Exhibit (g)(2)
GLOBAL CUSTODY ADDENDUM
TO CUSTODY AGREEMENT
This GLOBAL CUSTODY 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 the custodian
of the assets of certain series or portfolios of the Fund as identified in the
Custody Agreement, and the Fund desires to establish one or more custody
accounts through the Custodian for those assets of such series or portfolios of
the Fund to be held outside the United States;
NOW, THEREFORE, in consideration of the premises and of the mutual
promises and covenants contained herein, the parties hereto 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. Appointment of the Custodian as Global Custodian. The Custodian
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is hereby authorized and directed to, and shall, open and maintain one or more
custody accounts (the "Account") in such name or names as the Fund may, from
time to time, direct; and will accept, in accordance with the terms hereof, all
cash and currency (collectively referred to herein as "Cash") and all Securities
as may be agreed upon by the Custodian and the Fund which shall from time to
time be delivered to or received by it or any Sub-custodian in the United States
or in a country approved by the Fund for deposit in or otherwise held in the
Account (Cash and Securities are collectively referred to herein as "Assets").
The Custodian assumes no obligation to review the Assets in the Account or to
recommend the purchase, retention or sale of any Assets unless provided for by a
separate written agreement between the parties.
3. Maintenance of Assets Outside the United States. The Custodian is
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hereby authorized and directed to hold the Assets in the countries with the Sub-
custodians set forth on Schedule A annexed hereto (the "Foreign Sub-
custodians"). Schedule A may be amended from time to time by the Custodian in
order to delete, add or change Sub-custodians without the Fund's approval
provided that the Custodian shall notify the Fund (either orally or in writing)
of any such amendment. Schedule A may also be amended from time to time upon
agreement of the Custodian and the Fund in order to delete or add any country.
4. Foreign Sub-Custodians. Except as may otherwise be agreed upon
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in writing, Assets of the Fund shall at all times be maintained in the custody
of an "Eligible Foreign Custodian" as defined in or exempt under the 1940 Act.
With respect to holding Assets with an Eligible Foreign Custodian, it is
expressly understood and agreed that:
(i) The Custodian will endeavor, to the extent feasible, to
hold Securities in the country or other jurisdiction in which the
principal trading market for such Securities is located, where
such Securities are to be presented for cancellation and/or
payment and/or registration, or where such Securities are
acquired;
(ii) Cash which is maintained in a foreign country will be in
any currency which may be legally held in such country and may be
held in non-interest bearing accounts;
(iii) Foreign Sub-custodians may hold Securities in central
securities depositories or clearing agencies in which such
Foreign Sub-custodians participate;
(iv) Unless otherwise agreed to in writing by the parties hereto
or otherwise required by local law or practice, Securities
deposited with Eligible Foreign Custodians will be held in a
commingled account in the name of the Custodian or its designee
sub-custodian as custodian or trustee for its customers;
(v) Settlement of and payment for Securities received for, and
delivered from, the 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,
the delivery of Securities to a purchaser, broker, dealer or
their prospective agents either against a receipt for future
payment or without any payment (so-called "free delivery"); and
(vi) The Fund is solely responsible for the payment of and the
reclamation, where applicable, of taxes. The Custodian will,
however, cooperate with the Fund in connection with the Fund's
payment or reclamation of taxes and shall make the necessary
filings in connection with obtaining tax exemptions and tax
reclamations which are available to the Fund.
5. Powers of the Custodian.
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(a) General Powers. Subject to and in accordance with Proper
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Instructions, the Custodian, as the Fund's agent, and for the account and risk
of the Fund, is hereby authorized and empowered, with respect to Securities held
outside the United States with Foreign Sub-custodians, to authorize and empower
Foreign Sub-custodians to:
(i) receive and deliver Assets;
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(ii) receive all payments of principal, interest,
dividends and other income and distributions payable with
respect to Assets;
(iii) exchange Securities in temporary or bearer form for
Securities in definitive or registered form; effect an
exchange of shares where the par value of stock is changed;
and surrender Securities at maturity or earlier when
advised of a call for redemption (provided, however, that
the Custodian shall not be liable for failure to so
exchange or surrender any security or take other action (A)
if notice of such exchange or call for redemption or other
action was not actually received by the Custodian from the
issuer (with respect to Securities issued in the United
States) or from one of the nationally or internationally
recognized bond or corporate action services to which the
Custodian subscribes or from the Fund or (B) if, at the
time of deposit, any Security so deposited is subject to
call, exchange, redemption or similar action, unless
specifically instructed to do so by the Fund);
(iv) hold Assets (A) in its vaults, (B) at a domestic or
foreign entity that provides handling, clearing or
safekeeping services, (C) with an issuer in non-
certificated form, (D) on Federal Book Entry at the Federal
Reserve or the Custodian, or (E) with the prior approval of
the Fund, at any other location;
(v) register and/or hold Assets in the name of any
nominee of the Custodian or its Foreign Sub-custodians or
any of their respective nominees or any authorized agent,
subsidiary or other entity, including (without limiting the
generality of the foregoing) the nominee of any central
depository, clearing corporation or other entity with which
securities may be deposited (and the Fund hereby
indemnifies and holds harmless any such nominee against any
liability as a holder of record);
(vi) hold any Securities in bearer form;
(vii) in connection with the receipt of Assets, accept
documents in lieu of such Assets as long as such documents
contain the agreement of the issuer thereof to hold such
Assets subject to the Custodian's sole order;
(viii) make, execute, acknowledge and deliver as agent, any
and all documents or instruments (including but not limited
to all declarations, affidavits and certificates of
ownership) that may be necessary or appropriate to carry
out the powers granted herein;
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(ix) employ and consult with, and obtain advice from,
suitable agents, including auditors and legal counsel (who
may be counsel to the Fund or the Custodian) or other
advisers, and the Custodian shall incur no liability in
acting in good faith in accordance with the reasonable
advice and opinion of such agents or advisers;
(x) make any payments incidental to or in connection with
this paragraph 5(a); and
(xi) exercise all other rights and powers and take any
action it deems necessary in carrying out the purposes of
the Custody Agreement and this Addendum.
(b) Discretionary Corporate Action. Whenever Securities confer
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optional rights on the Fund or provide for discretionary action or alternative
courses of action by the Fund, the Fund shall be responsible for making any
decisions relating thereto and for instructing the Custodian to act. In order
for the Custodian to act, it must receive the Fund's instructions at the
Custodian's offices, addressed as the Custodian may from time to time request,
by no later than noon (Eastern Time) at least two (2) business days prior to the
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last scheduled date to act with respect to such Securities (or such earlier date
or time as the Custodian may notify the Fund). Absent the Custodian's timely
receipt of such instructions, the Custodian shall not be liable for failure to
take any action relating to or to exercise any rights conferred by such
Securities.
(c) Voting. With respect to all Securities, however registered,
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the voting rights are to be exercised by the Fund or its designee. With respect
to Securities issued in the United States, the Custodian's only duty shall be to
mail to the Fund any documents (including proxy statements, annual reports and
signed proxies) relating to the exercise of such voting rights. With respect to
Securities issued outside the United States, at the request of the Fund, the
Custodian will provide the Fund with access to a provider of global proxy
services (the cost of which will be paid by the Fund). If the Fund determines
not to utilize the services of such global proxy services provider, the
Custodian will endeavor to provide the Fund with proxy material actually
received by the Custodian from Foreign Sub-custodians, but otherwise shall have
no obligations with respect to voting.
(d) Foreign Exchange Transactions. The Custodian, as principal,
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is authorized to enter into spot or forward foreign exchange contracts with the
Fund and may provide such foreign exchange services to the Fund through its
subsidiaries or affiliates or through Foreign Sub-custodians. Instructions,
including standing instructions, may be issued with respect to such contracts,
but the Custodian may establish rules or limitations concerning any foreign
exchange facility made available to the Fund. In all cases where the Custodian,
its subsidiaries or affiliates or Foreign Sub-custodians enter into foreign
exchange contracts relating to the Account, the terms and conditions of such
foreign exchange contracts shall apply to such transaction. Neither the
Custodian nor any Foreign Sub-custodian shall be liable for any fluctuations or
changes in foreign exchange rates, which shall be the sole risk and liability of
the Fund.
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6. Agreements with Foreign Sub-Custodians. Each agreement with a
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Foreign Sub-custodian shall provide that: (a) the Fund's Assets will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of the Foreign Sub-custodian or its creditors or agents, except a claim of
payment for their safe custody or administration; (b) beneficial ownership of
the Fund's Assets will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records will be
maintained separately identifying the Assets of the Fund; (d) officers of or
auditors employed by, or other representatives of, the Fund and any Sub-
custodian, including to the extent permitted under applicable law the
independent public accountants for the Fund, will be given access to the books
and records of the Foreign Sub-custodian relating to its actions under its
agreement with the Custodian or its Sub-custodian; and (e) assets of the Fund
held by the Foreign Sub-custodian will be subject only to the instructions of
the Custodian, its Sub-custodian or its agents.
7. Transactions in Foreign Custody Account.
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(a) Except as otherwise provided in Paragraph (b) of this
Section 7, the provisions of Section 3 of the Custody Agreement shall apply
equally to the Securities of the Fund held outside the United States by Foreign
Sub-custodians.
(b) Notwithstanding any provision of this Addendum to the
contrary, settlement and payment for Securities received for the account of the
Fund and delivery of Securities maintained for the account of the Fund may be
effected in accordance with the customary established securities trading or
securities processing practices and procedures in the jurisdiction or market in
which the transaction occurs, including, without limitation, delivering
securities to the purchaser thereof or to a dealer therefor (or an agent for
such purchaser or dealer) against a receipt with expectation of receiving later
payment for such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a Foreign Sub-
custodian may be maintained in the name of such entity's nominee to the same
extent as set forth in Section 5 of this Addendum, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of such
securities.
8. Liability of Foreign Sub-Custodians. Each agreement pursuant to
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which the Custodian or its Sub-custodian employs a foreign banking institution
as a Foreign Sub-custodian shall to the extent applicable require the
institution to exercise the customary standard of care in the performance of its
duties and to indemnify, and hold harmless, the Custodian and any Sub-custodian
for the benefit of the Fund for and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian and any Sub-custodian
with respect to any claims against a Foreign Sub-custodian as a consequence of
any such loss, damage, cost, expense, liability or claim if and to the extent
that the Fund has not been made whole for any such loss, damage, cost, expense,
liability or claim.
9. Tax Law. The Custodian shall have no responsibility or liability
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for any obligations now or hereafter imposed on the Fund or any Sub-custodian by
the tax law of the
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United States of America or any state or political subdivision thereof. It shall
be the responsibility of the Fund to notify the Custodian of the obligations
imposed on the Fund or any Sub-custodian by the tax law of jurisdictions other
than those mentioned in the preceding sentence, including responsibility for
withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting. The sole responsibility of the
Custodian with respect to such tax law shall be to use reasonable efforts to
assist the Fund with respect to any claim for exemption or refund.
10. Compensation. In consideration of the services to be rendered
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pursuant to this Addendum, the Custodian shall be entitled to compensation as
agreed upon from time to time by the Fund and the Custodian.
11. Limitation of Liability; Indemnification.
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(a) The Custodian shall not be liable for any Losses (as defined
below) or action taken or omitted or for any loss or injury resulting from its
actions or its performance or lack of performance of its duties hereunder in the
absence of negligence, bad faith or willful misconduct on its part. With respect
to Losses incurred by the Fund as a result of the acts or the failure to act by
any Foreign Sub-custodian, the Custodian shall be liable for such Losses to the
same extent as set forth with regard to sub-custodians generally in the Custody
Agreement and shall take appropriate action to recover such Losses from such
Foreign Sub-custodian. In no event shall the Custodian or any Sub-custodian be
liable for (i) acting in accordance with Proper Instructions from the Fund or
any agent of the Fund, (ii) special or consequential damages, (iii) holding
Assets in any particular country, including, but not limited to, Losses
resulting from nationalization, expropriation or other governmental actions;
regulation of the banking or securities industry; currency controls or
restrictions, devaluations or fluctuations; or market conditions which prevent
the orderly execution of securities transactions or affect the value of Assets,
or (iv) any Losses due to forces beyond the reasonable control of the Custodian
or any Sub-custodian, including, without limitation, strikes, work stoppages,
acts of war or terrorism, insurrection, revolution, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software and hardware) services.
(b) The Fund shall indemnify the Custodian and hold it harmless
against any and all claims, losses, liabilities, damages or expenses (including
reasonable attorneys' fees and expenses) (collectively referred to herein as
"Losses") however arising from or in connection with this Addendum or the
performance of its duties hereunder, provided, however, that (i) the Custodian
shall not be indemnified and held harmless against any Losses arising from the
Custodian's negligence, bad faith or willful misconduct, and (ii) nothing
contained herein shall limit or in any way impair the right of the Custodian to
indemnification under any other provision of this Addendum.
(c) The Fund understands that when a Sub-custodian is instructed
to deliver Assets against payment, it may deliver such Assets prior to actually
receiving final payment and that, as a matter of bookkeeping convenience, it may
credit the Fund's Account with anticipated proceeds of sale prior to actual
receipt of final payment. The risk of non-receipt of payment shall be the Fund's
and the Custodian or said Sub-custodian shall have no liability therefor.
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(d) All credits to the Account of the Fund of anticipated
proceeds of sales and redemptions of Assets and of anticipated income from
Assets shall be conditional upon receipt of final payment and may be reversed to
the extent final payment is not received. In the event that the Custodian in its
discretion advances funds to the Fund to facilitate the settlement of any
transaction, or elects to permit the Fund to use funds credited to the Account
in anticipation of final payment, or if the Fund otherwise becomes indebted to
the Custodian (including indebtedness as a result of overdrafts in the Account),
the Fund shall, immediately upon demand, reimburse the Custodian for such
amounts plus any interest thereon.
(e) The Custodian's duties and responsibilities are solely those
set forth herein and it shall not be obligated to perform any services or take
any action not provided for herein unless specifically agreed to by it in
writing. Nothing contained in this Addendum shall cause the Custodian to be
deemed a trustee or fiduciary for or on behalf of the Fund.
12. Reports; Statements of Account; Computer Services.
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(a) Written Reports. The Custodian shall provide the Fund on a
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periodic basis with statements of assets in the Account ("Statement of Assets")
and statements of account showing all transactions in the Account ("Statement of
Account"). Statement of Assets, Statement of Account and confirmations
("Confirmation") shall identify the Assets held, and transactions involving,
each Sub-custodian or Foreign Sub-custodian.
(b) Examination of Reports. The Fund shall examine promptly
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each such Confirmation, Statement of Account and Statement of Assets. Unless the
Fund files with the Custodian a written exception or objection within ninety
(90) days after the date of such Confirmation or the closing date of the period
covered by such Statement of Assets or Statement of Account that reflects an
error or omission, the Fund shall be conclusively deemed to have waived any such
exception or objection thereon.
13. Notices, Instructions and Other Communications. Unless otherwise
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specified herein, all Statements of Assets, Statements of Account and
Confirmations shall be in writing and all notices, instructions or other
communications may be given either orally or in writing (including by tested
telex, telecopy or other electronic transmission, which may include Trade
Reports issued by the Institutions Delivery System or Depository Trust Company).
All Statements of Assets, Statements of Account, Confirmations, notices,
instructions and other communications shall be delivered to the address (post
office, telephone, telex or other electronic address) set forth on Schedule B
annexed hereto, which address may be changed upon thirty (30) days' prior
written notice to the other party. The Fund shall furnish, and shall cause the
Fund's investment adviser to furnish, to the Custodian a certificate indicating
those persons who are authorized to give the Custodian instructions hereunder
and with specimen signatures of such person. The Custodian is authorized to
comply with and rely upon any such notices, instructions or other communications
reasonably believed by it to have been sent or given by an authorized person.
The Custodian's understanding of any oral notice, instruction or other
communication shall be deemed controlling (whether given or received by the
Custodian), notwithstanding any discrepancy between such understanding and any
subsequent confirming document or communication.
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14. Termination. This Addendum shall be continuing and shall remain
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in full force and effect until terminated by the Custodian or the Fund upon the
termination of the Custody Agreement.
15. Assignment. Neither the Custodian nor the Fund shall assign this
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Addendum without first obtaining the written consent of the other party hereto.
16. Headings and Capital Terms. The section and paragraph headings
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contained herein are for convenience and reference only and are not intended to
define or limit the scope of any provision of this Addendum. All capitalized
terms used in this Addendum but not defined shall have the meanings assigned to
such terms in the Custody Agreement.
17. Entire Agreement; Amendment. This Addendum shall constitute the
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entire agreement of the parties with respect to the subject matter and
supersedes all prior oral or written agreements in regard thereto. Except as
otherwise provided, this Addendum may be amended only by an instrument in
writing duly executed by both parties hereto.
18. Governing Law; Jurisdiction; Certain Waivers.
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(a) This Addendum shall be interpreted and construed in
accordance with the internal substantive laws (and not the choice of law rules)
of the State of Ohio.
(b) The invalidity, illegality or unenforceability of any
provision of this Addendum shall in no away affect the validity, legality or
enforceability of any other provision; and if any provision is held to be
unenforceable as a matter of law, the other provisions shall not be affected
thereby and shall remain in full force and effect.
19. Rights and Remedies. The rights and remedies conferred upon the
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parties hereto shall be cumulative, and the exercise of waiver of any such
rights or remedy shall not preclude or inhibit the exercise or any additional
rights or remedies. The waiver of any right or remedy hereunder shall not
preclude or inhibit the subsequent exercise of such right or remedy.
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IN WITNESS WHEREOF, this Addendum has been executed and attested as of the
day and year first above written by the duly authorized offices of the Fund and
the Custodian.
M.S.D. & T. FUNDS, INC.
Attest:
/s/ W. Xxxxx XxXxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: W. Xxxxx XxXxxxxx Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary Title: President
FIFTH THIRD BANK
Attest:
________________________ By: /s/ Xxxxx X. Xxxxxxx, Xx.
Name: ---------------------------------
Title: Name: Xxxxx X. Xxxxxxx, Xx.
Title: Vice President
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SCHEDULE A
FIFTH THIRD BANK
GLOBAL CUSTODY ADDENDUM
COUNTRIES AND FOREIGN SUB-CUSTODIANS
FOR
M.S.D. & T. FUNDS, INC.
June 1, 2000
COUNTRY SUB-CUSTODIAN
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Argentina Banco Rio de la Plata
Australia Commonwealth Bank of Australia
Brazil BankBoston, N.A. - Sao Paulo
Canada Royal Bank of Canada
Chile BankBoston, N.A. - Xxxxxxxx
Denmark Den Danske Bank
Germany Dresdner Bank AG
Italy Banca Commerciale Italiana
Japan The Fuji Bank, Limited
Korea Standard Chartered Xxxx
Xxxxxx Banco Nacional de Mexico
New Zealand Australia and New Zealand
Banking Group
Norway Den norske Bank ASA
Spain Banco Bilbao Vizcaya
Sweden Skandinaviska Enskilda Banken
United Kingdom The Bank of New York
London Branch
SCHEDULE B
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FIFTH THIRD BANK
GLOBAL CUSTODY ADDENDUM
NOTICES
June 1, 2000
TO FIFTH THIRD BANK:
Post Office Address: Fifth Third Center
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention:
Telephone:
Telex:
Telecopy:
TO M.S.D. & T. FUNDS, INC.:
Post Xxxxxx Xxxxxxx: Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Mutual Fund Administration
Telephone: 000-000-0000
Telex: N/A
Telecopy: 000-000-0000
