Exhibit (g)(11)
AMENDMENT
TO CUSTODY AGREEMENT
AMENDMENT made as of April 26, 2002 to that certain Custody Agreement
dated as of May 28, 1993 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 ("Custodian") (such Custody Agreement,
including the Global Custody Addendum, Foreign Custody Manager Addendum and all
other amendments thereto, hereinafter referred to as the "Custody Agreement").
WITNESSETH:
WHEREAS, the Custodian has been appointed by the Fund as the custodian
of the assets of certain series or portfolios of the Fund as identified in the
Custody Agreement; and
WHEREAS, the Fund intends to enter into securities lending transactions
on behalf of certain of its series or portfolios and in connection therewith has
appointed Credit Suisse First Boston, New York Branch (the "Manager") as the
Fund's agent to carry out such securities lending transactions on behalf of such
series and portfolios; and
WHEREAS, the Manager has advised the Fund that it intends to deposit
any cash collateral received in connection with such securities lending
transactions into one or more joint accounts established with the Custodian and
to invest such cash collateral in instruments that have been pre-approved by the
Fund's adviser, all as permitted by the no-action letter dated July 24, 2001
issued by the Securities and Exchange Commission to The Chase Manhattan Bank
(the "Chase No-Action Letter"); and
WHEREAS, the Fund and the Custodian desire to amend the Custody
Agreement in order to provide for the transactions permitted by the Chase
No-Action Letter and to make certain other changes;
NOW, THEREFORE, the Fund and Custodian hereby agree as follows:
1. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to them in the Custody Agreement. In
particular, the term "Fund" hereinafter shall be deemed to refer to each
separate series or portfolio of the Fund unless the context otherwise requires.
2. In addition to the Fund Custody Accounts which the
Custodian has agreed to establish and maintain pursuant to Section 3.2 of the
Custody Agreement, the Custodian also agrees to establish and maintain one or
more joint accounts (the "Joint Accounts"). The Joint Accounts are intended to
be used to hold (i) cash collateral received in connection with securities
lending transactions entered into on behalf of the Funds, and (ii) any
short-term instruments
("Short-Term Investments") that may be purchased with the cash collateral in the
Joint Accounts. Each Joint Account so established shall be titled "Securities
Lending Joint Account" with an appropriate number designation.
3. (a) The Fund or its designee will deposit cash collateral
received in connection with any securities lending transactions into one or more
Joint Accounts, any such deposit to be accompanied by all information required
by the Custodian.
(b) The Custodian will make payments from a
Joint Account which holds any cash collateral of a Fund upon receipt of Proper
Instructions from the Fund or its designee, which Proper Instructions shall
include all information required by the Custodian for the allocation of any
Short-Term Investments purchased with such cash collateral among the
participating Funds.
(c) In the event that any payment to be made
under paragraph (b) of this Section 3 exceeds the funds available in the Joint
Account, the Custodian, in its discretion, may advance the participating Funds
such excess amount which shall be deemed a loan payable on demand, bearing
interest at the rate customarily charged by the Custodian on similar loans.
(d) Short-Term Investments in a Joint Account
will be transferred, exchanged or delivered by the Custodian upon receipt by the
Custodian of Proper Instructions from the Fund or its designee, which
Instructions shall include all information required by the Custodian. Settlement
and payment for Short-Term Investments received for, and delivery of Short-Term
Investments out of, a Joint Account may be made 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, delivery of Short-Term Investments to a
purchaser, dealer or their agents against a receipt with the expectation of
receiving later payment and free delivery. Delivery of Short-Term Investments
out of a Joint Account may also be made in any manner specifically required by
Proper Instructions acceptable to the Custodian.
(e) The Custodian, in its discretion, may credit
or debit a Joint Account on a contractual settlement date with cash or
Short-Term Investments with respect to any sale, exchange or purchase of
Short-Term Investments. Otherwise, such transactions will be credited or debited
to the Joint Account on the date cash or Short-Term Investments are actually
received by the Custodian and reconciled to the Joint Account.
(i) The Custodian may reverse credits or
debits made to a Joint Account in
its discretion if the related
transaction fails to settle within a
reasonable period, determined by the
Custodian in its discretion, after
the contractual settlement date for
the related transaction.
(ii) If any Short-Term Investments
delivered pursuant to this Section 3
are returned by the recipient
thereof, the
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Custodian may reverse the credits and debits
of the particular transaction at any time.
(f) If the Custodian credits a Joint Account on
a payable date, or at any time prior to the actual collection and reconciliation
to the Joint Account, with interest, dividends, or any other amount due, the
participating Funds will promptly return their share of any such amount upon
oral or written notification: (i) that such amount has not been received in the
ordinary course of business or (ii) that such amount was incorrectly credited.
If the participating Funds do not promptly return their share of any amount upon
such notification, the Custodian shall be entitled, upon oral or written
notification to the Fund, to reverse such credit by debiting the Joint Account
for the amount previously credited. The Custodian shall have no duty or
obligation to institute legal proceedings, file a claim or a proof of claim in
any insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for the Fund upon Proper Instructions
after consultation with the Fund.
4. The Custodian shall maintain records, based upon the Proper
Instructions it receives from the Fund or its designee, documenting for any
given day the aggregate investment in a Joint Account by each of the
participating Funds and each participating Fund's pro rata share of each
Short-Term Investment made through such Joint Account. The Custodian shall
maintain such records in conformity with Section 31 of the 1940 Act and the
rules and regulations promulgated thereunder.
5. The Custodian shall have no obligation or duty to monitor
or determine whether a Joint Account is being operated in compliance with the
Chase No-Action Letter.
6. Section 1.13 of the Custody Agreement is hereby amended and
restated in its entirety to read as follows:
"1.13 "Written Instructions" shall mean (i) written
communications actually received by the Custodian and signed
by two or more persons as the Board of Directors shall have
from time to time authorized, or (ii) communications by telex
or any other such system from two or more persons reasonably
believed by the Custodian to be Authorized, or (iii)
communications transmitted electronically through the
Institutional Delivery System (IDS), or any other similar
electronic instruction system acceptable to Custodian and
approved by resolutions of the Board of Directors, a copy of
which, certified by an Officer, shall have been delivered to
the Custodian."
7. This Amendment 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 Amendment.
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IN WITNESS WHEREOF, the Fund and the Custodian have caused this
Amendment to be executed by their respective officers, thereunto duly
authorized, as of the day and year first above written.
M.S.D. & T. FUNDS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
FIFTH THIRD BANK
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Trust Officer
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