EX - 99.(g)(5)
FOREIGN CUSTODY MANAGER AGREEMENT
AGREEMENT, made as of April 1, 2003, between MERCANTILE FUNDS, INC.
(the "Company") and FIFTH THIRD BANK ("Fifth Third").
W I T N E S S E T H :
WHEREAS, the Company desires to appoint Fifth Third as a Foreign
Custody Manager on the terms and conditions contained herein;
WHEREAS, Fifth Third desires to serve as a Foreign Custody Manager and
perform the duties set forth herein on the terms and conditions contained
herein;
NOW, THEREFORE, in consideration of the mutual promises hereinafter
contained in this Agreement, the Company and Fifth Third hereby agree as
follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings;
1. Capitalized terms used in the Agreement and not otherwise
defined in the Agreement shall have the meanings given such terms in the Rule.
2. "Board" shall mean the Board of Directors of the Company.
3. "Eligible Foreign Custodian" shall have the meaning provided
in the Rule.
4. "Monitoring System" shall mean a system established by Fifth
Third to fulfill the Responsibilities specified in clauses (1)(d) and (1)(e) of
Article III of this Agreement.
5. "Responsibilities" shall mean the responsibilities delegated
to Fifth Third under the Rule as a Foreign Custody Manager with respect to each
Specified Country and each Eligible Foreign Custodian selected by Fifth Third,
as such responsibilities are more fully described in Article III of this
Agreement.
6. "Rule" shall mean Rule 17f-5 under the Investment Company Act
of 1940, as amended, as such Rule became effective on June 12, 2000.
7. "Specified Country" shall mean each country listed on Schedule
I attached hereto and each country, other than the United States, constituting
the primary market for a security with respect to which the Company has given
settlement instruction to Fifth Third as custodian (the "Custodian") under its
Custody Agreement with the Company.
ARTICLE II
FIFTH THIRD AS FOREIGN CUSTODY MANAGER
1. The Board, on behalf of the Company, hereby delegates to Fifth
Third, with respect to each Specified Country, the Responsibilities.
2. Fifth Third 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 Company's assets would exercise.
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3. Fifth Third shall provide to the Board at such times as the
Board deems reasonable and appropriate based on the circumstances of the
Company's foreign custody arrangements, written reports notifying the Board of
the placement of assets of the Company with a particular Eligible Foreign
Custodian within a Specified Country and of any material change in the
arrangements (including the contract governing such arrangements) with respect
to assets of the Company with any such Eligible Foreign Custodian.
ARTICLE III
RESPONSIBILITIES
1. Subject to the provisions of this Agreement, Fifth Third shall
with respect to each Specified Country select an Eligible Foreign Custodian. In
connection therewith, Fifth Third shall: (a) determine that assets of the
Company 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 Company's
foreign custody arrangements with each Eligible Foreign Custodian are governed
by a written contract with the Custodian that will provide reasonable care for
the Company's assets based on the standards specified in paragraph (c)(1) of the
Rule; (c) determine that each contract with an Eligible Foreign Custodian 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 Fifth Third determines will provide, in
their entirety, the same or a greater level of care and protection for the
assets of the Company as such specified provisions; (d) monitor pursuant to the
Monitoring System the appropriateness of maintaining the assets of the Company
with a particular Eligible Foreign Custodian pursuant to paragraph (c) (1) of
the Rule and the performance of the contract governing such arrangement t; and
(e) advise the Company whenever Fifth Third determines under the Monitoring
System that an arrangement (including any material change in the contract
governing such arrangement) described in the preceding clause (d) no longer
meets the requirements of the Rule.
2. For purposes of clause (d) of the preceding Section 1 of this
Article, Fifth Third's determination of appropriateness shall not include, nor
be deemed to include, any evaluation of Country Risks associated with investment
in a particular country. For purposes hereof, "Country Risks" shall mean
systemic risks of holding assets in a particular country including, but not
limited to: (a) an Eligible Foreign Custodian's use of any depositories that act
as or operate a system or a transnational system for the central handling of
securities or any equivalent book-entries; (b) such country's financial
infrastructure; (c) such country's prevailing custody and settlement practices;
(d) nationalization, expropriation or other governmental actions; (e) regulation
of the banking or securities industry; (f) currency controls, restrictions,
devaluations or fluctuations; and (g) market conditions that affect the orderly
execution of securities transactions or affect the value of securities.
ARTICLE IV
REPRESENTATIONS
1. The Company hereby represents that: (a) this Agreement has
been duly authorized, executed and delivered by the Company, constitutes a valid
and legally binding obligation of the Company enforceable in accordance with its
terms, and no statute, regulation, rule, order, judgment or contract binding on
the Company prohibits the Company's execution or performance of this Agreement;
and (b) this Agreement has been approved and ratified by the Board at a meeting
duly called and at which a quorum was at all times present; and (c) the Board or
its investment advisor has considered the Country Risks associated with
investment in each Specified Country listed on Schedule 1 and will have
considered such Country Risks prior to any settlement instructions being given
to the Custodian with respect to any other Specified Country.
2. Fifth Third hereby represents that: (a) Fifth Third is duly
organized and existing under the laws of the State of Ohio, with full power to
carry on its businesses as now conducted, and to enter into this Agreement and
to perform its obligations hereunder; (b) this Agreement has been duly
authorized, executed and delivered by Fifth Third, constitutes a valid and
legally binding obligation of Fifth Third enforceable in accordance with its
terms, and no statute, regulation, rule, order, judgment or contract binding on
Fifth
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Third prohibits Fifth Third's execution or performance of this Agreement; and
(c) Fifth Third has established the Monitoring System.
ARTICLE V
CONCERNING FIFTH THIRD
1. Fifth Third 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 Company except to the extent
the same arises out of the failure of Fifth Third to exercise the care, prudence
and diligence required by Section 2 of Article II hereof. In no event shall
Fifth Third be liable to the Company, the Board, or any third party for special,
indirect or consequential damages, or for lost profits or loss of business,
arising in connection with this Agreement.
2. The Company agrees to indemnify Fifth Third 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 Fifth Third by reason or as a result of any action or inaction,
arising out of Fifth Third's performance hereunder, provided that the Company
shall not indemnify Fifth Third to the extent any such costs, expenses, damages,
liabilities or claims arise out of Fifth Third's failure to exercise the
reasonable care, prudence and diligence required by Section 2 of Article II
hereof.
3. Fifth Third shall only have such duties as are expressly set
forth herein. Without limiting the generality of the foregoing, in no event
shall Fifth Third be liable for any Country Risks associated with investments in
a particular country.
ARTICLE VI
MISCELLANEOUS
1. This Agreement constitutes the entire agreement between the
Company and Fifth Third, and no provision in the Custody Agreement between the
Company and the Custodian shall affect the duties and obligations of Fifth Third
hereunder, nor shall any provision in this Agreement affect the duties or
obligations of the Custodian under the Custody Agreement.
2. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to Fifth Third, shall be sufficiently
given if received by it at its offices at Fifth Third Center, 000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000, Attention: Mutual Company Client Services, or at such
other place as Fifth Third may from time to time designate in writing.
3. Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Company shall be sufficiently
given if received by it at its offices at Xxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx
00000 Attention: Funds Administration, or at such other place as the Company may
from time to time designate in writing.
4. In case any provision in or obligation under this Agreement
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 Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties. This Agreement shall
extend to and be binding upon the parties hereto, and their respective
successors and assigns; provided, however, that this Agreement shall not be
assignable by either party without the written consent of the other.
5. This Agreement shall be construed in accordance with the
internal substantive laws of the State of Ohio, without regard to conflicts of
laws principles thereof. The Company and Fifth Third each hereby irrevocably
waive any and all rights to a trial by jury in any legal proceeding arising out
of or relating to this Agreement.
6. The parties hereto agree that in performing hereunder, Fifth
Third is acting solely on behalf of the Company and no contractual or service
relationship shall be deemed to be established hereby between Fifth Third and
any other person.
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7. This Agreement 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 Agreement shall terminate simultaneously with the
termination of the Custody Agreement between the Company and the Custodian, and
may otherwise be terminated by either party giving to the other party a notice
in writing specifying the date of such termination, which shall be not less than
thirty (30) days after the date of such notice.
9. In consideration of the service provided by Fifth Third
hereunder, the Company shall pay to Fifth Third such compensation and
out-of-pocket expenses as may be agreed upon from time to time.
IN WITNESS WHEREOF, the Company and Fifth Third have caused this
Agreement to be executed by their respective officers, thereunto duly
authorized, as of the date first above written.
MERCANTILE FUNDS, INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: President
FIFTH THIRD BANK
By: /s/ Xxxxxxxxx Xxxxx
-------------------
Name: Xxxxxxxxx Xxxxx
Title: Trust Officer
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SCHEDULE I
SPECIFIED COUNTRIES
Argentina
Australia
Austria
Belgium
Brazil
Canada
Chile
China
Columbia
Czech Republic
Denmark
Egypt
Estonia
Finland
Germany
Greece
Hong Kong
Hungary
India
Indonesia
Ireland
Israel
Italy
Japan
Jordan
Korea
Malaysia
Mexico
Netherlands
New Zealand
Norway
Pakistan
Peru
Philippines
Poland
Portugal
Romania
France Russia
Singapore
Slovak Republic
Slovenia
South Africa
Spain
Sri Lanka
Sweden
Switzerland
Taiwan
Thailand
Turkey
United Kingdom
Venezuela
Zimbabwe
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