EXHIBIT NO. 99.7(b)
FUND ACCOUNTING AGREEMENT
AGREEMENT made as of the 18th day of December, 2006 between each of the
Investment Companies listed on Appendix A hereto, as the same may be amended
from time to time (each a "Fund" and collectively the "Funds") and State Street
Bank and Trust Company (the "Fund Accounting Agent"), and effective as to each
Fund as set forth on Appendix A.
WITNESSETH
WHEREAS, each Fund is or may be organized with one or more series of
shares, each of which shall represent an interest in a separate portfolio of
cash, securities and other assets (all such existing and additional series now
or hereafter listed on Appendix A attached hereto being hereinafter referred to
individually, as a "Portfolio," and collectively, as the "Portfolios"); and
WHEREAS, each Fund desires to retain the Fund Accounting Agent to perform
fund accounting and recordkeeping services on behalf of each of its Portfolios
under the terms and conditions set forth in this Agreement, and the Fund
Accounting Agent has agreed so to act.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
SERVICES AS FUND ACCOUNTING AGENT
Each Fund, on behalf of each of its Portfolios, hereby retains the Fund
Accounting Agent to perform the services set forth on Appendix B hereto in the
manner prescribed, if any, by such Fund's or Portfolio's, as the case may be,
currently effective prospectus and statement of additional information, copies
of which the Fund will furnish or cause to be furnished to the Fund Accounting
Agent after the filing thereof with the Securities and Exchange Commission
following the date hereof, or other governing document, a certified copy of
which has been supplied to the Fund Accounting Agent. The Fund Accounting Agent
hereby accepts such employment to perform the services set forth on Appendix B
hereto. The Fund Accounting Agent may, at its own expense, sub-contract with
third parties to perform certain of the services to be performed by the Fund
Accounting Agent hereunder; provided however that the employment of such third
parties shall not reduce the Fund Accounting Agent's obligations or
liabilities hereunder, as more particularly set forth in Section 3.02 hereof.
The Fund Accounting Agent agrees to perform the services described herein in
accordance with the standard of care set forth in Section 3.01(a) hereof.
For purposes of calculating the net asset value of a Fund, the Fund
Accounting Agent shall value each Fund's portfolio securities utilizing prices
obtained from sources designated by such Fund (collectively, the "Authorized
Price Sources") on a Price Source Authorization substantially in the form
attached hereto as Appendix C, as the same may be amended from time to time, or
otherwise designated by means of Proper Instructions (as such term is
hereinafter defined) (the "Price Source Authorization").
Section 1.01. Maintenance of Books and Records. All books and records
maintained by the Fund Accounting Agent pursuant to this Agreement, including
those maintained pursuant to Rule 31a-1 and Rule 31a-2 under the Investment
Company Act of 1940, as amended (the "1940 Act"), shall at all times be the
property of each applicable Fund and shall be available upon request during
normal business hours for inspection and use by such Fund and its agents,
including, without limitation, its independent certified public accountants. All
such books and records shall be maintained in a form acceptable to the
applicable Fund and in compliance with applicable law, regulation or
interpretation of a regulatory entity with jurisdiction over the Funds, and
shall be reasonably arranged and indexed by the Fund Accounting Agent in a
manner that permits reasonably prompt location, access and retrieval of any
particular record, including, if requested by a Fund, within the time period
specified by any regulatory entity with jurisdiction over the Funds. All books
and records maintained by the Fund Accounting Agent pursuant to this Agreement
shall be maintained for the periods required under Rule 31a-2 of the 1940 Act,
or longer, as may be agreed to by the parties and upon such terms as may be
agreed between the parties. In addition to the books and records required to be
maintained by the Fund Accounting Agent pursuant to this Agreement, the Fund
Accounting Agent shall keep such other books and records of each Fund as may be
agreed to by the parties and upon such terms as may be agreed between the
parties. Upon a Fund's request, the Fund Accounting Agent shall promptly
surrender to such Fund copies of all books and records of the Fund maintained by
the Fund Accounting Agent pursuant to this Agreement. Notwithstanding the
foregoing, no Fund shall take any actions or cause the Fund Accounting Agent to
take any actions which would cause, either directly or indirectly, the Fund
Accounting Agent to violate any applicable laws, regulations or orders.
Section 1.02. Authorized Persons. Concurrently with the execution of this
Agreement and from time to time thereafter, as appropriate, each Fund shall
deliver to the Fund Accounting Agent, duly certified as appropriate by a
President, Secretary, Treasurer or any Assistant Treasurer of such Fund, a
2
certificate setting forth the names, titles, signatures and scope of authority
of all persons authorized to give instructions or any other notice, request,
direction, instruction, certificate or instrument on behalf of such Fund
(collectively, the "Authorized Persons" and individually, an "Authorized
Person"). Such certificates may be accepted and reasonably relied upon by the
Fund Accounting Agent as conclusive evidence of the facts set forth therein and
shall be considered to be in full force and effect until delivery to the Fund
Accounting Agent of a similar certificate to the contrary. Upon delivery of a
certificate which deletes the name(s) of a person previously authorized by a
Fund to give instructions, such persons shall no longer be considered an
Authorized Person.
Section 1.03. Compliance with Governmental Rules and Regulations. The Fund
Accounting Agent shall refrain from taking any actions inconsistent with the
Funds' obligation to comply with applicable requirements of the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the
1940 Act, and the rules and regulations thereunder.
ARTICLE I-A
DUTIES OF FUNDS
Section 1A.01. Calculation Methods. Each Fund shall provide timely prior
notice to the Fund Accounting Agent of any modification to the manner in which
calculations referred to on Appendix B are to be performed as prescribed in any
revision to such Fund's governing documents and shall supply the Fund Accounting
Agent with certified copies of all amendments and/or supplements to the
governing documents in a timely manner. The Fund Accounting Agent shall not be
responsible for any revisions to calculation methods made by the Fund unless
such revisions are communicated in writing to the Fund Accounting Agent.
Section 1A.02. Delivery of Data. Each Fund shall provide, or shall cause a
third party to provide, timely notice to the Fund Accounting Agent of certain
data as a condition to the Fund Accounting Agent's performance described in
Article I above. The data required to be provided pursuant to this Section 1A.02
is set forth on Appendix D hereto, which schedule may be separately amended or
supplemented by the parties from time to time. The Fund Accounting Agent is
authorized and instructed to rely upon the information it receives from the Fund
or any third party. The Fund Accounting Agent shall have no responsibility to
review, confirm or otherwise assume any duty with respect to the accuracy or
completeness of any data supplied to it by or on behalf of any Fund.
Section 1A.03. Proper Instructions. The Fund or any other person duly
authorized by the Fund shall communicate to the Fund Accounting Agent by means
of Proper Instructions. "Proper Instructions" shall mean (i) a writing signed or
initialed by one or more persons as the Board of Directors or Board of Trustees
of a
3
Fund shall have from time to time authorized or (ii) communication effected
directly between a Fund or its third-party agents (each, a "Third Party Agent")
and the Fund Accounting Agent by electro-mechanical or electronic devices,
provided that such Fund and the Fund Accounting Agent agree to security
procedures. The Fund Accounting Agent may rely upon any Proper Instruction
believed by it to be genuine and to have been properly issued by or on behalf of
the applicable Fund. Oral instructions shall be considered Proper Instructions
if the Fund Accounting Agent reasonably believes them to have been given by a
person authorized to give such instructions. The Fund shall cause all oral
instructions to be confirmed in accordance with clauses (i) or (ii) above, as
appropriate. The Fund shall give timely Proper Instructions to the Fund
Accounting Agent in regard to matters affecting accounting practices and the
Fund Accounting Agent's performance pursuant to this Agreement.
ARTICLE II
COMPENSATION
On behalf of each of its Portfolios, each Fund shall compensate the Fund
Accounting Agent for its services and expenses in such amounts, and at such
times, as may be agreed upon in writing, from time to time, by the Fund
Accounting Agent and such Fund.
ARTICLE III
STANDARD OF CARE; INDEMNIFICATION
Section 3.01. Standard of Care.
(a) General Standard of Care. The Fund Accounting Agent shall exercise
diligence, prudence and reasonable care in carrying out all of its duties and
obligations under this Agreement, and shall be liable to each Fund for all
direct losses, damages and expenses suffered or incurred by such Fund or its
Portfolio(s) resulting from the failure of the Fund Accounting Agent to exercise
such diligence, prudence and reasonable care. In no event shall any party hereto
be liable for indirect, special or consequential losses, damages or expenses.
(b) Disruption of Services; Actions Prohibited by Applicable Law, Etc. In
order to prevent the disruption of services in the event of any reasonably
foreseeable adverse event (such as terrorism or related threats to security,
loss of electric power or communications lines, equipment failure, fire, water
damage or severe weather conditions), the Fund Accounting Agent shall maintain
at all times, at no additional expense to the Funds, a complete business
continuity, disaster recovery, business resumption and crisis management plan
("Business
4
Continuity/Disaster Recovery Plan") reasonably designed to safeguard from loss
or damage attributable to terrorism or related threats to security, fire, flood,
theft or any other cause the records and other data of the Funds and the
Portfolios and the Fund Accounting Agent's records, data, equipment, facilities
and other property used in the performance of its obligations under the
Agreement. Upon reasonable request, the Fund Accounting Agent shall discuss with
senior management of the Funds the Business Continuity/Disaster Recovery Plan
and/or provide a high-level presentation summarizing the Business
Continuity/Disaster Recovery Plan. For the avoidance of doubt, the parties
hereto agree that for purposes of the immediately preceding sentence,
"reasonable" shall mean at least annually. In the event of equipment failure,
work stoppage, governmental action, terrorism or related threats to security,
communication disruption or other impossibility of performance beyond the Fund
Accounting Agent's control, the Fund Accounting Agent shall, at no additional
expense to the Fund, use commercially reasonable efforts to minimize service
interruptions. In no event shall the Fund Accounting Agent incur liability
hereunder if the Fund Accounting Agent or any sub-contractor of the Fund
Accounting Agent (individually, a "Person") is prevented, forbidden or delayed
from performing, or omits to perform, any act or thing which this Agreement
provides shall be performed or omitted to be performed, by reason of: (1) any
provision of any present or future law or regulation or order of the United
States of America, or any state thereof, or of any foreign country, or political
subdivision thereof or of any court of competent jurisdiction; or (ii) any act
of God or war or other similar circumstance beyond the control of the Fund
Accounting Agent, unless, in each case, such delay or nonperformance is caused
by (A) the negligence, misfeasance or misconduct of the applicable Person, or
(B) a malfunction or failure of equipment operated or utilized by the applicable
Person other than a malfunction or failure beyond such Person's control and
which could not reasonably be anticipated and/or prevented by such Person.
(c) Mitigation by Fund Accounting Agent. Upon the occurrence of any event
which causes any loss, damage or expense to any Fund or Portfolio, (i) the Fund
Accounting Agent shall promptly notify the applicable Fund or Portfolio of the
occurrence of such event and (ii) the Fund Accounting Agent shall, and shall use
its best efforts to cause any applicable sub-contractor or other agent to, use
all commercially reasonable efforts and take all reasonable steps under the
circumstances to mitigate the effects of such event and to avoid continuing harm
to the Funds and the Portfolios.
(d) Advice of Counsel. The Fund Accounting Agent shall be entitled to
receive and act upon advice of counsel on all matters. The Fund Accounting Agent
shall be without liability for any action reasonably taken or reasonably omitted
in good faith pursuant to the advice of (i) counsel for the applicable
5
Fund or Portfolio, or (ii) at the expense of the Fund Accounting Agent, such
other counsel as the applicable Fund(s) and the Fund Accounting Agent may agree
upon; provided however, with respect to the performance of any action or
omission of any action upon such advice, the Fund Accounting Agent shall be
required to conform to the standard of care set forth in Section 3.01(a).
(e) Liability for Past Records. The Fund Accounting Agent shall have no
liability in respect of any loss, damage or expense suffered by a Fund, insofar
as such loss, damage or expense arises from the performance of the Fund
Accounting Agent's duties hereunder by reason of the Fund Accounting Agent's
reliance upon records that were maintained for such Fund by entities other than
the Fund Accounting Agent prior to the Fund Accounting Agent's retention
hereunder.
(f) Responsibility for Information. Each Fund, any Third Party Agent or any
Authorized Price Source from which the Fund Accounting Agent shall receive or
obtain certain records, reports and other data utilized or included in the
accounting services provided hereunder is solely responsible for the contents of
such information including, without limitation, the accuracy thereof and each
Fund agrees to make no claim against the Fund Accounting Agent arising out of
the contents of such third-party data including, but not limited to, the
accuracy thereof. The Fund Accounting Agent shall have no responsibility to
review, confirm or otherwise assume any duty with respect to the accuracy or
completeness of any such information and shall be without liability for any loss
or damage suffered as a result of the Fund Accounting Agent's reasonable
reliance on and utilization of such information, except as otherwise required by
the Price Source Authorization with respect to the use of data obtained from
Authorized Price Sources. The Fund Accounting Agent shall have no responsibility
and shall be without liability for any loss or damage caused by the failure of
any Fund or any Third Party Agent to provide it with the information required by
Article I-A above.
Section 3.02. Liability of Fund Accounting Agent for Actions of
Sub-Contractors, Agents, Directors, Etc. The Fund Accounting Agent shall be
liable for the actions or omissions of any of its sub-contractors or agents to
the same extent as if such action or omission was performed by the Fund
Accounting Agent itself. In the event of any direct loss, damage or expense
suffered or incurred by a Fund directly caused by or resulting directly from the
actions or omissions of any sub-contractor, agent, director, officer, employee,
representative or affiliate for which the Fund Accounting Agent would otherwise
be liable, the Fund Accounting Agent shall promptly reimburse such Fund in the
amount of any such loss, damage or expense.
Section 3.03. Indemnification.
6
(a) Indemnification Obligations of the Funds. Subject to the limitations
set forth in this Agreement, each Fund severally (and not jointly nor jointly
and severally) agrees to indemnify and hold harmless the Fund Accounting Agent
from all direct loss, damage and expense, and reasonable attorneys' fees,
suffered or incurred by the Fund Accounting Agent caused by or arising from any
actions taken by the Fund Accounting Agent on behalf of such Fund or its
Portfolio in the performance of its duties and obligations under this Agreement,
including without limitation all direct loss, damage and expense (including
reasonable attorney's fees) caused by or arising from the acts or omissions of
the Fund and all loss, damage and expense (including reasonable attorney's fees)
caused by or arising from the acts or omissions of any third-party whose
services the Fund Accounting Agent must rely upon in performing its services
hereunder; provided however, that such indemnity shall not apply to loss,
damage, expense or attorneys' fees occasioned by or resulting from the
negligence, misfeasance or misconduct of the Fund Accounting Agent; provided
further, that the Fund Accounting Agent shall not be entitled to indemnification
as to any matter to the extent that the loss, damage, expenses or attorneys'
fees is the result of the Fund Accounting Agent's breach of the applicable
standard of care under this Agreement.
(b) Indemnification Obligation of the Fund Accounting Agent. Subject to the
limitations set forth in this Agreement, the Fund Accounting Agent agrees to
indemnify and hold harmless each Fund, on behalf of its Portfolios, from all
direct loss, damage and expense, and reasonable attorneys' fees, suffered or
incurred by such Fund on behalf of its Portfolios and resulting directly from
the failure of the Fund Accounting Agent to exercise the standard of care set
forth in Section 3.01(a) hereof; provided however, that such indemnity shall not
apply to loss, damage, expense or attorneys' fees occasioned by or resulting
from the negligence, misfeasance or misconduct of any Fund.
(c) Notice of Litigation; Right to Prosecute, Etc. No Fund or Portfolio
shall be liable for indemnification under this Section 3.03 unless a Person
shall have promptly notified such Fund or Portfolio in writing of the
commencement of any litigation or proceeding brought against such Person in
respect of which indemnity may be sought under this Section 3.03. With respect
to claims in such litigation or proceedings for which indemnity by a Fund or
Portfolio may be sought and subject to applicable law and the ruling of any
court of competent jurisdiction, such Fund or Portfolio shall be entitled to
participate in any such litigation or proceeding and, after written notice from
such Fund or Portfolio to any Person, such Fund or Portfolio may assume the
defense of such litigation or proceeding with counsel of its choice at its own
expense in respect of that portion of the litigation for which such Fund or
Portfolio may be subject to an indemnification obligation; provided however, a
Person shall be entitled to participate in (but not control) at its own cost and
expense, the defense of any
7
such litigation or proceeding and, after written notice from such Fund or
Portfolio to any Person, such Fund or Portfolio may assume the defense of such
litigation or proceeding with counsel of its choice at its own expense in
respect of that portion of the litigation for which such Fund or Portfolio may
be subject to an indemnification obligation; provided however, a Person shall be
entitled to participate in (but not control) at its own cost and expense, the
defense of any such litigation or proceeding if such Fund or Portfolio has not
acknowledged in writing its obligation to indemnify the Person with respect to
such litigation or proceeding. If such Fund or Portfolio is not permitted to
participate or control such litigation or proceeding under applicable law or by
a ruling of a court of competent jurisdiction, such Person shall reasonably
prosecute such litigation or proceeding. A Person shall not consent to the entry
of any judgment or enter into any settlement in any such litigation or
proceeding without providing each applicable Fund or Portfolio with adequate
notice of any such settlement or judgment, and without each such Fund's or
Portfolio's prior written consent. All Persons shall submit written evidence to
each applicable Fund or Portfolio with respect to any cost or expense for which
they are seeking indemnification in such form and detail as such Fund or
Portfolio may reasonably request.
Section 3.04. Fund's Right to Proceed. Notwithstanding anything to the
contrary contained herein, each Fund or Portfolio shall have, at its election
upon reasonable notice to the Fund Accounting Agent, the right to enforce, to
the extent permitted by any applicable agreement and applicable law, the Fund
Accounting Agent's rights against any sub-contractor or agent for any loss,
damage or expense caused such Fund or Portfolio by such sub-contractor or agent,
and shall be entitled to enforce the rights of the Fund Accounting Agent with
respect to any claim against such sub-contractor or agent which the Fund
Accounting Agent may have as a consequence of any such loss, damage or expense,
if and to the extent that such Fund or Portfolio has not been made whole for any
such loss or damage. If the Fund Accounting Agent makes such Fund or Portfolio
whole for any such loss or damage, the Fund Accounting Agent shall retain the
ability to enforce its rights directly against such sub-contractor or agent.
Upon such Fund's or Portfolio's election to enforce any rights of the Fund
Accounting Agent under this Section 3.04, such Fund or Portfolio shall
reasonably prosecute all actions and proceedings directly relating to the rights
of the Fund Accounting Agent in respect of the loss, damage or expense incurred
by such Fund or Portfolio; provided that, so long as such Fund or Portfolio has
acknowledged in writing its obligation to indemnify the Fund Accounting Agent
under Section 3.03 hereof with respect to such claim, such Fund or Portfolio
shall retain the right to settle, compromise and/or terminate any action or
proceeding in respect of the loss, damage or expense incurred by such Fund or
Portfolio without the Fund Accounting Agent's consent and provided further, that
if such Fund or Portfolio has not made an acknowledgment of its obligation to
indemnify, such Fund or Portfolio shall not settle, compromise or terminate any
such action or proceeding without the written consent of the Fund Accounting
Agent, which consent shall not be unreasonably withheld or delayed. The Fund
Accounting Agent agrees to cooperate with each Fund or Portfolio and take all
actions reasonably requested by such Fund or Portfolio in connection with such
Fund's or Portfolio's enforcement of any rights of the Fund Accounting Agent.
Each Fund or Portfolio agrees to reimburse the Fund Accounting Agent for all
8
reasonable out-of-pocket expenses incurred by the Fund Accounting Agent on
behalf of such Fund or Portfolio in connection with the fulfillment of its
obligations under this Section 3.04; provided, however, that such reimbursement
shall not apply to expenses occasioned by or resulting from the failure of the
Fund Accounting Agent to exercise the standard of care set forth in Section
3.01(a) hereof.
ARTICLE IV
CONFIDENTIALITY
The parties hereto agree that each shall treat confidentially all
information provided by each party to the other regarding its business and
operations. All confidential information provided by a party hereto shall be
used by any other party hereto solely for the purpose of rendering services
pursuant to this Agreement and, except as may be required in carrying out this
Agreement, shall not be disclosed to any third party without the prior consent
of such providing party. During the term of this Agreement, the Fund Accounting
Agent agrees that it will maintain and enforce policies which prohibit the Fund
Accounting Agent and its employees from engaging in securities transactions
based on knowledge of the portfolio holdings of any Portfolio. The Fund
Accounting Agent is familiar with Regulation S-P and agrees not to disclose or
use non-public personal information about Fund or Portfolio shareholders except
in accordance with Regulation S-P and the Funds' applicable privacy policies.
Each party acknowledges that any breach of the foregoing agreements as to the
other party would result in immediate and irreparable harm to such other party
for which there would be no adequate remedy at law and agrees that in the event
of such a breach such other party will be entitled to equitable relief by way of
temporary and permanent injunctions, as well as such other relief as any court
of competent jurisdiction shall deem appropriate. The foregoing shall not be
applicable to any information that is publicly available when provided or
thereafter becomes publicly available other than through a violation of this
Agreement, or that is required to be disclosed by any auditor of the parties
hereto, by judicial or administrative process or otherwise by applicable law or
regulation.
ARTICLE V
TERMINATION
Section 5.01. Termination of Agreement as to One or More Funds. This
Agreement shall become effective as of the date first above-written and shall
remain in full force and effect for a period of two (2) years (the "Initial
Term").
9
During the Initial Term and thereafter, each Fund, at its discretion, may
terminate this Agreement in the event of any of the following termination
events: (i) such Fund's determination that there is a reasonable basis to
conclude that the Fund Accounting Agent is insolvent or that the financial
condition of the Fund Accounting Agent is deteriorating in any material respect,
in which case termination shall take effect upon the Fund Accounting Agent's
receipt of written notice of termination, or at such later time as such Fund
shall designate; (ii) the Fund Accounting Agent fails to (a) perform in a
material respect and on more than one occasion the fund accounting services set
forth on Appendix B hereto, and (b) cure or establish a remedial plan,
acceptable to such Fund acting reasonably, in each case within 30 days of
written notice thereof; or (iii) in such Fund's reasonable opinion, the Fund
Accounting Agent has not achieved one or more of the performance measures set
forth in any service level document (a "Service Level Document") that may be
established by the parties, and a plan or revised plan has not been put into
place in accordance with the following procedures: In the event that such Fund
reasonably believes that the Fund Accounting Agent has not met one or more of
the performance measures set forth in any Service Level Document during any
calendar quarter, the Fund may, in its discretion, submit a written deficiency
notice to the Fund Accounting Agent outlining the performance deficiencies
("Deficiency Notice"). Such Deficiency Notice must be provided to the Fund
Accounting Agent within 20 days of the end of such calendar quarter. After
receipt of such notice, the Fund Accounting Agent shall present the Fund with a
written plan to address the deficiencies set forth in the Deficiency Notice (the
"Plan"). Such Plan must be provided to Fund within 30 days after receipt of the
Deficiency Notice. If the Fund Accounting Agent fails to submit a Plan within
such 30-day period, the Fund may terminate this Agreement upon 60 days' written
notice to the Fund Accounting Agent. The Fund, in its discretion, may accept or
reject the Plan by notifying the Fund Accounting Agent in writing ("Response
Notice") within 15 days after submission of the Plan. If the Fund fails to
provide a Response Notice within such 15-day period, it shall be presumed that
Fund accepted the Plan. In the event the Fund submits a Response Notice
rejecting the Plan, the Fund Accounting Agent shall submit a revised plan
("Revised Plan") to the Fund. Such Revised Plan must be provided to the Fund
within 30 days after provision of the Response Notice rejecting the Plan. If the
Fund Accounting Agent fails to submit a Revised Plan within such 30-day period,
the Fund may terminate the Agreement upon 60 days' written notice to the Fund
Accounting Agent. The Fund, in its sole discretion, may accept or reject the
Revised Plan by notifying the Fund Accounting Agent in writing ("Revised Plan
Notice"). Any Revised Plan Notice must be submitted to the Fund Accounting Agent
within 15 days after provision of the Revised Plan. If Fund fails to provide a
Revised Plan Notice within such 15-day period, it shall be presumed that the
Fund accepted the Revised Plan. If Fund provides a Revised Plan Notice to the
Fund Accounting Agent that rejects the Revised Plan, the Fund may, in its sole
discretion, terminate this Agreement upon 60 days' written notice
10
to the Fund Accounting Agent. Such termination notice must be submitted to the
Fund Accounting Agent within 60 days after provision of the Revised Plan Notice.
Following the Initial Term, with respect to each Fund, this Agreement shall
continue in full force and effect until the first to occur of: (a) termination
by the Fund Accounting Agent by an instrument in writing delivered or mailed to
such Fund, such termination to take effect not sooner than ninety (90) days
after the date of such delivery; (b) termination by such Fund by an instrument
in writing delivered or mailed to the Fund Accounting Agent, such termination to
take effect not sooner than thirty (30) days after the date of such delivery;
(c) termination by such Fund on such date as is specified in a written notice to
the Fund Accounting Agent in the event of a material breach of this Agreement by
the Fund Accounting Agent, provided the Fund has notified the Fund Accounting
Agent of such material breach at least 15 days prior to the specified date of
termination and the Fund Accounting Agent has not remedied such breach by the
specified date; or (d) termination by such Fund by written notice delivered to
the Fund Accounting Agent, based upon such Fund's determination that there is a
reasonable basis to conclude that the Fund Accounting Agent is insolvent or that
the financial condition of the Fund Accounting Agent is deteriorating in any
material respect, in which case termination shall take effect upon the Fund
Accounting Agent's receipt of such notice or at such later time as such Fund
shall designate. In the event of termination pursuant to this Section 5.01 by
any Fund (a "Terminating Fund"), each Terminating Fund shall make payment of all
accrued fees and unreimbursed expenses with respect to such Terminating Fund
within a reasonable time following termination and delivery of a statement to
the Terminating Fund setting forth such fees and expenses. Each Terminating Fund
shall identify in any notice of termination a successor fund accountant to which
the property, records, instruments, and documents of its Portfolios held by the
Fund Accounting Agent shall, upon termination of this Agreement with respect to
such Terminating Fund and following the satisfaction of all obligations of such
Terminating Fund to State Street Bank and Trust Company arising under this
Agreement and/or such Terminating Fund's custodian agreement with State Street
Bank and Trust Company, be delivered in a format permissible under laws
applicable to the Terminating Fund. In the event that no written notice
designating a successor fund accountant shall have been delivered to the Fund
Accounting Agent on or before the date when termination of this Agreement as to
a Terminating Fund shall become effective, the Fund Accounting Agent shall
continue to perform the services contemplated by this Agreement and shall be
entitled to compensation for its services in accordance with the fee schedule
most recently in effect for such period as the Fund Accounting Agent continues
to perform services under the Agreement, and the provisions of this Agreement
relating to the duties and obligations of the Fund Accounting Agent and the
Terminating Fund shall remain in full force and effect. The Fund Accounting
11
Agent agrees to reasonably cooperate with a Terminating Fund in the execution of
documents and performance of other actions necessary or desirable in order to
substitute the successor fund accountant for the Fund Accounting Agent under
this Agreement. In the event or to the extent that no successor fund accountant
has been appointed, each Terminating Fund agrees to accept delivery of its
property and records within a reasonable time period. Notwithstanding the
foregoing, in the event of the termination of any Fund's custodian agreement
with State Street Bank and Trust Company (in its entirety, with respect to any
particular Fund, or with respect to its applicability to any particular
Portfolio, as may be applicable) ("Custodian Agreement Termination"), this
Agreement may, at the sole option of the Fund Accounting Agent, be terminated
(in its entirety, with respect to such Fund or with respect to its applicability
to such Portfolio, as the case may be, consistent with the scope of the
Custodian Agreement Termination) by the Fund Accounting Agent; provided that
such termination shall take effect on the same day as the Custodian Agreement
Termination and, provided further, that promptly following receipt by State
Street Bank and Trust Company of the notice regarding the Custodian Agreement
Termination, the Fund Accounting Agent notifies the Fund or applicable Portfolio
that it is terminating the Fund Accounting Agent by an instrument in writing
delivered or mailed to such Fund or applicable Portfolio.
Section 5.02. Termination as to One or More Portfolios. During the Initial
Term, this Agreement may be terminated as to one or more of a Fund's Portfolios
(but less than all of its Portfolios) in accordance with Section 5.01. Following
the Initial Term, this Agreement may be terminated as to one or more of a Fund's
Portfolios (but less than all of its Portfolios) by delivery by a Fund, on
behalf of its Portfolios, to the Fund Accounting Agent of an amended Appendix A
deleting such Portfolios pursuant to Section 7.08(b) hereof, in which case
termination as to such deleted Portfolios shall take effect thirty (30) days
after the date of such delivery. The execution and delivery of an amended
Appendix A which deletes one or more Portfolios shall constitute a termination
of this Agreement only with respect to such deleted Portfolio(s), shall be
governed by the provisions of Section 5.01 as to the identification of a
successor fund accountant and the delivery of property, records, instruments and
documents of the Portfolios so deleted, and shall not affect the obligations of
the Fund Accounting Agent and any Fund hereunder with respect to the other
Portfolios set forth in Appendix A, as amended from time to time.
ARTICLE VI
DEFINED TERMS
The following terms are defined in the following sections:
12
TERM SECTION
---- -------
Authorized Person(s) Section 1.02
Authorized Price Sources Article I
Business Continuity/Disaster Recovery Plan Section 3.01(b)
Fund(s) Preamble
Fund Accounting Agent Preamble
Person Section 3.01(b)
Portfolio(s) Preamble
Price Sourcing Authorization Article I
Proper Instructions Section 1A.03
Service Level Document Article III-A
Terminating Fund Section 5.01
Third Party Agent Section IA.03
1940 Act Section 1.01
ARTICLE VII
MISCELLANEOUS
Section 7.01. Representative Capacity; Nonrecourse Obligations. A COPY OF
THE DECLARATION OF TRUST OR OTHER ORGANIZATIONAL DOCUMENT OF EACH FUND THAT IS
ORGANIZED AS A
MASSACHUSETTS BUSINESS TRUST IS ON FILE WITH THE SECRETARY OF THE
COMMONWEALTH OF
MASSACHUSETTS, AND NOTICE IS HEREBY GIVEN THAT THIS AGREEMENT IS
NOT EXECUTED ON BEHALF OF THE MEMBERS OF THE BOARD OF TRUSTEES OR MEMBERS OF THE
BOARD OF MANAGERS OF ANY FUND AS INDIVIDUALS, AND THE OBLIGATIONS OF THIS
AGREEMENT ARE NOT BINDING UPON ANY OF THE TRUSTEES, MANAGERS, OFFICERS,
SHAREHOLDERS OR PARTNERS OF ANY FUND INDIVIDUALLY, BUT ARE BINDING ONLY UPON THE
ASSETS AND PROPERTY OF EACH FUND'S RESPECTIVE PORTFOLIOS. THE FUND ACCOUNTING
AGENT AGREES THAT NO SHAREHOLDER, TRUSTEE, MANAGER, OFFICER OR PARTNER OF ANY
FUND MAY BE HELD PERSONALLY LIABLE OR RESPONSIBLE FOR ANY OBLIGATIONS OF ANY
FUND ARISING OUT OF THIS AGREEMENT.
Section 7.02. Several Obligations of the Funds and the Portfolios. WITH
RESPECT TO ANY OBLIGATIONS OF A FUND ON BEHALF OF ANY OF ITS PORTFOLIOS ARISING
OUT OF THIS AGREEMENT, THE FUND ACCOUNTING AGENT SHALL LOOK FOR PAYMENT OR
SATISFACTION OF ANY OBLIGATION SOLELY TO THE ASSESTS AND PROPERTY OF THE
PORTFOLIO TO WHICH SUCH OBLIGATION RELATES AS THOUGH EACH FUND HAS SEPARATELY
CONTRACTED WITH THE FUND ACCOUNTING AGENT BY SEPARATE WRITTEN INSTRUMENT WITH
RESPECT TO EACH OF ITS PORTFOLIOS. CONSISTENT WITH THE FOREGOING, THE
OBLIGATIONS OF EACH FUND AND PORTFOLIO UNDER THIS AGREEMENT ARE SEVERAL AND
NEITHER JOINT NOR JOINT AND SEVERAL.
13
Section 7.03. Representations, Warranties and Covenants.
(a) Representations and Warranties of Each Fund. Each Fund hereby severally
and not jointly represents and warrants that each of the following shall be
true, correct and complete with respect to it at all times during the term of
this Agreement: (i) the Fund is duly organized under the laws of its
jurisdiction of organization and is registered as an open-end or closed-end
management investment company under the 1940 Act; and (ii) the execution,
delivery and performance by the Fund of this Agreement on behalf of each
applicable Portfolio are (w) within its power, (x) have been duly authorized by
all necessary action, and (y) will not (A) contribute to or result in a breach
of or default under or conflict with any existing law, order, regulation or
ruling of any governmental or regulatory agency or authority, or (B) violate any
provision of the Fund's Declaration of Trust or other organizational document,
or bylaws, or any amendment thereof or any provision of its most recent
Prospectus or Statement of Additional Information.
(b) Representations, Warranties and Covenants of the Fund Accounting Agent.
The Fund Accounting Agent hereby represents and warrants to each Fund that each
of the following shall be true, correct and complete at all times during the
term of this Agreement: (i) the Fund Accounting Agent shall maintain and keep
current a Business Continuity/Disaster Recovery Plan and the capacity to execute
such Business Continuity/Disaster Recovery Plan; and (ii) the execution,
delivery and performance by the Fund Accounting Agent of this Agreement are (w)
within its power, (x) have been duly authorized by all necessary action, and (y)
will not (A) contribute to or result in a breach of or default under or conflict
with any existing law, order, regulation or ruling of any governmental or
regulatory agency or authority, or (B) violate any provision of the Fund
Accounting Agent's corporate charter, or other organizational document, or
bylaws, or any amendment thereof.
Section 7.04. Insurance. The Fund Accounting Agent will maintain insurance
at all times during the term of this Agreement in a commercially reasonable
amount sufficient to cover its liabilities under this Agreement. Concurrent with
the execution of this Agreement and thereafter upon request of a Fund (but in no
event more frequently than annually), the Fund Accounting Agent shall provide a
"certificate of insurance" to each Fund evidencing such coverage.
Section 7.05. Reports by Independent Certified Public Accountants.
Annually, and as may otherwise be reasonably requested by a Fund, but in no
event more frequently than semi-annually, the Fund Accounting Agent shall
deliver to such Fund a Type II SAS 70 report, or such other report as may be
agreed to by the Funds and the Fund Accounting Agent, prepared by the Fund
14
Accounting Agent's independent certified public accountants with respect to the
services provided by the Fund Accounting Agent under this Agreement. Such report
shall be of sufficient scope and in sufficient detail as may reasonably be
required by any Fund and as may reasonably be obtained by the Fund Accounting
Agent.
Section 7.06. Remote Access. The Fund Accounting Agent will develop and
maintain systems that allow the Funds to access and download on a remote basis
certain Portfolio information, as may be agreed upon from time to time in
writing by the Funds and the Fund Accounting Agent, maintained in the Fund
Accounting Agent's databases. Each Fund and the Fund Accounting Agent hereby
agree to the terms of the Remote Access Services Addendum attached hereto.
Section 7.07. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the Fund, on the one hand, and the Fund
Accounting Agent, on the other, with respect to the subject matter hereof and
accordingly, supersedes as of the effective date of this Agreement any
fund
accounting agreement heretofore in effect between each Fund and the Fund
Accounting Agent.
Section 7.08. Waivers and Amendments. No provision of this Agreement may be
waived, amended or terminated except by a statement in writing signed by the
party against which enforcement of such waiver, amendment or termination is
sought; provided, however: (a) Appendix A - listing the Portfolios of each Fund
for which the Fund Accounting Agent serves as fund accountant may be amended
from time to time to add one or more Portfolios for one or more Funds, by each
applicable Fund's execution and delivery to the Fund Accounting Agent of an
amended Appendix A, and - the execution of such amended Appendix by the Fund
Accounting Agent, in which case such amendment shall take effect immediately
upon execution by the Fund Accounting Agent; (b) subject to Article V hereof,
Appendix A may - be amended from time to time to delete one or more Portfolios
(but less than all of the Portfolios) of one or more of the Funds, by each
applicable Fund's execution and delivery to the Fund Accounting Agent of an
amended Appendix A, in - which case such amendment shall take effect thirty (30)
days after such delivery, unless otherwise agreed by the Fund Accounting Agent
and each applicable Fund in writing; and (c) Appendix B - setting forth the
services to be performed by the Fund Accounting Agent may be amended from time
to time to add or delete one or more services by either party's execution and
delivery to the other party hereto of an amended Appendix B, in - which case
such amendment shall take effect immediately upon execution by the other party
hereto.
15
Section 7.09. Interpretation. In connection with the operation of this
Agreement, the Fund Accounting Agent and any Fund may agree in writing from time
to time on such provisions interpretative of or in addition to the provisions of
this Agreement with respect to such Fund as may in their joint opinion be
consistent with the general tenor of this Agreement. No interpretative or
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Agreement or affect any other Fund.
Section 7.10. Captions. Headings contained in this Agreement, which are
included as convenient references only, shall have no bearing upon the
interpretation of the terms of the Agreement or the obligations of the parties
hereto.
Section 7.11. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of The Commonwealth of
Massachusetts,
without giving effect to principles of conflicts of law.
Section 7.12. Notices. Except in the case of instructions by an Authorized
Person, notices and other writings contemplated by this Agreement shall be
delivered by hand or by facsimile transmission provided that in the case of
delivery by facsimile transmission, notice shall also be mailed postage prepaid
to the parties at the following addresses:
(a) If to any Fund:
[Trust Name]
c/o
Massachusetts Financial Services Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Treasurer of the MFS Funds
Telephone: 000-000-0000
Telefax: 617-954-
(b) If to the Fund Accounting Agent:
State Street Bank and Trust Company
U.S. Investor Services Division, LCC/2S
Lafayette Corporate Center
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000-0000
Attn: W. Xxxxxx Xxx, Senior Vice President
Telephone: 000-000-0000
Telefax: 000-000-0000
16
with a copy to:
Xxxx Xxxxx Zeven, Senior Vice President & Senior Managing
Counsel
State Street Bank and Trust Company
Legal Division, LCC/2S
Lafayette Corporate Center
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000-0000
Telephone: 000-000-0000
Telefax: 000-000-0000
or to such other address as a Fund or the Fund Accounting Agent may have
designated in writing to the other.
Section 7.13. Assignment. This Agreement shall be binding on and shall
inure to the benefit of each Fund severally and the Fund Accounting Agent and
their respective successors and assigns, provided that, subject to the
provisions of Section 5.01 hereof, neither the Fund Accounting Agent nor any
Fund may assign this Agreement or any of its rights or obligations hereunder
without the prior written consent of the other party.
Section 7.14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. With respect to each
Fund, this Agreement shall become effective when one or more counterparts have
been signed and delivered by such Fund and the Fund Accounting Agent.
Section 7.15. Consent to Recording. Subject to Section 7.16, each Fund and
the Fund Accounting Agent hereby agree that each may electronically record all
telephonic conversations between them and that any such recordings may be
submitted in evidence in any proceedings relating to this Agreement.
Section 7.16. Survival of Obligations. The provisions of this Section 7.16
and Sections 7.01, 7.02, 7.11, Section 1.01, Section 5.01, Article I-A, Article
II, Article III and Article IV hereof and any other rights or obligations
incurred or accrued by any party hereto prior to termination of this Agreement
shall survive any termination of this Agreement.
Section 7.17. Reproduction of Documents. This Agreement and all schedules,
addenda, exhibits, appendices, attachments and amendments hereto may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties hereto each agree that any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
17
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
18
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
Each of the Investment Companies listed on
Appendix A Attached Hereto, on Behalf of
each of Their Respective Portfolios
By: XXXXX X. XXXXX
--------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
STATE STREET BANK AND TRUST COMPANY
By: XXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
[Signature Page to
Fund Accounting Agreement]
19
APPENDIX A
TO
FUND ACCOUNTING AGREEMENT
BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
EACH OF THE INVESTMENT COMPANIES LISTED ON APPENDIX A THERETO
DATED AS OF DECEMBER 18, 2006
Except as may be otherwise indicated below, with respect to each fund listed on
this Appendix A, such fund shall become a "Fund" party to the
Fund Accounting
Agreement effective in 2007 upon the day immediately following such fund's
respective fiscal year end (FYE) reflected below.
TRUST FUND (FYE)
--------------------------------------------------------------------------------
Stand-Alone Trusts Massachusetts Investors Trust (12/31)
Closed End Funds MFS Charter Income Trust (11/30)
MFS Government Market Income Trust (11/30)
MFS Intermediate Income Trust (10/31)
MFS Multimarket Income Trust (10/31)
MFS Municipal Income Trust (10/31)
MFS Special Value Trust (10/31)
MFS Series Trust I MFS Cash Reserve Fund (8/31)
MFS Core Equity Fund (8/31)
MFS Core Growth Fund (8/31)
MFS New Discovery Fund (8/31)
MFS Research International Fund (8/31)
MFS Strategic Growth Fund (8/31)
MFS Technology Fund (8/31)
MFS Value Fund (8/31)
MFS Series Trust X MFS Aggressive Growth Allocation Fund (5/31)
MFS Conservative Allocation Fund (5/31)
MFS Emerging Markets Debt Fund (7/31)
20
MFS Emerging Markets Equity Fund (5/31)
MFS Floating Rate High Income Fund (8/31)
MFS Growth Allocation Fund (5/31)
MFS International Diversification Fund (5/31)
MFS International Growth Fund (5/31)
MFS International Value Fund (5/31)
MFS New Endeavor Fund (7/31)
MFS Moderate Allocation Fund (5/31)
MFS Strategic Value Fund (7/31)
MFS Series Trust XI MFS Mid Cap Value Fund (9/30)
MFS Union Standard Equity Fund (9/30)
MFS Series Trust XII MFS Lifetime Retirement Income Fund (4/30)
MFS Lifetime 2010 Fund (4/30)
MFS Lifetime 2020 Fund (4/30)
MFS Lifetime 2030 Fund (4/30)
MFS Lifetime 2040 Fund (4/30)
MFS Sector Rotational Fund (4/30) - effective
date 1/2/07
MFS Variable Insurance Trust MFS Capital Opportunities Series (12/31)
MFS Global Equity Series (12/31)
MFS Emerging Growth Series (12/31)
MFS High Income Series (12/31)
MFS Investors Growth Series (12/31)
MFS Investors Trust Series (12/31)
MFS Mid Cap Growth Series (12/31)
MFS Money Market Series (12/31)
MFS New Discovery Series (12/31)
MFS Research Series (12/31)
MFS Research Bond Series (12/31)
MFS Research International Series (12/31)
MFS Strategic Income Series (12/31)
MFS Total Return Series (12/31)
MFS Utilities Series (12/31)
MFS Value Series (12/31)
MFS/Sun Life Series Trust Bond Series (12/31)
Capital Appreciation Series (12/31)
Capital Opportunities Series (12/31)
Core Equity Series (12/31)
Emerging Growth Series (12/31)
21
Emerging Markets Equity Series (12/31)
Global Governments Series (12/31)
Global Growth Series (12/31)
Global Total Return Series (12/31)
Government Securities Series (12/31)
High Yield Series (12/31)
International Growth Series (12/31)
International Value Series (12/31)
Mass. Investors Growth Stock Series (12/31)
Mass. Investors Trust Series (12/31)
Mid Cap Growth Series (12/31)
Mid Cap Value Series (12/31)
Money Market Series (12/31)
New Discovery Series (12/31)
Research Series (12/31)
Research International Series (12/31)
Strategic Growth Series (12/31)
Strategic Income Series (12/31)
Strategic Value Series (12/31)
Technology Series (12/31)
Total Return Series (12/31)
Utilities Series (12/31)
Value Series (12/31)
Variable Accounts Capital Appreciation Variable Account (12/31)
Global Governments Variable Account (12/31)
Government Securities Variable Account (12/31)
High Yield Variable Account (12/31)
Money Market Variable Account (12/31)
Total Return Variable Account (12/31)
00
XXXXXXXX X
TO
FUND ACCOUNTING AGREEMENT
BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
EACH OF THE INVESTMENT COMPANIES LISTED ON APPENDIX A THERETO
DATED AS OF DECEMBER 18, 2006
A. Maintenance of books and records. Subject to the provisions of Section 1.01
of the Agreement, the Fund Accounting Agent will keep and maintain the
following books and records which each Portfolio is, or may be, required to
keep and maintain pursuant to any applicable statutes, rules and
regulations, including without limitation Rule 31a-1 and Rule 31a-2 under
the 1940 Act:
1. Journals containing an itemized daily record in detail of all
purchases and sales of securities and other instruments, all
settlements of securities and other instruments, all receipts and
disbursements of cash and all other debits and credits, as required by
Rule 31a-1(b)(1).
2. General and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including interest
accrued and interest received, as required by Rule 31a-1(b)(2)(i).
3. General ledger entries for investment, corporate actions, capital
share and income and expense activities.
4. Separate ledger accounts required by Rule 31a-1(b)(2)(i), (ii) and
(iii).
5. A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by Rule 31a-1(b)(8).
B. Performance of daily accounting services. The Fund Accounting Agent will
perform the following accounting services daily for each Portfolio:
1. Calculate the market value of each Portfolio's securities and other
investments at such times and in the manner specified in the then
currently effective prospectus of the Portfolio, using prices received
23
from the sources described in B.2 below, and transmit the price per
share to the Portfolio's transfer agent, NASDAQ (as applicable), and
other parties designated by the Portfolio.
2. Receive prices from sources designated by the Fund via MFS Fund
Treasury, the Portfolio's administrator (the "Administrator"), on the
Price Source Authorization ("PSA") supplied by the Fund via the
Administrator to the Fund Accounting Agent, as the same may be amended
by the Fund via the Administrator from time to time (collectively, the
"Authorized Price Sources").
a. If prices are not available from Authorized Price Sources or meet
or exceed the thresholds established by the Fund via the
Administrator and set forth in the PSA, the Fund Accounting Agent
shall notify the Administrator and shall follow procedures that
may be established from time to time between the parties hereto.
The Fund Accounting Agent shall not override valuations received
from an Authorized Price Source without written instructions from
the Fund via the Administrator.
3. Calculate the net asset value per share of each Portfolio.
4. Distribute the net asset values of each Portfolio to parties
designated by the Portfolio and to NASDAQ, if applicable.
5. Reserved.
6. Verify and reconcile with each Portfolio's custodian each Portfolio's
cash balances.
7. Reserved.
8. Compute (daily, weekly or monthly, as appropriate), as instructed,
each Portfolio's net income, realized capital gains and losses,
dividend payables, 1- and 7-day money market yields (simple [and
compounded, upon mutually agreed terms]; with and without waivers),
rolling 30-day yields; 30-day SEC-standardized yields (with and
without waivers), portfolio turnover rate, and, if instructed, average
dollar-weighted maturity (money markets).
9. Reconcile daily activity to the trial balance.
10. Record and reconcile capital stock activity (including share buy
backs) from the Portfolios' transfer agent(s) and notify the
Administrator when any "as-of" trades are "material" (as
defined/instructed by the Fund via the Administrator) to a fund's
daily activity.
24
11. Provide the Administrator with each Portfolio's average shares
outstanding on a semi-annual basis and settled shares for daily
distribution funds.
12. Accrue expenses of each Portfolio according to instructions received
from the Portfolio's Administrator.
13. To the extent such information is received from each Portfolio's
custodian and in reliance thereon, record changes in securities
holdings resulting from stock splits, stock dividends, capital
reorganizations and other corporate actions affecting securities held
by the Portfolios.
14. To the extent such information is received from the Portfolio or its
Administrator, record as an asset of the Portfolio on the Portfolio's
accounting records any derivatives contracts entered into by the
Portfolio, such as swap contracts, futures, and options on futures.
15. Provide such periodic reports and statements to the Administrator as
shall be mutually agreed upon by the Administrator and the Fund
Accounting Agent from time to time.
C. Additional accounting services. The Fund Accounting Agent will perform the
following additional accounting services for each Portfolio:
1. On a semi-monthly basis, verify and reconcile with each Portfolio's
custodian each Portfolio's safekeeping holdings positions versus
accounting records.
2. Provide fund accounting information, reports and documents (and any
sub-certifications as may be appropriate and mutually agreed upon from
time to time) for the following:
a. Federal and state income tax returns and federal excise tax
returns;
b. Each Portfolio's semi-annual reports with the Securities and
Exchange Commission ("SEC") on Form N-CSR or Form N-SAR,
including required certifications under the Xxxxxxxx-Xxxxx Act of
2002;
c. Each Portfolio's annual, semi-annual and quarterly (if any)
shareholder reports;
d. Each Fund's registration statements on From N-1A and other
filings relating to the registration of shares;
25
e. Any periodic audit of the Funds' compliance program under Rule
38a-1 of the 1940 Act.
f. The Administrator's monitoring of a Portfolio's status as a
regulated investment company under Subchapter M of the Internal
Revenue Code, as amended;
g. Annual audit by a Fund's independent certified public
accountants; and
h. Examinations performed by the SEC.
3. Process approved vouchers for Portfolio expenses when such vouchers
are delivered to the Fund Accounting Agent by the Administrator.
D. Special reports and services.
1. Provide valuation-related services, including without limitation
back-testing and stale price reporting, as shall be reasonably
requested by the Administrator from time to time.
2. Make available to the Administrator from time to time such information
or data about any Authorized Price Sources as may be agreed upon by
the Administrator and the Fund Accounting Agent.
3. Reserved.
4. Reserved.
5. Provide the necessary system and personnel support for fund mergers,
in-kind redemptions, and other transactions when these types of
transactions are approved and executed.
26
APPENDIX C
TO
FUND ACCOUNTING AGREEMENT
BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
EACH OF THE INVESTMENT COMPANIES LISTED ON APPENDIX A THERETO
DATED AS OF DECEMBER 18, 2006
To: State Street Bank and Trust Company
From: [Client/Fund Name] _______________________________________________________
Client/Fund Address: ___________________________________________________________
Date: ___________
Re: PRICE SOURCE AUTHORIZATION
Reference is made to that certain
Fund Accounting Agreement dated as of
December 18, 2006 (as amended, restated, modified or supplemented from time to
time, the "Accounting Agreement") by and among each Fund party thereto and State
Street Bank and Trust Company (the "Fund Accounting Agent"). Capitalized terms
used in this Price Source Authorization or in any attachment or supplement shall
have the meanings provided in the Accounting Agreement unless otherwise
specified. Pursuant to the Accounting Agreement, each Fund hereby directs the
Fund Accounting Agent to calculate the net asset value ("NAV") of each Fund or,
if applicable, its Portfolios, in accordance with the terms of such Fund's or
Portfolio's currently effective prospectus. The Fund Accounting Agent will
perform the NAV calculation subject to the terms and conditions of the
Accounting Agreement and this Price Source Authorization.
Each Fund hereby authorizes the Fund Accounting Agent to use the pricing
sources specified on the attached Authorization Matrix (as amended from time to
time) as sources for prices of assets in calculating the NAV of such Fund. Each
Fund understands that the Fund Accounting Agent does not assume responsibility
for the accuracy of the quotations provided by the specified pricing sources and
that the Fund Accounting Agent shall have no liability for any incorrect data
provided by the pricing sources specified by any Fund, except as may arise from
the Fund Accounting Agent's lack of
27
reasonable care in performing agreed upon tolerance checks as to the data
furnished and calculating the NAV of a Fund in accordance with the data
furnished to the Fund Accounting Agent. Each Fund also acknowledges that prices
supplied by such Fund or an affiliate may be subject to approval of that Fund's
Board of Trustees or Board of Directors, as applicable, and are not the
responsibility of the Fund Accounting Agent.
EACH FUND SEVERALLY (AND NOT JOINTLY NOR JOINTLY AND SEVERALLY) AGREES TO
INDEMNIFY AND HOLD THE FUND ACCOUNTING AGENT HARMLESS FROM ANY CLAIM, LOSS OR
DAMAGE ARISING AS A RESULT OF USING PRICES FURNISHED BY ANY SPECIFIED PRICING
SOURCE IN THE PERFORMANCE OF ITS DUTIES AND OBLIGATIONS UNDER THE ACCOUNTING
AGREEMENT.
The Fund Accounting Agent agrees that written notice of any change in the name
of any specified pricing source will be sent to the affected Fund as such
information is available to the Fund Accounting Agent.
Kindly acknowledge your acceptance of this authorization in the space provided
below.
EACH FUND LISTED ON APPENDIX A HERETO
By: XXXXX X. XXXXX
----------------------------------
Name: Xxxxx X. Xxxxx
Title: President
The foregoing authorization is hereby accepted.
STATE STREET BANK AND TRUST COMPANY
By: XXXX X. XXXXXX
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
28
AUTHORIZATION MATRIX TO BE ATTACHED TO PRICE SOURCE AUTHORIZATION DATED ________
CLIENT: ________ EFFECTIVE DATE: ______(SUPERSEDES PRIOR AUTHORIZATION MATRICES)
NOTE: [PLEASE SUBMIT CLIENT NAME, FUND NAME AND/OR LIST OF FUNDS WITH THIS FORM]
PRICING DEFAULT VALUATION
SECURITY TYPE PRIMARY SOURCE SECONDARY SOURCE TERTIARY SOURCE PRICING LOGIC LOGIC POINT
------------------------------------------------------------------------------------------------------------------------------------
EQUITIES
U. S. LISTED EQUITIES
(NYSE, AMEX) Bridge Reuters LAST Market Close
U.S. OTC EQUITIES (NASDAQ) Bridge Reuters Market Close
FOREIGN EQUITIES
LISTED ADR'S
FIXED INCOME
MUNICIPAL BONDS
US BONDS (TREASURIES, MBS,
ABS, CORPORATES)
EUROBONDS/FOREIGN BONDS
OTHER ASSETS
OPTIONS
FUTURES
NON - LISTED ADR'S
EXCHANGE RATES
FORWARD POINTS
PRICE SOURCE AND METHODOLOGY AUTHORIZATION
INSTRUCTIONS: FOR EACH SECURITY TYPE ALLOWED BY THE FUND PROSPECTUS, PLEASE
INDICATE THE PRIMARY, SECONDARY AND TERTIARY SOURCE TO BE USED IN CALCULATING
NET ASSET VALUE FOR THE FUNDS IDENTIFIED. NOTE: IF INVESTMENT MANAGER IS A
PRICING SOURCE, PLEASE SPECIFY EXPLICITLY.
STATE STREET PERFORMS A DATA QUALITY REVIEW PROCESS AS SPECIFIED IN THE SOURCES
STATUS PRICING MATRIX ON THE NAVIGATOR PRICING SYSTEM WHICH SPECIFIES PRICING
TOLERANCE THRESHOLDS, INDEX AND PRICE AGING DETAILS. THE SOURCES STATUS PRICING
MATRIX WILL BE PROVIDED FOR YOUR INFORMATION AND REVIEW.
AUTHORIZED BY:
By:
---------------------------------
Name:
TITLE:
ACCEPTED BY STATE STREET BANK AND TRUST COMPANY:
By:
---------------------------------
Name:
Title:
APPENDIX D
TO
FUND ACCOUNTING AGREEMENT
BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
EACH OF THE INVESTMENT COMPANIES LISTED ON APPENDIX A THERETO
DATED AS OF DECEMBER 18, 2006
INFORMATION REQUIRED TO BE SUPPLIED RESPONSIBLE PARTY
----------------------------------- -----------------
Portfolio Trade Authorizations Investment Adviser
Currency Transactions Investment Adviser
Cash Transaction Report Custodian
Derivatives Transactions Investment Adviser/Administrator
Portfolio Prices Third Party Vendors/Investment
Adviser
Exchange Rates Third Party Vendors/Investment
Adviser
Capital Stock Activity Report Transfer Agent
Dividend/Distribution Schedule Investment Adviser
Dividend/Distribution Declaration Investment Adviser
Dividend Reconciliation/Confirmation Transfer Agent
Corporate Actions Third Party Vendors/Custodian
Expense Budget Investment Adviser/Administrator
Amortization Policy Investment Adviser
Accounting Policy/Complex Investments Investment Adviser
Audit Management Letter Auditor
Annual Shareholder Letter Investment Adviser
Annual/Semi-Annual Reports Investment
Adviser/Administrator
REMOTE ACCESS SERVICES ADDENDUM
TO
FUND ACCOUNTING AGREEMENT
BETWEEN
STATE STREET BANK AND TRUST COMPANY AND
EACH OF THE INVESTMENT COMPANIES LISTED ON APPENDIX A THERETO
DATED AS OF DECEMBER 18, 2006
ADDENDUM to that certain Fund Accounting Agreement dated as of December 18,
2006 (the "Accounting Agreement") by and among each Fund party thereto (each, a
"Customer") and State Street Bank and Trust Company, including its subsidiaries
and affiliates ("State Street").
State Street has developed and utilizes proprietary accounting and other
systems in conjunction with the services which State Street provides to the
Customer. In this regard, State Street maintains certain information in
databases under its control and ownership which it makes available to its
customers (the "Remote Access Services").
The Services
State Street agrees to provide the Customer, and its designated investment
advisors, consultants or other third parties authorized by State Street
("Authorized Designees") with access to In~SightSM as described in Exhibit A or
such other systems as may be offered from time to time (the "System") on a
remote basis.
Security Procedures
The Customer agrees to comply, and to cause its Authorized Designees to comply,
with remote access operating standards and procedures and with user
identification or other password control requirements and other security
procedures as may be issued from time to time by State Street for use of the
System and access to the Remote Access Services. The Customer agrees to advise
State Street immediately in the event that it learns or has reason to believe
that any person to whom it has given access to the System or the Remote Access
Services has violated or intends to violate the terms of this Addendum and the
Customer will cooperate with State Street in seeking
injunctive or other equitable relief. The Customer agrees to discontinue use of
the System and Remote Access Services, if requested, for any security reasons
cited by State Street.
Fees
Fees and charges for the use of the System and the Remote Access Services and
related payment terms shall be as set forth in the fee schedule in effect from
time to time between the parties. The Customer shall be responsible for any
tariffs, duties or taxes imposed or levied by any government or governmental
agency by reason of the transactions contemplated by this Addendum, including,
without limitation, federal, state and local taxes, use, value added and
personal property taxes (other than income, franchise or similar taxes which may
be imposed or assessed against State Street). Any claimed exemption from such
tariffs, duties or taxes shall be supported by proper documentary evidence
delivered to State Street.
PROPRIETARY INFORMATION/INJUNCTIVE RELIEF
The System and Remote Access Services described herein and the databases,
computer programs, screen formats, report formats, interactive design
techniques, formulae, processes, systems, software, know- how, algorithms,
programs, training aids, printed materials, methods, books, records, files,
documentation and other information made available to the Customer by State
Street as part of the Remote Access Services and through the use of the System
and all copyrights, patents, trade secrets and other proprietary rights of State
Street related thereto are the exclusive, valuable and confidential property of
State Street and its relevant licensors (the "Proprietary Information"). The
Customer agrees on behalf of itself and its Authorized Designees to keep the
Proprietary Information confidential and to limit access to its employees and
Authorized Designees (under a similar duty of confidentiality) who require
access to the System for the purposes intended. The foregoing shall not apply to
Proprietary Information in the public domain or required by law to be made
public.
The Customer agrees to use the Remote Access Services only in connection with
the proper purposes of this Addendum. The Customer will not, and will cause its
employees and Authorized Designees not to, (i) permit any third party to use the
System or the Remote Access Services, (ii) sell, rent, license or otherwise use
the System or the Remote Access Services in the operation of a service bureau or
for any purpose other than as expressly authorized under this Addendum, (iii)
use the System or the Remote Access Services for any fund, trust or other
investment vehicle without the prior written consent of State Street, or (iv)
allow or cause
any information transmitted from State Street's databases, including data from
third party sources, available through use of the System or the Remote Access
Services, to be published, redistributed or retransmitted for other than use for
or on behalf of the Customer, as State Street's customer.
The Customer agrees that neither it nor its Authorized Designees will modify the
System in any way; enhance or otherwise create derivative works based upon the
System, nor will your or your Authorized Designees reverse engineer, decompile
or otherwise attempt to secure the source code for all or any part of the
System.
The Customer acknowledges that the disclosure of any Proprietary Information, or
of any information which at law or equity ought to remain confidential, will
immediately give rise to continuing irreparable injury to State Street
inadequately compensable in damages at law and that State Street shall be
entitled to obtain immediate injunctive relief against the breach or threatened
breach of any of the foregoing undertakings, in addition to any other legal
remedies which may be available.
Limited Warranties
State Street represents and warrants that it is the owner of and has the right
to grant access to the System and to provide the Remote Access Services
contemplated herein. Because of the nature of computer information technology
including, but not limited to, the use of the Internet, and the necessity of
relying upon third party sources, and data and pricing information obtained from
third parties, the System and Remote Access Services are provided "AS IS", and
the Customer and its Authorized Designees shall be solely responsible for the
investment decisions, results obtained, regulatory reports and statements
produced using the Remote Access Services. State Street and its relevant
licensors will not be liable to the Customer or its Authorized Designees for any
direct or indirect, special, incidental, punitive or consequential damages
arising out of or in any way connected with the System or the Remote Access
Services, nor shall either party be responsible for delays or nonperformance
under this Addendum arising out of any cause or event beyond such party's
control.
State Street will take reasonable steps to ensure that its products (and those
of its third-party suppliers) reflect the available state of the art technology
to offer products that are Year 2000 compliant, including, but not limited to,
century recognition of dates, calculations that correctly compute same century
and multi century formulas and date values, and interface values that reflect
the
date issues arising between now and December 31, 2099, and if any changes are
required, State Street will make the changes to its products at no cost to you
and in a commercially reasonable time frame and will require third-party
suppliers to do likewise. The Customer will do likewise for its systems.
EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET, FOR ITSELF AND ITS
RELEVANT LICENSORS, EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING THE
SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
Infringement
State Street will defend or, at our option, settle any claim or action brought
against the Customer to the extent that it is based upon an assertion that
access to the System or use of the Remote Access Services by the Customer under
this Addendum constitutes direct infringement of any patent or copyright or
misappropriation of a trade secret, provided that the Customer notifies State
Street promptly in writing of any such claim or proceeding and cooperates with
State Street in the defense of such claim or proceeding. Should the System or
the Remote Access Services or any part thereof become, or in State Street's
opinion be likely to become, the subject of a claim of infringement or the like
under any applicable patent or copyright or trade secret laws, State Street
shall have the right, at State Street's sole option, to (i) procure for the
Customer the right to continue using the System or the Remote Access Services,
(ii) replace or modify the System or the Remote Access Services so that the
System or the Remote Access Services becomes noninfringing, or (iii) terminate
this Addendum without further obligation.
Termination
Either party to the Accounting Agreement may terminate this Addendum (i) for any
reason by giving the other party at least one-hundred and eighty (180) days
prior written notice in the case of notice of termination by State Street to the
Customer or thirty (30) days notice in the case of notice from the Customer to
State Street of termination, or (ii) immediately for failure of the other party
to comply with any material term and condition of the Addendum by giving the
other party written notice of termination. This Addendum shall in any event
terminate within ninety (90) days after the termination of the Accounting
Agreement. In the event of termination, the Customer will return to State Street
all copies of documentation and other confidential information in its possession
or in the possession of its Authorized Designees. The foregoing provisions with
respect to confidentiality and infringement will survive termination for a
period of three (3) years.
Miscellaneous
This Addendum and the exhibit hereto constitute the entire understanding of the
parties to the Accounting Agreement with respect to access to the System and the
Remote Access Services. This Addendum cannot be modified or altered except in a
writing duly executed by each of State Street and the Customer and shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.
By its execution of the Accounting Agreement, the Customer (a) confirms to State
Street that it informs all Authorized Designees of the terms of this Addendum;
(b) accepts responsibility for its and its Authorized Designees' compliance with
the terms of this Addendum; and (c) indemnifies and holds State Street harmless
from and against any and all costs, expenses, losses, damages, charges, counsel
fees, payments and liabilities arising from any failure of the Customer or any
of its Authorized Designees to abide by the terms of this Addendum.
EXHIBIT A
to
REMOTE ACCESS SERVICES ADDENDUM
IN~SIGHT(SM)
System Product Description
In~Sight(SM) provides bilateral information delivery, interoperability, and
on-line access to State Street. In~Sight(SM) allows users a single point of
entry into State Street's diverse systems and applications. Reports and data
from systems such as Investment Policy Monitor(SM), Multicurrency Horizon(SM),
Securities Lending, Performance & Analytics and Electronic Trade Delivery can be
accessed through In~Sight(SM). This Internet-enabled application is designed to
run from a Web browser and perform across low-speed data lines or corporate
high-speed backbones. In~Sight(SM) also offers users a flexible toolset,
including an ad-hoc query function, a custom graphics package, a report
designer, and a scheduling capability. Data and reports offered through
In~Sight(SM) will continue to increase in direct proportion with the customer
roll out, as it is viewed as the information delivery system will grow with
State Street's customers.
