SECOND AMENDMENT to CUSTODIAN AGREEMENT
SECOND AMENDMENT to
CUSTODIAN AGREEMENT
CUSTODIAN AGREEMENT
AMENDMENT AGREEMENT, effective as of September 23, 2011, by and among MGI FUNDS, a statutory
trust organized under the laws of the State of Delaware (the “Fund”) and STATE STREET BANK AND
TRUST COMPANY, a Massachusetts trust company (“State Street” or “Bank”).
WHEREAS the Fund and Investors Bank & Trust Company (“IBT”) entered into a Custodian Agreement
dated July 7, 2005, as amended, modified and supplemented from time to time (the “Custodian
Agreement”);
WHEREAS, IBT merged with and into State Street, effective July 2, 2007, with the result that
State Street now serves as Custodian under the Custodian Agreement; and
WHEREAS, the Fund has requested that State Street amend the Custodian Agreement and State
Street has agreed to do so as an accommodation to the Fund notwithstanding that as amended, the
Custodian Agreement is not identical to the form of custodian agreement customarily entered into by
State Street as custodian, in order that the services to be provided to the Fund on behalf of its
Portfolios by State Street, as successor by merger to IBT, may be made consistently and predictably
to the Fund.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
herein set forth, the parties hereto agree as follows:
1. Amendments.
(a) Section 12.2 of the Agreement is hereby deleted in its entirety and replaced with the
following:
“Reserved.”
(b) The first paragraph of Section 16.1 of the Agreement is hereby deleted in its entirety
and replaced with the following:
“16.1 The initial term of this Agreement shall commence upon the date first
noted above and continue in full force and effect through and including December 31,
2014 (the “Initial Term”), unless earlier terminated as provided herein. Upon the
expiration of the Initial Term and every subsequent term (“Renewal Term”), the terms
of this Agreement shall automatically extend for an additional year, unless written
notice of non-extension is delivered by the non-extending party to the other party
no later than six months prior to the expiration of that year.”
(c) A new Section 26 is hereby added to the Agreement as follows:
“26. Loan Administration Services Addendum. In the event the Fund
engages Bank to perform loan administration services, Bank and Fund hereby agree to
be bound by the terms of the Loan Administration Services Addendum attached hereto
as Appendix C and the Fund shall reimburse Bank for its fees and expenses related
thereto as agreed upon from time to time by the Fund and Bank.”
(d) A new Section 27 is hereby added to the Agreement as follows:
“27. Income and Settlement Crediting. The Fund and Bank hereby agree
to the provisions set forth on Appendix D hereto with respect to income and
settlement crediting.”
2. Miscellaneous.
(a) Except as amended hereby, the Custodian Agreement shall remain in full force and effect.
(b) This Amendment 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each party hereto has caused this Amendment to be executed by its duly
authorized officer, as the case may be, as of the date and year first above written.
| MGI FUNDS | |||||||
| By: | /s/ Xxxx Xxxxxx
|
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| Name: | Xxxx Xxxxxx | ||||||
| Title: | Vice President and Treasurer | ||||||
| STATE STREET BANK AND TRUST COMPANY | |||||||
| By: | /s/ Xxxxxxx X. Xxxxxx
|
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| Name: | Xxxxxxx X. Xxxxxx | ||||||
| Title: | Executive Vice President | ||||||
APPENDIX C
Loan Administration Services Addendum
ADDENDUM to that certain Custodian Agreement (the “Custodian Agreement”) dated as of July 7, 2005
by and among MGI FUNDS, a statutory trust organized under the laws of the State of Delaware (the
“Fund”) and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company (“State Street” or
“Bank”).
Section 1. General. The following provisions shall apply with
respect to investments, property or assets in the nature of loans, or interests or participations
in loans, including without limitation interests in syndicated bank loans and bank loan
participations, whether in the U.S. or outside the U.S. (collectively, “Loans”) entered into by the
Fund.
Section 2. Safekeeping. Instruments, certificates, agreements
and/or other documents which Bank may receive with respect to Loans, if any (collectively
“Financing Documents”), from time to time, shall be held by Bank at its offices in Boston,
Massachusetts.
Section 3. Duties of Bank. Bank shall accept such Financing
Documents, if any, with respect to Loans as may be delivered to it from time to time by the Fund.
Bank shall be under no obligation to examine the contents or determine the sufficiency of any such
Financing Documents or to provide any certification with respect thereto, whether received by Bank
as original documents, photocopies, by facsimile or otherwise. Bank shall be entitled to assume
the genuineness, sufficiency and completeness of any Financing Documents received, and the
genuineness and due authority of any signature appearing thereon.
If payments with respect to a Loan (“Loan Payment”) are not received by Bank on the date on which
they are due, or in the case of interest or fee payments, not received either on a scheduled
interest or fee payable date, Bank shall provide to the Fund a past due report (“Past Due Report”).
Bank shall have no responsibility with respect to the collection of Loan Payments which are past
due, other than the duty to notify the Fund as provided herein.
Bank shall have no responsibilities or duties whatsoever, with respect to Loans or the Financing
Documents, except for such responsibilities as are expressly set forth herein. Without limiting
the generality of the foregoing, Bank shall have no obligation to preserve any rights against prior
parties or to exercise any right or perform any obligation in connection with the Loans or any
Financing Documents (including, without limitation, no obligation to take any action in respect of
or upon receipt of any consent solicitation, notice of default or similar notice received from any
bank agent or obligor, except that Bank shall undertake reasonable efforts to forward any such
notice to the Fund). In case any question arises as to its duties hereunder, Bank may request
instructions from the Fund and shall be entitled at all times to refrain from taking any action
unless it has received Proper Instructions from the Fund and Bank shall in all events have no
liability, risk or cost for any action taken, with respect to a Loan, pursuant to and in compliance
with such Proper Instructions.
Bank shall be only responsible and accountable for Loan Payments actually received by it and
identified as for the account of the Fund; any and all credits and payments credited to the Fund,
with respect to Loans, shall be conditional upon clearance and actual receipt by Bank of final
payment thereon.
Bank shall promptly, upon the Fund’s request, release to the Fund or to any party as the Fund may
specify, any Financing Documents being held on behalf of the Fund. Without limiting the foregoing,
Bank shall not be deemed to have or be charged with knowledge of the sale of any Loan, unless and except to the
extent it
shall have received written notice and instruction from the Fund with respect thereto,
and except to the extent it shall have received the sale proceeds thereof.
In no event shall Bank be under any obligation or liability to make any advance of its own funds
with respect to any Loan.
Notwithstanding any term of this Agreement to the contrary, with respect to any Loans, (a) Bank
shall be under no obligation to determine, and shall have no liability for, the sufficiency of, or
to require delivery of, any instrument, document or agreement constituting, evidencing or
representing such Loan, other than to receive such Financing Documents, if any, as may be delivered
or caused to be delivered to it by the Fund, (b) without limiting the generality of the foregoing,
delivery of any such Loan may be made to Bank by, and may be represented solely by, delivery to
Bank in Tagged Image Format File (TIFF) or Portable Document Format (PDF) form, facsimile or
delivery in tangible form of a copy of an assignment agreement or other agreement representing
rights in the Loan ( “Settlement Documentation”) or a confirmation or certification from the Fund
to the effect that it has acquired such Loan and/or has received or will receive, and will deliver
to Bank, appropriate Financing Documents constituting, evidencing or representing such Loan (such
confirmation or certification, together with any Settlement Documentation, collectively,
“Settlement Documentation or Confirmation”), in any case without delivery of any promissory note,
participation certificate or similar instrument (collectively, an “Instrument”), (c) if an original
Instrument shall be or shall become available with respect to any such Loan and the Fund desires
that Bank hold such Instrument, it shall be the sole responsibility of the Fund to make or cause
delivery thereof to Bank, and Bank shall be under no obligation at any time or times to determine
whether any such original Instrument has been issued or made available with respect to such Loan,
and shall not be under any obligation to compel compliance by the Fund to make cause delivery of
such Instrument to Bank, and (d) any reference to Financing Documents appearing herein shall be
deemed to include, without limitation, any such Instrument and/or Settlement Documentation or
Confirmation.
Section 4. Responsibility of the Fund. With respect to Financing
Documents held by Bank hereunder in accordance with the provisions hereof, the Fund shall (a) cause
the Financing Documents evidencing such Loan to be delivered to Bank and related payment amount
information, and such other information (e.g., ongoing agent bank notices) with respect to the
related Loan and Financing Documents as Bank reasonably may require in order to perform its
services hereunder (collectively, “Loan Information”), in such form and format as Bank reasonably
may require; (b) take all actions necessary to acquire good title to such Loan (or the
participation in such Loan, as the case may be), as and to the extent intended to be acquired; and
(c) cause Bank to be named as its nominee (e.g., administrative contact with the agent bank) for
payment purposes under the Financing Documents or otherwise provide for the direct payment of the
Loan Payments to Bank. Bank shall be entitled to rely upon the Loan Information provided to it by
the Fund without any obligation on the part of Bank independently to verify, investigate,
recalculate, update or otherwise confirm the accuracy or completeness thereof; and Bank shall have
no liability for any delay or failure on the part of the Fund in providing necessary Loan
Information to Bank, or for any inaccuracy therein or incompleteness thereof. With respect to each
such Loan, Bank shall be entitled to rely on any information and notices it may receive from time
to time from the Fund, the related agent bank, any obligor on the Loan or any similar party with
respect to the related Loan, and shall be entitled to update its records on the basis of such
information or notices received, without any obligation on its part independently to verify,
investigate or recalculate such information.
Section 5. Security Interest.
(a) General. The provisions of this Section shall constitute a security
agreement. Terms used in this Section which are defined or otherwise set forth in the Uniform
Commercial Code of the
Commonwealth of Massachusetts shall have the same meanings in this Section
as in the Uniform Commercial Code of the Commonwealth of Massachusetts. If a term is defined or
otherwise set forth in Article 9 of the Uniform Commercial Code of the Commonwealth of
Massachusetts and in another Article as well, the term as defined or otherwise set forth in Article
9 shall govern.
(b) Grant of Security Interest. To secure the due and punctual payment of
all liabilities, whether actual or contingent (“Liabilities”), of the Fund to Bank now or hereafter
arising or incurred under or in connection with the Agreement, the Fund hereby grants to Bank a
security interest in the following, whether now existing or hereafter acquired or created
(collectively, the “Collateral”):
(i) the Loan;
(ii) the Financing Documents;
(iii) all of the Fund’s cash, deposit accounts, and securities and other investment
property in the possession or under the control of any of Bank and its agents, affiliates
and subcustodians; and
(iv) any and all proceeds of any thereof.
The Liabilities include, without limitation, (a) the obligations of the Fund to Bank in relation to
any overdraft or other advance of cash or securities for any purpose including in connection with
any pre-determined income or assumed settlements; (b) the obligations of the Fund to Bank (in its
capacity as foreign exchange provider or otherwise) in relation to any spot or forward foreign
exchange contracts or any other foreign exchange contract or facility entered into with the Fund;
and (c) the obligations of the Fund to reimburse Bank for any taxes, interest, charges, expense,
assessments, or other liabilities that may be assessed against or imposed on Bank under or in
connection with the Agreement for the Fund.
(c) Chief Executive Office. The Fund represents and warrants to Bank that
the Fund’s chief executive office is located at 00 Xxxx Xxxxxx, Xxxxxx , XX 00000. The Fund
covenants to provide to Bank at least 30 days’ prior written notice of any change of location of
the Fund’s chief executive office.
(d) Default and Remedies. In the event that the Fund fails to satisfy any of
the Liabilities as and when due and payable, the failure will constitute a default under this
Section, and Bank will then have with respect to the Collateral, in addition to all other rights
and remedies arising under the Agreement or under applicable law, the rights and remedies of a
secured party under the Uniform Commercial Code of the Commonwealth of Massachusetts. Without
prejudice to Bank’s rights under applicable law, Bank will be entitled, without notice to the Fund,
to withhold delivery of any Collateral, sell or otherwise realize on any Collateral and to apply
the money or other proceeds and any other monies credited to the cash accounts in satisfaction of
such Liabilities. The Fund acknowledges that, in Bank exercising any such rights or remedies
against any Collateral, it will be commercially reasonable for Bank (i) to accelerate or cause the
acceleration of the maturity of any fixed term deposits comprised in the Collateral and (ii) to
effect such currency conversions as may be necessary at its current rates for the sale and purchase
of the relevant currencies.
(e) Financing Statements. The Fund hereby irrevocably authorizes Bank at any
time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction
any initial financing statements and amendments thereto that (i) indicate the Collateral as
described in Section 5(b) or (ii) as being of an equal or lesser scope or with greater detail, and
(ii) provide any other information required by part 5 of Article 9 of any applicable Uniform
Commercial Code jurisdiction for the sufficiency or filing office acceptance of any financing
statement or amendment, including whether the Fund is an organization, the type of organization and
any organizational identification number issued to the Fund. The Fund agrees to furnish
any such
information to Bank promptly upon Bank’s request. The Fund also ratifies its authorization for
Bank to have filed in any Uniform Commercial Code jurisdiction any like initial financing
statements or amendments thereto if filed prior to the date hereof.
(f) Further Assurances. The Fund agrees to take such actions as Bank may
from time to time request in order to insure that Bank has a first perfected security interest in
the Collateral and that Bank has the ability to enforce its security interest. Without limitation
upon the foregoing, for such purposes the Fund (i) will promptly deliver to the possession of or
grant control to Bank or its designee over any instruments (including promissory notes) and chattel
paper comprised in the Collateral and not already in the possession or under control of Bank and
its agents, affiliates and subcustodians, (ii) will promptly obtain termination amendments of
Uniform Commercial Code financing statements or terminations or subordinations of security
interests or other liens, in form and substance satisfactory to Bank, where the failure to take
such action could result in a competing security in or other lien on any of the Collateral having
priority over the security interest of Bank in the Collateral, and (iii) will promptly execute and
file such notices and registrations and take such other actions, including actions required under
the law of any foreign jurisdiction, which are, in the opinion of Bank, necessary or advisable to
assure the attachment, perfection, priority and ability of Bank to enforce the security interest
and (iv) further authorizes Bank to take such action as in the opinion of Bank may be necessary or
advisable under any foreign law including making an appropriate entry in any security interest,
charge or lien registry in the country under whose laws the Fund is organized or in which the Fund
maintains an office. The reference in clause (i) to granting “control” to Bank means causing Bank
to have control (A) in the case of electronic promissory notes governed by the Electronic
Signatures in Global National Commerce Act or an applicable Uniform Electronic Transaction Act, for
purposes of that Act, (B) in the case of electronic chattel paper, for purposes of section 9-105 of
the Uniform Commercial Code, and (C) in the case of a deposit account or investment property, for
purposes of sections 8-106, 9-104 and 9-106 of the Uniform Commercial Code.
APPENDIX D
Income and Settlement Crediting
Notwithstanding anything in the Agreement to the contrary, the Fund and Bank agree:
| A. | Upon receipt of Proper Instructions on behalf of the applicable Portfolio, which may be continuing instructions when deemed appropriate by the parties, Bank may transfer, exchange, deliver or release domestic Portfolio Securities upon sale of such Portfolio Securities for the account of the Portfolio in accordance with customary or established market practices and procedures, including, without limitation, delivery to the purchaser thereof or to a dealer therefor (or an agent of such purchaser or dealer) against expectation of receiving later payment. | |
| B. | Bank shall collect on a timely basis all income and other payments with respect to registered domestic Portfolio Securities held hereunder to which each Portfolio shall be entitled either by law or pursuant to custom in the securities business, and shall collect on a timely basis all income and other payments with respect to bearer domestic Portfolio Securities if, on the date of payment by the issuer, such Portfolio Securities are held by Bank or its agent. Without limiting the generality of the foregoing, Bank shall detach and present for payment all coupons and other income items requiring presentation as and when they become due and shall collect interest when due on Portfolio Securities held hereunder. Bank shall credit income to a Portfolio as such income is received or in accordance with Bank’s then current payable date income schedule. Any credit to a Portfolio in advance of receipt may be reversed when Bank determines that payment will not occur in due course and the Portfolio may be charged at Bank’s applicable rate for time credited. Income due to each Portfolio on securities loaned shall be the responsibility of the Fund. Bank will have no duty or responsibility in connection therewith, other than to provide the Fund with such information or data as may be necessary to assist the Fund in arranging for the timely delivery to Bank of the income to which a Portfolio is properly entitled. | |
| C. | Upon receipt of Proper Instructions on behalf of the applicable Portfolio, which may be continuing instructions when deemed appropriate by the parties, Bank shall pay out monies of a Portfolio upon the purchase of domestic securities, options, futures contracts or options on futures contracts for the account of the Portfolio but only (a) in accordance with customary or established market practices and procedures, including, without limitation, delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against expectation of receiving later delivery of such securities or evidence of title to such options, futures contracts or options on futures contracts to Bank (or any bank, banking firm or trust company doing business in the United States or abroad which is qualified under the 1940 Act to act as a custodian and has been designated by Bank as its agent for this purpose) registered in the name of the Portfolio or in the name of a nominee of Bank or in proper form for transfer; (b) in the case of a purchase effected through a U.S. securities system, in accordance with the conditions of Rule 17f-4 under the 1940 Act, as amended from time to time; (c) in the case of repurchase agreements entered into between the Fund on behalf of a Portfolio and Bank, or another bank, or a broker-dealer which is a member of the Financial Industry Regulatory Authority (formerly NASD), (i) against delivery of the securities either in certificate form or through an entry crediting Bank’s account at the Federal Reserve Bank with such securities or (ii) against delivery of the receipt evidencing purchase by the Portfolio of securities owned by Bank along with written evidence of the agreement by Bank to repurchase such securities from the Portfolio; or (d) for transfer to a time deposit account of the Fund in any bank, whether domestic or foreign; such transfer may be |
| effected prior to receipt of a confirmation from a broker and/or the applicable bank pursuant to Proper Instructions from the Fund. | |
| D. | Bank shall use reasonable commercial efforts to collect all income and other payments with respect to the Foreign Portfolio Securities held hereunder to which the Portfolios shall be entitled. In the event that extraordinary measures are required to collect such income, the Fund and Bank shall consult as to such measures and as to the compensation and expenses of Bank relating to such measures. Bank shall credit income to the applicable Portfolio as such income is received or in accordance with Bank’s then current payable date income schedule. Any credit to the Portfolio in advance of receipt may be reversed when Bank determines that payment will not occur in due course and the Portfolio may be charged at Bank’s applicable rate for time credited. Income on securities loaned other than from Bank’s securities lending program shall be credited as received. |
| E. | (a) Bank shall, in accordance with the terms set out in this Section, debit or credit the appropriate cash account of each Portfolio in connection with (i) the purchase of securities for such Portfolio, and (ii) proceeds of the sale of securities held on behalf of such Portfolio, on a contractual settlement basis. |
(b) The services described above (the “Contractual Settlement Services”) shall be
provided for such instruments and in such markets as Bank may advise from time to time. Bank
may terminate or suspend any part of the provision of the Contractual Settlement Services
under this Agreement at its sole discretion immediately upon notice to the Fund on behalf of
each Portfolio, including, without limitation, in the event of force majeure events
affecting settlement, any disorder in markets, or other changed external business
circumstances affecting the markets or the Fund.
(c) The consideration payable in connection with a purchase transaction shall be
debited from the appropriate cash account of the Portfolio as of the time and date that
monies would ordinarily be required to settle such transaction in the applicable market.
Bank shall promptly recredit such amount at the time that the Portfolio or the Fund notifies
Bank by Proper Instruction that such transaction has been canceled.
(d) With respect to the settlement of a sale of securities, a provisional credit of an
amount equal to the net sale price for the transaction (the “Settlement Amount”) shall be
made to the account of the Portfolio as if the Settlement Amount had been received as of the
close of business on the date that monies would ordinarily be available in good funds in the
applicable market. Such provisional credit will be made conditional upon Bank having
received Proper Instructions with respect to, or reasonable notice of, the transaction, as
applicable; and Bank or its agents having possession of the asset(s) (which shall exclude
assets subject to any third party lending arrangement entered into by a Portfolio)
associated with the transaction in good deliverable form and not being aware of any facts
which would lead them to believe that the transaction will not settle in the time period
ordinarily applicable to such transactions in the applicable market.
(e) Simultaneously with the making of such provisional credit, the Fund on behalf of
each Portfolio agrees that Bank shall have, and hereby grants to Bank, a security interest
in any property at any time held for the account of the Portfolio to the full extent of the
credited amount, and the Fund on behalf of each Portfolio hereby pledges, assigns and grants
to Bank a continuing security interest and a lien on any and all such property under Bank’s
possession, in accordance
with the terms of this Agreement. In the event that the applicable Portfolio fails to
promptly
repay any provisional credit, Bank shall have all of the rights and remedies of a
secured party under the Uniform Commercial Code of The Commonwealth of Massachusetts.
(f) Bank shall have the right to reverse any provisional credit or debit given in
connection with the Contractual Settlement Services at any time when Bank believes, in its
reasonable judgment, that such transaction will not settle in accordance with its terms or
amounts due pursuant thereto will not be collectable or where Bank has not been provided
Proper Instructions with respect thereto, as applicable, and the Portfolio shall be
responsible for any costs or liabilities resulting from such reversal. Upon such reversal
(i) of a credit, a sum equal to the credited amount shall become immediately payable by the
Portfolio to Bank and may be debited from any cash account held for benefit of the
Portfolio, and (ii) of a debit, Bank shall recredit any amount so debited.
(g) In the event that Bank is unable to debit an account of the Portfolio, and the
Portfolio fails to pay any amount due to Bank at the time such amount becomes payable in
accordance with this Agreement, (i) Bank may charge the Portfolio for costs and expenses
associated with providing the provisional credit, including without limitation the cost of
funds associated therewith, (ii) the amount of any accrued dividends, interest and other
distributions with respect to assets associated with such transaction may be set off against
the credited amount, (iii) the provisional credit and any such costs and expenses shall be
considered an advance of cash for purposes of this Agreement and (iv) Bank shall have the
right to setoff against any property and to sell, exchange, convey, transfer or otherwise
dispose of any property at any time held for the account of the Portfolio to the full extent
necessary for Bank to make itself whole.
