Chase Manhattan Bank
American Skandia Trust
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Re: Foreign Custody Manager Delegation Amendment
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Dear Sirs:
Reference is made to the Amended and Restated Custody Agreement dated as of April 10, 1998, (the "Agreement") by and between The
Chase Manhattan Bank (as successor by operation of law to Xxxxxx Xxxxxxx Trust Company) ("Custodian") and the American Skandia Trust
("Client") for the safekeeping of securities and cash ("Foreign Assets") received by the Custodian for the account of the Client.
Unless otherwise defined herein, terms defined in the Agreement are used herein with their defined meanings.
1. In addition to the duties of the Custodian under the Agreement, with respect to Foreign Assets in such jurisdictions as
the Client and the Custodian shall agree from time to time, the Client hereby delegates to the Custodian, and the Custodian hereby
accepts and assumes, the following duties of a "Foreign Custody Manager" as set forth in Rule 17f-5 ("rule 17f-5") under the
Investment Company Act of 1940, as amended ("1940 Act"):
a. selecting Eligible Foreign Custodians (as that term is defined in rule 17f-5(a)(1)), having first determined that
Foreign Assets placed and maintained in the safekeeping of each such Eligible Foreign Custodian will be subject to
reasonable care, based on the standards applicable to custodians in the relevant market, after having considered all factors
relevant to the safekeeping of such Foreign Assets, including, without limitation, those factors set forth in rule
17f-5(c)(1)(i)-(iv);
b. determining that the written contract with each Eligible Foreign Custodian requires that the Eligible Foreign
Custodian will provide reasonable care for Foreign Assets based on the standards applicable to custodians in the relevant
market (as provided in rule 17f-5(c)(1)) and entering into written contracts with such Eligible Foreign Custodians in
accordance with Rule 17f-5 (c)(2); and
c. establishing a system for monitoring the appropriateness of both maintaining the Foreign Assets with each Eligible
Foreign Custodian and the performance of the custody contract with such Eligible Foreign Custodians, it being understood,
however, that if an Eligible Foreign Custodian in a given country no longer affords reasonable care to the Foreign Assets
and that no other Eligible Foreign Custodian in that country would afford reasonable care or otherwise does not meet the
requirements of rule 17f-5, Custodian shall promptly so advise Client and foreign assets will be withdrawn from the Eligible
Foreign Custodian as soon as reasonably practicable. .
For purposes of clarity, it is understood and agreed that Custodian shall not be responsible for any Foreign Custody Manager duties,
including but not limited to those described in a., b. and c. above, with respect to any securities depository.
2. In acting as a Foreign Custody Manager, the Custodian shall exercise reasonable care, prudence and diligence such as a
person having responsibility for the safekeeping of fund Foreign Assets.
3. The Custodian shall provide the Board of Directors of the Client with written quarterly reports for use at the Client's
quarterly Board of Directors meetings regarding the placement of the Foreign Assets with a particular Eligible Foreign Custodian and
of any material changein the arrangements with any Eligible Foreign Custodian holding any Foreign Assets.
4. In acting as a Foreign Custody Manager, the Custodian shall not supervise, recommend or advise the Client relative to
the investment, purchase, sale, retention or disposition of any Foreign Assets in any country, including with respect to prevailing
country risks. At Client's request, Custodian shall provide to Client such information relating to country risk as is specified in
Appendix 1 hereto or as may otherwise be required under Rule 17f-5. Client hereby acknowledges that: such information is solely
designed to inform Client of market conditions and procedures and is not intended as a recommendation to invest or not invest in
particular markets.
5. (a) The Client represents that it: (i) has the authority and power to delegate to the Custodian the duties set forth
herein, (ii) has taken all requisite action (corporate or otherwise) to authorize the execution and delivery of this Amendment, and
(iii) the Foreign Assets being placed and maintained in Custodian's custody is subject to the 1940 Act, and (iv) its Board (or other
governing body) has determined that it is reasonable to rely on Custodian to perform as Client's Foreign Custody Manager. (b)
Custodian represents that it: (i) is a U.S. Bank (as defined in rule 17f-5(a)(7), and (ii) has taken all requisite action (corporate
or otherwise) to authorize the execution and delivery of this Amendment.
6. (a) In addition to the duties of the Custodian under the Agreement, the Custodian shall, as required by SEC rule 17f-7
of the 1940 Act, provide an analysis of the custody risks associated with maintaining the Client's Foreign Assets with each Eligible
Securities Depository used by the Custodian and at which any Foreign Assets of the Client are held or are expected to be held. The
foregoing analysis will be provided to Customer at the Custodian's Website. In connection with the foregoing, the Client shall
notify the Custodian of any Eligible Securities Depositories at which it does not choose to have its Foreign Assets held. The
Custodian shall monitor the custody risks associated with maintaining the Client's Foreign Assets with each such Eligible
Securities Depository on a continuing basis and shall promptly notify the Client or its investment adviser of any material change in
such risks in accordance with Section (a)(1)(i)(B) of Rule 17f-7. This notification will be in the form of Network Management Market
flash e-mails sent to the client or its investment adviser.
(b) If a custody arrangement with an Eligible Securities Depository no longer meets the requirements of Rule 17f-7, the
Custodian shall promptly so advise Client and Foreign Assets will be withdrawn from the depository as soon as reasonably practicable.
(c) The Custodian shall exercise reasonable care, prudence and diligence in performing the requirements of Rule 17f-7.
(d) Based on the information available to it in the exercise of diligence, the Custodian shall determine the eligibility
under rule 17f-7 of each depository before including it on Appendix B hereto and shall promptly advise the Client if any Eligible
Securities Depository ceases to be eligible.
7. Section 2 of the Agreement is hereby deleted and replaced with the following:
Foreign Property may be placed and maintained by Custodian on behalf of Client: (i) in custody and deposit accounts that
have been established by the Custodian with one or more Eligible Foreign Custodians as listed on Exhibit A, and as such
Exhibit may be amended from time to time by the Custodian by written notice to the Client (the "Subcustodians"), (ii)
through the facilities of the securities depositories (which shall be Eligible Securities Depositories on and after the date
of compliance with rule 17f-7 and shall be "securities depositories" as defined in (a)(1)(ii)-(iii) of the 1997 amendments
to rule 17f-5 until such time) listed on Exhibit B hereto (except that a "securities depository" as used herein when
referring to a securities depository located in the U.S. shall mean a "securities depository" as defined in SEC rule
17f-4(a)), which are hereby authorized in respect of the markets in which foreign Property is currently held, and (iii)
through the facilities of securities depositories listed on Exhibit B in respect of the markets in which foreign Property is
not currently held and as to depositories added to such Exhibit from time to time by the Custodian on written notice to the
Client, but as to both such types of depositories only upon Authorized Instructions (and which shall have the same
definitions as in (ii) above). At the request of Client, Custodian may, but need not, add to Exhibit A an Eligible Foreign
Custodian that is a bank where Custodian has not acted as Foreign Custody Manager with respect to the selection thereof.
Custodian shall notify Client in the event that it elects to add any such entity. For purposes of the liability provisions
of the Agreement, the term Subcustodian shall not include any entity so added.
8. Except as expressly amended hereby, all terms and provisions of the Agreement are and shall continue to be in full force
and effect. This Amendment shall be construed in accordance with the laws of the State of New York, without regard to its conflict
of laws principles. This Amendment may be executed by one or both of the parties hereto in any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and the same instrument.
If the foregoing corresponds to your understanding of our agreement, please indicate your
acceptance by the signature of your authorized representative below.
Yours truly,
The Chase Manhattan Bank
By: _________________________________
Name: Xxxx Xxxxxx
Title: Vice President
Agreed and accepted:
American Skandia Trust
By: ________________________________
Name:
Title:
Date:
Appendix 1
Information Regarding Country Risk
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1. To aid Client in its determinations regarding Country Risk, Custodian shall furnish annually and upon the initial placing of
Foreign Assets into a country the following information:
A. Opinions of local counsel concerning:
i. Whether applicable foreign law would restrict the access afforded Client's independent public accountants
to books and records kept by an Eligible Foreign Custodian located in that country.
ii. Whether applicable foreign law would restrict the Client's ability to recover its assets in the event of
the bankruptcy of an Eligible Foreign Custodian located in that country.
iii. Whether applicable foreign law would restrict the Client's ability to recover assets that are lost while
under the control of an Eligible Foreign Custodian located in the country.
B. Written information concerning:
i. The likelihood of expropriation, nationalization, freezes, or confiscation of Client's assets.
ii. Whether difficulties in converting Client's cash and cash equivalents to U.S. dollars are reasonably
foreseeable.
C. A market report with respect to the following topics: (i) securities regulatory environment, (ii) foreign ownership
restrictions, (iii) foreign exchange, (iv) securities settlement and registration, (v) taxation, and (vi) securities depositories
(including securities depository evaluation).
2. Custodian shall furnish the following additional information on an as needed basis:
Market flashes, including with respect to changes in the information in market reports.
