Exhibit (g)(3)
FOREIGN CUSTODY MANAGER ADDENDUM
TO CUSTODY AGREEMENT
This FOREIGN CUSTODY MANAGER ADDENDUM ("Addendum") dated as of June 1, 2000
by and between M.S.D. & T. FUNDS, INC., a Maryland corporation (the "Fund"), and
FIFTH THIRD BANK, a banking corporation organized pursuant to the laws of the
State of Ohio (the "Custodian"), is made as an addendum to the Custody Agreement
dated as of May 28, 1993 (the "Custody Agreement") between the Fund and the
Custodian;
WHEREAS, the Custodian has been appointed by the Fund as to the custodian
of the assets of certain series or portfolios of the Fund as identified in the
Custody Agreement; and
WHEREAS, by a Global Custody Addendum dated as of June 1, 2000 (the "Global
Custody Addendum") to the Custody Agreement, the Custodian was appointed by the
Fund as the custodian of those assets of such series or portfolios of the Fund
to be held outside the United States; and
WHEREAS, the Fund desires to appoint the Custodian as the "Foreign Custody
Manager" (as that term is defined in Rule 17f-5(a)(2) under the Investment
Company Act of 1940, as amended) for such series or portfolios of the Fund and
the Custodian is willing to serve as the Foreign Custody Manager for such series
or portfolios of the Fund, in each case on the terms and conditions contained
herein;
NOW, THEREFORE, in consideration of the premises and of the mutual promises
and covenants contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Addendum, the following words and phrases, unless the
context otherwise requires, shall have the following meaning:
1. Capitalized terms used in the Addendum and not otherwise defined in the
Addendum shall have the meanings given such terms in Rule 17f-5 under the
Investment Company Act of 1940, as amended (the "Rule").
2. "Board" shall mean the Board of Directors of the Fund.
3. "Eligible Foreign Custodian" shall have the meaning provided in the
Rule, except that it shall not include any Securities Depository the use of
which is mandatory (i) by law or regulation, or (ii) because securities cannot
be withdrawn from such Securities Depository, or (iii) because maintaining
securities outside such Securities Depository is not consistent with prevailing
custodial practices.
4. "Fund" shall hereinafter be deemed to refer to each separate series or
portfolio of the Fund unless the context otherwise requires.
5. "Monitoring System" shall mean a system established by the Custodian to
fulfill the Responsibilities specified in clauses (1)(d) and (1)(e) of Article
III of this Addendum.
6. "Responsibilities" shall mean the responsibilities delegated to the
Custodian as a Foreign Custody Manager with respect to each Specified Country,
as such responsibilities are more fully described in Article III of this
Addendum.
7. "Specified Country" shall mean each country listed on Schedule I
attached hereto and each country, other than United States, constituting the
primary market for a security with respect to which the Fund has given
settlement instructions to the Custodian Bank as custodian under the Custody
Agreement and Global Custody Addendum.
ARTICLE II
THE CUSTODIAN AS FOREIGN CUSTODY MANAGER
1. The Fund on behalf of its Board hereby delegates to the Custodian with
respect to each Specified Country the Responsibilities.
2. The Custodian accepts the Board's delegation of Responsibilities with
respect to each Specified Country and agrees in performing the Responsibilities
as a Foreign Custody Manager to exercise reasonable care, prudence and diligence
such as a person having responsibility for the safekeeping of the Fund's assets
would exercise.
3. The Custodian shall provide to the Board, no later than 15 days after
the end of each calendar quarter, written reports notifying the Board of the
placement of assets of the Fund with a particular Eligible Foreign Custodian
within a Specified Country selected by the Custodian and of any material change
in the Arrangements with respect to the Fund with any such Eligible Foreign
Custodian.
ARTICLE III
RESPONSIBILITIES
1. The Custodian shall with respect to each Specified Country and each
Eligible Foreign Custodian selected by the Custodian: (a) determine that assets
of the Fund held by such Eligible Foreign Custodian will be subject to
reasonable care, based on the standards applicable to custodians in the relevant
market in which such Eligible Foreign Custodian operates, after considering all
factors relevant to the safekeeping of such assets, including, without
limitation, those contained in Section (c)(1) of the Rule; (b) determine that
the Fund's foreign custody
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arrangements with each Eligible Foreign Custodian selected by the Custodian are
governed by a written contract with the Eligible Foreign Custodian (or, in the
case of an Eligible Foreign Custodian selected by the Custodian which is a
Securities Depository, by such a contract, by the rules or established practices
or procedures of the Securities Depository, or by any combination of the
foregoing) which will provide reasonable care for the Fund's assets based on the
standards specified in paragraph (c)(1) of the Rule; (c) determine that each
contract described in the preceding clause (b) (or, in the case of an Eligible
Foreign Custodian selected by the Custodian which is a Securities Depository, by
such a contract, by the rules or established practices or procedures of the
Securities Depository, or by any combination of the foregoing) shall include the
provisions specified in paragraph (c)(2)(i)(A) through (F) of the Rule or,
alternatively, in lieu of any or all of such (c)(2)(i)(A) through (F)
provisions, such other provisions as the Custodian determines will provide, in
their entirety, the same or a greater level of care and protection for the
assets of the Fund as such specified provisions; (d) monitor pursuant to the
Monitoring System the appropriateness of maintaining the assets of the Fund with
a particular Eligible Foreign Custodian selected by the Custodian and the
contract governing the arrangement; and (e) advise the Fund whenever an
arrangement described in the preceding clause (d) no longer meets the
requirements of the Rule that the Fund must withdraw its assets from such
Eligible Foreign Custodian as soon as reasonably practicable. The Fund agrees
that the Custodian may employ, consult and obtain advice from suitable advisors,
agents and third parties as the Custodian deems appropriate in its sole
discretion in connection with actions taken by the Custodian hereunder to
fulfill the Responsibilities.
2. For purposes of clause (d) of the preceding Section 1 of this Article,
appropriateness shall not include, nor be deemed to include, any risks
associated with investment in a particular country. Maintaining assets of the
Fund with an Eligible Foreign Custodian selected by the Custodian will on any
day be considered appropriate if the Custodian on such day would select such
Eligible Foreign Custodian in accordance with Articles II and III of this
Addendum.
ARTICLE IV
REPRESENTATIONS
1. The Fund hereby represents that: (a) this Addendum has been duly
authorized, executed and delivered by the Fund, constitutes a valid and legally
binding obligation of the Fund enforceable in accordance with its terms, and no
statute, regulation, rule, order, judgment or contract binding on the Fund
prohibits the Fund's execution or performance of this Addendum; (b) this
Addendum has been approved by the Board at a meeting duly called and at which a
quorum was at all times present; and (c) the Board has considered the risks
associated with investment in each Specified Country listed on Schedule 1 and
will have considered such risks prior to any settlement instructions being given
to the Custodian with respect to any other Specified Country.
2. The Custodian hereby represents that: (a) the Custodian is duly
organized and existing under the laws of the State of Ohio, with full power to
carry on its businesses as now
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conducted, and to enter into this Addendum and to perform its obligations
hereunder; (b) this Addendum has been duly authorized, executed and delivered by
the Custodian, constitutes a valid and legally binding obligation of the
Custodian enforceable in accordance with its terms, and no statute, regulation,
rule, order, judgment or contract binding on the Custodian prohibits the
Custodian's execution or performance of this Addendum; and (c) the Custodian has
established the Monitoring System.
ARTICLE V
CONCERNING THE CUSTODIAN
1. The Custodian shall not be liable for any costs, expenses, damages,
liabilities or claims, including attorneys' and accountants' fees, sustained or
incurred by, or asserted against, the Fund except to the extent the same arises
out of the failure of the Custodian to exercise the care, prudence and diligence
required by Section 2 of Article II hereof. In no event shall the Custodian be
liable to the Fund, the Board, or any third party for special, indirect or
consequential damages arising in connection with this Addendum.
2. The Fund agrees to indemnify the Custodian and holds it harmless from
and against any and all costs, expenses, damages, liabilities or claims,
including attorneys' and accountants' fees, sustained or incurred by or asserted
against the Custodian by reason or as a result of any action or inaction,
arising out of the Custodian's performance hereunder, provided that the Fund
shall not indemnify the Custodian to the extent any such costs, expenses,
damages, liabilities or claims arise out of the Custodian's failure to exercise
the reasonable care, prudence and diligence required by Section 2 of Article II
hereof.
3. The Custodian shall only have such duties as are expressly set forth
herein. Without limiting the generality of the foregoing, in no event shall the
Custodian be liable for any risks associated with investments in a particular
country, but shall only be liable for the risks associated in placing assets of
the Fund with a particular Eligible Foreign Custodian selected by the Custodian.
ARTICLE VI
MISCELLANEOUS
1. This Addendum constitutes the entire agreement between the Fund and the
Custodian with respect to the subject matter and supersedes all prior oral or
written agreements in regard thereto.
2. Any notice or other instrument in writing, authorized or required by
this Addendum to be given to the Custodian, shall be sufficiently given if
received by it at its offices at the Custodian Center, 000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000, Attention: Mutual Fund
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Client Services, or at such other place as the Custodian may from time to time
designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Addendum to be given to the Fund shall be sufficiently given if received by
it at its offices at Xxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention:
M.S.D. & T. Funds Administration, or at such other place as the Fund may from
time to time designate in writing.
4. In case any provision in or obligation under this Addendum shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
thereby. This Addendum may not be amended or modified in any manner except by a
written agreement executed by both parties. This Addendum shall extend to and be
binding upon the parties hereto, and their respective successors and assigns;
provided, however, that this Addendum shall not be assignable by either party
without the written consent of the other.
5. This Addendum shall be construed in accordance with the internal
substantive laws of the State of Ohio, without regard to conflicts of laws and
principles thereof.
6. The parties hereto agree that in performing hereunder, the Custodian is
acting solely on behalf of the Fund and no contractual or service relationship
shall be deemed to be established hereby between the Custodian and any other
person.
7. This Addendum may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
8. This Addendum shall be continuing and shall remain in full force and
effect until terminated by the Custodian or the Fund upon termination of the
Custody Agreement.
9. In consideration of the services provided by the Custodian
hereunder, the Fund shall pay to the Custodian such compensation and out-of-
pocket expenses as may be agreed upon from time to time by the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be
executed by their respective officers, thereunto duly authorized, as of the date
first above written.
M.S.D. & T. FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
FIFTH THIRD BANK
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Vice President
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SCHEDULE I
Specified Countries
COUNTRY SUB-CUSTODIAN DEPOSITORY (Acronym)
------- ------------- --------------------
Argentina Banco Rio de la X.X. Xxxxx, Caja de Valores, SA
Buenos Aires
Australia Commonwealth Bank of Australia, Austraclear, Ltd.
Sydney
Reserve Bank Information &
Transfer System
Brazil BankBoston, Sao Paulo Bolsa de Valores de Sao Paolo
(BOVESPA)
Bolsa de Valores de Rio de
Janiero (BVRJ)
Central de Custodia e de
Liquidacao Financiera de
Titulos (CETIP)
Sistema Especial de
Liquidacao e Custodia
(SELIC)
Canada Royal Bank of Canada, Montreal Canadian Depository for
Securities Ltd (CDS)
West Canada Depository Trust
Company (WCDTC)
Chile BankBoston, Xxxxxxxx None
Denmark Den Danske Bank, Copenhagen Vaerdipapircentralen (VP)
Germany Dresdner Bank, Frankfurt/Main Deutsche Kassenverein AG
(DKV)
Italy Banca Commerciale Italiana, Monte Titoli SpA (MT)
Milan Banca d'Italia
Japan The Fuji Bank, Limited, Tokyo Japan Securities Depository
Center (JASDEC)
The Bank of Japan
Korea Standard Chartered Bank, Seoul Korea Securities Depository
(KSD)
Mexico Banco Nacional de Mexico, Instituto Para el Deposito
Mexico City de Valores (SD Indeval)
Banco de Mexico
New Zealand ANZ Banking Group, Ltd., Reserve Bank of New Zealand /
Wellington Austraclear Ltd
Norway Den norske Bank, Oslo Verdipapirsentralen (VPS)
Spain Banco Bilbao Vizcaya, Madrid Banco de Espana (GB)
Servicio de Compensacion y
Liquidacion de Valores SA
(SCLV)
Sweden Skandinaviska Enskilda Banken Vardepapperscentralen (VPC)
(SEB), Stockholm
United Kingdom The Bank of New York, London Central Gilts Office (CGO)
Central Money Markets Office
(CMO)
