of
such a report by PNC Bank.
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 the Fund 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 the Fund may be registered in the name of the Fund; PNC
Bank; the Book-Entry System; a sub-custodian; or any duly appointed nominee(s)
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 its registered nominee or in the name of the Book-Entry System,
any securities which it may hold for the account of the Fund and which may from
time to time be registered in the name of the Fund. PNC Bank shall hold all such
securities which are not held in the Book-Entry System in a separate account for
the Fund in the name of the Fund physically segregated at all times from those
of any other person or persons.
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 the
Fund, 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 notice, proxies, and proxy soliciting materials to the registered
holder of such securities. If the registered holder is not the Fund then Written
or Oral Instructions must designate the person(s) 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.
(1) collect and receive for the account of the Fund,
all income, dividends, distributions, coupons, option
premiums, other payments and similar items, included
or to be included in the Property, and, in addition,
promptly advise the Fund of such receipt and credit
such income, as collected, to the Fund's custodian
account;
(2) endorse and deposit for collection, in the name of
the Fund, checks, drafts, or other orders for the
payment of money;
(3) receive and hold for the account of the Fund all
securities received as a distribution on the Fund's
portfolio 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 portfolio securities belonging to the Fund held by
PNC Bank hereunder;
(4) 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
(5) 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.
(1) PNC Bank is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(a) for examination by a broker or dealer selling
for the account of the Fund in accordance with
street delivery custom;
(b) for the exchange of interim receipts or
temporary securities for definitive securities;
and
(c) for transfer of securities into the name of the
Fund 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.
(2) Unless and until PNC Bank receives Oral or Written
Instructions to the contrary, PNC Bank shall:
(a) 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 the Fund;
(b) collect interest and cash dividends received,
with notice to the Fund, to the account of the
Fund;
(c) hold for the account of the Fund all stock
dividends, rights and similar securities issued
with respect to any securities held by PNC Bank;
and
(d) 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
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
account(s) on its records for and on behalf of the Fund.
Such account(s) may be used to transfer cash and
securities, including securities in the Book-Entry System:
(1) 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
(2) 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 Prospectus,
the Internal Revenue Code (including regulations), 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 advisor(s) 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; and
vi. 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 the
Fund pay out of the moneys held for the account of the Fund 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 sell securities upon
receipt of Oral Instructions from the Fund that specify:
i. the name of the issuer and the title of the security,
including CUSIP number if applicable;
ii. the number of shares or principal amount sold, and
accrued interest, if any;
iii. the date of trade, settlement and sale;
iv. the sale price per unit;
v. the total amount payable to the Fund upon such sale;
vi. the name of the broker through whom or the person to
whom the sale was made; and
vii. the location to which the security must be delivered
and delivery deadline, if any.
PNC Bank shall deliver the securities upon receipt of the total amount
payable to the Fund 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.
i. PNC Bank shall furnish the Fund the following reports:
(1) such periodic and special reports as the Fund may
reasonably request;
(2) a monthly statement summarizing all transactions and
entries for the account of the Fund, listing the
portfolio securities belonging to the fund with the
adjusted average cost of each issue and the market
value at the end of such month, and stating the cash
account of the Fund including disbursement;
(3) the reports to be furnished to the Fund pursuant to
Rule 17f-4; and
(4) 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 to telephonic demands thereto, and 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.
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 Fund to the
Fund. It may deliver them to a bank or trust company of PNC Bank's, 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
expenses. PNC Bank shall have a security interest in and shall have a right of
setoff against Property in the Fund's possession as security for the payment of
such fees, compensation, costs and expenses.
16. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be addressed (a) if to PNC Bank at PNC
Bank's address, 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 the address of the
Fund; or (c) if to neither of the foregoing, at such other address as shall have
been notified to the sender of any such Notice or other communication. 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. 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 agrees with PNC Bank to
comply with all relevant provisions of the 1940 Act; and (iii) PNC Bank and such
delegate promptly provide such information as the Fund may request, and respond
to such questions as the Fund may ask, relative to the delegation, including
(without limitation) the capabilities of the delegate.
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. 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 more separate documents their agreement, if any, with respect
to delegated duties and/or Oral Instructions.
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.
This Agreement shall be deemed to be a contract made in Pennsylvania and
governed by Pennsylvania law. 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. This Agreement shall be binding
and shall inure to the benefit of the parties hereto and their respective
successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxx
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Title: V.P.
FLAG INVESTORS EQUITY PARTNERS FUND, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title:
